In a major step to modernize cross-border money movement, Visa has expanded its stablecoin settlement capabilities. The payments giant is now working with merchant acquirers Worldpay and Nuvei and has integrated the Solana blockchain to enhance speed and efficiency.
This expansion builds on previous pilots with issuers, where millions of USDC stablecoins were moved across blockchain networks to settle transactions. The goal is to provide faster, more cost-effective cross-border settlement options for financial institutions and their merchant clients.
How Visa’s Settlement System Works
When a consumer uses a Visa card at any merchant worldwide, the payment is authorized almost instantly. Behind the scenes, however, funds must move from the customer’s bank (the issuer) to the merchant’s bank (the acquirer). Visa’s treasury and settlement systems facilitate this process, ensuring accurate and timely transfers across nearly 15,000 financial institutions and over 25 currencies.
Traditional settlement often involves multi-day processes and costly international wire transfers. By incorporating blockchain technology and stablecoins, Visa aims to streamline these operations, reducing both time and expenses.
The Role of Stablecoins and Blockchain
Stablecoins like Circle’s USDC offer the stability of fiat currencies with the efficiency of digital assets. They can be transferred quickly and securely on blockchain networks, making them ideal for cross-border settlements.
Visa has been actively testing the use of USDC through its partnerships with crypto-native companies and traditional financial institutions. The integration of high-performance blockchains like Solana and Ethereum allows for near-instant settlement with lower transaction costs.
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Benefits of Using USDC for Settlement
- Speed: Transactions that once took days can now be completed in near real-time.
- Cost Reduction: Eliminates many of the fees associated with traditional wire transfers.
- Transparency: Blockchain technology provides a clear, immutable record of each transaction.
- Flexibility: Supports multiple currencies and reduces friction in international trades.
Expansion to Acquirers: Worldpay and Nuvei
After successfully testing stablecoin settlements with issuers, Visa is now extending these capabilities to acquirers. Worldpay and Nuvei, two leading global merchant acquirers, are part of this new pilot program.
This move is particularly significant for merchants involved in the digital economy, such as crypto on-ramp services, gaming platforms, and NFT marketplaces. Many of these businesses prefer receiving stablecoins over traditional fiat currencies due to faster access to funds and reduced conversion costs.
Through Visa’s Circle account, settlement payouts can now be made in USDC to Worldpay and Nuvei, who can then forward these payments to their end merchants.
Why Solana Was Added
To meet growing client demand for high-performance blockchain solutions, Visa added support for Solana. Known for its speed and scalability, Solana processes transactions in 400-millisecond block times and regularly handles over 2,000 transactions per second during peak periods.
This makes Visa one of the first major payment companies to use Solana for large-scale settlement operations between clients. The blockchain’s efficiency supports Visa’s goal of offering faster, cheaper settlement options.
Industry Response and Future Outlook
Industry leaders have welcomed Visa’s continued innovation in the digital payments space. Representatives from Circle, Worldpay, and Nuvei emphasized the importance of stablecoins and blockchain technology in shaping the future of global commerce.
Visa’s commitment to integrating digital currency solutions highlights a broader trend toward modernizing financial infrastructure. As more businesses and financial institutions adopt digital assets, the efficiency and inclusivity of global money movement are expected to improve significantly.
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Frequently Asked Questions
What is stablecoin settlement?
Stablecoin settlement refers to the use of digital currencies pegged to stable assets, like the US dollar, to process and finalize transactions. This method leverages blockchain technology to enable faster, cheaper cross-border transfers compared to traditional banking systems.
How does Visa use USDC?
Visa uses USDC (USD Coin) to move funds between issuers and acquirers during the settlement process. By transferring USDC over blockchains like Ethereum and Solana, Visa reduces the time and cost associated with conventional international wire transfers.
Why did Visa choose Solana?
Visa integrated Solana due to its high transaction speed, low costs, and scalability. Solana’s ability to process thousands of transactions per second makes it suitable for large-scale settlement operations requiring efficiency and reliability.
Which companies are involved in Visa’s pilot?
Visa is working with merchant acquirers Worldpay and Nuvei in its latest stablecoin settlement pilot. These companies help route digital currency payments to merchants worldwide, particularly those in the crypto and digital goods sectors.
Are stablecoin settlements secure?
Yes, transactions using stablecoins on blockchain networks are cryptographically secured and recorded on a decentralized ledger. This ensures transparency and reduces the risk of fraud or errors common in traditional settlement processes.
Will this impact everyday Visa users?
Most cardholders will not notice a direct change, as the enhancement affects backend settlement processes. However, the improvements may lead to lower costs for merchants and potentially better exchange rates for international transactions over time.