Let’s learn about Visa’s value added services

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Beyond facilitating payments, Visa has been steadily expanding into value-added services (VAS) – a broad portfolio of products and services that complement the core payment network. Visa’s Value-Added Services include areas like fraud prevention tools, cybersecurity services, consulting and analytics, loyalty and marketing solutions, processing infrastructure, and more. The goal of VAS is twofold: deepen Visa’s partnerships with clients (by solving more of their needs) and generate new revenue streams beyond transaction fees At the last Investor Day in 2021, Visa committed to building out VAS aggressively, and the results are evident. Visa now offers 200+ value-added solutions serving issuers, acquirers, merchants, fintechs, and partners across the globe VAS has grown at a ~20% CAGR since 2021, with revenue rising from around $5.0 billion in FY2021 to $8.8 billion in FY2024 At $8.8B, VAS represents 24% of Visa’s total revenues (up from 22% three years prior) – a meaningful share that is expected to increase as these services continue to scale. Importantly, VAS revenue is well-diversified globally (nearly 60% of VAS revenue now comes from outside the U.S.), reflecting Visa’s success in rolling out these offerings in many markets.

A key element of Visa’s VAS expansion is the Visa-as-a-Service strategy, which involves unbundling Visa’s core capabilities and selling them in new forms to new customer segments In practice, this means Visa is repackaging technologies that were once used internally or only for card transactions and offering them as standalone “network services” that can run over any platform. A prime example is Visa Protect for A2A, essentially a fraud prevention service for account-to-account payments. Visa took the sophisticated fraud detection capabilities of VisaNet, componentized them into a standalone service, and adapted them to work in an ACH/RTP environment Now Visa sells this to banks and real-time payment networks globally to help make account-to-account payments safer Similarly, Visa has unbundled its brand and dispute-resolution rules to create Visa A2A, a new service in the UK that runs over existing bank account infrastructure. Visa A2A brings Visa’s brand assurance, consumer protections, technology, and risk management to account-based transfers (such as peer-to-peer payments), effectively enabling bank transfer payments that carry a Visa-like experience and trust Another offering, Risk-as-a-Service, allows issuers and acquirers to tap into Visa’s entire risk management platform for their non-card businesses – Visa extracted its internal risk systems and now provides end-to-end fraud and cyber risk management to clients as a service.