In times of the current macroeconomic challenges, firms are seeking to drive their business growth by diversifying their services and product offering. In the payments sector, Visa is eyeing the remittances and B2B market to drive growth. The push into the remittances and B2B sector come at a time when the consumer payments business is not growing at a faster rate.
In the past, Visa has been hesitant to enter the remittance market. However, with the market expected to record strong growth in 2022 and beyond, the firm is finally foraying into the sector to drive its business growth. According to a report from World Bank, the remittance market is expected to reach US$802 billion in transfers in 2022, recording a growth of 3.7% this year.
In the global remittance market, the firm is expected to compete with incumbents such as MoneyGram and fintech firms such as Remitly. Both of these firms are looking to win over customers by offering faster, cheaper, and new ways to send money cross-borders. Notably, with incumbents seeing the extended presence of Visa in the remittances market, players are entering into a strategic partnership with the global card giant. For instance,
The remittance service, which Visa is planning to launch in the near term, will allow recipients to receive the money on debit, prepaid, or reloadable credit. It means that recipients will not have to go to the agent to collect the money. On the other hand, people can initiate remittance payments through a debit or credit card from a mobile device. This will make the entire process more efficient and faster.
Along with the remittance market, Visa is also eyeing to drive business growth through its entry into the B2B payments space. In the B2B payments space, Visa will be competing with new entrants such as Ramp, which also recently launched the buy now pay later method, to further accelerate its growth. The B2B card payments segment is about a US$20 trillion market opportunity, and Visa is already one of the leading players in the segment with US$1 trillion in payments volume.
Currently, Visa is focusing to build the B2B card markets in the United States initially, because it is the market where the most money is moving. However, in the long-term, the firm is projected to further expand its footprint in the global B2B payments market, which is a US$120 trillion market opportunity. Notably, the entry of Visa into the remittances and B2B payments market will further drive competition in the space over the next three to four years. With its strong presence in the global payments market, Visa is projected to make remittance payments more secure, reliable, instant, and cheaper. Consequently, the firm is projected to gain more traction for its remittance services among consumers globally from the short to medium-term perspective.