Daily News 19

Tag: Visa

  • Payward-Backed Reap Turns to Non-USD Stablecoins for 24/7 Cross-Border FX Settlement

    Key Highlights

    • Reap, a Visa Principal Issuer Member owned by Kraken parent Payward, plans to add a Mexican peso stablecoin to its card, cross-border payments, and treasury products.
    • The Hong Kong-based fintech is also exploring stablecoins pegged to the Hong Kong dollar, euro, South Korean won, and Japanese yen through its global stablecoin partnership with Visa.
    • Founder Daren Guo emphasizes that while public blockchains operate continuously, traditional FX settlement still relies on banking hours and can take days, with emerging-market corridors incurring 5% to 7% fees.

    Reap Expands Stablecoin Suite Beyond Dollar Denomination

    Hong Kong-based fintech platform Reap is preparing to launch a Mexican peso-denominated stablecoin across its card issuance, cross-border payments, and treasury management products, according to founder Daren Guo. The move signals a strategic push to diversify stablecoin utility beyond the U.S. dollar, which currently dominates nearly 99% of stablecoin payment volume even when commercial activity occurs in local currencies worldwide.

    Visa Partnership Enables Around-the-Clock Settlement

    Reap operates as a Visa Principal Issuer Member (VPIM), granting it the ability to issue cards on its own bank identification numbers (BINs) and support partners in more than 100 markets. The company’s global stablecoin partnership with Visa provides its card programs with around-the-clock settlement capabilities, addressing a critical friction point in traditional finance. As Guo explained, “Visa makes stablecoins settle. Reap makes them spendable.” This infrastructure allows Reap to bridge the gap between public blockchains, which run continuously, and the legacy foreign exchange system that remains tethered to banking hours, correspondent banks, and multi-day settlement cycles.

    Payward Acquisition Unlocks New Capabilities

    The expansion follows Reap’s acquisition by Payward, the parent company of cryptocurrency exchange Kraken. Guo noted that the deal “opens up additional capabilities,” including possible access to yield, tokenized equities and trading. With the backing of a major crypto exchange group, Reap is positioned to integrate deeper financial primitives into its stablecoin-powered payment rails, potentially offering clients yield-bearing instruments and tokenized asset exposure alongside core payments and treasury functions.

    Targeting High-Fee Emerging Market Corridors

    Guo highlighted the economic inefficiency of current cross-border flows, stating that “Public blockchains run continuously, but global foreign exchange (FX) still relies on banking hours, correspondent banks and settlement that can take days. In emerging and cross-border markets, moving money between currency corridors can incur fees of 5% to 7%.” By introducing stablecoins pegged to the Mexican peso, Hong Kong dollar, euro, won, and yen, Reap aims to reduce these costs and enable real-time, programmable money movement for businesses operating across currency zones.

    Why This Matters

    The stablecoin market has long been dominated by USD-pegged tokens such as USDT and USDC, creating a structural mismatch for businesses that earn and spend in non-dollar currencies. Reap’s multi-currency stablecoin roadmap, backed by Visa’s settlement network and Payward’s exchange infrastructure, represents a concerted effort to localize stablecoin utility for global commerce. If successful, the initiative could accelerate adoption of on-chain payments in Latin America, Europe, and Asia-Pacific, where businesses currently bear high FX conversion costs and settlement delays. The involvement of a Visa Principal Issuer Member also underscores growing institutional comfort with stablecoin-based payment rails, potentially setting a precedent for other fintechs to issue non-dollar stablecoins at scale.

    Frequently Asked Questions

    Which stablecoins is Reap planning to support?

    Reap is preparing to add a Mexican peso stablecoin and is exploring tokens pegged to the Hong Kong dollar, euro, South Korean won, and Japanese yen for integration across its card, cross-border payments, and treasury products.

    How does Reap’s Visa partnership enable stablecoin spending?

    As a Visa Principal Issuer Member, Reap can issue cards on its own BINs and leverage Visa’s global stablecoin partnership to provide around-the-clock settlement, making stablecoins spendable at any merchant that accepts Visa across more than 100 markets.

    What role does Payward play in Reap’s expansion?

    Payward, the parent company of Kraken, acquired Reap and provides additional capabilities including potential access to yield-generating products, tokenized equities, and trading infrastructure, enhancing Reap’s stablecoin-powered financial services suite.

  • Visa Tightens Memecoin Card Rules After Digital-Media Classification

    Visa Tightens Memecoin Card Rules After Digital-Media Classification

    Key Highlights

    • Visa is directing payment processors to stop using merchant category code 5815 (digital media) for memecoin purchases and instead apply cryptocurrency-related classifications.
    • JPMorgan Chase flagged at least one Visa transaction for incorrect coding, and the New York Attorney General’s Office is reviewing the issue.
    • The reclassification does not prohibit card-based memecoin purchases but may affect how card rewards are applied to such transactions.

