Visa rolls out Visa Open Banking Solutions on the US market

Visa acquired Tink in 2021. Since then, the American giant has relied on the European fintech to roll out Visa Open Banking Solutions, with the ambition of competing with the open banking market in the United States. Less well regulated than in Europe, this market offers opportunities that Visa is keen to explore. Despite the presence of Plaid, currently the undisputed local leader.

FACTS

• Visa is now offering open banking solutions in the United States via Visa Open Banking Solutions.

• To do this, the company relies on Tink, a European platform owned by the American giant, whose acquisition was finalised in March 2022 for the equivalent of €1.8 billion.

• Since then, Visa has been working with American banks and fintechs such as Capital One, Fiserv, Dwolla, etc., to create and sign data access charters.

• Thanks to this preparatory stage, Visa is now in a position to offer fintech products, operating directly under the name Visa Open Banking Solutions.

• Visa Open Banking Solutions currently offers three products:

  • Account verification: enabling instant verification of a customer's account directly with their bank account, simplifying the payment process, etc.

  • Balance verification: improving the user experience by balancing balances in real time.

  • A service called "Transactions": harmonising transaction data from a large number of banks in the United States.

• In Europe, the duo has already signed a number of partnerships since the takeover, with major players such as Adyen and Revolut.

CHALLENGES

• International expansion: The US open banking market is dominated by Plaid, which Visa tried to buy before the Covid-19 crisis. This monopoly situation may affect the arrival of a new player, but Visa Open Banking Solutions can count on Tink today to put its efforts into practice and avoid a disruption of this market.

• Getting Americans to adopt open banking: According to a study carried out by Visa, 87% of consumers in the United States already use at least one form of open banking service linking their bank accounts to a third-party service. However, the study shows that only 34% of users are actually aware of open banking and the services and benefits it can bring. Visa therefore wants to help democratise these solutions and demonstrate their value to the general public.

MARKET PERSPECTIVE

• Visa's attempt to acquire Plaid in 2020 was blocked by the US Department of Justice (DoJ). The DoJ opened an antitrust investigation against Visa, suspecting that the payments giant was trying to prevent the emergence of a potential competitor.

• The acquisition of Tink therefore represents an alternative for Visa, which is acquiring the open banking skills of one of Europe's biggest fintechs.