The digitization of money movement is critical to recovery

The COVID-19 pandemic has revolutionized Central and Eastern Europe, Middle East and Africa’s (CEMEA) payments ecosystem, with five years of digital transition witnessed in 2020 alone. This massive digital leap forward applies to all forms of money movement – not just the traditional consumer purchase transactions we often think about in our payment ecosystem. In CEMEA, we are seeing a number of new consumers, businesses and government needs emerging for moving money securely and seamlessly.

What the pandemic has highlighted is that cash and checks are no longer the preferred payment forms for many. For instance, more workers now seek to access their earned wages between paychecks, in lieu of waiting for payment on the traditional two-week cycle. The same holds true for cross-border remittances, such as international money transfers made by migrant workers to send money to their home countries. Over 250 million workers send remittances, and the United Nations believes one in nine people globally are supported by them.¹ These monetary lifelines sent by these migrant workers are hugely important for millions of families around the world therefore, crucial that money can be swiftly and quickly transferred.

Four big new flows

Over the past year, we have seen significant growth from person-to-person transactions (P2P), business-to-consumer transactions (B2C), business-to-business transactions for both large and small businesses (B2B and B2b) and government-to-consumer payments (G2C). For example, during fiscal year 2020, P2P transactions saw a 75 percent increase globally as more people exchanged funds virtually.³

In response to this growing demand, Visa has expanded its Visa Direct platform and launched Visa Direct Payouts; a single point of connection to push payments for domestic payouts and cross border remittances. This new processing capability enables fintech to target some of the more lucrative segments of the market, while banks and money transfer operators can capitalize on reduced complexity and universal enablement of cross-border remittances. Visa Direct Payouts supports real-time domestic and cross-border person-to-person, business-to-small business and business-to-consumer use cases, such as insurance disbursements, marketplace seller payouts - providing workers faster access to their earnings, as well as remittances.

Person to Person - We are seeing an increasing demand for P2P. Families who rely on remittances from loved ones are unable to walk up to the usual counters to send or receive cash. Small entrepreneurs are looking to provide their services remotely and are turning to P2P platforms to collect funds. We have introduced new capabilities such as send-to-contacts in Russia through our Visa Direct solution. It reaches 200 countries and territories and links 99% of bank accounts in 88 countries while facilitating domestic and cross border payments in over 160 currencies⁵. We’re also creating new use-cases, such as in South Africa with prominent retailers such as Pick n Pay where instant cash deposits are made into bank accounts of debit card customers.

Government to Citizen - Governments around the globe have shown how welfare support can be distributed by card. In the US, the Inland Revenue Service⁶ is using cards to distribute Economic Impact Payments to millions of Americans struggling with the medical and economic effects of COVID-19. The Dominican Republic sent relief funds to 770,000 families using virtual payment credentials in partnership with Visa and issuer bank Banreservas⁷. In CEMEA, Visa has been collaborating with the South African Post Office and the Egyptian National Post organization (ENPO) to deliver emergency aid through contactless-enabled prepaid and debit cards benefiting more than 10 million households.^8,9