Thursday, July 7

Visa’s crypto payment growth points to investment paying off

  • Visa’s crypto volume is exploding.
  • The network’s $1 billion crypto-related spend total in H1 2021 points to an effective growth strategy.

CFO Vasant Prabhu told CNBC that consumers spent more than $1 billion on goods and services using its cryptocurrency-linked cards in the first half of 2021. Volume in 2019 and 2020 was only a fraction of that six-month total. Visa counts three major crypto-based card partners— BlockFi, Circle, and Coinbase—and cardholders can use the cards at more than 70 million merchants globally.

Visa earned over $2.4 trillion in payment volume in Q2 FY 2021

Visa earned over $2.4 trillion in payment volume in Q2 FY 2021.

Insider Intelligence

In the US, 18% of customers said they will likely use cryptocurrencies to make a purchase this year, according to a PYMNTS and BitPay survey. A similar Mastercard index found that 40% of global consumers plan to use cryptos by year’s end. This figure reflects growing interest, with appetite especially high among Gen Zers—trends mirrored in Visa’s massive H1 crypto total. And there’s a long runway for gains since cryptos still composed just 0.02% of Visa’s total volume in the period.

Visa has its sights set on cryptos—and it looks like those ambitions are paying off, which could help aid in recovery and keep it at the forefront of payments innovation.

  • Earlier this year, Visa CEO Al Kelly noted that the company wanted to get involved in crypto investments—even though at the time, he noted that volatile assets like Bitcoin were typically treated more like assets than as a means of payment, a trend that current results might be bucking. Prabhu told CNBC that the network wants to make cryptos more like fiat currency, which could foreshadow a change in stance. But it might also preview a more aggressive push into stablecoins and central bank digital currencies (CBDCs), which can help mitigate challenges like volatility and make crypto transactions more straightforward. The network will also need to be mindful of regulatory challenges moving forward.
  • Doubling down on cryptos indicates Visa’s commitment to evolve alongside the payment space. Competition in cryptos is mounting, both among other networks—Mastercard is launching a card in partnership with Gemini this summer, and a recent Discover hire foreshadows a crypto push—and fintechs, like PayPal’s Checkout with Crypto option. By pursuing its crypto ambitions through card-based options, Visa can not only court new partners and expand its addressable base but also ensure it doesn’t lose volume to fintechs or other competitors. Preventing disintermediation will be critical to maintaining pandemic recovery as spending normalizes: Visa posted 11% global growth in Q1 2021—nearing pre-pandemic levels in some markets.

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