Visa, Remitly partner on faster cross-border P2P

Visa and Remitly have formed a partnership enabling U.S. consumers to send cross-border remittances in real time via Visa Direct, the card network’s debit push-payments service.

The move comes as Visa gets closer to finalizing its purchase of London-based cross-border payments specialist Earthport, following a brief bidding war with Mastercard as competition in the B2B and consumer remittance markets escalates.

Andrew Harrer/Bloomberg

Seattle-based Remitly, whose digital remittance network has been expanding aggressively and now reaches consumers in Africa, Asia, Central America and South America, will add Visa Direct as an option to send funds in real time to eligible recipients with a debit card, Visa said in a Thursday press release.

The service will be available later this year for U.S.-based senders, and Remitly aims to eventually expand access to other sending markets, according to the release.

“This collaboration extends Visa’s ability to deliver faster payments to customers, regardless of borders or location,” said Bill Sheley, global head of Visa Direct, in the release.

Adding an option that guarantees the arrival of funds within 30 minutes will help Remitly expand its audience, according to Matt Oppenheimer, Remitly’s co-founder and CEO, in the release.

“Our customers have unique money transfer needs, including a need for more choices in how they send and receive money,” Oppenheimer said in the release.

Visa also has a need to keep pace with Mastercard, which tried to buy Earthport in January by topping Visa’s original offer made in December. Visa raised its offer to $320 million in February, and a few weeks later Mastercard dropped out of the contest. Mastercard later announced its purchase of Transfast, a New York-based cross-border transfer firm.

If Visa’s purchase of Earthport goes through as planned—the U.K.’s financial regulator approved it this week—Visa and Mastercard will each own a digital cross-border payments firm with a mobile-first focus. Mastercard previously had an alliance with Transfast leveraging Mastercard Send, its own debit push-payments service for both B2B and consumer use cases.

With Remitly, Visa will be positioned to cover both sides of a growing market, according to observers.

Debit card-based cross-border remittances is still a relatively new niche, said Talie Baker, a senior analyst with Aite Group.

“Debit cards are not as prevalent in most economies where remittances flow, but push-to-card payments can be used for prepaid cards, which is a great solution to get funds into unbanked recipients’ hands quickly and safely,” Baker said.

Debit push payments also are the only robust mechanism for guaranteeing that cross-border payments flow in real time, which serves a specific niche when urgency is a factor, but demand is still relatively low, she said.

“Driving adoption of push-to-card is also going to take some time and consumer education,” Baker said.