The Visa Fintech Initiative: Sri Lanka, a collaboration between Visa and Hatch aimed at supporting Sri Lankan fintech startups to supercharge their offerings through the company’s myriad of products and services. To that end, the program hosted a series of webinars open to all fintech entrepreneurs in the island nation. The final webinar in the series focused on introducing these value-added services from its toolbox to local entrepreneurs to help grow their fintech services. The session featured panelists from Visa India and South Asia, including Associate Director – Product Value Added Services at Visa, Dhruv Jauhar, and Product Manager at Visa, Sneha Gupta.
Visa Cloud Connect
The benefits of a cloud-based operation model are numerous, which is why several organizations have embraced it over the past decade. For fintech companies, it offers a pathway to reduce their overheads while having the infrastructure in place for global expansion. Recognizing this trend, Visa Cloud Connect is a platform that allows fintechs to securely connect to VisaNet with their existing cloud infrastructure for more efficient acceptance, authorization, and clearing of card transactions.
The platform offers flexibility, market access, and many powerful features. For example, fintech startups seeking to expand internationally can utilise the company’s platforms to process all major credit and debit payments without exception. In addition, as it automatically routes all transactions to multiple applications, the process is streamlined and secure with industry-leading firewalls, encryption, and access detection. All this, with the highest level of processing performance across all applications and endpoints, makes Visa’s cloud services an attractive offering for fintechs.
Visa Cardholder Transaction Score (VCTS)
Visa offers predictive and descriptive insights to help financial institutions make better credit decisions. It does so by using a suite of predictive models, which analyse an individual’s transactions after they’ve given the authorisation to do so. Afterward, a score of their creditworthiness is generated that’s valid up to a future period of around 12 months. Fintechs can access this VCTS score and its insights through an application programming interface (API).
The VCTS scores offer a range of benefits for fintech startups. Notably, they improve market efficiency by helping identify the best products for each customer. Further, the scores help enhance the underwriting process with better approval rates. For customers new to banking and lack credit or have a limited credit history, these scores help financial institutions make better decisions during the initial credit line assignments. Finally, with a better risk evaluation option, the company offers better customer management tools for fintechs. As a result, they’re better able to identify low-risk customers and make offers such as credit line increases.
Visa Stop Payment Service (VSPS)
This product tackles specific customer complaints where they had requested a monthly subscription to be canceled, but it’s debited regardless. In such instances, VSPS declines all unwanted recurring subscriptions on their Visa card. It does so by creating stop instructions according to the specifications of the cardholder, including stop instructions with a future start date. Such instructions are made either by the fintech, using the Visa online portal when a customer contacts them, or by the customers via banking apps that have integrated the VSPS API. Any stop instruction from VSPS is in effect immediately and can significantly help reduce chargebacks and customer complaints.
Visa Advanced Authorizations (VAA) and Visa Risk Manager (VRM)
The rise of eCommerce also comes with the risks of fraudulent transactions, which are growing in complexity with digitisation. If they wish to ensure a secure and frictionless payment environment, fintechs need advanced capabilities to tackle fraud. The company offers fintechs advanced risk management and fraud prevention tools to create a better customer experience. Namely, VAA and VRM are cloud-based platforms that work together to give fintechs powerful authorization decision-making capabilities.
VAA evaluates nearly 100% of authorizations on global VisaNet and derives a two-digit risk score. This score indicates the probability of a transaction being fraudulent. The VAA’s algorithm is updated periodically to ensure its effectiveness in the face of evolving threats. It has proven to be a valuable tool and annually prevents an estimated $25 billion in fraud.
VRM is a web-based portal that leverages VAA to allow fintechs to decline high-risk transactions. It will enable fintechs to develop and refine their rules for payment authorization and offline case management. Creating these rules is simple as its highly intuitive user interface allows fintechs to select from multiple parameters and build sophisticated fraud management rules. Further, it can be integrated as an API, allowing fintechs to unlock new use cases, such as notifying customers of possible fraudulent transactions and having them confirm or deny these via a mobile app.
Visa Risk-based Auto Dispute (VRAD)
Built atop the VRM, the VRAD is another solution by Visa that allows fintechs to optimize and automate fraud-dispute submissions with minimal inconvenience to customers. VRAD enables operating teams that monitor high-risk transactions to flag potentially fraudulent transactions and report them to the company instantly. Thus, saving the time and effort that would have otherwise been taken to submit and manually resolve a dispute. Here too, the company has made VRAD’s capabilities available as an API, which can connect with existing internal risk management systems or customer relationship management (CRM) tools utilized by the fintech.
Visa Analytics Platform (VAP)
The VAP is a self-service web-based analytics platform by Visa that provides access to anonymised data to issuers and acquirers for analysis. From a customer’s early spending behaviors to fraud detection, the VAP offers fintechs valuable insights across multiple categories. A notable feature it provides is peer benchmarking, allowing fintechs to identify and evaluate business opportunities. Given Visa’s widespread use, the benchmarks offered by the VAP are an invaluable tool for any fintech startup.
Smarter Stand-In Processing (Smarter STIP)
Smarter STIP by Visa uses deep learning to help financial institutions increase transaction authorizations during outages. An example of such instances is when during a sale by an eCommerce merchant, their host crashes due to heavy traffic. In such cases, the system utilises AI to generate an informed decision to approve or decline transactions on behalf of issuers to provide consumers with a frictionless Visa payment experience. Thus, it ensures that issuers such as the merchant do not miss out on transactions when their host is ‘down’ while ensuring the company will not grant blanket approval to every transaction.
With its services, Visa is supercharging fintechs
Visa’s value-added services are designed to help fintech startups in several ways. These services can provide financial institutions and fintech startups with the tools and resources they need to build and grow their businesses. At the Visa Fintech Initiative: Sri Lanka, we saw how these services could empower startups to offer frictionless payments, utilize improved data analytics, and have strong fraud prevention measures. Overall, Visa’s value-added services can provide fintech startups with the tools and resources they need to build and grow their businesses and help them better serve their customers.