Remittances is a $500 billion market and Visa has made a major move to invest in its ability to streamline cross-border money transfers. Reuters reports that the payments giant is acquiring UK-based company Earthport, which offers an API to remittance firms and banks, for $250.6 million.
According to Business Insider, Earthport’s client roster includes Bank of America, Hyperwallet and TransferWise in addition to banks in 87 countries. Rather than dealing with several global payment channels, these financial companies can leverage Earthport’s API and cut down on costs. After making an initial bid in November, Visa revised its bid for acquisition after an undisclosed US company put forth a bid.
Visa has the opportunity to bolster its current cross-border services while also expanding its reach in the digital remittance space, as Business Insider notes.
Cross-border payments are usually expensive and can be slow as well. Lowered cost and increasing speed for remittances are two ways that companies can innovate to get ahead.
Cross-border payments are usually expensive and can be slow as well. Lowered cost and increasing speed for remittances are two ways that companies can innovate to get ahead. Business Insider Intelligence forecasts digital remittances to grow at an 11.5% compound annual growth rate (CAGR) from $225 billion in 2018 to $387 billion in 2023.
Cross-border payment volume at Visa has been an area of growth for the company, which has also been developing Visa B2B Connect as a cross-border business-to-business (B2B) payment platform.