By Jeff Domansky, June 7, 2021
The big news of the day is that Jeff Bezos plans to go into space with his brother next month. Fitting as we approach the 52nd anniversary of Neil Armstrong’s July 20, 1969 walk on the moon.
Meanwhile, back here on earth, the other news of the day is Visa and Goldman Sachs taking one small step for small businesses and another big step for global real-time payments.
In a new partnership, Goldman Sachs will use Visa’s B2B Connect and Visa Direct Payouts solutions channel to help its commercial and corporate banking clients simplify the often complex, slow, and expensive cross-border payments process.
Faster, simpler, less expensive?
As most businesses know, cross-border payments and sending money across the world are notoriously slow, expensive, and opaque when it comes to interbank fees, currency exchange, and other costs of B2B payments.
Competition from fintechs and other new FI competitors is disrupting the status quo and forcing a fresh new approach to financial transactions.
“There is an immediate need for modernization of global money movement to help businesses around the world simplify and enhance how they pay and get paid across borders,” said Alan Koenigsberg, global head of new payment flows, Visa Business Solutions. “Visa’s partnership with Goldman Sachs Transaction Banking is an important milestone in our efforts to break down traditional processes and silos and help spur innovation in this critical industry segment for the decades to come.”
Goldman Sachs business clients will have immediate access to Visa’s solutions through existing connections, whether by API, file, or online web platforms.
“We believe paying someone halfway around the world should be just as easy as paying someone around the corner,” said Eduardo Vergara, global head of Transaction Banking Product and Sales at Goldman Sachs. “We are proud to partner with Visa to introduce fast and easy ways our clients can make payments across the globe.”
Businesses hope this will also mean less expensive B2B money transfers.
$10 trillion cross-border marketplace
Visa estimates B2B payments globally at more than $120 trillion annually, of which $10 trillion are cross-border payments.
The Visa B2B Connect network uses tokenized technology to ensure the secure transmission of sensitive financial information. Goldman Sachs expects further benefits from the partnership, including a simpler workflow, additional payment options for higher and lower value B2B payments, optimized fees, and faster, easier reconciliation through improved reporting.
Launched just two years ago, Visa B2B Connect has tripled the reach of its network through a single connection to billions of endpoints in 97 countries. Visa Direct Payouts also provides higher volume, lower value B2B and B2C transactions.
If we can send Neil Armstrong and Jeff Bezos into space, the are signs the payments industry can work faster to sort out the challenge of more straightforward, more efficient, and less expensive payments across borders.
As Neil Armstrong famously said, “That’s one small step for man. One giant step for mankind.” It’s time that applied to the payments industry too.
Read the Visa/Goldman Sachs news release here.
Recent PaymentsNEXT coverage of cross-border payments:
SWIFT aims for faster future cross-border payments
B2B cross-border payments may recover 30% by 2022
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