Inside Visa’s Tech-Charged Future: From Crypto to AI

0:00More than$13 trillion in purchases crossed your networks in 2024. That's, what, like three times the size of Japan's GDP? How many transactions have crossed your networks, let's say, in the past minute? We can do up to 85 ,000 transactions per second. It depends on the day, the hour. It fluctuates. But you can think of it on average about 10 ,000 or so per second. So that was 10 ,000 right there, another 10 ,000 right now. And that obligation weighs heavily on us to make sure it is always on, secure, reliable, and trustworthy.

0:41This week on Bold Names, Rajat Taneja, President of Technology at Visa. Yeah, Mebs, two big topics that are going on in the payment space right now. We wanted to talk to him about the rise of cryptocurrency and, of course, artificial intelligence. So we've got programmable money and programmable shoppers. So Visa, arguably the world's biggest middleman, is getting into stable coins, that digital alternative to conventional money. Also working on how AI is going to disrupt how we shop, hopefully for the better. All that and more this week with Rajat. From The Wall Street Journal, I'm Christopher Mims.

1:21And I'm Tim Higgins. This is Bold Names, where you'll hear from the leaders of the bold name companies featured in the Wall Street Journal. Today we ask, is Visa the next everything platform?

1:39Rajat, thank you for joining us. I want to start with this idea of Visa as a technology company. I think most people would, of course, identify you with your cards. They would identify you as a payment network. why are you looking to change that perception? Well, we are the original tech company, right? Think of us as a hyperscaler in the money movement and the payments business. So hyperscaler being like one of the big cloud providers like Google. Correct. So if you look at the big hyperscalers, you see them providing infrastructure as a service, platform as a service, allowing us, various companies to run software as a service.

2:18and we are that full stock for the payments and money movement business. So you think of yourself as a hyperscaler for money? I think that's a very good way to characterize it for sure. If you look at Visa, on our foundation infrastructure is global connectivity. It is our network, VisaNet, and it is what we offer to connect network of networks. So that's the foundation. On top of that foundation, our infrastructure, is our services. I'll give you an example. It could be our credentials, tokens, could be authentication services, risk services, fraud services. On top of that layer comes our solution layer.

3:05So here we take these componentized capabilities from the services layer and create new end-to-end solutions and features. We have products that we call Visa Accept and Visa Pay that allows anybody with a phone and a credential to be able to either accept payments as a seller or to pay a seller without needing the massive infrastructure that is traditionally needed. But why this transition now, right? I mean, what pressures are you feeling in your core card business that move you to want to redefine yourself in this way? We're not really redefining ourselves. It's what we've always been. But what we have been doing in the last 10 years or so is we have been opening up our network in new and unique ways to extend it, to allow a lot more innovation on top of our network to go from being a pure network to being a network of networks.

4:02And therefore having different layers that can support new and unique forms of commerce. Right. One thing that we're hearing a lot more about is digital currencies. You've shifted in some ways to support digital currencies. What is the macro shift that we're seeing here in finance that's moving you to do that? So digital currency is a large umbrella term, right? When you are using a card, whether it's a credit or a debit or a prepaid, or even if you want to pay in installments, you're using a form of digital currency to make that payment. Either paying ahead, paying now, paying later. But I think what's happening now is that's being extended with additional capabilities like stablecoins.

4:50and there are certain use cases in which stable coins are really helpful. They are useful when somebody wants to own an asset in US dollar, let's say, and they don't have access to it, or if their local fiat currency is very volatile, or some cases of cross-border payments and very fast settlements. And let me interrupt you there because I think a lot of folks are not familiar with stable coins, But a stablecoin, as I understand it, correct me if I'm wrong, it's a token on a blockchain. So it's technically a cryptocurrency. Most stablecoins, of course, are dollar denominated. And it means that the company that issues the stablecoin, if it issues one stablecoin, it has to be holding about a dollar in its reserves, right?

5:37So you're saying that you're not issuing stablecoins, but you're giving people new ways to transact in stablecoins. Is that right? That's correct. So if you think about the stack in layers, you have the foundational technology stack, the blockchain layer, if you will, and that has to be very robust and that has to be able to create and mint the stablecoin and transact it. But then on top of that, as you just pointed out, you need the reserve layer where you have the backed stablecoin with currency, like in this case, the example you were saying was US dollars. But there's a third layer that's very important as well on top of these two, which is what we call the interface layer.

