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Virtual card transactions to increase 388% by 2028 - Industry roundup: 4 October

Virtual card transactions to increase 388% by 2028 thanks to API platforms 

A study from Juniper Research has found that the total volume of virtual card transactions will reach 175 billion by 2028; rising from 36 billion in 2023. Growing by a significant 388%, the market will be accelerated by adopting API (Application Programming Interface) virtual card issuing platforms.

A virtual card uses a randomly generated and generally temporary card number linked to a payment account, which is used to process payments instead of genuine payment details. Virtual cards provide a secure and fast way to distribute funds while effectively managing spending limits.

The report identified easy-to-use API platforms, which allow businesses to establish a virtual card programme that they can deploy quickly and scale alongside their needs, as a critical development driving virtual card growth.

Another key success factor identified by the report was the readiness of a virtual card platform to integrate within an organisation’s software and established infrastructure quickly. For example, procurement-focused virtual cards must integrate with accounts payable software to automate renewals, log payments and generate digital receipts. Virtual card vendors must, therefore, integrate with a wide range of third-party software systems across key verticals of interest to maximise their success.

“By offering Banking-as-a-Service APIs featuring virtual cards, vendors such as Stripe empower businesses to launch their own virtual card programmes,” commented Daniel Bedford, author of the report and Research Analyst, Juniper Research. “We recommend that virtual card vendors focus on API-enabled models, to maximise the flexibility virtual cards provide."


Australia extends rate hike pause for another meeting

At its meeting on 3rd October, the Reserve Bank of Australia opted to leave the cash rate target unchanged at 4.1%, and the interest rate paid on Exchange Settlement balances unchanged at 4%.

The first monetary policy meeting of the RBA’s new governor, Michele Bullock, saw the central bank stick to a cash rate of 4.1% for the fourth consecutive month. In a statement, Bullock noted that “The higher interest rates are working to establish a more sustainable balance between supply and demand in the economy and will continue to do so.”

The RBA’s central forecast is for CPI inflation to continue declining but not back to within the 2-3% target range until late 2025.

“Some further tightening of monetary policy may be required to ensure that inflation returns to target in a reasonable timeframe, but that will continue to depend upon the data and the evolving assessment of risks,” added Bullock. “In making its decisions, the board will continue to pay close attention to developments in the global economy, trends in household spending, and the outlook for inflation and the labour market.”


MonetaGo and Tesselate to boost trade finance fraud detection

Financial technology solutions provider MonetaGo has partnered with financial services digital transformation firm Tesselate. MonetaGo’s Secure Financing system will integrate with Teselate’s hive.t, the marketplace that aims to promote interoperability, providing financial institutions with the ability to detect and prevent duplicate financing fraud.

MonetaGo’s Secure Financing system combines document fingerprinting and document data authentication to enable banks, non-bank financial institutions, fintechs and trade finance funds to verify documents such as invoices, bills of lading, warehouse receipts and purchase orders before deciding to finance them. The solution hashes relevant information from documents to create a unique fingerprint, which is compared against MonetaGo’s global registry to identify if the same document has been used in prior financing. 

The Secure Financing system also provides financiers with an additional layer of security against potential fraud attempts by comparing documents against trusted data sources to identify falsification or tampering.


Visa launches US$100m generative AI ventures initiative

Visa has announced a US$100m generative AI ventures initiative to invest in the next generation of companies focused on developing generative AI technologies and applications that will impact the future of commerce and payments.

Having used AI in payments since 1993, Visa says it considers this initiative an extension in using AI to drive innovation in payments, create value for partners and clients, and enable and empower global commerce. Generative AI is an emerging subset of AI that is built on large language models (LLMs) to develop artificial general intelligence capable of generating text, images or other content from large sets of existing data when given prompts. 

Visa Ventures, Visa's global corporate investment arm, will lead this initiative. Visa Ventures has been investing in and partnering with companies driving innovation in payments and commerce since 2007. 

“With generative AI’s potential to be one of the most transformative technologies of our time, we are excited to expand our focus to invest in some of the most innovative and disruptive venture-backed startups building across generative AI, commerce and payments,” said David Rolf, Head of Visa Ventures.


UBS goes live on Broadridge’s DLT-enabled repo solution

Broadridge Financial Solutions has announced that UBS successfully went live on its sponsored repo solution built on the DLT-enabled Distributed Ledger Repo (DLR) platform. 

Broadridge says that the sponsored repo solution marks the launch of the next phase in the rollout of its DLR platform. As the network expands across the global repo community, the technology firm says this is a major step forward to providing clients with settlement cost savings, process simplification, scalability, and reduction of operational risks via DLT and smart contracts. The global expansion of the DLR platform across both sell-side and buy-side firms should enable a network effect of increased benefits and additional transaction types.

“By digitising our existing sponsored repo trade flow and incorporating those trade flows into our DLR tech stack on Broadridge’s platform, we can increase efficiencies while reducing the risk of fails and lowering our settlement costs,” said Christian Rasmussen, Head of Investment and Execution, Group Treasury UBS. 


Expel to help Visa clients manage cybersecurity risk

Visa has announced a strategic partnership with Expel, a security operations provider, extending the payment firm’s value-added services offering in the emerging managed detection and response (MDR) segment to clients. Visa will begin offering Expel’s solution to clients within the US and Canada, with plans to roll out globally.

Global cybercrime costs are expected to reach US$10.5 trillion annually by 2025, impacting businesses of all sizes. Through the referral partnership, Visa and Expel say they are working to make it easier for clients to anticipate and protect against cyber threats.

Companies are dealing with a large quantity of issues related to cybersecurity, including an ever-expanding threat landscape, a constant stream of cybersecurity alerts and events, and challenges hiring and retaining cybersecurity talent. Ensuring that clients across the network have a strong security posture, including cyber, is a high priority for Visa. Building on the work already undertaken to protect the network, Visa is committed to facilitating secure global money movement by helping clients identify and mitigate their own cyber vulnerabilities. Expel MDR prioritises detections based on clients’ key assets, reduce alert-to-response time to minutes, automatically stop threats from spreading, and arm Visa’s clients with metrics to strengthen their security. 

The partnership is intended to give clients the ability to move from a reactive security posture to a proactive posture, focused on risk-based decision making, and improved threat detection and response capabilities. Clients will also receive MDR services informed by external intelligence, trends, and threat techniques, and visibility across attack surfaces that include cloud, on-premises, SaaS applications, and Kubernetes. The service should mean less time managing security operations and dedicating resources to other high-priority initiatives, while offering 24/7 security monitoring and response.

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