Future of payments: Visa to invest $100M in generative AI

October 3, 2023 Coin Telegraph

Future of payments: Visa to invest 0M in generative AI

Visa says it was one of the first firms in the world to pioneer AI in payments, deploying AI-based technology for risk and fraud management in 1993.

Global payment giant Visa is raising its bet on artificial intelligence (AI) in commerce and settlements by setting up a new fund to invest in generative AI ventures.

Visa on Oct. 2 announced a new $100 million generative AI initiative to invest in companies focused on developing generative AI technologies and applications related to commerce and payments.

The investment will be curated by Visa’s global corporate investment arm, Visa Ventures, which has been working on supporting innovation in payments and commerce since 2007.

Generative AI is a type of AI technology that can produce various types of content, including text, imagery, audio and synthetic data. Major AI chatbots like OpenAI’s ChatGPT and Google’s Bard show the capabilities of generative AI to comprehend and produce human-like writing.

According to Visa’s chief product and strategy officer Jack Forestell, generative AI has a promising future in the financial world. He said:

“While much of generative AI so far has been focused on tasks and content creation, this technology will soon not only reshape how we live and work, but it will also meaningfully change commerce in ways we need to understand.”

Visa’s latest move into generative AI comes on the heels of significant efforts to apply AI technology in the company’s ecosystem.

Visa says it was one of the first firms in the world to pioneer AI use in payments back in 1993, deploying AI-based technology for risk and fraud management. In 2022, Visa’s real-time payment fraud monitoring solution, Visa Advanced Authorization, reportedly helped prevent an estimated $27 billion in fraud.

In 2021, Visa also introduced VisaNet +AI, a suite of AI-based services focused on fixing delays and confusion with managing account balances and other issues of daily settlement for financial institutions.

Some of the tools in the VisaNet +AI suite include Smarter Stand-In Processing, which aims to improve payment experiences during outages by mirroring issuer approval decisions. Other such products include Smarter Posting, which helps enable faster consumer payment experiences and reduce confusion from posting delays.

Besides actively investing in AI, Visa has also been bullish on using cryptocurrency technology in payments. In April 2021, Visa shared plans for a new crypto product that is designed to drive mainstream adoption of public blockchain networks and stablecoin payments.

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Digital yuan app adds prepaid Mastercard Visa top-ups for tourists

September 25, 2023 Coin Telegraph

China

The e-CNY app now allows tourists to top-up their wallets using Mastercard and Visa payments with a “recharge first and use later” option.

Tourists planning to visit the People’s Republic of China can now pre-charge their digital yuan wallets using Visa and Mastercard payment options as the nation continues to update the mobile app powering its central bank digital currency (CBDC) pilot.

The e-CNY app, which is still in its pilot version, is available to iOS and China-based Google Play Store users. The application serves individual users, allowing them to open digital yuan wallets to use e-CNY.

As per the latest iOS app update published on Sept. 22, version 1.1.1 supports its top-up service with international card options.

*The latest version of e-CNY app on the Apple App Store introduces the top-up service for international cards. Source: e-CNY app*

According to a number of local Chinese news outlets, the latest version of the e-CNY app coincides with the start of the Asian Games.

*A tutorial for foreign users outlining the process of signing up using an international number. Source: e-CNY app.*

China has extensively trialed using the digital yuan as a payment option for foreigners visiting the country. According to Yicai, the Beijing Winter Olympics in 2022 marked the beginning of the CBDC pilot being open for tourists as a means to transact with local merchants using e-CNY.

Inbound tourists are reportedly able to make use of overseas mobile numbers to register and open e-CNY wallets and make use of the recharge wallet feature, which now supports Visa and Mastercard payments.

As Cointelegraph recently reported, China is making moves to ensure that the digital yuan is available as a payment option for all retail payment scenarios. This would make the digital yuan a ubiquitous payment method in China between retail users and merchants.

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Visa Says This Ethereum Rival Has ‘Unique Technological Advantages’ Over Other Chains

September 13, 2023 The Daily Hodl

Visa’s Head of Crypto Says Payments Giant Eyeing CBDCs, Stablecoins and Blockchain Networks

September 6, 2023 The Daily Hodl

Payments Giant Visa Selects Ethereum Rival Solana (SOL) for Stablecoin Settlement Expansion

September 5, 2023 The Daily Hodl

Visa taps into Solana to widen USDC payment capability

September 5, 2023 Coin Telegraph

Coin Telegraph

The global payments firm has expanded its stablecoin settlement capability to include USDC tokens issued on the Solana blockchain.

