Entrepreneurs who want to expand abroad are growing and therefore have their own expectations when it comes to financial flows on a larger scale. How are they?
Currently, the expectations of companies regarding international transfers do not differ significantly from the expectations of individuals. They should be easy, fast, cheap, transparent in terms of their route and predictable in terms of time to reach the beneficiary. I believe that payments made by companies and individuals are combined. Ultimately, we expect them to be efficient and convenient, regardless of whether we are making such a transfer from our account to a friend’s account or working as a financial director in a large company.
What you mentioned sounds like the consumerization of business payment solutions. To what extent is it actually possible for all this to work efficiently, quickly and cheaply, as in the case of individual customers?
It just happens, although not at the same pace everywhere. The world is moving towards consumerization. Please look at how domestic transfers have become modernized, modernized and simplified. The payment method in Poland is currently easy and fast. The same thing is happening in the SEPA area (Single Euro Payments Area – ed.), i.e. transfers in euro currency: they are subject to the same rules and are becoming more and more simple. However, cross-border payments, traditionally done through correspondent banking, pose a challenge. Their consumerization and simplification is absolutely possible and is a trend we are currently observing. This includes the activities of companies such as Visa, which introduces innovative solutions that change international transfers – to the benefit of banks and their clients.
What solutions can be used to reach this expected level? Do you see any gates?
Today’s model is based on the correspondent banking model. The bank where we ordered a foreign transfer must have “friendly” banks abroad that will facilitate the transfer of such a payment to the target market to the bank of the transfer recipient. Sometimes there are more than one or two intermediaries on this journey, which is why the transfer takes quite a long time. Each bank charges a service fee, which increases costs. What should be done? In my opinion, shorten the chain of intermediaries. Support is provided by the development of technology and digitization of payments, which is handled, among others, by: Visa. Thanks to Visa’s competences, we can carry out, in cooperation with our partners, a wide range of transfers regardless of the currency.
More and more foreigners, including those from outside the European Union, come to Poland to work and send money. How do you approach these challenges at Visa?
More and more people are moving to study abroad, work or simply live. Poland is also becoming more and more open to the world. Over 1.1 million foreigners already work in our country (data: Social Insurance Institution, April 2024). Many of them come from countries outside the European Union, such as Ukraine, and even from outside Europe – for example from Nepal or Colombia. Such people may find reasons to make some transfers to their family or friends at least several times a year. However, it sometimes happens that they encounter a barrier in banks, primarily price. Therefore, they often use non-bank financial institutions to make transfers. Visa aims to equip both banks and other financial institutions with appropriate tools that will enable them to serve this customer segment. Visa Direct is an example because it facilitates instant international transfers to cards, accounts and digital wallets in over 190 countries and territories. This service has many applications, such as person-to-person (P2P) overseas payments and account-to-account transfers, business and government disbursements to individuals or small businesses, trade settlements, and refunds.
How does the digitization of the financial industry affect money flows around the world, does it accelerate them and increase opportunities?
Digitalization affects many aspects of life. The communication system between financial institutions has revolutionized over the years. The payment message takes a few seconds, but the settlement is tedious and long. There are areas that can still be improved. We are moving towards immediacy, we all want everything to happen quickly, so systems must be very efficient, fast and at the same time very secure.
Well, how to approach this challenge? Ensuring security is a big cost if we want to significantly increase the speed of flows.
Over the last five years, Visa has invested over €9 billion to secure and enhance its technology platforms. Last year, the company helped block more than $40 billion in fraudulent transactions, with fraud cases occurring at less than 0.1%. transaction. The point is to check the payments in terms of the recipient and the purpose of the payment to see if we are financing any illegal area. All this needs to be monitored, and faster and faster, practically in real time. This is how fast payments are supposed to be.
Over the past five years, Visa has invested more than €9 billion to secure and improve its technology platforms, preventing more than $40 billion in global fraud last year.
For example, as part of a pilot project carried out in the UK, Visa, in cooperation with local partners, demonstrated how the use of the latest artificial intelligence technologies can contribute to a significant reduction in losses caused by instant payments fraud, which has occurred in this country in recent years. reach 600 million pounds annually. Summarizing the project, Visa announced that its model was able to correctly identify 54 percent. fraudulent transactions that were not detected by advanced fraud detection systems implemented in banks.
What do the youngest generations of customers expect and do you notice that there are big differences in the approach to how such people want to make their transfers?
Young people from the Alpha generation would like their lives to be easy and comfortable. For many of them, the center of world management is a mobile phone and everything must be there – the ability to contact peers, but also pay for services or products purchased online. Our children will not want to run to the bank with transfers, they will live online and use applications. One-click payment is the expected future.
