Visa Moves Aggressively Toward a Cashless Society Using 'Digital Wallets' That Support NFC Payments

Visa Looks Beyond the Card With One-Click Digital Wallet

May 11, 2011

GigaOM - Visa is starting to put its big payment acquisitions to work with a new a digital wallet offering that looks to bring one-click transactions to e-commerce, mobile and social networking sites. The wallet, which offers users a simple sign-in instead of entering payment information for purchases, will help consumers checkout faster and should reduce online abandoned shopping carts for retailers.

The digital wallet, which will be introduced this fall in the U.S. and Canada, leverages Visa’s high-profile acquisitions in the past year of PlaySpan and CyberSource, two online payment solutions that have been active in facilitating online payments for merchants, social networks and digital goods sales on gaming sites. The move also shows how Visa is ramping up to compete in the payments space and is ready to take on companies like PayPal and a bunch of other providers.

Visa said the wallet and services platform will store Visa and non-Visa payments accounts including PayPal information and will support NFC payments through Visa’s payWave application. The card network sees the wallet being used for everything: e-commerce, mobile shopping, micropayments, social networks and personal payments.

Some of the big features for the digital wallet will be the ability to make payments using an email address or sign-in and password instead of typing in a credit card number, address and expiration date. In addition to using multiple payment options, users will be able to set preferences for which account will be tapped for certain purchase amounts and merchant types. And Visa said the digital wallet will hold loyalty card information and will offer the opportunity to receive opt-in discounts or offers from participating merchants.

The latest news from Visa highlights again how the credit card companies are positioning themselves for payments as they expand online through mobile and become more person-to-person. Visa recently announced a strategic investment in Square and is moving along with its own NFC plans. And it’s working with CashEdge and Fiserv to enable personal payments.

By tying NFC together with a larger wallet offering that’s good for online transactions, Visa is trying to build a one-stop shop for both online and offline payments. The company will still need to get people to sign up for this digital wallet, and just having an easier sign-in process for transactions doesn’t mean people will automatically use it for payments.

But Visa’s got the reputation and experience to help educate people about the merits of online payments and the value of a digital wallet. And with the help of CyberSource and PlaySpan, it has the ability to bring the solution to thousands of online merchants right away.

This is also about making sure Visa has got a foothold in the new world of digital payments, which is evolving quickly and getting more competitive.

• PayPal is expanding its online efforts and going more mobile, while Amazon is reportedly considering its own NFC efforts that could tap its expertise in online retail transactions and its large customer base.
  


• Apple is also reportedly looking at NFC and could potentially bring a payment offering that ties into its iTunes system.
  


• AT&T, Verizon and T-Mobile’s Isis joint venture has also regrouped and is looking more toward a mobile wallet that will utilize NFC.
  


• Facebook could also be a player someday with its Facebook Credits, which are now being used for Facebook Deals.
  


• And finally, rival MasterCard is also pushing hard on NFC and just yesterday announced that Carta was partnering to enable mobile provisioning of NFC.

Bill Gajda, head of global mobile product at Visa, said the company’s brand, expertise and global reach can help create a scalable digital wallet solution that should be easy to understand and frictionless for consumers. He said it’s part of a larger transition for the company as it slowly moves away from being a card network to a broader payments platform.

“People will use plastic for many years to come but increasingly, we’ll be talking about accounts not cards and Visa as a payment platform and provider as opposed to a physical card payment company,” Gajda said.

At this point, the race is on to see who can provide a payment option for people as they look to shop online, on mobile devices and in person with the help of smartphones. And Visa is showing it wants to be in the driver’s seat on this. There’s still going to be a lot of room for players in this payments market for some time, but Visa is showing that it’s marshaling its resources to try to maintain its strong position as payments evolve.

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