Visa has entered a first-time partnership with the International Finance Corp. to drive use of digital payments in emerging markets.
The card network, the largest in the U.S., will work with the IFC in shouldering the risk for extending about $200 million in credit by way of about 50 financial institutions, initially in 14 countries in Latin America and the Caribbean, they said in a press release Wednesday.
Visa and the IFC, which provides lending in emerging markets, expect the program to enable millions of underbanked consumers and small businesses to tap digital payments in a way that lets them better participate in their local economies and the global economy.
The move by the San Francisco-based card company comes as it seeks to build business around the world and spur interest in digital payments as the global economy increasingly thrives on electronic movement of money, including stablecoins.
Despite economic conflict in some parts of the world and rising inflation in the U.S., Visa’s cross-border and e-commerce businesses have been resilient, Visa CEO Ryan McInerney said during a presentation at an investor conference Tuesday.
“Cross-border has actually accelerated a little bit,” McInerney said at the Goldman Sachs Communacopia + Technology Conference. “We've seen cross-border go from about 12% year-over-year growth in the last quarter. We're running at about 14% through the end of August.”
That’s despite the U.S. war in Iran driving fuel prices higher and contributing to higher prices for goods and services.
“Consumers and businesses do have a lot of uncertainty,” McInerney acknowledged. “You see that in the consumer confidence measurements. You know there's uncertainty about some of the affordability issues. They're uncertain about the elections.”
Still, the Visa CEO maintained that demand for the card network’s services are holding steady. “If you actually look at our business and how they're spending, it's strong and stable,” he said.
Some segments of Visa’s business are doing better than others. “We continue to see e-commerce growing faster than travel,” McInerney said.
The company is also seeking to become active in global digital commerce by way of stablecoins, participating in various initiatives with the digital currencies. In June, Visa and rival Mastercard joined with other financial firms to say they were creating a consortium to support the stablecoin Open USD.
That stablecoin collective will benefit from “shared economics and neutral governance,” McInerney said. “We think it's quite possible that those two elements of design of OUSD could help OUSD become an extremely relevant stablecoin globally” in certain markets, he said.
With respect to its new partnership with the IFC, Visa called the agreement “an innovative risk-sharing initiative designed to help expand financial inclusion by increasing access to digital financial services in emerging markets.”
The IFC calls itself the “largest global development institution focused on the private sector in emerging markets.”
“Through this first-of-its-kind partnership with IFC, Visa will help financial institutions bring secure and reliable payment solutions to more people and small businesses in emerging markets,” Visa’s Chief Risk and Client Services Officer Paul Fabara said in the release.