Not long after we saw Elon Musk's X (ex-Twitter) make moves into payments, Visa has successfully completed its acquisition of Pismo, a global cloud-native issuer processing and core banking platform, for $1 billion in cash. Earlier reports said Visa was competing with at least one other firm to acquire Pismo.
The collaboration aims to offer clients core banking and card-issuer processing capabilities across all product types through cloud-native APIs. The Pismo platform will enhance Visa's ability to provide support and connectivity for emerging payment methods and real-time payments networks.
“Core banking and issuer processor capabilities are key offerings for many of our financial institution and FinTech partners’ clients,” Jack Forestell, chief product and strategy officer at Visa, said in the release. “With the combination of Visa and Pismo, we can now broaden these offerings and better serve the ecosystem.”
Expanding Offers and Availability
The acquisition enables Visa to broaden its offerings and better serve the financial institution and FinTech ecosystem, allowing the launch of innovative payments and banking products on a single cloud-native platform. This also expands the geographic footprint of Pismo, which had operations in Latin America, Asia-Pacific, and Europe.
So, what can we expect from this partnership? While details are scarce, Visa's acquisition of Pismo enables them to expand their services into core banking, an industry that has been dominated by established companies for decades. It remains to be seen what exactly Visa will be offering; but, with its reputation and resources, Visa could disrupt the marketplace.
The financial services industry, specifically payments and banking, has seen major companies try to get their slice of the pie. As noted above, X has started its foray into the payments industry. We saw Apple take a leap into banking, offering a high-yield savings account. We also saw Walmart take a step into checking by offering accounts to its employees and a small percentage of online customers for beta testing.
Competition is Fierce
With new competition from Visa, core processors are in unfamiliar territory -- in that they never had a new entrant in the industry with Visa's reputation and resources.
However, current core processors do have the advantage of being established players, with strong relationships with their clients. It will be important to maintain those relationships and ensure their users are satisfied with the services provided.
In addition, it's vital to ensure that their core platforms are integrated with the latest technologies -- AI and machine learning, for instance -- to provide new solutions and enhance legacy payments such as checks. This enables their clients to take advantage of what is new, while also automating their current payment channels.