Visa Membership

Visas are one of the largest payment-processing networks in the world, with a record of about 15,000 interconnected financial institutions. It allows for frictionless cross-border transactions that enable international commerce and serve the needs of a global customer base. As a Visa issuer member, your financial institution will be guaranteed a full range of innovative payment solutions within reach to help make the process of making payments safer, faster, and more efficient. In this way, you’ll gain the trust and confidence of your customers irrespective of the different parts of the world they represent.

What is a Visa Member

A Visa member is an entity authorized to participate in the Visa payments network. The rights and obligations are ultimately defined by Visa within the framework of financial regulations imposed by national regulators where Visa operates. It is basically a big ecosystem of members including card issuers, merchant acquirers, merchants, cardholders, and service providers who come together to offer smooth, secure transactions using Visa-branded payment cards.

What is a Visa Issuer

Unlike Discover and American Express, Visa does not issue cards to the public, but issues cards through financial institutions that take up Visa issuer membership. A Visa issuer is one of the member institutions holding membership with Visa authorizing it to issue Visa-branded payment cards to consumers or businesses, such as credit, debit, or prepaid cards. The Visa Members form part of the Visa payment network that can enable them to participate in or facilitate transactions within the Visa ecosystem.

Visa issuers can be any banks, credit unions, or other financial institutions approved by Visa for issuance of their cards. They play a very critical role in ensuring that methods of payment are available to both consumers and businesses alike, accepted throughout the world, safely and with convenience, either online or physically. In furtherance to making their various products and packages even more attractive, a Visa issuer may give other benefits, such as identity theft protection, fraud protection, car rental insurance, and discounts on business purchases.

It provides for different card levels to suit different needs and consumer segments, including, among others, Visa Classic for everyday transactions, Visa Gold with added benefits, Visa Signature offering superior rewards, and Visa Infinite with top-shelf benefits like personalized services and private access to the finest experiences. In other words, as a Visa issuer, you would be able to substantially diversify your card portfolio and that way expand the market reach and competitiveness of your institution.

Overview of Visa

Visa’s story began in 1958 when Bank of America launched the BankAmericard program in California, thought to be the first consumer credit card. In 1974, it expanded nationally, and in 1975 a debit card was introduced. In 1976, BankAmericard was renamed Visa with the purpose of underlining its global presence and cohesive network. Through the 80s, Visa continued to grow and develop advanced security measures, including the Card Verification Value—what today is better known as the CVV code. Today, Visa also continues to focus on innovation and security, as well as collaboration with fintech in general, while taking initiatives for a cashless society.

The various Visa products and services are available in over 200 countries and territories on any card, laptop, tablet, and mobile device. The core products of Visa include credit, debit, and prepaid cards, among a host of business solutions and global ATM services. Its network spreads across continents, thereby allowing it to facilitate payments and transactions at all levels in different currencies throughout the Americas, Europe, the Asia-Pacific, Africa, and the Middle East. With Visa’s extensive global presence and versatile product and service offering across multiple platforms, the opportunity for your financial institution is tremendous.

Benefits of Visa Issuer Membership

With nearly 40% of the world’s card transactions taking place over Visa-branded cards, be assured that your financial institution will definitely be introduced to a huge market share by becoming a member of Visa, out of which it will be strategically positioned to have that leading edge in this fast-changing face of the financial world. Be a Visa issuer, and this might open up different avenues for innovation to your institution to tap into a vast pool of consumers already attuned and accustomed to the Visa ecosystem.

Benefits of Visa Issuer Membership to Financial Institutions:

• Visa is known for reliability, security, and innovation. Becoming part of the Visa network can immediately align your financial institution with this globally recognized brand. You will be able to build trust among businesses and consumers globally.
• Visa gives you unrivaled access to a multi-million-dollar market in over 200 countries and territories, tapping into this extensive network to attract customers, expand your existing customer base, and sell services globally to both consumers and businesses. Because Visa has a suite of products, you will also be able to tailor your offerings to meet the needs of specific customers while differentiating your financial institution in the marketplace.
• Visa consistently pioneers cutting-edge payment technologies, and you can gain access to innovative solutions, such as contactless payments, mobile wallets, and enhanced security features, that will allow you to offer state-of-the-art services, and meet evolving modern consumer preferences.
• Visa’s ecosystem emphasizes seamless payment experiences, and after becoming a Visa member, you can provide customers with convenient, globally accessible payment solutions, contributing to increased satisfaction and loyalty.
• Visa provides guidance and support to its issuer members to ensure adherence to regulatory requirements and compliance standards, which can help you navigate complex regulations more effectively.

Visa Membership vs. Mastercard Membership

While the respective basic services offered by both Mastercard and Visa are similar, each has subtle differences and even some unique features that you should consider in choosing between them. The choice, of course, depends on factors such as a network’s market reach, its product portfolio, brand recognition, and cost structure. Of course, you also have to think about your business goals, including your institution’s product strategy and the preferences of your target markets.