6:18Because you have to be able to go from a closed loop to an open loop to really scale the technology and its value, scale to billions of endpoints, make sure that compliance and rules and regulations of every country are met. and you're able to have on and off ramps into, let's say, a credit credential or other credentials. And so that's where we come in. When we come back, are cryptocurrency networks a threat to Visa's business? And how is Rajat thinking about this new market? It's an evolution of a platform. And if you look at many platforms, they were initially built for a particular purpose and then they expanded it horizontally to serve their consumers in new and unique ways.

7:12Stay with us.

7:21Let's take a step back here for a second. So ultimately, what is Visa's goal when it comes to crypto? How does it factor into the company's global growth strategy? So our mission, if you will, and it's a beautiful mission, is to uplift everyone everywhere by being the best way to pay and be paid. And certainly, core of our business is the various credentials we provide and process. but as you sort of look at cross-border business payments, for example, or person-to-person payments, or in new and unique use cases, there are various new aspects of payments that are going to take birth and our platform provides the underlying capability that allows trust and allows privacy and it allows compliance, it allows security.

8:17and a number of resilience to underpin these new forms of digital payments. I mean, let's talk about how that plays out in practice, right? So this spring, you announced a partnership with the startup Bridge to offer a stablecoin-linked Visa card to customers. So how does that partnership work exactly between you and the startup and then also for consumers? Look, the way it works is that you need stable coin card programs. You need a card program, the ability to move from fiat into stable coin and back into fiat. That's what the bridge partnership allows. And we have about 135 stable coin card programs worldwide.

9:04We are building these in over 40 countries right now. and you're able to access this with several merchants and it's a growing part of our technology stack and partnerships. So, I mean, just to put a fine point on it, you are becoming a platform on which people can transact in everything, including cryptocurrency. But it feels like part of the reason you're doing that is you must be feeling some potential disruptive pressure from stable coins, from competing payment networks. I mean, let's be real. The whole reason that a lot of people have created many of these cryptocurrency networks is explicitly to disrupt you, to charge merchants lower fees, to charge lower fees for transactions across borders.

9:59Do you feel like there's any potential disruptive threat? Is that part of what's driving you opening up this network and turning yourself into this kind of modularized, almost like Amazon web services, but for money? It's an evolution, right? It's an evolution of a platform. And if you look at many platforms, they were initially built for a particular purpose. They grew, they created very compelling capabilities for that purpose, and then they expanded it horizontally to serve their consumers in new and unique ways. And so the North Star for us is our mission, which I mentioned is about allowing and helping and uplifting everyone everywhere by being the best way to pay and be paid.

10:47And there are different ways to pay and be paid in the future. When the internet was born and e-commerce took birth, there was a lot of concern by everybody to enter card numbers and it almost didn't take off. And then Visa's face-to-face payment that we had perfected allowed us to bring that to bear and create a secure and trustworthy environment where e-commerce could flourish. And then that grew to include mobile transactions with tokenized credentials. Now, the generative AI era is giving birth to agentic commerce. So we're going from e-commerce to a-commerce, and we have to, again, reinvent how that trust that was built for face-to-face, then went to e-commerce, then went to mobile commerce, can bring this new beautiful ways of agentic commerce to thrive, where you can have hyper-personalization, hyper-tailored experiences with an agent helping do things for you that are very mundane and time-consuming.

11:57and not enjoyable and bring the joys and pleasures and happiness of shopping to you in different ways. So that's all extensions of the software and the system. Are you someone who taps, swipes, or clicks? Soon, maybe you'll be doing none of those things. What does Visa look like in the age of generative AI? Now you can have an agent and you can tell it, this is kind of what I'm trying to accomplish. go and bring me best recognized capabilities of products in this space. And that's today, and we're all less than three years into this era of generative AI. Can you imagine what it would be like in three years from now or 10 years from now?

12:41That is next.

