Visa, which is pitted against MasterCard to emerge the top player in the credit card industry globally, reported impressive numbers for the quarter ended June 30, 2014— a 5.3 per cent rise in operating revenues to $3.16 billion and a 11.4 per cent increase in net to $1.37 billion. But it is in no mood to rest on its laurels and instead unveiled Visa Digital Solutions which is designed to help facilitate secure payments across a broad range of Internet-connected products, in a bid to position itself as the preferred digital payments enabler for customers and partners.
Will the new initiative help Visa replicate its success in the physical world of plastic cards in the digital world? Before answering this query, let’s rewind briefly to recap Visa’s foray into the digital payment space and figure out what value it added to customers.
Visa made its intension to be the credit card of choice for digital transactions clear when it launched its online digital wallet service V.me a couple of years ago (for starters, a ‘digital’ wallet isn’t necessarily same as a ‘mobile wallet’ though a digital wallet service could also be housed in a mobile app interface).
V.me was aimed at making it easier for consumers to shop online, whether via web, mobile or tablet. The digital payments service stored not only the customer’s Visa card information, but also that of his/her MasterCard, American Express and Discover cards. It enabled the customer to just enter his/her V.me email and password while transacting at a supported merchant’s website, instead of entering in his/her payment information and shipping preferences manually. It also offered an added layer of security as the customer’s 16-digit card number was not displayed on the merchant’s site.
V.me effectively replaced the ‘Verified by Visa’ online authentication system. Typing in a 16-digit card number and expiry date to pay online has always been a disheartening customer experience and Visa aimed to position V.me as an online payment mechanism that can match the simplicity of PayPal and Amazon’s 1-Click payment option.
Recognizing that most customers will want only one wallet, Visa let them include cards and accounts from multiple banks in their V.me wallet, with the customer’s email address being a unique identifier. Besides enabling mobile contactless payments, V.me also supported a variety of ways to initiate payments, including bar and QR codes as well as NFC. Then in July 2014, Visa replaced V.me with Visa Checkout that enables consumers in the US, Canada and Australia to pay for goods online, on any device, in ‘just a few clicks’. The customer using Visa Checkout first creates an account and then links multiple Visa, MasterCard, American Express and Discover cards to his/her account. He/she is then able to select the ‘Visa Checkout’ button on participating merchants’ online and mobile commerce sites to pay by providing his/her username and password.
Extending its digital ambitions, it now intends to focus on activities that will accelerate digital commerce with Visa as a platform partner. To achieve this, Visa will enable more than traditional issuers and acquirers access to the network’s platforms so they can build experiences that use Visa’s payment capabilities. These new partners would include mobile operators, telcos, technology companies, device manufacturers, social networks and the application developer community. Visa is also offering specs and software development kits to enable solutions to embed Visa payWave and QR codes as the partners develop their solutions.
The idea is to help clients and their customers use Visa products in the digital world as easily as they can in the physical world. Sounds good. But Visa is not the lone player looking to grab a larger pie of the digital payment enabling space. Besides, MasterCard which is offering PayPass Wallet Services, PayPal and Amazon’s 1-Click, American Express, through its Serve platform, is not only competing head-to-head in the online payments space, but is working to enable other features like peer-to-peer payments. Then there are Google Wallet and other emerging players like Square, Dwolla, Direct Debit, BPAY, iDeal, etc. So in this more than cluttered space characterized by the problem of plenty, how will Visa grab customers’ and partners’ eyeballs and emerge a winner?
The answer possibly lies in larger partnerships and smarter branding. Visa has already roped in more than 180 FIs and organizations to offer Visa Checkout to their customers, including Bank of America, Chase and Citi. It may have to enlarge and strengthen this partnership roster besides coming out with a stellar, out-of-the box marketing initiative that will make Visa Checkout the Visa card of the digital world.
Will the new initiative help Visa replicate its success in the physical world of plastic cards in the digital world? Before answering this query, let’s rewind briefly to recap Visa’s foray into the digital payment space and figure out what value it added to customers.
Visa made its intension to be the credit card of choice for digital transactions clear when it launched its online digital wallet service V.me a couple of years ago (for starters, a ‘digital’ wallet isn’t necessarily same as a ‘mobile wallet’ though a digital wallet service could also be housed in a mobile app interface).
V.me was aimed at making it easier for consumers to shop online, whether via web, mobile or tablet. The digital payments service stored not only the customer’s Visa card information, but also that of his/her MasterCard, American Express and Discover cards. It enabled the customer to just enter his/her V.me email and password while transacting at a supported merchant’s website, instead of entering in his/her payment information and shipping preferences manually. It also offered an added layer of security as the customer’s 16-digit card number was not displayed on the merchant’s site.
V.me effectively replaced the ‘Verified by Visa’ online authentication system. Typing in a 16-digit card number and expiry date to pay online has always been a disheartening customer experience and Visa aimed to position V.me as an online payment mechanism that can match the simplicity of PayPal and Amazon’s 1-Click payment option.
Recognizing that most customers will want only one wallet, Visa let them include cards and accounts from multiple banks in their V.me wallet, with the customer’s email address being a unique identifier. Besides enabling mobile contactless payments, V.me also supported a variety of ways to initiate payments, including bar and QR codes as well as NFC. Then in July 2014, Visa replaced V.me with Visa Checkout that enables consumers in the US, Canada and Australia to pay for goods online, on any device, in ‘just a few clicks’. The customer using Visa Checkout first creates an account and then links multiple Visa, MasterCard, American Express and Discover cards to his/her account. He/she is then able to select the ‘Visa Checkout’ button on participating merchants’ online and mobile commerce sites to pay by providing his/her username and password.
Extending its digital ambitions, it now intends to focus on activities that will accelerate digital commerce with Visa as a platform partner. To achieve this, Visa will enable more than traditional issuers and acquirers access to the network’s platforms so they can build experiences that use Visa’s payment capabilities. These new partners would include mobile operators, telcos, technology companies, device manufacturers, social networks and the application developer community. Visa is also offering specs and software development kits to enable solutions to embed Visa payWave and QR codes as the partners develop their solutions.
The idea is to help clients and their customers use Visa products in the digital world as easily as they can in the physical world. Sounds good. But Visa is not the lone player looking to grab a larger pie of the digital payment enabling space. Besides, MasterCard which is offering PayPass Wallet Services, PayPal and Amazon’s 1-Click, American Express, through its Serve platform, is not only competing head-to-head in the online payments space, but is working to enable other features like peer-to-peer payments. Then there are Google Wallet and other emerging players like Square, Dwolla, Direct Debit, BPAY, iDeal, etc. So in this more than cluttered space characterized by the problem of plenty, how will Visa grab customers’ and partners’ eyeballs and emerge a winner?
The answer possibly lies in larger partnerships and smarter branding. Visa has already roped in more than 180 FIs and organizations to offer Visa Checkout to their customers, including Bank of America, Chase and Citi. It may have to enlarge and strengthen this partnership roster besides coming out with a stellar, out-of-the box marketing initiative that will make Visa Checkout the Visa card of the digital world.
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