Visa is pushing deeper into the cryptocurrency space by piloting a new service allowing fintechs to add crypto features to their offerings, and its first partner is a neobank focused on the Black community.
On Wednesday, the payments giant announced Visa Crypto APIs, a set of application programming interfaces (APIs) that allow Visa’s fintech customers to offer the ability to buy, custody, and trade digital assets held by Anchorage, a federally-chartered digital asset bank.
First Boulevard, a digital-only bank with a goal of increasing financial empowerment in the Black community, is the first customer to use Visa Crypto APIs, which will start as a pilot program.
The payments giant expects to make a wider launch of the APIs later this year.
“It’s an important step to launch a broader suite of crypto API capabilities to Visa’s network of clients to help them integrate and interact with these new crypto assets and blockchain networks,” Cuy Sheffield, head of crypto at Visa, told Insider. “First Boulevard is the perfect partner to pilot this program. We love their focus on empowerment education for Black consumers that are increasingly interested in crypto.”
This partnership follows Visa’s commitment to revamp digital-currency services, and an increased focus on cryptocurrency across fintechs.
More than 35 crypto wallets already operate on Visa’s payments rails, including BlockFi and Coinbase. And Visa sees an opportunity to process crypto transactions similar to any other payment method.
“It goes without saying, to the extent a specific digital currency becomes a recognized means of exchange, there’s no reason why we cannot add it to our network, which already supports over 160 currencies today,” Al Kelly, Visa’s chairman and CEO, said on the company’s first-quarter earnings call in January.
Visa’s first partner on its new crypto initiative is First Boulevard
First Boulevard was founded by Donald Hawkins following the killing of George Floyd in an effort to drive change and build generational wealth in the Black community.
“When I look at all of the issues that Black America generally fights — education reform, police brutality, real estate issues — everything tends to point back to money, either us having a lack of it or a lack of understanding,” Donald Hawkins, founder and CEO of First Boulevard, told Insider.
“The piece that’s been missing is that relatable, brand-identified financial platform that really resonates with our specific affinity group — Black America,” Hawkins added.
Motivated by the systematic barriers Black Americans have long faced in understanding financial systems, Hawkins’ solution was building First Boulevard into a “financial platform that could really help Black America win.”
“Our north star at First Boulevard is really helping Black America reclaim its $1.4 trillion in economic impact,” said Hawkins.
As phase one of First Boulevard’s mission centers on helping Black Americans circulate funds within their community, the digital bank features a “Cash Back For Buying Black” incentive — earning customers up to 15% cash back when they spend money at black businesses.
The partnership will bridge the gap between Black America and cryptocurrency
The launch of First Boulevard came at the perfect time for Visa’s entry into the crypto space.
Sheffield noted that following the rise of fintechs incorporating Bitcoin into their products, many Visa clients we’re asking what the global payments company could do to help.
As Visa began exploring new capabilities in the crypto space, their focus was building a mission-driven partnership — aligned with company efforts to embed diversity and inclusion into offerings and its go-to-market strategy.
As the pilot program seeks to bridge the gap between Black America and the rapid growth of cryptocurrency, financial education will play a key role.
“We see cryptocurrency and Bitcoin as a gateway to financial literacy,” said Sheffield.
The pilot program will assess “the level of education that we need to provide the Black community to feel comfortable with jumping in, being mindful of effective ways and actionable ways that they can apply Bitcoin and other types of cryptocurrencies,” added Hawkins.
Visa’s launch comes as crypto becomes table stakes for fintechs
To be sure, Visa isn’t the only incumbent pushing into the crypto space. Bitcoin’s price surged as high as $40,000 earlier this year, nearly four times what it was worth the same time last year.
Square’s Cash App offers crypto trading, and it’s been a huge boost to the peer-to-peer payments app. Bitcoin accounted for nearly 80% of Cash App revenue in the third quarter of 2020. And last November, payments giant PayPal added crypto trading to its app.
Visa’s Crypto APIs will allow its fintech customers to embed crypto trading into their own apps, helping them compete with the likes of Cash App and PayPal without building their own offerings.
“It’s very hard to build yourself,” Sheffield said. “[Fintechs] want a global, neutral, trusted brand that they already have a close relationship with and can help provide best in class infrastructure.”
Visa will look to grow the functionality of its Crypto APIs beyond trading and holding cryptocurrencies, adding features like crypto rewards on cards and auto-buy functionalities. But as an infrastructure player, that will largely depend on what its clients want to build.
“We’re excited to see what entrepreneurs end up building, how they integrate it to the products, and what the consumer experiences are,” Sheffield said.
The crypto APIs are part of Visa’s broader developer center, a set of APIs that are part of what Visa calls its “value-added services.”
It’s all part of Visa’s effort to diversify beyond its bread-and-butter card processing business and bring fintechs on board its network.
“We see that as a tremendous opportunity for Visa,” Sheffield said.