12:55Let's maybe just put a pin in crypto for a moment and really just dive into AI and how you see this. I mean, Visa, I think, has long been involved with AI, right? Whether it's fraud protection or security over the years, putting you on the forefront of this technology as we see kind of the next evolution of it. And when you say agentic or you talk about agents, you're talking about AI working as the consumer going out and doing things, right? So how do you imagine this world? Why would people, why would your customers want to use AI agents to make purchases? Isn't that kind of taking the fun out of shopping?

13:33I think there are lots of things today that are not fun, that are mundane. There's buying new shoes or buying new sneakers, and then there's what, paying your bills? I mean, what is not fun about shopping? Tell me exactly. paying your bills, subscription management, canceling subscriptions, price matching, registrations, warranties. There's so many aspects, getting the best deals. So even though payments have become increasingly easier over time, the actual shopping experience is still in the hunt and peck era. We have a lot of burden on ourselves as consumers to go find what we want, make sure it is the right thing, what we would really like to get.

14:21And so agentic commerce allows us to have software or in the future, it could be a hardware manifestation that understands us. May I stop you for a second? Yeah. What would be something in your day-to-day life you wish you had an agent that could go out and buy for you or help you buy? I mean, so many different things. If you're buying a new bike, let's say, and there are thousands of different kinds of bikes and technologies and gears. And I was buying one for my kid the other day and I'm not an expert in bikes and I'm trying to understand all of these to get the safest bike that would allow my child to go to school and back.

14:59Now, all that research, which I would have had to do or a consumer has to do for so many different use cases, now you can have an agent and you can tell it, hey, this is kind of what I'm trying to accomplish. Go and bring me best recognized capabilities of products in this space. So that research becomes hyper-personalized. It becomes hyper-tailored, right? You become a segment of one. And that's today, and we're all less than three years into this era of generative AI. Can you imagine what it would be like in three years from now or 10 years from now? I mean, when you talk about, Adrian, in this kind of conversation that's going on, I think our viewers and listeners would be somewhat familiar with this.

15:41They're going on to ChatGPT, or they're going on to Google, and saying, hey, I need some new sneakers. What are the best sneakers out there, right? And so it sounds like you're taking it a next step there in your mind that that would then help you make the transaction, help you go down that funnel to buying something. Correct. And discovering it and then buying it, some things you may want to do yourself, something you may empower your agent to do with permission. And the way it will evolve and what it will look like in the future is very hard for us to predict, much like when the first iPhone came out in 2007, we could never have imagined how we would be using it today.

16:24And this world of commerce powered by generative AI is going to evolve even faster than that because of the unique characteristics and capabilities of these particular types of models and technology. But no matter what happens in the future, we can say what will still be the same. What we as consumers or as merchants would still want 10 years from now, which is we would want to make sure our data is secure, that I am in control of my data and what I allow it to do. I want to make sure that the guardrails that an agent can do on my behalf are very clear to me and I'm able to manage it. All those things are going to be required in the future.

17:11Trust is the underlying platform for all of this. And as we were talking, that's kind of how we're extending our technology to empower and enable and catalyze this beautiful new world of agentic commerce. Trust has to be earned, of course. You know, you made an announcement recently of this thing called the Trusted Agent Protocol. Is that part of what you are talking about here? And if so, why does it matter? It's trusted agent protocol. Correct. Indeed. It's exactly what we are trying to do. So there are different parts of this platform that let me sort of unpack for you. Maybe you could do it as an example.

17:55Okay, so this agent's buying me a bike. What parts of the trusted agent protocol should make me trust it? So the first thing is the merchant should know that the agent is a legitimate agent, that they have been cryptographically validated and verified by some platform underneath. So it is not a fraudulent or a scam that is going on. So there is the proof that is needed for that agent, for the merchant. And this is a huge thing, right? Because we are coming out of, we are currently in the e-commerce world. The internet has made this possible. and right now we are known as shoppers we are known by some identifiers right whether it's our cell phone or email address or the tokens that you provide through visa right and the idea that an ai buyer will be out there how do we know it's real right yeah it sounds dangerous that's right and that's why you need some kind of proof and a platform that can validate that they are who they say they are authenticate and they're authorized to do what they are trying to do.