Global payments processor Visa has rolled out support for USD Coin (USDC) payments settled on the Solana blockchain as its stablecoin offering begins to expand.

Visa revealed that it is carrying out live and completed pilots with issuers and acquirers, moving millions of USDC tokens between partners across the Etheruem and Solana blockchains to settle fiat-based payments.

An announcement from the payments firm outlined the evolution of VISA’s adoption of USDC through pilots involving Crypto.com to integrations with merchant payment processors Worldpay and Nuvei.

The integration of USDC issued on Ethereum and Solana into Visa’s ecosystem means that the former can leverage Visa’s treasury and settlement systems to bridge traditional finance with Web3. Visa’s head of crypto Cuy Sheffield added that tapping into stablecoins USDC and blockchains like Ethereum and Solana help improve the speed of cross-border settlement.

1/ We are excited to announce that Visa has expanded our stablecoin settlement capabilities to merchant acquirers launching pilots with @Worldpay_Global and @Nuvei utilizing the Solana blockchainhttps://t.co/E0TjMO5xiH
— Cuy Sheffield (@cuysheffield) September 5, 2023

Visa began testing USDC in 2021 in collaboration with Crypto.com to test stablecoin settlement on the issuance side. The resulting pilot leveraged Ethereum-based USDC to receive payments from Crypto.com for cross-border volume on its Australian card program.

Settlements for cross-border purchases made on Crypto.com Visa cards had previously required multiple day currency conversion processes and accrued wire transfer fees. As a result the crypto exchange now uses USDC for settlement obligations for its Australian Visa card.

Crypto.com also uses a Visa treasury-managed account with USD Coin issuer Circle to send USDC across border on the Ethereum blockchain which reportedly reduces the length and complexity of international wire transfers.

Circle co-founder and CEO Jeremy Allaire said that the partnership marks a fundamental blockchain innovation that could alter payments and commerce:

“Circle built USDC to provide a functional digital dollar that could move at the speed of the internet to facilitate secure, reliable payments.”

The integration of USDC also allows Visa to send funds to USDC acquirers including Worldpay and Nuvei, which is expected to increase settlement times for merchants using their services.

The payment processors are then able to route USDC payments to merchants they serve, connecting Visa’s traditional fiat ecosystem through to stablecoins and the wider cryptocurrency space that they serve.

Worldpay merchant solutions president Jim Johnson said that the Visa’s USDC settlement capability would enable it to offer merchants more choices for receiving funds and better manage its treasury operations.

In prior conversation with Cointelegraph during Money20/20 in Amsterdam in June 2023, Nabil Manji, Worldpay head of crypto and web3, outlined how the firm had partnered with Coinbase back in 2013 to allow the exchange to become the first to accept fiat-based card payments worldwide.

Commenting on the latest developments, Manji said Visa’s new USDC settlement service is the first step in allowing Worldpay’s clients to access faster, more cost-efficient settlement of consumer payments.

"It opens the door to exploring future enhancements such as 24/7/365 settlement availability and real-time or multiple daily settlements, all of which can help to accelerate cross-border commerce."

As Cointelegraph previously reported, Visa has begun exploring a solution to make off-chain gas fee settlements for Ethereum using a Paymaster smart contract. These types of smart contracts are able to make payments for users and execute logic for various transaction capabilities.

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Visa Tests New System for Paying Ethereum Gas Fees via Credit Card

August 14, 2023 The Daily Hodl

Visa Exploring Ways of Paying Transaction Fees on the Ethereum Blockchain With Just a Card

August 11, 2023 The Daily Hodl

Visa explores crypto gas fees payments through cards

August 11, 2023 Coin Telegraph

Coin Telegraph

Visa’s innovative solution employs Ethereum's ERC-4337 standard and the "paymaster" smart contract, enabling off-chain gas fee settlement.

In a potential transformative move for users, Visa, the payment solution provider, is testing an innovative solution enabling on-chain gas fees to be paid using a Visa card.

Mustafa Bedawala, a VISA product manager, presented the report, highlighting an observed challenge with cryptocurrency wallets; the ongoing requirement to oversee Ethereum (ETH) balances for covering gas fees.

