Visa Membership

Visa is among the largest payment processing networks in the world, connecting around 15,000 financial institutions. It enables frictionless cross-border transactions that promote international commerce and address the needs of a global customer base. By joining the network as a Visa issuer, your financial institution can gain access to a vast array of cutting-edge payment solutions that are secure, swift, and efficient, and therefore allow you to build customer trust and loyalty, no matter the location of your customers.

What Is a Visa Member

A Visa member is an entity authorized to participate in the Visa payments network with rights and obligations ultimately defined by Visa within the framework of financial regulations imposed by national regulators of jurisdictions where Visa operates. The network is a vast ecosystem connecting such members as card issuers, merchant acquirers, merchants, cardholders, and service providers, allowing seamless and secure transactions using Visa-branded payment cards.

What Is a Visa Issuer

Unlike Discover and American Express, Visa doesn’t issue cards directly to the public but rather through financial institutions that are granted Visa issuer membership. A Visa issuer is an institution that holds membership with Visa, giving it the authorization to issue Visa-branded payment cards, such as credit, debit, or prepaid cards, to consumers or businesses. These members are part of the Visa payment network, allowing them to participate in and facilitate transactions within the Visa ecosystem.

Visa issuers can be financial institutions like banks, credit unions, or other entities that have been approved by Visa to issue Visa cards. They play a crucial role in providing consumers and businesses access to payment methods that are widely accepted across the globe, enabling secure and convenient transactions both online and in person. To improve their offerings, Visa issuers can also provide additional benefits, including safeguards against identity theft and fraud, insurance coverage for car rentals, and discounts on business purchases.

Visa authorizes Visa issuer members to issue various card levels satisfying different needs and consumer segments. These card levels include Visa Classic for everyday transactions, Visa Gold with various additional perks, Visa Signature with premium rewards, and Visa Infinite with such top-tier benefits as personalized services and exclusive access to unique experiences. Essentially, as a Visa issuer, you would be able to significantly diversify your card portfolio and this way expand your institution’s market reach and competitiveness.

Overview of Visa

Visa’s story began in 1958 when Bank of America launched the BankAmericard program in California, considered the first consumer credit card. In 1974, it expanded nationally, and in 1975, a debit card was introduced. To emphasize BankAmericard’s global presence and cohesive network, in 1976, it was renamed Visa. Through the 80s, Visa continued to grow and develop advanced security measures, such as the Card Verification Value (CVV) code. Today, Visa remains focused on innovation and security, as well as collaborations with fintech companies, and initiatives toward a cashless society.

Visa operates in more than 200 countries and territories with products and services available on cards, laptops, tablets, mobile devices, and more. Visa’s core products include credit, debit, and prepaid cards as well as business solutions and global ATM services. Its network spans across continents, facilitating payments and transactions in various currencies in the Americas, Europe, Asia-Pacific, Africa, and the Middle East. Visa’s extensive global presence and versatile range of products and services across multiple platforms can present a tremendous opportunity for your financial institution.

Benefits of Visa Issuer Membership

With almost 40% of global card transactions occurring through Visa-branded cards, you can be sure that by becoming a Visa member, your financial institution will be exposed to a substantial market share and gain a strategic edge in the swiftly evolving financial industry. As a Visa issuer, your institution will have a variety of opportunities to innovate and tap into a large pool of consumers who are already familiar and comfortable with Visa’s payment ecosystem.

Visa issuer membership advantages for financial institutions:

• Visa has a reputation for reliability, security, and innovation, and joining Visa’s network can instantly align your financial institution with this globally recognized brand which will allow you to build trust with consumers and businesses worldwide
• Visa’s presence in over 200 countries and territories opens doors to a vast global market, and you can leverage this extensive network to attract customers, expand your customer base, and offer your services to consumers and businesses across borders
• Since Visa offers a variety of products, you can tailor your offerings, meet specific customer needs, and differentiate your financial institution in the market
• 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

Both Mastercard and Visa networks offer similar fundamental services, yet there are nuanced differences and unique features that you should consider when choosing between them. Your choice will depend on such factors as the network’s market reach, 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 the comparison of Visa and Mastercard:

• Visa is larger in terms of transactions, purchase volume, and cards in circulation but both have nearly identical global merchant acceptance footprints which means that regardless of your chosen network, your cards will likely be accepted at a comparable number of merchants globally
• While Visa operates as a single entity globally, allowing for centralized decision-making and consistency across regions, Mastercard functions as a collaborative network of regional entities, providing a bit more flexibility in regional adaptations and approaches which is useful for institutions focused on specific regional markets or industries
• Visa has a broader global reach, whereas Mastercard’s historical strengths lie in travel and entertainment (although both networks currently serve a wide range of industries)
• Visa tends to focus on innovative payment features and products, while Mastercard tends to dedicate more efforts to innovative security initiatives and collaborations, emphasizing robust transaction security
• Visa offers slightly more benefits for its lower-level credit cards compared to Mastercard, whereas Mastercard predominantly reserves its best perks for its premium cards which is why Visa might be a better choice if you target a broader range of consumers
• Visa imposes data processing fees on the card issuer for each transaction, whereas Mastercard levies connectivity fees on issuing banks for utilizing the Mastercard network at various stages of the payment processing workflow

While there are various other differences between the two leading payment processors, they are very similar in their capabilities, innovative payment features, and security. As we said earlier, you have to analyze their differences and similarities against your business model and goals in order to make an optimal decision that will positively impact the growth of your financial institution. Do let us know if you need help from our experienced lawyers when conducting an in-depth analysis.

How Visa Members Are Regulated

Becoming a Visa issuer means signing up for continuous adherence to various rules and regulations designed to ensure secure and efficient transactions, safeguard cardholder data, maintain network integrity, and uphold consumer protection standards. Visa members are regulated through various internal policies and guidelines set out by Visa itself, as well as external regulatory frameworks and standards imposed by financial authorities and governing bodies in various jurisdictions.

Visa sets out specific terms and conditions in membership agreements that members must adhere to, outlining their obligations, responsibilities, and permitted activities within the Visa network. It also maintains a comprehensive set of operating regulations that members must follow regarding transaction processing, security standards, dispute resolution, and compliance measures. Since Visa itself is regulated by various financial authorities, its members are subject to compliance with the regulations imposed by these authorities as well, including requirements related to security, data protection, and anti-money laundering and counter-financing of terrorism (AML/CFT) measures.

Visa members must also align with industry standards and regulations governing the payment card industry, such as the Payment Card Industry Data Security Standard (PCI DSS) to ensure secure handling of cardholder data. The PCI DSS includes such rules as implementing robust firewalls to protect cardholder data against unauthorized access, using encryption protocols when transmitting cardholder data across public networks to safeguard information, and keeping systems, software, and security applications updated with the latest patches to address vulnerabilities. All of these rules and standards are imposed and updated by the Payment Card Industry Security Standards Council (PCI SSC).

Visa members are subject to financial regulations and supervision imposed by regulatory authorities in the regions where they operate. These regulations ensure financial stability, consumer protection, and fair business practices. As a licensed financial institution, you probably already know what national and regional regulatory frameworks are applicable to you. If you haven’t obtained an appropriate financial license yet, know that it will be required for your Visa membership application, and take the time to talk with our team to find out about the swiftest and most suitable way to obtain a license for your financial institution.

Types of Visa Issuer Memberships

You can choose from two types of Visa issuer memberships. Your decision should be based on such factors as your institution’s capabilities to manage the responsibilities associated with a specific membership, business goals, associated risks, and membership eligibility criteria. Our team of experienced lawyers can help you conduct an in-depth analysis of your business, and share actionable insights that will help you decide what Visa membership suits your business best.

Types of Visa issuer memberships:

• Principal membership
• Associate membership

The principal membership is designed for larger financial institutions that are experienced in risk underwriting, credit management, billing customers, and collecting payments. They work directly with Visa for product development and marketing. Although they need to pay service fees, they enjoy the highest level of flexibility in handling various capabilities and bear complete responsibility for all activities linked to the assigned Bank Identification Number (BIN), a critical component in credit, debit, and prepaid card transactions allowing to identify an issuer.

Principal Members can conduct, inter alia, the following activities:

• Issue cards
• Disburse cash
• Acquire merchants
• Manage settlement risk
• Host own processing
• Sponsor others
• Handle reporting
• Manage sponsored financial institutions
• Directly license BINs
• Register third-party agents

The associate membership is designed for smaller financial institutions, including startups. They work under the sponsorship and authorization of the principal member and are allowed to issue Visa cards. However, their authority and responsibilities within the Visa network are limited compared to principal members. Nevertheless, associate members often benefit from the infrastructure and support provided by their sponsoring principal members.