18:58So there's the authentication and then there is the authorization. The second thing is the merchant would need to know that who is this agent representing? Can you give me some verification on who the consumer is or the organization or the business that you are actually representing? So first you are legitimate and now let me know who you're presenting so I can recognize you. And then as the payment is happening, you want to make sure that the agent has the payment in a secure encapsulation so that the payment instrument and the credentials that are being used to actually transfer the money for the goods or the service are being done with care and with security.

19:43And then finally, it's based on open standards. So you don't need to have one specific agent for one type of merchant or one country or one segment and your agent and merchants can interact in a very open manner for purchases. I'm going to go back to that thing I keep hitting on. So when you see the kind of the future of agentic AI and payments out there, how does that fit into Visa's revenue model? How are you making your money on that? So the way the underlying economics would work will probably evolve and change over time. As a technologist, though, for me, the core is to make sure that the guardrails and the security and the aspects around compliance and personalization being done very carefully with control and privacy-preserving frameworks.

20:40the form it is occurring in is different, but the underlying platform has to provide all of those. So it's ensuring that the payment rails go into whatever form of shopping that's occurring. That's what you're concerned about. The business will follow into the new frontier, if you will. That's right. I do wonder, I was talking to a fintech consultant, Richard Krohn, who's a really smart guy, And he thinks there's a huge potential here for Visa to grab a piece of the ad tech business from the likes of Google. That Google makes some money, makes some money, a lot of money from those promotion fees, right?

21:18And Visa makes its money from transaction fees. But in a world of agentic AI, programmable shoppers, if you will, is there room there for kind of Visa to get into that space, into the ad tech game? Is that out of the realm of possibilities? Are you thinking like that? It starts something we have thought of even remotely right now. Our focus really is about secure commerce and catalyzing this world of hyper-personalization or self-driving commerce where, like I was saying, the mundane aspects can be done by a delegate. And then things that one enjoys and the happiness that one gets in discovering things of one's interest are even more in the future than today.

22:03Given all you've described, all of the new lines of business that you're pushing into, all of the new technologies that you're offering merchants and consumers, it feels like this is a world where Visa is even bigger and maybe you have even more power. And of course, some merchants famously already think Visa holds too much power. And whether or not you agree with that, how do you strike a balance between what's good for Visa and what is good for the people you serve, in particular merchants? Look, we're an enabler, right? We are the layer that enables commerce to take place. Our focus has been to serve this market, bringing the economies of scale, bringing decades of expertise and experience.

22:50Just in the last five years, you spent over$12 billion on enhancing and making our networks stronger and more robust, ensuring the resilience of the billions and billions of transactions that we do every year. So that focus of ours, that goal of ours continues to ensure that merchants, consumers, and economies thrive. When we do this properly, it's good for merchants. It's good for consumers. It's good for economies. It's good for commerce. And frankly, it's good for society. We've talked about Visa as a tech company here. And I think you've made the case for why that is. And we've seen the company evolve in this last generation.

23:37With AI, there's the potential to evolve even more. With these digital currencies that you're working with, there's more change coming. What is Visa going to be for the next generation? I think Visa will continue to be, I hope, the platform of trust. Because at the end of the day, the future of commerce, the future of AI, will belong not to the fastest, but the most trusted. And as AI rewires everything about society, and commerce is a part of that, that we can bring to it the same kind of capabilities that we brought to the very beginnings of this ability to have electronic payments to face-to-face commerce, e-commerce, and mobile commerce, and we bring that to this new wave of agentic commerce.

24:39Well, I think that's a good spot to leave it. Sir, thank you for coming on today. It was a great conversation. Thank you very much. My pleasure. And that's Bold Names for this week. Our producer is Alexis Green. Our video producer is Kasha Broussalian. And our fact checker is Aparna Nathan. Jessica Fenton is our technical manager. Jessica and Michael LaValle are our sound designers. Jessica also wrote our theme music. Our supervising producer is Catherine Millsop. Our development producer is Aisha Al-Muslim. Chris Zinsley is the deputy editor. and Felana Patterson is the Wall Street Journal's head of news audio.

25:18For even more, check out our columns on wsj.com. We've linked them in the show notes. I'm Tim Higgins. And I'm Christopher Mims. Thanks for listening.