Visa acquired Pismo. Here’s how their competitors can take advantage
Visa acquired a company called Pismo.io, who focuses on payment API integrations. We read through the PR statements, and there’s some gold nuggets for Pismo’s competitors, if they know what to look for.
So what’s the goal for Visa acquiring them?
There’s a few outlined in Visa and Pismo’s mutual PR article:
1) Visa wants to position themselves to provide better core banking and issuer processing capabilities
The issuer processor is a vital part of making and receiving payments and works in the background. It isn’t consumer facing. An issuing processing platform facilitates smooth and secure electronic payment processing between fintechs, banks, merchants, financial institutions, and more.
They manage the complex processes involved in authorization, clearing, and settlement of transactions.
2) Visa’s focused on providing support and connectivity for emerging payment rails.
Payment rails basically connect a person paying and someone getting paid – it’s what powers apps like Venmo.
3) Visa is going to expand their global marketshare via partnerships.
Visa is going to leverage Pismo’s technology and integrate them to their global partners, and Pismo makes a fat ton of cash by having a built in market to use their products.
So what does that mean for Pismo’s competitors?
1) Pismo is joining a behemoth of an organization
This generally means it’ll take a long time to integrate Pismo into Visa’s larger ecosystem. A larger organization generally moves slowly because of all the different departments that need to be involved in decision making and integration process.
2) There’s also a lot less appetite for risk
Larger organizations means a larger focus on mitigating risk, since any kind of compliance issue could mean hundreds of millions in lost revenue and fines. That means compliance teams tend to take 2-3x longer to approve marketing campaigns than smaller startups.
Fintech startups can take advantage by moving decisively and quickly. While you may not have the same budget, you can get scrappy and creative.
3) Competitors like Crassula.io should lean hard into digital wallets.
Why? It’s a core reason Visa acquired Pismo, and Pismo doesn’t have a strong online presence selling their digital wallet solution. Crassula has only 1 article about digital wallets they wrote 6 months ago, even though their digital wallet solution is a core offering of their product.
4) Visa told on themselves
Jack Forestell, Chief Product and Strategy Officer at Visa said they were using the acquisition to push Pismo’s core banking and issuer solutions. He also mentioned wanting to focus on emerging payment rails, like Pix in Brazil.
This tells us a few things:
First, they’re hitting Brazil. If you’re in that market, you need to double down on marketing and sales to keep up.
Second, they’re going after emerging markets – meaning they’re going wide and shallow. They won’t be able to effectively penetrate several emerging markets at once, it’s just not feasible. Entering the market in Brazil has different requirements than Argentina, Peru, or Chile, let alone Mexico. That gives startups in those markets a chance to go deep and vertical, and really establish a corner on the individual markets.
