October 3, 2023 at 14:57 GMTModified date: October 3, 2023 at 14:57 GMT
October 3, 2023 at 14:57 GMT

New Visa fund to invest $100m in AI businesses

Visa has unveiled plans to launch a new $100m fund directed towards those leveraging generative artificial intelligence (AI).

New Visa fund to invest $100m in AI businesses

Visa has unveiled plans to launch a new $100million fund directed towards those leveraging generative artificial intelligence (AI). It plans to invest in companies that are actively implementing these technologies into the commerce and payment industry.

According to the press release, Visa views this venture as “an extension of the company’s leadership in AI use to drive innovation in payments, create value for partners and clients, and enable and empower global commerce”. 

All investments under this initiative will be overseen by Visa Ventures, the global corporate investment branch of Visa. This arm has a history dating back to 2007, with its core focus being on fostering innovation in payments and commerce.

Visa’s broader association with AI is not new. It first utilised AI technology back in 1993 for risk and fraud management purposes. More recently, it has released more advanced AI-powered tools and services.

Generative AI in the Financial Sphere

Generative AI took the world by storm last year with the widespread release of ChatGPT. The broader technology has the capability to produce diverse content, including text, images, sound, and data. 

Jack Forestell, Visa’s chief product and strategy officer, said: “While much of generative AI so far has been focused on tasks and content creation, this technology will soon not only reshape how we live and work, but it will also meaningfully change commerce in ways we need to understand.”

Visa’s Prior Engagements with AI

Over the years, Visa has incorporated AI into various aspects of its business. In 2021, Visa rolled out VisaNet +AI. These AI-infused services were developed to address challenges like delays and complications associated with managing account balances, among other day-to-day settlement issues faced by financial institutions. 

Some notable tools from this suite are Smarter Stand-In Processing and Smarter Posting. The former helps enhance payment experiences during outages, while the latter aids in faster consumer payment experiences.

The company then released the Visa Advanced Authorization in 2022. It is a real-time payment fraud monitoring tool by Visa and has averted potential frauds estimated around $27bn.

Insights from Visa Ventures

David Rolf, who heads Visa Ventures, is bullish on the future of generative AI. He stated that generative AI holds the promise “to be one of the most transformative technologies of our time.”

When discussing Visa Venture’s investment strategy, Rolf told TechCrunch that the business has “a lot of flexibility” in terms of the number of investments and the average check size. 

He added: “Given the early stage of the industry we’d expect to make a range of smaller investments of a few $M. That said, we have the ability to make larger investments where there is a strong rationale to do so.”

Rolf emphasised that Visa is specifically keen on supporting companies that utilise GenAI to address tangible challenges in commerce, payments, and fintech.

The fund’s main page highlighted its dedication to the technology.

It said: “Visa sees generative AI as a transformative force in the world of commerce and payments, enabling faster access to critical information, better decision-making and unlocked potential. We look forward to helping bring this future to life.”