Traditional players like Visa Inc are racing to create strategic commercial partnerships with rising and potential Fintech companies.
Sunday Times’ Julius Bizimungu talked to Otto Williams, the Head of Partnerships, Fintech and Ventures at Visa to discuss the company’s position when it comes to financial technology and their latest work in Africa.
Williams was in Kigali to take part in GSMA Mobile 360 Africa conference.
Below are excerpts:
The Financial Technology (Fintech) industry continues to attract more attention globally and the space has been growing steadily, particularly in Africa, driven by increased investments and the willingness of regulators to open up.
Last year alone, Fintech attracted 39.7 per cent of the total funds raised on the African continent.
When you talk about Visa today, the first thing and probably the only thing many will tell you is a ‘visa card’. But I suppose you do more than just that?
Yes, we do have over 3 billion consumer accounts globally and over 50 million merchants that are enabled to accept visa. We view that as significant assets that help us to push for more partnership and collaborations, and that’s exactly what we are doing.
We have always been a partnership network. We are a network of 17,000 banks, but we also have a network of technology platforms and Fintechs and we are expanding collaborations.
That’s how people should think of us.
How do you describe your operations in Rwanda?
Rwanda is one market that I am personally excited about. It is a startup-heavy market – there are quite a lot of startups developing here and trying to create solutions that make a difference.
Our operation here is engaging that community more.
We, obviously, will continue to drive our business in this market to enable visa credential distribution, whether in digital or physical form or both, but more importantly, engaging with the startup community because we view this market as an incubator of startups.
We want to bring our capabilities to them, expose APIs (set of tools for building software applications) that they can access, and drive global experiences, instead of having to build them.
With this, we believe they can bring great solutions to additional Visa markets.
Much of these startups you are talking about are technology-driven like the financial technology firms, and they are disrupting the financial sector where your core business is. Where do you see yourself in face of this disruption?
We see ourselves enabling new and compelling consumer experiences. In doing so, we are doing it in a number of ways; we are entering commercial partnerships with Fintechs to further enable what they are trying to create.
What we are also doing is investing in some Fintechs where it makes sense because we also want to bring their capabilities [on board] as well for the benefit of all our stakeholders, including the banks because banks also want to create good consumer experience.
At the same time, these kinds of partnerships we are creating help Fintechs not to be held down by legacy infrastructure.
We have heard some of the players within the traditional financial sectors perceive Fintechs negatively. What more value do you see in Fintechs that perhaps some bankers don’t see in them?
We have seen Fintechs that bring blockchain solutions. We recently made an investment in a Fintech that will bring crypto security to our platform, we have seen Fintechs that manages chargeback (reversal of a prior outbound transfer of funds from a consumer’s bank account, line of credit, or credit card) fraud, and we have invested in Fintechs that help banks build wallet solutions.
That is how we view fintechs.
Visa recently made Fintech investments in companies like YellowPepper, Klarna, Paidy, Marqeta and PayStack in Nigeria.
A few months ago, you announced plans to expand your Fintech Fast-Track Programme in Africa, Middle East and Central and Eastern Europe. Talk to us about this programme?
Fintech Fast-track is a programme we have launched globally and it is a programme that enables Fintechs to connect much more seamlessly with Visa and to streamline processes or requirements.
It includes facilitating fintechs to obtain Visa licences so that they can issue digital credentials or even physical credentials to their consumer base – a process that is not easier today.
It removes a lot of barriers for Fintechs since we allow them to connect to our already established network to access resources. That is what the programme is about and we have seen Fintechs take advantage of it and drive consumer use cases but also drive down their costs.
Where do you see the future of financial technology in Africa?
Financial technology in Africa is going to be digitally driven. The consumer is digital, they want to be able to make transactions and payments using their mobile devices, whether it is QR or via messaging.
That is a shift we are seeing and that is the future that we anticipate.
Visa Inc created a card that transformed the way people transact. What would you say is your next moonshot?
What we know is that we have got the skill of our global network. We will continue to leverage that skill to drive expansion.
Whether we are the ones that are going to create the next moonshot consumer experience? Probably not. But the partners we are enabling on our network are going to create those moonshot consumer experiences and we believe that.
We are creating new network capabilities to empower that and make it happen. We are also acquiring assets like blockchain assets to make sure that the network is ready for new players and partners that want to create those new experiences.
But I will tell you that we definitely see tremendous future in B2B (business to business) payments. We believe this is an area that is not yet tapped and there is more we can do.
That is why we have launched a B2B platform built on blockchain technology and allows for faster and a lot more streamlined movement of funds across borders.