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Solana Collaborates with Visa to Integrate USDC Payments

Solana and Visa Enhance Payment Options with USDC Integration

Solana has recently enhanced its blockchain capabilities by supporting Visa’s strategic expansion into stablecoin settlements, specifically focusing on the inclusion of USD Coin (USDC).

Solana with VISA logo infront of map

Following reports that Shopify has incorporated Solana Pay into its range of payment solutions, Visa has introduced support for USD Coin (USDC) payments on the Solana blockchain as part of its expanding stablecoin services.

Visa has partnered with merchant acquirers Worldpay and Nuvei, allowing them to settle transactions with USD Coin (USDC) rather than traditional fiat currencies. Settlement is the process where the issuing bank transfers funds from the cardholder’s account through a payment gateway to the bank handling card payments for the merchant.

USDC is a stablecoin pegged to the U.S. dollar, with Circle holding sufficient dollar reserves to back each circulating USDC token. Stablecoins like USDC play a crucial role in the crypto market, allowing traders to exit transactions when they lack immediate access to fiat currencies in traditional banks.

Cuy Sheffield, Visa’s Head of Crypto, explained that by utilizing stablecoins like USDC and global blockchain networks such as Solana and Ethereum, they aim to enhance cross-border settlement speed and provide clients with a contemporary option for seamless fund transfers from Visa’s treasury.

“By leveraging stablecoins like USDC and global blockchain networks like Solana and Ethereum, we’re helping to improve the speed of cross-border settlement and providing a modern option for our clients to easily send or receive funds from Visa’s treasury.”

In 2021, Visa initiated testing with USDC in collaboration with Crypto.com, focusing on the utilization of stablecoin settlement from the issuance perspective. This pilot project relied on Ethereum-based USDC to receive payments from Crypto.com for cross-border transactions within its Australian card program.

Previously, settling cross-border purchases made with Crypto.com Visa cards involved lengthy currency conversion procedures and incurred wire transfer fees. Consequently, the crypto exchange has adopted USDC for settling obligations related to its Australian Visa card transactions.

Furthermore, Crypto.com utilizes a Visa treasury-managed account in partnership with USD Coin issuer Circle to facilitate cross-border USDC transfers on the Ethereum blockchain. This approach reportedly streamlines international wire transfers, reducing their duration and complexity.

Circle’s co-founder and CEO, Jeremy Allaire, emphasized that this partnership represents a significant blockchain innovation with the potential to reshape the landscape of payments and commerce.

“Circle built USDC to provide a functional digital dollar that could move at the speed of the internet to facilitate secure, reliable payments.”

The inclusion of USDC in Visa’s system enables the company to transmit funds to USDC acquirers, such as Worldpay and Nuvei, potentially reducing settlement durations for the merchants utilizing their services.

Subsequently, these payment processors can direct USDC payments to the businesses they support, effectively bridging Visa’s conventional fiat network with stablecoins and the broader cryptocurrency domain they serve.

Jim Johnson, President of Worldpay’s merchant solutions, expressed that Visa’s USDC settlement capability opens up new avenues for merchants to receive funds and enhances their capacity to oversee treasury operations more effectively.

By incorporating the USDC settlement system, the current eight-day credit card transaction settlement period for merchants may be significantly reduced to just four days. Furthermore, it holds the promise of reducing currency conversion fees by approximately 20 to 30 basis points.

Worldpay and Nuvei, with a combined customer base of 7,325 and 101 enterprises, respectively, are now in a position to extend stablecoin payment acceptance to their diverse array of merchant clients, including NFT marketplaces and fiat on-ramp service providers.

Jim Johnson, the President of Worldpay Merchant Solutions, remarked, “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.”

This achievement marks another significant step for conventional financial organizations harnessing blockchain technology. Research firm Bernstein has suggested that the stablecoin market has the potential to expand to $2.8 trillion within the next five years as global financial and consumer platforms increasingly embrace these tokens on public blockchains for facilitating value exchange on their platforms.

 

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