Visa Inc. is leveraging its sponsorship of the National Football League with a new one-day promotion geared to attract small businesses to its Authorize.Net payment gateway on Super Bowl Sunday, Feb. 7.
Visa announced Tuesday that it will waive Authorize.Net’s monthly gateway fee for the life of an account, along with transaction fees for the first 100,000 transactions, for businesses in the United States and Canada that sign up for Authorize.Net on Sunday. Visa values the savings for small businesses at more than $10,000 per business.
Visa says it is making the offer because many businesses still face challenges when it comes to accessing resources that enable long-term growth. Indeed, only 43% of merchants have embraced e-commerce, and 39% have added contactless card acceptance, Visa says.
“The resiliency of small businesses is inspiring, but there is work to do to help them recover and thrive,” Carleigh Jaques, senior vice president and general manager of Authorize.Net, said in a prepared statement. “The Authorize.Net offer extends Visa’s commitment to digitally enable businesses and helps alleviate burdens by minimizing some recurring operational costs.”
Still, the five-figure savings touted by Visa and Authorize.Net is not likely to dramatically alter the competitive landscape among gateways, says John Jakobe, market intelligence manager for The Strawhecker Group.
“I honestly don’t think the impact on other gateways will be too significant,” Jakobe says by email. “Most gateway providers resell Authorize.Net anyway, in addition to their own solution, so it could even benefit them as well.”
Further, the fact that Authorize.Net cannot sell merchant accounts is likely to prompt merchants to seek other providers to fill this gap, raising the question whether Visa will extend the offer to merchants that are sold Authorize.Net through these other gateway providers.
“If that is the case, then I think the impact is minimal,” says Jakobe. “If not, I think it could have a decent impact on some providers, but I don’t think it would be game-changing as Authorize.Net is only one piece of the larger e-commerce puzzle.”
Jakobe also points out that the waiver likely excludes interchange fees, which are priced by processors. These fees “make up the vast majority of the cost to the merchant,” Jakobe says. “Transaction fees are typically minimal to begin with, but can add up over time.”
In related news, Visa announced VisaNet +AI, a suite of artificial intelligence-powered services for banks, merchants, and consumers. The new services are aimed at relieving delays and confusion with managing account balances and the unpredictability of daily settlement for financial institutions.
Services in VisaNet +AI include Visa Smarter Posting, Visa Smarter Settlement Forecast, and Visa Smarter Stand-In Processing, which Visa announced in August
Visa Smarter Posting, uses artificial intelligence to deliver a customized score based on analysis of transaction details and historical data to predict the likelihood a transaction amount will remain consistent through clearing. The service proved 98% accurate during testing.
Visa Smarter Settlement Forecast provides clients with customized seven-day forecasts of the settlement amount they may need on hand each day. Visa Smarter Stand-In Processing uses deep learning to help financial institutions increase transaction authorizations during outages by generating an informed decision to approve or decline transactions on behalf of issuers.
“With our investment in AI infrastructure, we’re unlocking novel, real-time solutions to complex problems,” Jack Forestell, executive vice president and chief product officer for Visa, said in a prepared statement. “This is just the beginning of what we can do with the predictive power of AI.”