Visa Joins Amex And MasterCard To Compete In Digital Wallet Arena

The mobile payment segment is heating up, with Visa joining the fray in announcing its version of a digital wallet. Earlier this year both American Express and MasterCard announced plans to offer digital payment capabilities for shoppers. Visa expects to launch the digital wallet in the U.S. and Canada in fall 2011.

The American Express version is called Serve, and was unveiled in March. The MasterCard program is a reported collaboration with Citigroup and Google, as reported in the Wall Street Journal.

The three largest credit card companies also are keeping their eyes on PayPal, which already has added mobile to its online payment service and plans to also offer offline payment in the future, noted Andrew Morris, CEO of Morris Advisors, Inc., during a session on mobile payment at the IBM Retail User Group (IRUG) conference in Orlando this week. Morris described the Visa digital wallet as “a cloud-based wallet, similar to PayPal.”


And don’t rule out Apple’s role in NFC payment, according to many industry experts. “iTunes already holds 200 million credit cards,” said Morris, so an entry by Apple into NFC payment would not be a surprise.

How The Visa Digital Wallet Works
Visa’s digital wallet will store Visa and non-Visa payments accounts, support Near Field Communication (NFC) payments through the Visa payWave application and deliver transaction services to accommodate e-Commerce, mobile commerce, micropayments, social networks and person-to-person payments. 

Using NFC, shoppers will be able to use their smart phones as in-store payment devices. The platform will be accessible in-store, online or through a mobile device.

Visa’s current contactless technology offering, payWave, enables account holders to complete a purchase by waving a Visa payWave-enabled card or mobile device in front of a secure reader. Hundreds of thousands of merchants in the U.S., Canada, and Australia are able to accept mobile Visa payWave transactions today.

Key features of the Visa digital wallet include:

  • Click-to-buy. Designed to streamline shopping and security, consumers can enter an email address, alias or online ID and password, instead of a billing address, account number and expiration date. In addition, Visa is exploring various authentication technologies that will bring added layers of security to online purchases.
  • Cross-channel payments solution. The wallet is designed to consolidate multiple Visa and non-Visa payments accounts and can be used in mobile, e-Commerce, social network and retail POS environments.
  • Preference management. Focused on providing an enhanced personalized experience, this feature is designed to enable consumers to set preferences for how their wallet will work, so they can customize and control the features of their personal wallet from privacy settings to designating which account will be accessed based on merchant type or purchase amount.
  • Merchant offers. This feature is designed to allow consumers to personalize their shopping experience by opting-in to receive money-saving discounts or promotions from participating merchants.

Visa is working with payments card issuers, community banks, credit unions, acquirers, payments processors and merchants to launch the digital wallet. The mobile payments provider is working with a number of organizations that support its wallet strategy, including Nordstrom fsb, Barclaycard US, PNC Bank, Royal Bank of Canada, Card Services for Credit Unions (CSCU) and US Bank, among others.

Streamlining Commerce For Global Markets
In an effort to reach a more global group of shoppers, Visa is launching a range of customized mobile-payment services designed to replicate components of traditional and digital e-Commerce payments. The customized mobile payments services address specific requirements of geographic markets in different regions of the world.

In certain emerging geographic markets with significant mobile penetration, Visa will work with financial institutions and mobile network operators to provide consumers with a secure, reliable and globally accepted form of payment and the ability to transfer and receive funds, manage financial accounts or top-up wireless air time using their mobile handset, the company reported.

Differing Goals For Different Countries
Because payment infrastructure and card availability is different throughout the world, Visa’s focus varies from country to country. For example, in countries like India and Russia, where, according to Visa, card issuance and mobile subscriptions are high but card usage is relatively low, Visa will seek to help drive account activation and usage. By working with financial institutions and mobile operators, Visa will help link existing card portfolios with mobile devices in order to bring payment functionality to handsets.  

In countries within Africa and the Middle East, where mobile device usage is high and traditional electronic payments infrastructure is less developed, Visa will work with mobile network operators to link new virtual mobile prepaid Visa accounts to mobile phone numbers to enable cash-in, cash-out, personal payments and mobile payments.

Visa also intends to connect existing “closed loop” mobile money services that today provide basic mobile banking and payments services to unbanked and under-banked consumers to its global, open loop network, VisaNet. The integration will open closed loop systems and provide consumers and merchants with scale, functionality and acceptance beyond their existing local geographic footprints. 

For more turnkey insights on mobile commerce trends, register for the Retail TouchPoints Customer Lifecycle Conference, a complimentary virtual event that will bring together industry experts and retailers. Howard Wilcox, Senior Analyst with Juniper Research, will highlight the progression of NFC and its role in retail, as well as case study examples of how retailers are winning with mobile. Register now!

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