Visa and MasterCard are fighting a truce battle to keep a startup. The winner will be a business that will grow in prominence in the coming years: the shipments of "low cost" money from one country to another, which will soon exceed US $ 30,000 million annually.The first to approach a proposal to take control of Earthport, the London-based firm dedicated to low-cost international transfers, was Visa, which was willing to put on the table a whopping US $ 255 million.Predictably, MasterCard's response was not long in coming. If his opponent wanted to play hard, he was willing to do it: 305 "green sticks" was his proposal.Visa "put the cry in the sky" and far from resigning to his rival, he redoubled the bet: he offered US $ 320 million as "last offer".Mastercard does not want to give in, and that's why it has just asked Earthport shareholders not to make a decision yet, since it is analyzing several options.Meanwhile, the startup lives its moment of glory. And no wonder: wanted by the two largest credit cards on the planet, their shares grew five times since the dispute began.But, what does this company have so that two giants like Visa and Mastercard are beating a duel to keep it?The secret of desireEarthport was born in 1997 as a financial services company. It is dedicated to streamlining and cheapening international money transfers between banks, based on the use of new technologies.As these operations continue to be carried out "old-fashioned" (ie, using intermediary banks), the traditional process usually takes several days and is expensive.In January 2016, Earthport added Ripple as a strategic partner, a blockchain-based platform for the financial market. Since then, it became an ally of several companies that needed to turn money abroad, especially banks.In 2017 he got an investment round of US $ 32 million, with important funds behind, like Andressen Horowitz. Today, it has 200 employees and offices in London, New York, Dubai, Miami and Singapore."Earthport grows every year in the number of countries where it operates and sends money to different parts of the world, these operations are vital for payment companies such as Visa and MasterCard, which are fighting side by side to stay with the leadership in this segment ", says Alberto Vega, Latin America manager of BitPay, to iProUP.Juan José Méndez, manager of Marca de Ripio, ensures that Earthport registered an increase of close to 30% in the number of countries in which it operates."It offers a solution that allows you to lower costs considerably, since with one network you reach almost 90 territories, Visa and MasterCard seem to be interested in reducing the number of intermediaries with which they handle international transfers," the executive points out to iProUP.However, experts say that the key here is not the use of virtual currencies per se, but the blockchain platform - in this case, Ripple - a technology that promises to revolutionize the way information is transferred in a faster and reliable."It's similar to what Walmart is doing: using blockchain, but not virtual money, the advantage Ripple gives them is speed, unlike other traditional systems, the information is recorded almost instantly," says Méndez.In this way, according to Vega, the company manages to "reduce the total number of intermediaries, no matter what technology is used, although the chain of blocks is one of the most promising to solve this problem."As an example, he points out that "Bitcoin makes it possible in several markets, although its liquidity is still limited".The futureAt this time, Earthport is deciding whether to accept the Visa offer or if it expects Mastercard to put more money on the table. Some sources give the first as a fact.Méndez reiterates that the main benefit for the company that wins will be "the reduction of costs, since it would work with less intermediaries in international payments".In addition, continues the expert, "would be less dependent on other companies that provide the service, as they would incorporate the know-how to your company.""The game has several edges, mainly the construction of liquidity in different markets," says Vega.He also points out that whoever "loses" the battle for Earthport will be forced to bet on similar firms, such as the Currency Cloud. And he points out that the virtual currency companies would also be allies to achieve the cheapening of transnational transactions or become competition.The director of Ripio adds to the list to Transfer Wise: "It is more user-oriented", he says, although it highlights the antiquity in the Earthport market as a differential.Faced with a global market that is constantly changing, both Visa and MasterCard know that money transfers to any country in the world should be done quickly and without leaving security aside."Without a doubt, it is a battle for something that the two companies consider to be key and the one that loses will be at a disadvantage, we must follow it closely because it is not common to see such a battle between two important players," says Méndez."This competition is key to the strategies of global expansion of both, the construction of infrastructure that allows them to outdo their competitor will continue to be a focus for both companies," says Vega.He adds: "No matter who wins this bid, the fight has many rounds ahead although they say that whoever hits first hits twice".For Argentina, how are we doing?While Visa and Mastercard are struggling globally to see which one is left with Earthport, at the local level they are working to mature contactless technology, which speeds card payments and opens up a new range of possibilities.The first to bring this method to Argentina was Mastercard, just over a year ago, but Prisma, Visa issuer in the country, is not only renewing plastics with banks, but is also working with businesses So they accept this new modality."As of the first quarter, customers of the main banks in Argentina will receive their contactless plastics," he anticipated iProUP Agustin Parodi, manager of Acquisition Products of Prisma's Means of Payment division.
At the same time, they negotiate with supermarkets, service stations and other chains the implementation of new collection devices that accept contactless, which speeds transactions, promises to avoid long queues and offers greater security for the following aspects:- The customer supports the card over the reader, without having to deliver it to a third party- The plastic has a chip with encrypted data that allows not to "clone" the card.- The transaction does not require the issuance of a coupon or the signature of the client in transactions of up to $ 1,000.- The cards can be "virtualized" in an electronic wallet, allowing placing the cell phone over the terminal."The strategy until now is single-brand (only Visa) After the first quarter we will do it with all of them", says the manager of Prisma, a company that recently obtained the license to issue Mastercard.He also reported the arrival of his VisaNet network in the country, with which he could implement payments from cell phones, cars and smart watches. The company affirms to iProUP that even the appliances can be used to pay purchases in a non-face-to-face manner.For example, an intelligent refrigerator can combine the VisaNet platform and the app of a supermarket so that the user requests those foods as soon as they detect missing items, pay them through the screen of the appliance and receive them at home.Likewise, the company opened this platform globally to independent programmers to enable them to develop solutions that are "embedded" in any type of device connected to the Internet.For its part, First Data, an issuer that until recently was exclusive to MasterCard, went ahead of Prisma (and, also, Visa) to launch its contactless payment devices in the country.In fact, Argentina will be the first country in Latin America and fifth in the world (after the United States, Canada, Germany and the United Kingdom) in which the US company will introduce its Clover terminals.Both the equipment that Prisma will distribute and those that First Data will deliver to the stores will have touch screens, Wi-Fi and 3G Internet connection and compatibility with magnetic stripe cards, with chip and contactless.In addition, those of the US firm will incorporate software to monitor sales, manage personnel data and allow the installation of apps and thus expand the functionalities of the team based on the information generated in the transactions.Thus, First Data Cono Sur expects to reach 200,000 adhered businesses and launched the Acceptadores campaign, an online community of SMEs in which, through training, it promotes its collection terminals.The goal of being the main online payment processor leads both brands to offer millionaire sums for a -until now- unknown British company.While Mastercard asked the shareholders of Earthport to make a decision, it knows that the clock is running. And that it is not good to make anyone wait in times of digital transformation.