Dive Brief:

• Visa and Fidelity National Information Services (FIS) have expanded their partnership to provide new value-added services to financial institutions in a bid to level the playing field for smaller regional and community banks competing with bigger banks, the payment giants said Thursday in a press release.
• Among the credit and debit card issuing services that Visa and FIS are offering to financial institutions are a digital campaign manager for their marketing teams; a branded digital wallet link; and e-commerce fraud mitigation. Visa and FIS are also providing the bank card issuers with stop payment services so cardholders and call centers can stop recurring payments to merchants, the release said.
• With the new services, Visa and FIS aim to give regional and community banks access to more services that let them increase their card issuer revenue, reduce fraud losses and keep customers, according to the press release.

Dive Insight:

Visa, the biggest U.S. card network, and its rival Masterard are both leaning further into value-added services. In January, Visa CEO Ryan McInerney said during an earnings call that the network giant uses its value-added offering to deepen client relationships and sell customers a broader array of services. The company argues the strategy also results in better sales for banking clients.

“Our collaboration with FIS is making it easier for financial institutions of all sizes to compete more effectively by offering solutions that drive growth and enhance customer retention,” Kathleen Pierce-Gilmore, global head of Visa’s issuing solutions, said in the statement. “We partner to provide banks with more accessible tools from fraud prevention to cutting-edge digital experiences for their customers.”

Earlier this month, Visa appointed Andrew Torre as president of value-added services, replacing Antony Cahill, who became the San Francisco-based company’s CEO of European operations.

Visa’s value-added services business logged annualized revenue growth of 20% in the years since 2021, ballooning into a $9 billion global business, according to the release announcing Torre’s appointment.

Meanwhile, value added services have also been a driver of growth for Mastercard. The company’s first-quarter value-added services revenue jumped 16% over the year-earlier period, according to a May earnings release.

Beyond its Visa collaboration, FIS made two acquisitions this year to bolster its services aimed at banks and chief financial officers. In February, the company confirmed its purchase of digital corporate banking services company Dragonfly and supply chain finance software provider Demica. The acquisitions will support the company’s payments, anti-fraud, treasury and supply chain management offerings.

Fraud prevention tools have become critical for payments providers and financial institutions as they combat fraud losses, and prepare for an increase in threats. Fraud losses in card payments will keep rising over the next decade, culminating in $403.88 billion of losses worldwide over the next ten years, industry research firm Nilson Report predicted in a January.