Visa Europe: the future of payments

Visa Europe: the future of payments

Visa Europe : the future of payments

One of the real privileges of my role at Visa Europe is the fact that I get to test out every new Visa payment solution.  Each time we develop a new innovation, I make sure the research and development teams give me a prototype.  That way I can judge, for myself, the ease and convenience, and I can see, first hand, the attitudes and reactions of real people – including the frontline retail staff, who play such an important role in supporting the introduction of new payment services.

A couple of years ago, I was finally persuaded to put my trusty Nokia 6310i into retirement and, in its place, I was given a shiny new smartphone.  From the outset, it supported Visa payWave contactless payments, and was loaded with my bank’s mobile banking application.  It also had in-built Oyster card functionality, enabling me to pay for travel across London’s underground and bus networks.  Then, each time we put another new service into development, it gets incorporated into my smartphone.

To say that this has been a life changing experience is no exaggeration. 

I have become a mobile money evangelist.  I see how it makes life easier and more convenient.  I understand the value it can bring to our members.  I also witness, on a daily basis, the way other people react – including the teenagers who stop me in the underground to ask where I got my phone, and the shop assistants who gape, wide-eyed and open-mouthed, each time I use it at a contactless terminal.

Consequently, I am convinced that the future of money will be mobile.  The mobile device is set to become the remote control for my entire financial life.  In the past, new payment innovations may have been ‘pushed’ to a largely indifferent market, but in the future, I know they will be ‘pulled’ by a hugely eager and enthusiastic market.

Getting the end-to-end proposition right

So who will be the winners in the new world of payments?

It won’t necessarily be those companies who operate at the bleeding edge.  The first into a new market is rarely the most successful.  Instead, the winners are those who get the proposition right. 

Consider the way Apple has operated. 

Apple was not the first company to make an MP3 player.  Indeed, when the iPod first arrived ten years ago, it seemed destined for failure.  A late arrival to a crowded market, it cost far more than any of the alternatives, and was launched in the midst of a global technology slump.

It was a similar story with the iPhone.  When it first arrived in 2007, there were hundreds of other smartphones available, the specifications did not compare particularly well, and the mobile community was not exactly welcoming Apple into the fold with open arms.   Yet, in both cases, Apple was first to get the wider proposition right, and the Apple device quickly became the icon. 

With mobile money, the winners will be those who get the end-to-end proposition right – and I know that no one is better equipped to do this than Visa Europe and its members.

The components of the winning proposition

We are working towards a future in which any one can pay at any time, in any place, from any device, backed by the strength of one of the world’s most trusted brands.  In creating this future, Visa Europe and its members have some truly unique assets, which place us, collectively, in pole position.

• The payments leader

With 400 million cards, generating more than €1 trillion in point of sale volumes, and accounting for €1 in €8 of consumers spending, Visa Europe is well established as Europe’s payments leader.

• The industry innovator

From the creation of the credit card in 1958, to the invention of the dial up terminal, to the shift to chip and PIN, to the deployment of contactless, Visa has always been at the forefront of change – and we have the authority to lead change.

• The most trusted brand

For more than a decade, we have been rated by Reader’s Digest as Europe’s most trusted payments brand.  In any league table of global brand values, Visa always appears well above its peers.  We have also been rated as the most trustworthy brand to deliver mobile payments.

• A phenomenal distribution network

Online, over the phone and face-to-face, Visa enjoys an unsurpassed level of acceptance across 200 countries worldwide.  Here in Europe, we have a strong, productive partnerships with some 4,000 members, for whom money and finance is already a core business.

• A focus on interoperability

Everything we do has to work for every member in any situation.  To meet the Visa brand promise, we establish and abide by global standards.  Indeed, one of the real product development frustrations we often face is the time and effort it takes to define these principles.

• A commitment to security
  Across Visa Europe, our fraud-to-sales ratio, now trending below 0.04 per cent, has reached a historic low.  Because we want to keep things this way, solid security is factored into all of our new innovations, and our risk roadmap anticipates and accommodates the realities of operating within a more open and complex industry ecosystem.

• The payments ‘back office’

Over 50 years, we have perfected the details of running a secure, reliable, ‘always on’ payment processing infrastructure – and doing so at vast scale. 

Our current platforms are the result of a €500 million investment.  As well as delivering the necessary authorisation, clearing and settlement and data management facilities, they come with all the mechanisms for built-in consumer protection.  This is an aspect which many new entrants routinely overlook.  What happens when things go wrong?  When goods or services aren’t delivered as promised?  Or payment is fraudulent?  Or a dispute escalates?  Issues like this may only occur in a tiny minority of transactions.  But, these so called ‘exception items’ will always happen – and for consumers they are a defining, moment of truth. 

Finally, as a European association, we are committed to working on behalf of our members, making sure that you have the necessary fire power to win in the new world of payments.  Collectively, we have all of the right components to drive change and to achieve scale.

What?  When?  How?

One of the things that is so exciting at Visa Europe right now is knowing that the coming months are set to be punctuated by a steady stream of product launches and enhancements.

Two entirely new services are now nearing commercial availability:

• Visa Mobile P2P payments – enabling registered users to transfer funds to any Visa cardholder from their mobile phone, backed by all the security, the expertise and the connectivity of the Visa Europe processing systems.

• Visa Mobile Alerts – notifying registered cardholders in real-time, whenever their card has been used to make payments across the Visa Europe payment network.

At the same time, we are finalising the details of our commercial Near Field Communication (NFC) services.  Here, we are defining the necessary standards, to ensure that mobile devices can work easily and securely across the existing Visa payWave contactless acceptance infrastructure.  We are also providing a range of here and now solutions to bring NFC capabilities to existing devices.

We are also working on a range of advanced loyalty and e-commerce services, and accelerating towards the launch of our next big innovation – our own member-issued digital wallet, which is due for launch in selected markets from 2012.

What is important is that all of these developments can be integrated together.  The idea is that they all become facets of a wider proposition which, from a member perspective, would also include the core mobile banking service.  With this in mind, the underlying platforms are designed to be flexible, and complementary, and to accommodate a clearly defined development roadmap.

Although our approach is mobile-centric vision, it is not mobile-only.  Our vision is for any time, any location, and any device.  That includes the mobile phone, AND the tablet, AND the laptop, AND the PC, AND, for the foreseeable future at least, the trusty plastic card.  Again, we are focussed on the end-to-end proposition, and we know that a single solution across a single channel will never be adequate.

As you can see, it’s a busy time for Visa Europe and we want our members to take full advantage of our investments and our innovations.  So, speak to your relationship manager for more details.

2012 – the year it all comes together

The London 2012 Olympic and Paralympic Games is set to be an accelerator for the future of payment.

For example, we are working closely with a range of other Olympic partners, such as Samsung and McDonalds, to showcase the ease and simplicity of mobile payments; we are also working with the UK authorities, including Transport for London, to extend the mobile-ready acceptance infrastructure; and, of course, we are working with the Visa Europe membership on cash displacement.

Every time the Olympic Games take place, the world watches.  For London 2012, the world will be watching the future of payment.