Details are still scarce about how the payment networks’ universal checkout "button" will look, but as Visa’s CEO sketched the goals for analysts on Tuesday, it appears each participant will have some branding representation.
Individual payment networks will be represented on e-commerce checkout pages with "the same detail,” said Alfred Kelly, Visa CEO, during a wide-ranging presentation at the annual J.P. Morgan Global Technology and Communications Conference in Boston.
“It’s yet to be defined and branded [but] it’ll open up a wallet, probably a card pre-selected, and [the consumer] can override that, select their product and confirm their purchase—very streamlined, a far less friction-type of experience,” he said.
It’s still “early innings” in the button’s development with many meetings still in progress between payment brands and EMVCo., which developed the standard for a universal checkout experience, Kelly said, adding: “It’s going to mean compromise on everybody’s part, but it’s going to allow a merchant to connect in one way for all, facilitating all networks.”
He also likened the concept to India’s approach to making payment apps interoperable.
“I think this is a case, analogous to the broad QR code in India where it’s just a very smart thing for the industry leaders to come together through the standard body of EMVCo, and actually do something that’s good for the payment ecosystem and put our individual egos aside,” Kelly said.
Kelly says he isn’t worried about reports that Amazon may develop its own payment network that would share more revenue with merchants.
“Amazon is very, very customer-focused. … It’s hard for me to imagine them ever wanting to be in a position where they’re forcing consumers into a certain … vehicle for paying,” Kelly said. “I think they’re going to want to be as open as they could possibly be to facilitate as many people, wanting to use whatever they want to use to pay on Amazon.”
On blockchain’s relevance to Visa, Kelly said it’s an area the company is exploring with no sense yet of its potential to disrupt existing payment models. “Blockchain is actually not very good about facilitating low-value, high-volume scale transactions, which is the core of what we do, so you’re not going to see us making any announcements that we’re moving to it in any way, shape or form to drive our core business,” he said.
Visa continues to see soaring growth for contactless payments globally, except in the U.S. The U.S. now accounts for half of the non-contactless transactions in the world, up from 40% a year ago, as contactless transaction volume grows in all other major markets.
“So we’re obviously very focused on getting contactless going in the U.S. … over the next couple of years,” Kelly said.
Visa is using its push payment Visa Direct capability to expand its geographic reach in Europe.
“We’ve chosen a path of going down and utilizing our rails for push payments rather than trying to piece together a country-by-country ACH network to facilitate this,” Kelly said, noting P2P payments are one of various use cases for push payments.
In a mature payments market like the U.S., it takes work to drive significantly more transaction volume, but there’s still plenty of opportunity, Kelly said.
Consumers are still spending more than $3 trillion via cash and checks in transactions that could migrate to cards. Examples include smaller transactions, where Kelly said Visa needs to “educate” merchants about the costs of operating in cash instead of electronic payments. “And we have to educate consumers about the fact that the acceptance is better than they might actually think it is at the smaller merchants,” he said.
E-commerce is “a major weapon” in Visa’s U.S. growth strategy, as more commerce shifts online, Kelly said. B2B payments also are ripe for improvement by shifting more payments away from checks and wires, but the complexity of different business verticals creates challenges, he said.
One other area where Visa sees room for growth is in managing large payments.
“We’re spending a lot of time thinking about things like rent and education, insurance, those kinds of things,” Kelly said.