Here is a comparison of Visa and Mastercard:

• For other metrics, such as transactions, purchase volume, and cards in circulation, Visa is larger. Both have practically the same global merchant acceptance footprints, so no matter which network you end up with, your card will most likely be accepted throughout the world by a relatively equal number of merchants.
• Visa is a single entity across the world and hence able to make decisions centrally with consistency across regions. MasterCard serves as an interlinked network of regional entities which allows them to be slightly more flexible in terms of regional adaptations and approaches helpful to institutions that put their concentration on particular regional markets or industries.
• Visa is more international in its penetration, and the historical focuses of Mastercard have been travel and entertainment, though today both networks serve a wide array of industries. Generally, Visa centers its efforts on innovative features and products related to the payments domain, while Mastercard generally invests more time and energy into innovative initiatives and security collaborations with a heavy emphasis on transaction security.
• Visa gives a few more benefits with its lower-tiered cards compared to Mastercard, while Mastercard saves the best perks for the premium cards, so if you target a broader range of consumers, then perhaps Visa is the best choice.
• For every transaction, Visa charges the card issuer data processing fees, while Mastercard charges the issuing bank for connectivity fees because the latter used the Mastercard network at any instance in the payment processing workflow of a transaction. As we were saying, it is important that you analyze their differences and similarities against your business model and goals to make an appropriate decision that would favourably benefit the growth of your financial institution.

Please, let us know if you need help from our experienced lawyers in doing an in-depth analysis.

How Visa Members Are Regulated

Becoming a Visa issuer means signing up for continued adherence to a set of various rules and regulations that allow for secure and efficient transactions, protection of cardholder data, assurance of network integrity, and protection of consumer standards. Membership in Visa is regulated internally by the various policies and guidelines set out by Visa and from the outside through various regulatory frameworks and standards imposed by financial authorities and governing bodies in different jurisdictions.

Visa has spelled out certain terms and conditions in the membership agreements that the members are expected to observe, stating their responsibilities, liabilities, and allowed activities within the network. Secondly, it has developed an exhaustive operating regulation which the members are expected to adhere to with regard to the processing of transactions, standards on security, dispute resolution, and compliance measures. Its members will be obliged to follow the very same regulatory environment that has been set by various financial authorities, to which Visa itself is regulated-including, among others, the security-related requirements, data protection, and AML/CFT measures.

The members of Visa are also supposed to follow set standards and regulations within the industry for security processing of information obtained from cardholders, such as the Payment Card Industry Data Security Standard. Examples of such PCI DSS rules include maintaining a firewall configured to protect cardholder data from unauthorized access; transmitting cardholder data across public networks in an encrypted form using encryption protocols to protect information; and keeping systems, software, and security applications current with the latest patches to address newly discovered vulnerabilities. All of these rules and standards are imposed and updated by the Payment Card Industry Security Standards Council, or PCI SSC.

Visa Members are subject to financial laws and regulations, as well as supervisory control, exercised by regulatory bodies where members operate. Indeed, regulatory requirements support financial stability, consumer protection, and equitable business dealings. Because you have been accredited as a financial institution, you likely already know what national and regional regulatory regimes apply to you. If you haven’t obtained an appropriate financial license, let this be a reminder that it will be required for your Visa membership application. Take a second to speak with our team and find out what the quickest and best route is to take to get a license for your financial institution.

Types of Visa Issuer Memberships

You can choose between two types of Visa issuer membership. A number of determinants might facilitate the basis of choice, including but not limited to an institution’s capability to manage responsibilities associated with a certain membership, business goals at stake, associated risks, and membership eligibility criteria. Our team of well-versed lawyers can engage you in an in-depth analysis of your business and share actionable insights to guide you toward choosing what kind of Visa membership best suits your business.

Membership levels of Visa issuers are:

• Principal membership
• Associate membership

The principal membership is for the large financial institutions that have the experience in the risk underwriting, credit management, direct customer billing, and collections. They deal directly with Visa for product development and marketing activities. Although they pay service fees, they enjoy the highest level of freedom for processing various capabilities and take full responsibility for all activities performed with the assigned BIN, which is a critical part of the credit, debit, and prepaid card transaction identifying an issuer.

As a Principal Member, the following functions amongst others, could be executed:

• Card issuance
• Cash dispensing
• Merchants’ acquiring
• Settlement Risk Management
• Hosting of one’s own processing
• Sponsor others
• Handle reporting
• Manage sponsored financial institutions
• License BINs directly
• Register third-party agents

The associate membership is designed for smaller financial institutions, including startups. They are operated under the sponsorship and permission of the principal member and permission, under which they can issue Visa cards. Their power and role inside the Visa network is limited in comparison with the principal members. Associate members often benefit from infrastructure and support provided by their sponsoring principal members.

