When Visa turned part of its technology shop into an innovator's sandbox, the card brand hoped it would accelerate its evolution from a rail for plastic cards to a diverse commerce enabler.
This week at the Mobile World Congress in Barcelona the card network demoed some new technology ideas tied to that effort, revealing the use cases made possible through an open technology posture. As consumers and merchants adopt multichannel shopping and payments, more traditional payment companies like processors and card networks are pressured to keep up.
"There is a movement from plastic to digital. 2016 was the first time electronic payments passed cash," said Avin Arumugam, senior vice president of Internet of Things (IoT) at Visa.
Arumugam's mind is filled with creative use cases — an earlier discussion about dashboard payments turned into a prediction of how people will make payments from driverless cars. This week Arumugam's use cases were much closer to the present. "All people in payments have been waiting for these things to intersect. There's a lot going on with IoT, P-to-P [and] biometrics ... and it's awesome," he said.
Biometrics, IoT and wearable technology have been regarded as "futuristic," but they are getting closer to a competitive reality, according to Arumugam.
Five early developers were at the Barcelona event to demonstrate their technology and competed for a prize of about $35,000. The startups include Biowatch, which powers NFC payments based on vein technology through a Bluetooth-enabled watch; Maintool, which tracks a person's vital signs when attached to a watch; Evopark, which helps consumers find and pay for parking spaces; Wia, a cloud-based IoT platform that powers data management; and Kwik, which provides a WiFi-enabled buy button.
Visa has expanded its "Everywhere" initiative to Europe, adding geographic diversity to its effort to lure programmers who can embed payments into new venues, or the make existing payments faster or more secure. Everywhere, which is the network's attempt to take advantage of the "staggeringly large" opportunity available through open development, uses Visa's scale and network reach to attract new ideas, offering potential cash support, access to partners and collaborators and Visa's application programming interfaces to build new payments functions.
Starting in March, Visa will recruit developers in Europe to submit business ideas that apply to areas such as how digital payments can create products that aid local communities; or how mobile payments transform intercity travel; or aid international travel.
"One of the big themes were looking at is the IoT," Arumugam said. "As consumers figure out what they like you'll see new products come out for wearables."
Some early feedback shows people want a mix of passive and active payment devices depending on where they are, Arumugam said. "You may want to use a watch in some instances and a ring, which is passive and easier to use, in other circumstances."
Wearables such as the Apple Watch are leveraging the same contactless payment specifications that Android Pay, Apple Pay and Samsung Pay do, making the category one that merchant service providers should pursue, according to Rick Oglesby, president of AZ Payments Group.
"The point when we’ll see consumers regularly paying with a wearable device is still somewhat forward-looking," Oglesby said. "However the payment networks have been working to ensure that the underlying technology of accepting an in-person payment from a card, from a mobile device, or from a wearable device is about the same regardless of the device."
Visa also hopes to address expanding digital needs in emerging markets, moving mVisa, its QR-based payment service, to India, Kenya and Rwanda, with plans to add it to Egypt, Ghana, Indonesia, Kazakhstan, Pakistan and Vietnam.
In India, the government is strongly encouraging a move to digital payments — if not mandating it — suggesting now's the time to get aggressive with digital payments, according to Arumugam. There may be distinct opportunities in merchant services, he added.
"The government action accelerates the push to digital, and we're working in the Indian ecosystem to do that," Arumugam said, noting that many merchants are accustomed to using cash or very rudimentary feature phone technology to execute transactions, creating a change management issue. "Sometimes it can be more complex to make these changes when you don't have the crutch of a smartphone to lean on."