Visa Expands Card Program Financing Through On-Chain Lending
Visa plans to expand financing options for payment companies working with digital assets by combining traditional payment infrastructure with on-chain lending tools.
Visa introduced a lending mechanism that combines VisaNet settlement data with on-chain lending infrastructure. The solution will allow settlement data to be used to access working capital through blockchain protocols. It’s designed primarily for fintech companies and operators of stablecoin-linked card programs.
According to Visa, more than $694 billion in stablecoin-denominated loans has been issued through on-chain lending protocols since 2020. These services are available around the clock, but most lending activity has so far remained within the crypto industry and has seen little use in financing traditional payment operations.
Visa aims to change this model by combining payment data with programmable financial infrastructure. VisaNet settlement data allows lenders to assess the actual performance of individual card programs. Blockchain technology can automate funding, collateral management, and loan repayment.
Rubail Birwadker, Visa’s Global Head of Growth Products and Partnerships, said stablecoins are changing both how money moves and the infrastructure that supports payments. The company expects that combining verified payment data with blockchain technology will enable more transparent and programmable mechanisms for providing liquidity.
The new initiative is part of Visa’s broader stablecoin strategy. The company’s current figures in this area include:
- more than 160 stablecoin-linked card programs operating on the Visa network;
- nearly 200% year-over-year growth in payment volume across these programs;
- more than $20 billion in annualized stablecoin settlement volume at the current run rate;
- more than 15-fold year-over-year growth in stablecoin settlement volume.
The company also launched the Visa Stablecoin Platform, expanded stablecoin settlement capabilities, and broadened its range of services for financial institutions working with digital assets.
Visa Expands Access to Working Capital Through On-Chain Lending: The Credit Coop Case
The press release noted that access to working capital remains a challenge for fast-growing payment companies. Traditional lenders often require borrowers to reach significant scale, establish a lengthy operating history, and undergo manual risk assessments. As a result, companies may gain access to financing later than they need it to sustain growth.
Visa’s partnership with Credit Coop provided a practical example of the new approach. Credit Coop provides working capital and settlement financing to operators of stablecoin-linked card programs. Smart contracts automate funding, collateral management, and loan repayment.
With the client’s permission, Credit Coop matches Visa settlement data with on-chain data. This allows it to assess the borrower’s current performance, while loan repayments can be tied directly to the card program’s settlement cash flow.
Since 2023, the model has supported more than $2.5 billion in total financed settlement volume. According to Visa, none of the participating credit facilities recorded a default during that period.
The automated blockchain infrastructure also processed:
- more than 3,000 borrowing transactions;
- more than 9,000 repayment transactions.
All these transactions are recorded directly on-chain, keeping the financing history verifiable and available for audit.
Credit Coop founder and CEO Chris Walker said payment companies have potential collateral in the form of expected settlement proceeds, but they’ve traditionally struggled to demonstrate the quality of those assets to lenders in real time. Combining Visa data with blockchain infrastructure allows lenders to analyze a program’s current performance and automate repayments from settlement cash flows.
Visa sees on-chain lending as an extension of its strategy to connect the traditional financial system with digital asset technologies. Over time, the combination of payment infrastructure, tokenized assets, and programmable financial instruments could be used for lending, liquidity management, and settlement automation.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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