Associate Members can conduct the following activities:

• Issue cards
• Disburse cash
• Acquire merchants
• Directly license BINs
• Register third-party agents

Eligibility Criteria for Visa Issuer Membership

To become an issuing member of Visa, your financial institution will have to fulfill various requirements set out by Visa, and essentially build a formidable card issuance proposition. All of your supplied information about meeting these requirements will have to be supported by various documents that we can help you prepare, including drafting, having them translated, and ensuring their accuracy and alignment with Visa’s standards and guidelines. This way you’ll avoid any legal errors and streamline the application process.

You can contact us any time but for now, take note of the following Visa membership eligibility criteria:

• Demonstrable compliance with regional financial regulations and licensing requirements
• Demonstrable compliance with the PCI DSS and Visa’s guidelines
• Financial stability, sufficient capitalization, and sound business practices
• The infrastructure and technology to process transactions securely and efficiently
• Robust risk management systems to mitigate fraud and protect cardholder data
• Paying membership fees associated with joining the Visa 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
• Evidence of sufficient capitalization to support card issuance activities
• Certificates affirming compliance with regional financial regulations and industry standards
• Documentation of your institution’s AML/CFT policies and procedures
• Description of the institution’s technology and infrastructure for transaction processing
• Details on data security measures and compliance with PCI DSS standards
• Issuer application form provided by Visa, completed with accurate information
• Details about legal actions, disputes, or litigations involving your institution

It’s also important to note that to launch a card program, you might need the following enablement partners:

• A BIN sponsor – the issuing bank that owns the BIN, which is necessary to access the Visa network, holds cardholder funds, and takes on the role of managing risk and local country regulations, in line with Visa rules
• An issuer processor who will keep the system of record, manage issuance, authorize transactions, and communicate with settlement entities
• A fraud solutions partner who will help you battle fraud within your issuing program (many of these partners also offer dispute solutions to ensure your program runs smoothly)
• A program manager who will oversee your card program, including establishing key relationships, marketing to consumers and merchants, and helping to support profitability

Finding reliable enablement partners might be challenging and to simplify the process, Visa has already established plenty of such relationships. It collaborates with a range of trusted enablement partners whom you can engage with to launch your solutions. Each partner undergoes Visa’s thorough vetting process, ensuring they are recognized as a program partner or solution provider within the network. To maximize the strength and value of your potential partnerships, our team can share legal perspectives and recommendations tailored to your business.

How to Apply to Become a Visa Issuer

To become a Visa issuing member, you can apply through the Visa’s licensing program which will simplify your application process. The platform guides applicants through digital questionnaires and offers the option to seek guidance from Visa at every stage. As licensing rules vary by country, you’ll require a specific license (i.e., authorization to utilize your membership) for each country where operations are intended. Specific application steps, just like prerequisites, will vary depending on your selected countries or regions.

The key stages of the Visa membership application process:

• Prepare and internally review all your documents to ensure they meet Visa’s criteria and accurately represent the institution’s capabilities and compliance status
• Fill out 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
• Based on the country you are applying for, Visa’s dashboard will update with additional forms, including an anti-money laundering questionnaire, client licensing agreement, and, if you’re applying for associate membership, sponsorship agreement
• Undergo a vetting process by Visa, which involves assessments, due diligence, and approval based on meeting the established criteria
• Once approved, you may begin the implementation activities to connect to the Visa network

After the approval, you’ll also gain access to several other Visa products and services – like Visa Application Programming Interfaces (APIs) and solutions. This access opens doors to a plethora of tools and resources designed to bolster your institution’s presence and efficiency within the Visa network.

If you wish to become a Visa member and enable your financial institution to benefit from the extensive global network and innovative payment solutions, our team here at Regulated United Europe will be delighted to support you in ensuring that your company fully complies with the relevant eligibility criteria and is well-prepared to enter into an agreement with Visa or a principle member.

We have over six years of experience in helping numerous businesses navigate the financial industry and and experience in obtaining electronic money institution license in Europe. Contact us now to schedule a personalized consultation during which we’ll discuss your immediate steps toward a successful Visa issuer membership application.