How Visa is powering the next generation of mobile payments
- The future of mobile payments will involve internet-connected devices such as refrigerators, cars and wearables.
- Visa says the future of payments innovation will center on partnerships between startups and incumbents.
On Wednesday, Visa, in an attempt to live up to its “Everywhere you want to be” tagline, introduced 13 new token-service providers that will allow digital payments from internet-connected devices, appliances and wearables. Of them, some major players include payment platform developers including Infosys, Rambus and FitPay, which works with wearables companies.
Transition from physical cards to mobile payments to payment from internet-connected devices (including wearables) is preoccupying major payment providers like Visa. The race to produce an easy, quick and secure way to pay has pushed incumbents to grow their partnership to bring choice and convenience to the consumer.
Tearsheet caught up with Jim McCarthy, executive vice president of innovation and strategic partnerships at Visa, at the Wired Business Conference Wednesday in New York, to get his thoughts on the what Visa is focusing on in payments, how to build a culture of innovation and how big finance and startups can partner.
What are the customer experience factors that you design for?
We don’t have to decide whether people use rings, watches or clothing to pay — consumers can decide what’s right for them. For us, it’s making it as easy as possible. Technology doesn’t drive things. I like to tell people about the Uber story. No one six or seven years ago, would have known that the big disruptor was a taxi or limousine service.
With the move from plastic card-enabled payments to a mobile ecosystem where a multitude of internet-connected devices can be linked to one individual’s payment account, where does this take us?
We talk about the Internet of Things, but as humans, the fact is we’re all in the mesh as well — we’ve exposed information about ourselves in a discreet or anonymous or aggregated way. Your card’s in the cloud — pretty soon you’ll be able to pre-order cash through an iris scan and won’t need phone or pin number. Where we get excited is smart devices like a refrigerator that can sense when stuff’s going bad or when you need to replace something. That combined with with rules you establish — whether it can connect to Amazon or Instacart — that’s all real. As the world explodes with devices that are internet connected, for us to put payment credentials on each of them is difficult. The token service providers take Visa’s software and work with third parties (for example, FitPay works with wearables companies).
How do you build a culture of innovation at a company as old as Visa?
For us to grow and continue to be innovative, we have to connect to third parties — we have opened our network (APIs) and partnered with companies that are changing the way consumers interact with the digital world around us.
So, it’s no longer a war between big finance and startups in the payments space?
People underestimate how difficult payments is — there’s regulation and compliance. The partnership model works — even in the bitcoin ecosystem, Coinbase partnered with Shift Payments to issue a Visa card. I’m a believer in partnerships in the space. It’s very difficult without Visa or Mastercard to build a global acceptance network and scale.