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ChapterTitle
Insights and Expertise

One app to That's the type of solution Visa is seeking to enable
through its Pay-by-Bank offering. Here's a quote about this
rule them all from BusinessWire, https://bit.ly/3LOxw9C:

"Non-card payments don't deliver the same experience,
By Ken Musante security and protections as card-based payments.
Electronic payments, like ACH transfers, have been left
Napa Payments and Consulting out of the digital revolution. With pay by bank, Visa is
digitizing and streamlining the account-to-account (A2A)
s a consumer, it's difficult to manage the varied payments experience, giving people more choice over
payment methods available. For international how they want to pay, whether that's an A2A transfer,
transactions, I use a different card than for applying for a loan or paying with another funding
A business transactions. For airline purchases, I source, like a credit card. Since its acquisition of Tink,
use a different card, and for home renovation, still another. Visa has expanded across Europe, giving millions of bank
customers innovative financial management tools and
I'm torn when making an international purchase for work, removing friction from their payment experiences. Visa is
as my business card has a currency conversion fee. I'm bringing this new technology to the U.S."
a sucker, but I am reluctant to change my business card
due to auto-payments, stored credentials and reward Such an offering will surely disintermediate card
programs. payments, and while that is a potential blow to Visa, it's

Not all those who wander are lost not as impactful as you might think. Consider that the
single greatest cost of a card transaction is interchange,
What if there was a better way? What if instead of storing a and 100 percent of interchange is paid to the issuing bank.
single payment token, a credential was stored, and I could
select the payment method at the time of the transaction? Similar to interchange, Visa's take differs based on
criteria such as the card type, region (of the merchant and
cardholder) and data submitted with the authorization—
but Visa receives a much smaller share of the overall
transaction cost.
All that is gold does not glitter

If Visa moves transactions to its Pay-by-Bank solution, it
may expand the Visa use-case and only minimally impact
its take rate. Visa's Flexible Credential allows issuers the
optionality to extend many funding sources to a single
card or product whereby the consumer can determine, at
time of checkout, the funding source to tap.

This ability opens an entirely new revenue source for Visa,
which may now have greater visibility into transactional
data and use that information to market a specific funding
source based on the transaction size, available balances or
rewards.
Think about an end-of-the-month purchase where Visa
could offer a BNPL option or a more traditional loan for
a large-ticket item. So long as Visa is able to tokenize the
user's credentials and authenticate the user, at the time
of the transaction, it can more than make up for the lost
card volume by increasing its transaction count and
monetizing consumer data. Visa already has a proof of
concept running in Europe on its Tink platform and is
bringing that to the States.
Even the smallest person can change
the course of the future
Consumers will have more choices of how to pay.
Embedded banking will mean more than accessing

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