Visa's Digital Wallet Coming This Fall to Compete With Amazon, PayPal
We knew this was coming. Not only did Visa say last week that it would be making a significant mobile payments announcement today, but recent acquisitions made by the card-issuer, including CyberSource, Authorize.net and PlaySpan, hinted that it was on track to get into electronic payments business.
This morning, Visa unveiled a digital wallet that includes “click-to-buy” features for making e-commerce payments. The program is expected to launch in the fall in the U.S. and Canada. More advanced features, such as mobile payments, will launch in other countries first, where mobile usage is high, but card issuance has historically been low.
In the emerging markets, it said very politely that it will “aid in the complexity of the myriad of network operators, handset models and operating systems,” which is code for it’s a big mess so we have nothing to announce now.
Visa’s click-to-buy features will compete directly with Amazon’s 1-click and PayPal services, which are used by many merchants across the Web to speed up the check-out process by only requiring a username and password instead of having to type in a credit card number.
PayPal issued a statement reacting to the news today: “PayPal was built 12 years ago because traditional payment methods weren’t designed for the digital world. We’re light years ahead: More than 98 million people around the world have already trusted us with their digital wallets.”
While ultimately most charges made on PayPal and Amazon end up on a credit card of some sort, this announcement today positions Visa to have a more direct relationship with the card owner to add on additional money-making services. The announcement also will enable the company to compete directly with electronic payment providers, like PayPal and Amazon, as well as other card issuers, such as MasterCard, American Express and Discover, which are all working on new hybrid digital models for the future.
It’s teamed up with 14 or so banks, credit unions and other financial processors to roll the services out.
Key features include:
- Click-to-buy: Users will have an online ID and password to make e-commerce purchases instead of using an account number. This will be easy to use across both e-commerce and mobile commerce, and include such activity as paying for virtual goods inside of a game.
- The Wallet: Users will be able to store multiple accounts in the digital wallet, including non-Visa payment accounts.
- Merchant offers: Users will be able to opt in to receive discounts or promotions.