In a groundbreaking announcement at the recent Singapore Fintech Festival 2023, Visa and Tencent Financial Technology, the fintech arm of global internet giant Tencent, declared a strategic partnership to enable Weixin users to receive inbound remittances directly into their digital wallets. This collaboration aims to extend the reach of the Visa Direct network to over one billion Weixin users in Mainland China, a key player in the world's largest inbound remittance markets.
The partnership comes at a time when digital wallets are experiencing exponential growth, with the global user base projected to surpass five billion by 2026. Digital wallets offer a secure and seamless way for users to perform financial transactions without the need to share account or card details. This makes them an ideal receiving endpoint for cross-border transactions, ensuring ease of use for consumers and facilitating reliable payouts for businesses.
Shirley Yu, Group General Manager at Visa Greater China, highlighted the rapid growth of cross-border transfers via digital wallets, citing a 48% increase in 2021, totaling $16 billion. In particular, major inbound remittance markets in the Asia-Pacific region, such as Greater China, India, the Philippines, and Bangladesh, have high digital wallet penetration. This makes wallets an important way for people who can not use traditional banks to receive money sent from other countries.
The collaboration builds on Visa's existing partnerships with Thunes and TerraPay, both of which have integrated Visa Direct capabilities. This expansion increases Visa Direct's global reach to an impressive 8.5 billion endpoints, encompassing over 3 billion cards, 3 billion accounts, and 2.5 billion digital wallets. Visa Direct serves as a pivotal access point, transforming global money movement by facilitating fund delivery to eligible cards, bank accounts, and wallets worldwide.
Royal Chen, Vice President of Tencent Financial Technology, expressed the significance of the partnership, characterizing it as a pivotal step toward forging a new era of global payment networks. By integrating with Visa Direct's client network, Tencent can seamlessly connect customers from these institutions to Weixin users in eligible markets, fostering compliance and streamlining cross-border financial transactions. Notably, Chen also emphasized the collaborative synergy, describing the opportunity to create a new, open, diverse, and inclusive borderless payment network together.
Tencent Financial Technology's cross-border payment arm, Tenpay Global, has already established partnerships with over 30 leading global remittance institutions. This has enabled remittance users in more than 60 countries and territories to connect with Weixin users. Leveraging standard APIs and robust global fund processing capabilities, Tenpay Global's innovative remittance solution ensures qualified Weixin users in Mainland China can receive remittances from abroad directly into their Weixin Wallet balance.
This collaboration not only addresses the growing demand for efficient cross-border transactions but also underscores the transformative potential of strategic partnerships in shaping the future of digital payments on a global scale.