The standard Ethereum procedure involves users acquiring ETH from an exchange or on-ramp service and then transferring it to their wallets to cater to variable gas fees. This continuous adjustment of gas prices frequently leads to users either overspending or having insufficient ETH, introducing intricacies and challenges.

Visa’s innovative solution employs Ethereum's ERC-4337 standard and the "paymaster" smart contract, enabling off-chain gas fee settlement. The process involves the user triggering an Ethereum transaction via wallet, sent to the paymaster.

*Image illustrating steps involved in paying gas fees with Visa Card via Paymaster. Source: Visa*

The web service computes the gas fee and charges Visa using Cybersource. Subsequently, a digital signature is provided and momentarily validated, then attached by the wallet before being sent to Ethereum. Paymaster verifies the signature and covers the gas fee.

This sequence of steps allows the user to directly pay gas fees with their Visa card off-chain, eliminating the need for users to hold ETH merely for paying fees.

According to the publication, Visa has trialed this concept on the Ethereum Goerli testnet, utilizing available open-source tools like Stackup's userop.js library. The trial transactions effectively covered fees through the paymaster, bypassing the requirement for ETH.

Notably, this concept has the potential to reduce friction for blockchain users and allows the user to directly pay gas fees with their Visa card off-chain, eliminating the need for users to hold ETH merely for paying fees.

The report also suggested wider ramifications, highlighting the potential for merchants or dApps to utilize the paymaster framework to improve customer interactions, facilitating gas fee payments using Visa cards. This innovation may also create opportunities for current wallet and paymaster providers to introduce options for Visa card-based gas fee payments.

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Cryptopay EU card provider loses license, company says card funds are safe

June 22, 2023 Coin Telegraph

bank of lithuania

The EU Cryptopay cards may stop working soon as the Bank of Lithuania has revoked the EMI license of the app’s provider, UAB PayrNet.

The European Union debit card provider for Cryptopay has lost its Electronic Money Institution (EMI) license, according to a June 22 email sent to its customers. The company recommends to EU cardholders that they should immediately spend or transfer funds from their cards. Funds held in the app’s accounts are safe, Cryptopay told Cointelegraph.

*Cryptopay June 22 email. Source: Cryptopay*

Cryptopay had been using UAB PayrNet, a licensed EMI in Lithuania, to provide its EU customers with debit card services. But PayrNet’s license was revoked by Lithuania’s central bank, leading to the risk that users’ funds may become temporarily stuck on their cards.

An email stated that only funds transferred to a user’s debit card would be affected. Otherwise, “this issue in no way influences your Cryptopay account which shall continue business as usual.”

As for funds that have already been transferred to a card, Cryptopay recommends that they be spent or transferred away “as soon as possible.” This can be done by using the card to buy crypto, withdrawing it as cash from an ATM, transferring it to a different card or simply spending the money at a store.

Cryptopay also clarified that even if a customer’s card stops working, the user can still recover the card’s funds from UAB PayrNet directly. Cryptopay offered to help coordinate this process if this becomes necessary.

In an email conversation with Cointelegraph, a Cryptopay representative clarified that the problem primarily affects users in the EU. However, users in the United Kingdom may be temporarily affected because the company has “switched off card services in order to maintain operational stability.” These services should be back up and running within “a couple of days” in the United Kingdom.

Cryptopay head of support Konstantin Gorin stated that the company has dealt with crises from the banking system in the past, and he believes the company is ready to tackle this present challenge:

“This October it’s ten years on the market for us, we’ve seen worse. We’ve already been through similar situations in the past (back in 2018 when MasterCard and VISA pulled a plug on almost every existing crypto card programme and back in 2020 when Wirecard scandal hit the market), we're confident that we’ll overcome this and keep on.

Gorin also claimed that the team is already working on a new debit program, stating, “First order of business to make sure our affected clients are taken care of, next — we’re already working on a new card programme solution for them and for us."

Debit card issuer Wirecard went bankrupt in June 2020. At the time, it had become one of the most used debit card providers for crypto companies, including Cryptopay. Cryptopay later relaunched its program with a different provider.

Despite continuing troubles in the crypto debit card industry, there are also signs that debit card companies are becoming more favorable to crypto. In March, Mastercard announced that it would integrate stablecoins into its payment network within the Asia-Pacific region, allowing them to be accepted in the region wherever Mastercard is.

Visa

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