In the early days of the internet, it was not uncommon, even in major publications, for opinion writers to scoff, panning the fledgling web as little more than an upstart tech project with no real future.
To some, the idea that someday, thanks to a collection of new open-source protocols like TCP/IP transmitting data across telephone lines and fiber optic cables collectively powered by a new generation of infrastructure companies, people would be able to work remotely, book travel and dinner with a click, meet strangers from all over, and abandon the mall for online shopping was laughable.
This kind of take has not aged well.
Today, we know that people do all of those things and more. And we know that the road to now is littered with many seemingly unsinkable retailers that, as a result of the online boom, no longer exist, replaced by large online retailers and marketplaces and countless others who capitalized on the internet’s potential.
The internet is going nowhere.
Even so, at the time, “the internet is going nowhere” was not an unreasonable position. Implicit in it, though, was a seriously flawed assumption: that the world would continue to work essentially as it had, where shopping required leaving your house and the internet remained a fringe tech experiment — a play place for nerds and hobbyists.
And maybe the internet’s detractors would have been right if the technologies and ecosystem behind it remained static. I remember when I got my first dial-up internet connection. It was slow and unreliable. Web browsers were clunky and hard to use. There weren’t many great websites or applications — and many people didn’t have the patience to endure long load times. The market value of high-profile dot com startups had cratered. To be fair, there was kind of a lot to be skeptical about.
But the open-source technology didn’t remain static. It evolved and matured and a vibrant ecosystem of companies across the world continued to innovate around it.
Broadband, Wi-Fi, and 3G connections scaled the performance of these networks, smartphones brought convenience and access in the palm of your hand, developers built new and more powerful apps for consumers, and the rest is history.
Blockchains’ broadband moment
Blockchains today share some parallels with the early internet — particularly more than their fair share of skeptics, hecklers and critics. It’s hard not to hear echoes of the past’s self-certainty whenever an analyst says something like, “blockchains are too slow! Too hard to use! Too expensive!” or “they don’t have any use cases!”
Sure, blockchains have been all of those things, and some use cases are more obvious than others. But the internet was once slow, expensive, and hard to use — and today, it’s fast enough to stream live video from space, cheap enough to be free in a lot of places, and easy enough for a six-year-old to use.
At Visa, we’ve been on the forefront of payments technology for more than six decades. We saw the potential for the internet in its early days and played a major role in helping it scale and support new forms of commerce. Today, we see significant potential for blockchain networks — and many possible futures. Here are a few areas of focus today.
Efficient global settlement
Not long ago, we became one of the first major payments networks to test stablecoin settlement on Ethereum in USDC, working together with Crypto.com as issuer. This year, we’ve expanded that settlement pilot to both issuer and acquirer partners, and to Solana — a blockchain whose innovative design enables it to process over 2k transactions per second. In the immediate, this has provided a modern, convenient option for fintech issuers and acquirers to help make and receive payments from Visa’s treasury accounts as well as opportunities for acquirers to get funds to their merchants faster.
Going forward, we imagine a future where Visa’s network of networks involves more than just multiple currencies and bank settlement rails, but also multiple blockchain networks, stablecoins, and CBDCs or tokenized deposits. We expect traditional fiat and legacy settlement rails to co-exist with tokenized fiat running over global 24/7 real time blockchain networks for a long time. And we see our role as a bridge to meet our clients where they are regardless of preferred currency, settlement network, or form factor.
Blockchain powered cross-border disbursements
Cross-border money movement has long presented challenges for users on either end of a transaction. We’ve made great strides to help simplify processes, introduce efficiencies, and expand what’s possible in terms of cross-border disbursements. Today, Visa Direct, our push payments platform, can reach nearly 7 billion endpoints, including more than 3 billion cards, 2 billion accounts and 1.5 billion digital wallets.¹ It helps enable same-day² payment for rideshare drivers, fast insurance payouts, remittances, early access to wages, real-time marketplace payouts, and a growing number of use cases.³ Someday soon, blockchain networks might be part of it.
For a lot of folks, particularly in emerging economies, digital wallets are the first points of entry into the digital economy. We are actively exploring how Visa Direct can enable our clients to have the option to push funds over blockchain networks in approved stablecoins to next generation wallets.
Helping clients understand and leverage blockchains
Blockchain technology has been around for less than a decade. And with each new project, each new blockchain, and each new use case, it grows in complexity. Banks and financial institutions want to understand how best to serve their clients in this space, or risk seeing them get those services elsewhere. Merchants are exploring NFTs. And central banks are researching CBDCs.
To help best serve our clients and partners, we’re doing deep research into the space, exploring which blockchains have the potential to enhance payment rails, piloting real-world ways to help reduce friction for end users, and getting a clear sense of what consumers want from this quickly evolving tech. We share our learnings often, and put our in-house expertise to work helping clients navigate the ins and outs of blockchain technology through Visa Consulting and Analytics
Have a blockchain strategy
While time will tell what role blockchain networks play in our world 10 years from now, if the fate of the early internet’s critics can teach financial institutions anything, it’s that they would do well to have a strategy either way.
- Visa Direct Wallet capability is under development and not yet commercially available.
- Actual fund availability depends on receiving financial institution and region.
- Use Case Disclosure: Use cases are for illustrative purposes only. Program providers are responsible for their programs and compliance with any applicable laws and regulations.