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M. Tad Tilahun

April 2021

Senior Vice President, Head of Product & Solution Delivery, CEMEA, Visa.


4 - 5 Minutes

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.

The digital payments opportunity

We have been working to identify, prioritize and enable new and improved money flows beyond consumer-to-business transactions for a number of years. These new flows account for $185 trillion in annual global value exchange.2 Money-transfer behaviours are changing across CEMEA, but the picture is far from homogenous. Each country, business sector and customer segment is evolving in different ways and at different speeds, driven by different economic and social circumstances, but importantly offering clear growth potential.

In CEMEA, new flows of money movement represent an unprecedented opportunity for the entire payments ecosystem. We can capitalize on this opportunity by offering different payment products (credit, debit prepaid) and ensure a variety of payment channels and solutions are readily available; from smartphone apps to direct bank transfers.

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.

Business to Business - Businesses need more efficient payments and faster settlements, expert advice, and relevant reporting. They also need streamlined procurement, visibility into spending, predictable cross-border transactions, and alternative payment methods. Digitization across B2B is helping us to reimagine how commerce happens, both in the office and at home, locally or cross-border. It is fostering connectivity and partnership across the full B2B payments ecosystem in a way we have not seen before. Following the pandemic, the B2B segment of the new payment flows environment is estimated to be worth $9 trillion , the largest in CEMEA. $2 trillion of this $9 trillion4 opportunity is focused on executing our Visa B2B Connect solution which is an innovative non-card based payment network delivering B2B cross-border payments that are predictable, secure and cost-effective.

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.

Business to Consumer - The gig economy is quickly shifting shape to deliver services most relevant today and creating entirely new sellers and service providers. As technology evolves to meet demand, influenced by ongoing changing patterns of payment behaviour, consumers are expecting better experiences at lower cost and increased efficiency.

Individuals want seamless, touchless, and hygienic money transmission between friends and family as well as with shops and other service providers. They also want to pay bills and keep track of personal budgeting on their smart phones, to have immediate access to cash where required, and send electronic money to others with a couple of taps on a touchscreen. All this is achievable through digital payment.

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

Progress through partnerships

Visa, working with partners across CEMEA, is central to developing solutions to capture this considerable growth potential. The aim is simplification and efficiency without compromising on security and legitimacy. For example, Visa is supporting new services in the person-to-person sphere through Visa Direct, working in Russia with Best2Pay who is one of the leading provider for cashless tips in Russia and supporting innovative products for new-age customers such as gaming audience of gaming platform FaceIT or users of Cyberpunk. Scan-to-pay capabilities – using QR codes – are in use with notable steps being taken in Egypt and Pakistan. In Ghana, a partnership with Expresspay, the eCommerce marketplace and a payment gateway provider, has led to greater use of wallet top-ups reporting growth of 168% year on year.

Secure, immediate money movement is critical to keeping families and friends financially connected and the economy running. The pandemic is just one point on the journey to new ways to move money. The opportunity for the banking industry is clear. Those ready to adapt will be set apart for years to come. Visa is focused on helping our clients navigate these uncharted waters.

1 “International Migration 2019 Report”, United Nations, Department of Economic and Social Affairs, 2019: https://www.un.org/en/development/desa/population/migration/publications/migrationreport/docs/InternationalMigration2019_Report.pdf

2Visa Annual Report 2020: https://s26.q4cdn.com/639886258/files/doc_downloads/Visa-Inc.-Fiscal-2020-Annual-Report.pdf

3Visa Annual Report 2020: https://s26.q4cdn.com/639886258/files/doc_downloads/Visa-Inc.-Fiscal-2020-Annual-Report.pdf

4McKinsey Global Payments Map; Visa analysis

5Visa Data: https://www.visa.co.uk/run-your-business/visa-direct.html

6Inland Revenue Service, More Economic Impact Payments set for disbursement in coming days; taxpayers should watch mail for paper checks, debit cards, 2021: https://www.irs.gov/newsroom/more-economic-impact-payments-set-for-disbursement-in-coming-days-taxpayers-should-watch-mail-for-paper-checks-debit-cards

7Visa, A COVID silver lining in Latin America: digital payments surge, 2020: https://usa.visa.com/visa-everywhere/blog/bdp/2020/10/09/a-covid-silver-1602273015995.html

8ITWeb Africa, Visa partners with Egyptian Bank and Post Office for financial inclusion, 2017: https://itweb.africa/content/xA9POvNZadwvo4J8

9The Citizen, The new Sassa card, 2018: https://citizen.co.za/news/south-africa/1947537/the-new-sassa-card/

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