In 1958 Visa was founded as a bank consortium with an ambitious mission: create a network so extensive and holistic that merchants could accept card payments from any individual bank. Visa would pave the way for card transactions to replace cash, and in 2007 Visa spun out of the banks that created it to become an independent company. Today Visa is one of the most valuable FinTechs in the world (worth more than many of the banks that founded it). Together with Mastercard, it represents well north of half a trillion dollars in market cap, with almost every card transaction flowing through its network.
While card payments offer merchants massive convenience, they come with a price – every time you swipe your card, a network of intermediaries take a portion of the transaction. Globally, governments and private corporations have noted this, and we've seen the rise of government-enforced open banking through regulations like PSD2 and real-time payment networks like FedNow in the US, Faster Payments in the UK, UPI in India, and PIX in Brazil. These alternative payment networks allow merchants and consumers to transfer money between bank accounts in real time while bypassing the expensive traditional card networks.
Even with this massive cost savings for merchants, one challenge still exists – merchants today are global. They need to support customers using different banks and real-time payment networks, and merchants don't want to manage the complexity of hundreds of integrations across countries, private bank networks, and legacy payment methods.
Enter: Banked. When we met Brad, Neil, and the team at Banked, the value proposition of their product was immediately apparent. Banked offers merchants a single integration to accept real-time payments at checkout, via a payment link, or through an API. Instead of losing the 2-3% on each transaction that merchants typically lose on interchange, Banked allows merchants to leverage open banking regulation and access government-issued payments rails to accept instant account-to-account payments. The payment flow is simple – biometric verification happens in the consumer's banking app, offering a safe and inexpensive alternative to cards while still encompassing the speed and convenience of a card.
Banked is attacking the market head on – partnering with some of the largest financial institutions in the world to offer this to their merchants, and we are excited to be investing alongside many of these institutions. The coverage offered by strategic partners will enable Banked to leverage their robust network from day one – allowing their customers to accept real time payments globally.
Since being founded in 2018, Banked has hit the ground running with deep integrations and global partnerships with marquee financial services firms and payments companies, creating an unparalleled partner network of the world's largest merchants. We couldn't be more excited to partner with Brad and the team at Banked on their vision of making real-time payments accessible to all merchants, and we are excited to lead a $15M investment alongside Citi, NAB, and Rapyd.