    Visa Cracks Down on Memecoin Transaction Coding

    Visa is moving to tighten how memecoin purchases are classified across its network after scrutiny revealed that some card transactions were being processed under a digital-media merchant category code typically reserved for goods such as movies and audiobooks. The change follows test purchases made through Robinhood Wallet and Fomo using Visa and Mastercard cards via Apple Pay and Google Pay, which were processed by Crossmint and received merchant category code 5815. That code covers digital goods, whereas cryptocurrency purchases traditionally fall under separate merchant codes that determine how card issuers handle transactions, including rewards eligibility and risk controls.

    Issuer and Regulatory Scrutiny Prompts Action

    The misclassification drew immediate pushback from major financial institutions and regulators. JPMorgan Chase challenged the coding of at least one Visa transaction, stating it carried the wrong merchant category code and confirming it had opened a case with Visa. Simultaneously, the New York Attorney General’s Office said it was reviewing the issue. In response, Visa has reportedly instructed payment processors, including Checkout.com, to cease using the digital-media category for memecoin purchases and has given them until next week to update their systems to reflect cryptocurrency-related classifications.

    SEC Guidance Does Not Govern Card Network Rules

    Crossmint had cited a 2025 U.S. Securities and Exchange Commission staff statement on memecoins in connection with the transactions. However, that guidance pertains to securities law classification and does not determine how card networks categorize transactions for processing, rewards, or compliance purposes. Visa’s directive addresses the payment-network layer specifically, ensuring that memecoin purchases are routed through the appropriate merchant codes used for other cryptocurrency transactions.

    Why This Matters

    The reclassification carries practical consequences for consumers and the broader crypto payments ecosystem. Merchant category codes influence whether a transaction qualifies for standard credit card rewards—such as cash back on digital media—or is excluded, as many issuers treat cryptocurrency purchases differently. By aligning memecoin coding with established cryptocurrency categories, Visa closes a loophole that could have allowed purchasers to earn rewards unintended for digital-asset acquisitions. The move also signals that card networks and issuers are actively monitoring the intersection of consumer payments and emerging token types, especially as wallets like Robinhood Wallet and apps like Fomo expand access to memecoins through familiar checkout rails like Apple Pay and Google Pay. Regulatory attention from the New York Attorney General underscores that compliance scrutiny extends beyond securities law into consumer-protection and payment-network integrity.

    Frequently Asked Questions

    Does Visa’s change ban buying memecoins with a credit or debit card?

    No. Visa’s directive does not prohibit card-based memecoin purchases. It requires that such transactions be classified under cryptocurrency-related merchant category codes rather than the digital-media code (5815).

    Will this affect credit card rewards on memecoin purchases?

    Potentially, yes. Many card issuers exclude cryptocurrency-coded transactions from standard rewards programs. Shifting memecoin purchases to crypto merchant codes may cause them to lose eligibility for cash back, points, or miles that might have applied under the digital-media classification.

    What role did the SEC’s 2025 memecoin statement play in this decision?

    The SEC staff statement addresses whether certain memecoins qualify as securities under federal law. It does not govern payment-network merchant category codes. Visa’s action is independent and focused on transaction processing classification, not securities regulation.

  • Velocity Raises $48M Series A from Visa, Circle, and Ripple

    Velocity Raises $48M Series A from Visa, Circle, and Ripple

    Velocity Raises $10M Series A Extension, Valuation Reaches $200M

    London-based stablecoin infrastructure provider Velocity has secured an additional $10 million in Series A funding, bringing the total round to $48 million and valuing the company at $200 million post-money. The extension, announced on September 15, includes participation from Visa Ventures, Circle Ventures, Ripple, Haun Ventures, Translink Capital, and Mirana Ventures.

    Series A Growth From $38M to $48M

    The original $38 million Series A, disclosed on July 14, was led by Dragonfly and FirstMark with participation from Activant Capital, Capital One Ventures, QED Investors, Coinbase Ventures, Wintermute Ventures, and Ripple. At that stage, Velocity reported total capital raised since May 2025 of nearly $50 million.

    CEO Eric Queathem confirmed the additional financing values the company at $200 million after the investment. He noted the original Series A had been oversubscribed, according to comments accompanying the funding disclosure.

    Ripple participated in both financing announcements, while Visa Ventures, Circle Ventures, Haun Ventures, Translink Capital, and Mirana Ventures joined the extension disclosed this week.

    Capital Deployment: Stablecoin Infrastructure for Existing Financial Systems

    Velocity plans to use the capital to develop infrastructure for issuers, acquirers, payment companies, banks, and merchants. Its system connects stablecoins with banking rails, custody, liquidity, compliance, and settlement tools while allowing customers to continue using their existing finance operations.

