Visa has recently announced the expansion of its stablecoin settlement services to the Solana blockchain with Circle’s USDC stablecoin. This strategic initiative was announced on the 5th of September 2023.
A statement released by Visa details Visa’s progression in adopting USDC, starting with pilot programs in collaboration with Crypto.com and extending to full-scale integrations with merchant payment processors Worldpay and Nuvei.These pilots will enable the settlement of fiat-denominated payments authorized over VisaNet, Visa’s payment authorization network.
Visa’s Adoption of Stablecoin Settlements
Visa’s foray into stablecoin settlements began in 2021 with a pilot program in collaboration with Crypto.com. The successful pilot used USDC, a popular stablecoin issued on the Ethereum blockchain, for cross-border settlements. By leveraging the advantages of stablecoins like USDC and blockchain networks like Ethereum and now Solana, Visa aims to enhance the speed and efficiency of cross-border settlement processes.
The integration of USDC issued on Ethereum and Solana into Visa’s ecosystem means the former can leverage Visa’s treasury and settlement systems to bridge traditional finance with Web3. Visa’s head of crypto, Cuy Sheffield, added that tapping into stablecoins USDC and blockchains like Ethereum and Solana helps improve the speed of cross-border settlement.
Is Solana The Best Choice For Visa’s Program?
Solana, known for its high-performance capabilities, offers faster settlement times and lower transaction costs than traditional payment rails. With block times of 400 milliseconds and an average of 400 transactions per second (TPS).
Solana provides the scalability and throughput required for Visa’s global payment network. Subsequently, by integrating Solana into its infrastructure, Visa aims to reduce merchant settlement times and improve overall transaction efficiency.
Integrating Solana and Ethereum into Visa’s ecosystem allows seamless integration with traditional finance. Moreover, it allows the facilitation of secure and reliable cross-border payments.
Additionally, using stablecoins reduces settlement times and costs, benefiting both merchant acquirers and the merchants they serve.
The Impact on Merchant Acquirers and Merchants
Visa’s expansion of stablecoin settlement capabilities directly impacts merchant acquirers and the merchants they serve. With the ability to settle payments in USDC, merchant acquirers can offer merchants more choices for receiving funds.
Jim Johnson, President of Worldpay Merchant Solutions, added: ‘Visa’s USDC settlement capability enables Worldpay to bring more of our treasury operations in-house and allows us to offer merchants more choices for receiving funds. Diversifying funding options and increasing flexibility is critical to serving the changing needs of global merchants in today’s rapidly evolving commerce landscape.’
The integration with Visa is a monumental win for Solana, elevating its status within the crypto community and beyond. Solana’s high throughput and low latency make it an ideal candidate for handling large-scale financial transactions.