Associate Members can do the following:

• Issue cards
• Disburse Cash
• Acquire Merchants
• License BINs directly
• Register third-party agents

Eligibility Criteria for Visa Issuer Membership

To be an issuing member of Visa, your financial institution shall have to fulfill various conditions specified by Visa and actually come up with a robust card issuance proposition. The information you will provide from your side towards meeting these requirements will be obliged, in this respect, to be supported by various documents, which we can help you prepare, including drafting, translation, and verification for their correctness and appropriateness according to the standards and guidelines set up by Visa. This way, you will avoid any legal mistake and make the application process more feasible.

You may contact us anytime at any moment, but for now, take note of the following eligibility criteria for Visa membership:

• Demonstrated compliance with local regulatory requirements on financial matters and licensure.
• Demonstrate compliance with PCI DSS and Visa’s requirements.
• The financial stability to operate a business with adequate capitalization and sound business practices.
• The capability for providing infrastructure and technology necessary to support safe and secure processing of Visa transactions.
• The existence of robust risk management systems to mitigate fraud and ensure cardholder data security.
• Payment of membership fees to Visa for joining its network.

To prove that you meet Visa’s requirements, you’ll have to provide various documents:

• Your financial institution’s license from a national regulator where you operate
• Incorporation documents
• A viable business plan outlining your institution’s strategy, target market, and growth projections as a Visa issuer
• Organizational chart detailing your institution’s hierarchy, key roles, and responsibilities
• Recent audited financial statements demonstrating financial stability and viability
• Proof of sufficient capitalization to support card issuance activities.
• Certificates of compliance with local financial regulations, as well as with industry standards.
• Proof of your organization’s AML/CFT policies and procedures in place.
• Overview of the technological setup and total capacity for handling transaction processing at the organization.
• Information on data security and related compliances to PCI DSS standards.
• A Visa issuer application form completely and accurately filled out.
• Legal actions: Details with respect to litigation, disputes, or legal actions against your organization.

It’s also important to note that in order to launch a card program, you may need the following enablement partners and can include but aren’t limited to the following:

• A BIN sponsor-an issuing bank that owns the BIN is needed to gain access to the Visa network to hold cardholder funds and to play a risk manager and adherence role to local country regulations. This, according to Visa rules.
• A processor acting as an issuer that will keep records, manage the issue, authorize transactions, and communicate with the settlement entities via interfaces.
• A fraud solutions partner who will help you in fighting fraud within your issuing program. Most of these partners offer dispute solutions besides making your program fully operational.
• A program manager who will manage your card program; including developing key relationships, marketing to consumers and merchants, and assisting in supporting profitability.

Finding trusted enablement partners may be cumbersome and to make that process easier, Visa has already forged numerous such relationships. It works with a variety of premier enablement partners that you can hire to get your solutions up and running. Each of those partners has been through Visa’s complete vetting process to make sure they are an identified program partner or solution provider within our network. To ensure you get the most out of the strength and value of your future partnerships, our team will be ready to share legal insights and recommendations particularized for your business.

How to Become a Visa Issuer

The first step toward offering Visa is to become a Visa issuing member through applying via the licensing program, which will make it easy for you to get through the application process. The platform will guide you through web-based questionnaires and also include the option of consulting Visa at any stage of the process. Since licensing policies vary per country, you will have to apply for a separate license-i.e., permission to use your membership-in every country where you want to operate. Some application steps, such as requirements, will vary depending on the countries or regions you have selected to operate within.

The key steps in the process for applying for a Visa membership are:

• Prepare and internally review all your documents to ensure they are in compliance with the Visa requirements and correctly reflect the capability and compliance status of the institution.
• Complete and submit Visa’s onboarding questionnaire, including a copy of your banking license or regulatory credentials, and audited financial statements for the past three years.
• The Visa dashboard would be updated with additional forms that include anti-money laundering questionnaire, client licensing agreement, and, for associate membership, sponsorship agreement depending on which country you are applying for.
• Vetting process by Visa through assessments and due diligence with approval against the predefined criteria.
• Implement activity upon approval to connect to the Visa network.

Once approved, you also gain access to various Visa products and services, ranging from APIs to solutions. This access opens up a world of possibilities in terms of tools and resources that will help fortify your institution’s presence and efficiency within the Visa network.

Should you want to become a Visa member and enable your financial institution to benefit from the broad global network and innovative payment solutions, the team at Regulated United Europe would be more than glad to provide you with consultations on securing full eligibility for your company and preparing it for an agreement with either Visa or any principle member.

With over six years of experience in helping numerous businesses enter the financial industry, we are already seasoned professionals in obtaining an EMI license in Europe. To discuss further steps on your successful Visa issuer membership application, get in touch today and schedule a personal consultation.