    Queathem said the company has focused on how money moves behind consumer payments. Velocity’s stated strategy is to place stablecoin settlement underneath existing payment and treasury systems instead of requiring companies to operate a separate crypto stack.

    Visa Investment Follows Operational Stablecoin Settlement Work

    Visa’s investment comes as the card network builds more stablecoin capabilities into its payment infrastructure. In Velocity’s funding announcement, Rubail Birwadker, Visa’s global head of growth products and strategic partnerships, said stablecoins were playing an increasingly important role in the Visa ecosystem and described Velocity as infrastructure for “stablecoin-powered money movement to every business.”

    The investment follows operational work between the two companies. On September 9, MVB Financial and Velocity announced participation in a Visa Direct pilot that lets eligible participants use stablecoins for certain push-to-card funding and settlement obligations. Digital-asset conversion, wallet connectivity, and on-chain controls are handled through licensed partners.

    Velocity said the MVB arrangement uses a single API and regulated wallet infrastructure. Stablecoins can be brought into payment flows without customers maintaining separate blockchain systems, while availability depends on eligibility and geography.

    Visa itself reported this month that more than 160 stablecoin-linked card programs were live globally during its fiscal second quarter. Payment volume across those programs had risen nearly 200% year over year, while stablecoin settlement volume had passed a $20 billion annualized rate.

    Velocity Targets Settlement, Liquidity, and Treasury Operations

    Founded in 2025, Velocity works with merchants, payment providers, fintech companies, and financial institutions that want to use stablecoins for money movement without rebuilding their existing treasury systems. Its platform combines stablecoin rails with local banks, custody providers, liquidity management, and compliance services.

    The company says the infrastructure can reduce reliance on prefunded accounts and extend settlement beyond standard banking hours. Its website lists payments, settlement, treasury automation, regulated wallets, FX connectivity, and liquidity services among its current products.

    Queathem previously worked at Worldpay, where his experience centered on large payment networks and settlement systems. His thesis for Velocity is that stablecoins will increasingly operate behind existing payment products instead of requiring businesses or consumers to change the interface they use.

    His forecast remains a company view rather than a confirmed market outcome. Queathem said he believes “in five years every global business is going to hold value onchain,” with treasury reconciliation and liquidity infrastructure becoming more important as corporate use develops.

    Competitive Landscape: Stablecoin Infrastructure Funding Surge

    Stablecoin payment infrastructure has drawn several large financings during 2026. In March, Tazapay took its Series B funding to $36 million with backing from Circle Ventures, Coinbase Ventures, and Ripple.

    A separate Checker funding round brought $8 million to an infrastructure provider building a single API for banks and fintech firms. Checker said it had processed more than $3 billion in transactions during the previous 12 months.

    Visa had invested in another stablecoin infrastructure provider before joining Velocity. Visa Ventures took a strategic stake in BVNK in 2025 after the company’s $50 million Series B. Mastercard later completed its acquisition of BVNK in August 2026 in a deal worth up to $1.8 billion. BVNK provides fiat-to-blockchain infrastructure for payments, payouts, settlement, and treasury activity.

    UK Regulatory Environment: Developing Stablecoin Regime

    Velocity is headquartered in London, where regulators finalized new rules for qualifying stablecoins and crypto custody on June 30. The framework will apply to firms authorized under the new regime from October 25, 2027, while the application gateway opens September 30, 2026.

    Velocity says its platform connects customers with licensed banks, FX providers, and digital-asset partners. Its public materials do not claim that every regulated function is carried out directly by Velocity itself, and its MVB announcement states that digital-asset conversion and related controls are performed by licensed partners.

    Circle Ventures’ participation comes as Circle expands payment infrastructure tied to $USDC. Circle reported $74.1 billion of $USDC in circulation as of September 10, while the company said the asset was available through more than 1,000 banks, blockchains, distributors, and other partners.

    Velocity said the $48 million Series A will support continued platform expansion and work with issuers, acquirers, merchants, payment providers, and financial institutions. No separate timetable for deploying the new $10 million extension was disclosed in the September 15 announcement.

  • Ant International Joins Visa, Mastercard to Develop AI Agent Payment Standards

    Ant International Joins Visa, Mastercard to Develop AI Agent Payment Standards

    Ant International has partnered with Visa and Mastercard to develop common standards for identifying and monitoring AI agents as autonomous software takes on a larger role in global payments. The collaboration aims to create an interoperable “Know Your Agent” framework that lets merchants and payment providers verify which AI agents are behind transactions and whether they are authorized to act.

    Framework addresses projected growth in agentic commerce

    The initiative arrives as payment companies prepare for AI systems that can search for products, place orders, and make payments for consumers and businesses. Ant cited McKinsey projections that AI agents could handle between $3 trillion and $5 trillion of global consumer commerce by 2030.

