Visa Rolls Out Crypto Advisory Service

Payments giant Visa has launched its Global Crypto Advisory Practice to help financial institutions dipping their toe into the cryptocurrency pool.

Visa said the arrival of the new service comes, as the case for crypto is getting stronger for financial institutions, banks and other organisations.

It cited its own global study, entitled “the Crypto Phenomenon: Consumer Attitudes & Usage” released this week, which showed that awareness of crypto among financial decision makers surveyed in the UK is high at 92 percent.

Crypto advice service

Visa’s Global Crypto Advisory Practice will be an offering within the Visa Consulting and Analytics (VCA).

It is designed to help clients and partners advance their own crypto journey.

According to Visa, there are currently financial institutions eager to attract or retain customers with a crypto offering.

And there are retailers looking to delve into NFTs.

Meanwhile central banks, which have been notoriously reticent, are exploring digital currencies.

The Bank of England for example in September 2014 warned that Bitcoin could pose a threat to financial stability in the UK should it see widespread adoption.

In May this year, the governor of the Bank of England (BoE) Andrew Bailey, who is known for his reluctant stance on decentralised money, said cryptocurrencies “have no intrinsic value” and people should only buy cryptocurrencies if they are prepared to lose all their money.

He then one step further and reiterated his long-standing concern when he said cryptocurrencies and similar assets were a danger to the public.

But Visa this week has said that understanding the crypto ecosystem is a vital first step.

Through its work with more than 60 crypto platforms, “Visa’s global network of consultants and product experts have deep expertise to help financial institutions evaluate the crypto opportunity, develop concrete strategies, and pilot new user experiences and innovations like crypto rewards programs and CBDC-integrated consumer wallets.”

“We’ve seen a material shift in our clients’ mindset in the last year, from a desire to explore and experiment with crypto, to actually building a strategy and product roadmap.” said Claudio Di Nella, Head, Visa Consulting & Analytics, Europe.

Changing attitudes?

Visa’s decision to offering an advisory service comes after a new report from Visa shows significant awareness and adoption among consumers globally.

Its study, “The Crypto Phenomenon: Consumer Attitudes & Usage,” found that approximately one quarter of crypto-aware UK respondents have directly engaged with crypto – either as an investment vehicle or as a medium of exchange.

“Crypto represents a technological shift for money movement and digital ownership,” said Antony Cahill, Deputy CEO, Visa, Europe. “As consumers change their approach to investing, where they bank, and their views on the future of money, every financial institution will need a crypto strategy.”

The Visa report surveyed more than 6,000 financial decision makers across eight markets (Argentina, Australia, Brazil, Germany, Hong Kong, South Africa, the UK and US), and uncovered the following insights:

• 41 percent of UK adults surveyed have either used cryptocurrencies or view them positively
• 14 percent surveyed are curious and taking steps to learn more
• Awareness of crypto is high at 92 percent in the UK (94 percent globally) among survey participants with discretion over their household finances.
• A significant segment is using or investing with crypto. Approximately one quarter (27 percent) of crypto-aware adults surveyed in the UK already own or use cryptocurrency, and the majority of that group (58 percent) say their use has increased in the past year.
• Engagement is higher in emerging markets. 37 percent of crypto-aware adults surveyed in emerging markets use or own crypto compared to 29 percent in developed markets.

The study also found that key motivators in the UK include wealth-building and belief in crypto as the future of financial services.

The biggest drivers of owning and using cryptocurrency among active UK crypto owners include to take part in the “financial way of the future” (33 percent) and to build wealth (28 percent) – both forward looking motivators. Meanwhile 31 percent also see crypto as a global currency which allows them to send money abroad without conversion fees.

And the study also found that crypto-linked cards and crypto rewards are attractive.

Among current crypto owners in the UK, 78 percent surveyed express interest in crypto-linked cards, which allow you to convert and spend crypto at the retailers where you shop in the same way you can use a debit or credit card. 85 percent are interested in crypto rewards, which allow you to earn crypto as a reward for your card spending.

Crypto services

Visa meanwhile is also set to launch services this year that will allow buying, selling and custody of digital currency through its banking partners, Reuters reported.

It pointed out that there are also a number of Visa card programs that let users earn bitcoin on purchases and the network will also allow its client the use of USD Coin, a stablecoin cryptocurrency whose value is pegged directly to the US dollar, to settle transactions on its payment network.

However, for cryptocurrencies such as bitcoin to be used as a medium of exchange, price stability is needed, Visa’s chief financial officer, Vasant Prabhu, told Reuters.

“If the price is going to fluctuate from $60,000 to $50,000 in a few hours, it’s a very difficult thing for a merchant to accept (bitcoin) as a currency,” Prabhu said.

“I don’t know if cryptocurrencies like bitcoin will ever be a medium of exchange. Stablecoins will,” he said, adding that Visa would facilitate such transactions when the time was right.

Expert reaction

News of Visa offering a crypto advice service drew comment from industry experts, with Lewis Pinner, senior director of enterprise and globals at NetApp, saying the move highlighted the need for trust and regulation when it comes to crypto.

“The crypto sector is booming, but despite key players – like VISA – becoming more involved, it remains unregulated in the UK,” noted Pinner. “This is perhaps a sign of things to come as more established players try to make their mark and bridge the gap to more agile fintechs.”

“For this to happen, there must be trust between the industry and consumers,” said Pinner.

“The industry must ensure there is the correct security and use data-driven strategies to manages their processes automate payments, manage fraud and mitigate risk, while also guaranteeing the correct regulations are in place,” he said. “These are especially important when dealing with new technologies and only then will consumers (re)gain the full confidence of the FS sector.”