By Vikram Modi, VP and Head, Visa Direct Strategic Solutions
The global pandemic has left a major impact on consumers and businesses everywhere, rapidly changing the way we pay and get paid. Whether sending money to family and friends abroad or easily accessing earned wages, COVID-19 has accelerated a critical need for fast and secure digital payments.
With consumer adoption of digital payments accelerating, small and micro businesses are quickly adapting to this shifting consumer behavior and embracing digital-first payment strategies. In the ‘Visa Back to Business Study’ that analyzed consumer and SMB behavior across eight markets, 78%1 of consumers reported that they have changed the way they pay, while 67% of SMBs reported having tried a new approach to accommodate new consumer expectations.
Similarly, consumers have become more reliant on digital means for money transfer, with PayPal reporting substantial growth in its person-to-person (P2P) payments.
Enabling Quick Access to Funds, Globally
While digital is crucial for domestic money movement when senders and recipients are physically distanced from each other, digital channels for cross-border money transfers are just as critical. To power faster access to funds around the world, Visa and PayPal recently announced the extension of their global partnership for consumers and small businesses sending or receiving money via PayPal, Venmo, Xoom, Braintree, Hyperwallet and iZettle. This includes expanding PayPal’s Instant Transfer service globally, using Visa Direct’s real-time payment capabilities2. Through this collaboration, eligible merchants and consumers can now receive money more quickly and easily, eliminating the friction and delays associated with traditional channels.
Opening Up Cash Flow through Faster Payments
Fifty-two percent of small business owners have reported concerns about not having the same revenue as prior to COVID-193. As such, managing cash flow is a top priority for SMBs, yet real-time access to accounts receivables continues to be a challenge. Real-time payout solutions such as Visa Direct provide the key to unlocking this opportunity, providing SMBs with greater control over their cashflow, and ready access to funds whenever they need it.
While the global pandemic has, to a degree, imposed a digital lifestyle on consumers and small businesses, our insights suggest that these changes are here to stay and that these behavioral changes will persist beyond the pandemic. At Visa, we are creating solutions for this digital-first, instant access world.1 Visa ‘Back to Business’ Report – July 2020: https://usa.visa.com/dam/VCOM/global/run-your-business/documents/visa-back-to-business-study.pdf 2 Actual fund availability depends on receiving financial institution, receiving account type, region, and whether transaction is domestic or cross-border 3 Visa ‘Back to Business’ Report – July 2020