Visa Inc. (NYSE:V) has unveiled the Digital Finance for All (DFA) Initiative in collaboration with the GSMA Mobile for Development Foundation (GSMA Foundation), marking a significant step toward promoting digital financial inclusion for approximately 20 million individuals, including smallholder farmers (SHFs) and owners of nano, micro, and small enterprises (NMSEs). This strategic move is poised to benefit Visa, as increased financial inclusion and wider adoption of digital payments are expected to bolster its performance.
The initiative targets individuals, particularly women, from low and middle-income countries across Asia, Latin America, and Africa. Despite the growth in digital payments driven by improved mobile access, there remains a notable gender gap in phone ownership and Internet usage. According to The Global Findex Database 2021 report, digital payments in low and middle-income countries have surged by 66% since 2014, yet there is a 20% lower likelihood for women in these regions to possess a financial account. Moreover, SHFs encounter limited or no access to formal financial services like loans, savings, and credit.
DFA aims to address these challenges by providing financial education resources through a mobile financial literacy toolkit, thereby facilitating broader participation and access to mobile money services. By expanding the reach of the digital economy, this initiative is expected to contribute to Visa’s revenue growth in the future. Particularly in regions like Africa, where mobile money services represent a significant market, Visa is forging partnerships with local entities to tap into the rapid digital transformation underway.
Visa’s Visa Direct solution is set to play a crucial role in enabling users to send or receive money from any mobile money account or Visa card globally, thereby increasing transaction volumes within Visa’s network and bolstering its presence in untapped markets.
In addition to providing financial literacy tools, DFA will collaborate with the Visa Economic Empowerment Institute and GSMA Foundation to conduct joint research on advocacy, financial inclusion, and product innovation for SHFs, NMSEs, women, and displaced individuals worldwide. This partnership underscores Visa’s commitment to addressing the barriers of financial and digital literacy hindering financial inclusion.
Regarding price performance, Visa shares have demonstrated strong growth, gaining 30.1% over the past year, outpacing the industry’s growth rate of 25.5%.
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