Visa: the highs and lows of B2B payments

Summary

Ben Ellis, leader of Visa B2B Connect, discusses the challenges and innovations in the cross-border B2B payments landscape at Sibos, Amsterdam. He highlights pain points such as payment predictability, tracking, and fees, and explains how Visa is addressing these issues through their new Visa B2B Connect network. The network enables secure, predictable, and scalable cross-border payments, while also embracing flexibility in connecting with various banking standards. Looking ahead, Ellis envisions continued innovation to streamline payments and reduce pain points, making B2B transactions more seamless and efficient worldwide.

Takeaways

• 😀 Ben Ellis leads Visa B2B Connect globally, a service that handles large ticket cross-border payments for businesses around the world.
• 😀 Cross-border B2B payments are complex due to multiple markets, jurisdictions, and business practices, making them harder to manage than consumer payments.
• 😀 Key pain points for corporations in cross-border payments include predictability (when and how much will the payment arrive), tracking payments in route, and transparency on fees.
• 😀 According to Visa's research, 70% of corporations across 20 countries reported pain points with cross-border B2B payments.
• 😀 The payments ecosystem is innovating in response to these pain points, with financial institutions and companies like Visa working together to develop solutions.
• 😀 Visa’s solution to cross-border B2B payment challenges is Visa B2B Connect, a multilateral network designed to offer secure, predictable, and efficient payments.
• 😀 Visa B2B Connect allows banks to send B2B payments globally, with all transactions subject to standardized rules and regulations that Visa already uses in traditional business.
• 😀 Standardization remains a challenge in the payments industry, but Visa addresses this by offering flexibility and compatibility with multiple formats, including ISO20022 and older MT standards.
• 😀 Visa has built Visa B2B Connect to be API-enabled, allowing banks to connect in different ways (e.g., directly or via third-party integrators) to suit their existing infrastructure.
• 😀 Looking forward, the future of B2B payments involves continued innovation, making payments more seamless, reaching more markets, and improving data transparency to reduce pain points.

Q & A

What is Visa B2B Connect and what role does it play in cross-border payments?

Visa B2B Connect is a multilateral network designed to facilitate large, cross-border B2B payments. It connects financial institutions and enables businesses to send secure, predictable payments internationally, overcoming the challenges posed by multiple jurisdictions, business practices, and payment systems.

What are some of the key pain points that businesses face with cross-border B2B payments?

The main pain points businesses face include unpredictability of payment arrival, difficulties in tracking the payment's status, and uncertainty about fees. These challenges complicate the overall cross-border payment process for corporates.

What did Visa's research reveal about corporate challenges in cross-border payments?

Visa's research found that 70% of businesses across 20 countries face challenges with cross-border B2B payments. These challenges primarily revolve around predictability, payment tracking, and transparency of fees.

How is the payments industry addressing the pain points businesses face in cross-border B2B payments?

The payments industry is innovating by developing solutions that address these pain points. Financial institutions and companies like Visa are creating more predictable, secure, and transparent payment systems. This innovation is crucial for improving payment experience and reducing friction in cross-border transactions.

What capabilities does Visa bring to the table in solving the cross-border payments challenge?

Visa brings extensive capabilities including experience in working with banks in structured, regulated environments, scalability, and robust technology. These capabilities have been applied to create Visa B2B Connect, a platform that solves complex cross-border payment issues by offering secure and predictable transactions.

What does Visa B2B Connect offer that traditional cross-border payment systems do not?

Visa B2B Connect offers a multilateral network, which means that banks can send cross-border payments to any recipient bank within the network. This provides a more scalable and predictable way to make B2B payments compared to traditional systems that often involve multiple intermediaries and varying regulations.

How does Visa address the issue of standardization in the cross-border payments ecosystem?

Visa addresses the standardization challenge by building flexibility into its system. The platform supports ISO20022, but also accommodates other formats like MT standards, and offers multiple connection options such as API and file transfer. This allows banks to integrate with Visa B2B Connect regardless of their existing technology stack.

What role does ISO20022 play in Visa B2B Connect's cross-border payments?

ISO20022 is the preferred global messaging standard for financial institutions. Visa B2B Connect uses this standard to ensure interoperability and standardization across its network, helping streamline cross-border transactions and improve data consistency.

What is Visa's approach to ensuring that banks can integrate with Visa B2B Connect?

Visa provides flexibility in how banks can connect to the platform. This includes offering both API-enabled connections and traditional file transfer methods. By doing so, Visa ensures that banks can engage with Visa B2B Connect, regardless of their current technological infrastructure.

What does Ben Ellis envision for the future of B2B payments?

Ben Ellis believes the future of B2B payments will involve continued innovation, with companies like Visa and financial institutions working to make payments more seamless, inclusive, and data-rich. He hopes that, in the coming years, the pain points businesses face will significantly decrease due to ongoing improvements in the payment ecosystem.