    Jiang-Ming Yang, chief innovation officer at Ant International, emphasized that safeguards will be essential as agents gain more authority over financial transactions because AI systems can produce incorrect information or take actions users did not intend.

    “Trust is the foundation of the AI transformation,” Yang told CNBC.

    Interoperable identity system reduces friction

    Under the collaboration, Ant International, Visa, and Mastercard plan to establish common methods for linking an AI agent to a valid entity, evaluating its behavior, and monitoring its activity. The companies are focusing on interoperability between their separate systems so an agent that has already established its identity with one payment provider would not necessarily have to repeat the process with another.

    “If [an] agent registers with Ant, they don’t need to register again with Visa, Mastercard,” Yang said.

    Such a system would give merchants and payment processors a consistent way to determine which software agent is requesting a transaction and the party on whose behalf it is operating.

    Pablo Fourez, chief digital officer at Mastercard, said interoperability between Know Your Agent frameworks will be needed if agentic commerce is to operate across different platforms.

    “Interoperability across Know-Your-Agent frameworks is essential to making agentic commerce work at scale,” Fourez said, stressing the need for merchants and payment companies to consistently identify AI agents they can trust.

    Each company brings existing agent payment infrastructure

    Each of the three companies has spent the past year developing its own technology for AI-led payments. Mastercard on Wednesday launched Agent Connect, a system that gives merchants a single integration for product discovery, cart creation, and customer-approved payments across AI shopping platforms.

    Agent Connect works with Mastercard Agent Pay, which records customer authority through tokenized permissions when an AI system is allowed to make a purchase. Merchants and payment providers can use the permission to determine whether the transaction falls within instructions provided by the customer.

    Visa builds autonomous payment stack

    Visa has been developing a separate stack for autonomous payments. In April, the company introduced Intelligent Commerce Connect, bringing payment initiation, tokenization, authentication, and spending controls into infrastructure designed for AI agents.

    The system allows agents to search for products and complete transactions on behalf of consumers while using Visa’s existing payment network and security tools. Visa expanded that work in June with new AI and stablecoin capabilities, including a partnership with OpenAI to support payments within agentic commerce experiences. Its stablecoin settlement activity had reached a $7 billion annualized run rate at the time, crypto.news previously reported.

    Mastercard targets machine-to-machine transactions

    Mastercard has taken a similar route through Agent Pay for Machines. The company unveiled the payment network in June with support from more than 30 payment, blockchain, and technology companies, including Ripple, Coinbase, Stripe, Adyen, and the Solana Foundation.

    The network was built for transactions initiated by autonomous software, including high-volume and low-value payments. Users can set spending limits, authorization requirements, and settlement conditions, while transactions can run through conventional payment networks or stablecoin rails.

    Both card companies have consequently been developing controls for a payment environment in which the person buying a product may not directly interact with the merchant’s checkout page.

    Ant International adds digital wallet scale

    Ant International gives the collaboration access to another part of the global payments market through Alipay+, its cross-border payment and digitalization platform. More than 50 electronic wallets have partnered with Ant International through Alipay+, according to the company. Such wallets are widely used in markets where consumers frequently rely on mobile payment systems instead of physical credit or debit cards.

    Digital wallets represented 56% of global e-commerce transaction value and 33% of point-of-sale value in 2025, according to Worldpay data cited by the companies. Total spending through the payment method exceeded $13 trillion.

    Card networks and digital wallets have become increasingly connected as wallets add support for cards and other funding sources, giving AI payment systems multiple routes through which transactions could eventually be completed.

    Stablecoins emerge as machine payment rail

    Visa has already been testing combinations of AI payments and blockchain-based settlement. Wirex joined Visa’s Agentic Ready program in June to test AI agents making stablecoin payments, initially focusing on software subscriptions, marketing spending, and procurement.

    The tests were designed to determine how autonomous software could initiate financial transactions while preserving security controls and user authority.

    Stablecoins have become another part of the infrastructure being developed for machine-led transactions. Visa and Artemis said in July that stablecoins could be suited to low-value machine-to-machine payments, while traditional cards could continue handling consumer purchases.

    Alipay deploys consumer-facing AI ordering

    Ant’s work on payment standards is arriving as its former parent company’s Alipay platform begins putting AI-assisted purchasing tools in front of consumers. Ant International separated from Hangzhou-based Ant Group nearly three years ago. Ant Group operates Alipay, the mobile payment service widely used in mainland China.

    Alipay said Wednesday that users can now create recurring Starbucks requests through one of its AI features.

    “buy me a Starbucks iced Americano at 10 a.m. every day,” according to the announcement. The system can then place the requested order at the scheduled time before asking the customer to complete payment.

    The arrangement keeps the payment approval with the user even though the AI feature handles the recurring order. Alipay users can make recurring ride-hailing requests from Didi through the same AI tool, extending the automated system from retail purchases to transportation services.