November 14, 2012
As it turns out, digital wallets aren’t just a creature of the big banks. With Visa Inc.’s announcement on Tuesday that it has made its V.me digital wallet commercially available, the world’s largest payments network said some 53 financial institutions have signed on to offer the product to customers. Among these institutions are several dozen credit unions and community banks looking to have new wallet tech available as the holiday shopping season looms.
Up to now, such technology has been the preserve of some of the nation’s largest financial institutions, including money-center banks with the resources to develop and support the product for potentially millions of customers. For example, the Isis mobile wallet, which comes from a consortium put together by wireless carriers AT&T Mobility, T-Mobile USA, and Verizon Wireless, claims American Express Co., Capital One Financial Corp., and JPMorgan Chase & Co. as participating institutions a few weeks after the launch of its pilot in Austin, Texas, and Salt Lake City.
“We’re looking at all the things out there in terms of mobile wallet,” John Schulte, senior vice president and chief information officer with Mercantile Bank of Michigan, one of the small banks supporting V.me, tells Digital Transactions News. “That may be Google Wallet, V.me, or [Apple Inc.’s] Passbook. We’re going to place multiple bets.” With $1.4 billion in assets, Mercantile serves the Grand Rapids, Holland, and Lansing markets.
Service organizations for credit unions and small banks also have signed on to offer V.me, including Independent Community Bankers of America and The Members Group, which provides processing for both credit unions and community banks. “Especially for smaller issuers, it’s becoming increasingly important to offer customers multiple ways to transact,” said Brandon Kuehl, product development architect at TMG, in a statement released on Wednesday.
For now, V.me is restricted to e-commerce transactions, unlike Isis and Google Wallet, for example, which work at the point of sale. V.me allows users to store any payment card from any brand and use the credentials to make payments at participating merchants. Early merchants for the service, which has been in beta testing until now, include Bidz.com, Buy.com, Cooking.com, Modnique, and PacSun. At Tuesday’s launch, Visa said 23 online merchants are now accepting V.me, including Blue Nile and Shoebuy.com. 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 accepting sites.
Schulte says the convenience of storing all payment media in one digital place, along with loyalty points and other rewards, appeals to consumers his bank has talked to. “Customer awareness [of digital wallets] is actually pretty low, but when presented with a vision of the possibilities, that really excites them,” he says. Marketing hasn’t started yet, Schulte says, but will include pages on the bank’s Web and mobile sites and social-media campaigns. “It’s really about selling the future right now,” he notes. “We’re excited.”
Still, Mercantile isn’t placing all of its digital eggs in the Visa basket. Schulte says the bank is open to cooperating with a wide range of wallet providers, including non-banks like Google. Mercantile began working with another non-bank player, PayPal Inc., three years ago to offer person-to-person payments. “A lot of banks will see Google and PayPal as the enemy,” he says. “I scratch my head [at that]. It’s a mentality of curling up in a ball and ignoring what’s going on, or worse, blocking your customers. It’s not an effective strategy.”
For now, the price is right for Mercantile. “As a launch partner, there was really no cost” to offer V.me, Schulte says.
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