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The payments space is an exciting investment theme. One which we are heavily exposed to via Visa. It has been very interesting to follow the US payments space as a South African because we are ahead of them in this area.
South Africa has 5 or 6 large banks who are all willing to "talk" to each other via a centralised payments system. This makes the system much more efficient. The US has thousands of different banks, normally by state, and they do not integrate very well. That is why Paypal has been so successful as a centralised system.
Since Covid hit, fast electronic payments have become even more crucial. Small businesses have cashflow shortages and cash is dirty. This Tech Crunch article talks about how Paypal has expanded their instant transfer services globally. This also applies to cross border payments which are still very expensive and slow in most places.
You will be happy to hear that Paypal and Visa are best friends. All these payments go through Visa's sophisticated switching systems. Visa Direct, the product used for these payments, has reported 80% growth in the latest quarter.
