August 30, 2012
With digital wallets from the likes of PayPal Inc., Google Inc., and the Isis consortium grabbing headlines, Visa Inc.’s V.me staff has been quiet but busy. The payment service is live with five online merchants, and Visa plans to introduce it as a commercial product by year’s end, a spokesperson with the network tells Digital Transactions News.
While Visa is concentrating its wallet on e-commerce for now, the product will ultimately allow mobile-device users to make purchases at physical stores. When this capability arrives, Visa will likely use some combination of the device’s secure element and cloud servers to store card credentials, Visa watchers say. This so-called hybrid approach contrasts with that of Isis, a joint venture of the country’s largest mobile carriers. Isis plans to use the secure chip in the phone, probably the SIM card, to house users’ payment details. Google this month revamped its wallet to store card credentials in the cloud, but retained reliance on the phone-based secure element to house a prepaid virtual card that identifies users and initiates transactions.
Introduced late last year, V.me allows users to store any payment card from any brand and use the credentials to make payments at participating merchants. So far, these include Bidz.com, Buy.com, Cooking.com, Modnique, and PacSun. For the V.me beta, “a good chunk” of Visa employees are using the wallet, but any consumer can sign up for it at any of the merchants’ sites, the spokesperson says. He adds he cannot quantify the number of users. Sign-ups at the merchant sites take place during checkout and allow users to load their cards without leaving the site. Once enrolled, consumers can use the wallet to make payments at any of the five merchant sites.
Buy.com went live on V.me first, in May, with the other four following later. More merchants may be added before the beta ends. At that point, Visa will rely on its network of issuing financial institutions to promote the wallet to their account holders.
Currently, users can load only payment media into the wallet, though Visa is likely to allow non-payment documents, such as transit tickets or forms of ID, later. Apple Inc. has already introduced this capability with its Passbook wallet, due out with its expected introduction of the iOS 6 operating system, and Google is planning a similar feature. Visa will include a location-based offers service with V.me that will likely rely on what it learns from a pilot it is running with The Gap clothing chain. In the pilot, cardholders who buy at The Gap with their Visa card trigger an alert telling them they can claim a discount if they return to a Gap store within a specified period of time.
Physical-world payments, however, are not likely to be enabled any time soon. While Isis hasn’t launched yet and rival MasterCard Inc. only introduced its wallet strategy in May, the nearly year-old Google Wallet has struggled in large part because of a paucity of retail locations equipped with readers capable of handling mobile devices using near-field communication (NFC) chips. “We’re big fans of NFC, but it’s not quite ready for prime time,” the spokesperson says. “There are 300,000-plus NFC terminals around the world, well below the millions of locations where people are shopping online.”
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