At first blush, the new Visa Checkout looks a little too similar to the V.me digital wallet it replaces. But in nearly every aspect of redesigning the product, Visa found some excess baggage that needed to go.
Most of all, Visa decided to get away from the "wallet" metaphor most new digital payment systems use as a foundation. Features like storing points and redeeming coupons "can kind of get in the way" when shopping online, says Christopher Boncimino, senior vice president of digital solutions at Visa. "We threw all of that stuff overboard."
Though the product still works with any payment card, it no longer stands in the way of the bank-issued card that funds any online purchases. Once Checkout knows a user's card and device, an icon representing the card appears by the Checkout logo. The user then clicks that card icon to pay, Boncimino says.
"We are not in the wallet business," Boncimino says. "We are in the card and digital payments business."
For authentication, Visa implemented a 'remember me' feature for future use of the digital card while also simplifying the language in its terms and conditions, Boncimino says. Visa Checkout users must still create a user ID and password.
The card network emphasizes that Visa Checkout works across all devices and allows automatic payment for online transactions wherever a Visa Checkout icon appears.
When transforming V.me into Visa Checkout, the company began asking how it could make a Visa card "work phenomenally well online," Boncimino says. In answering that question, it became apparent that Visa had to drop some aspects of V.me to ultimately simplify the user experience through Visa Checkout, he adds.
"Like all products we have rebuilt, you would expect us to constantly look at it and refine it, and that's where we started on this," Boncimino says.
Visa's approach indicates that it has changed its view on the mobile wallet landscape, says Richard Oglesby, senior analyst at Double Diamond Payments Research.
"There is a philosophical change going on here that I think is important," Oglesby says. Visa is shifting away from pushing a consumer digital wallet product that promises to replace a physical wallet, and instead saying it is offering an easier way to spend money online, Oglesby says.
"From a scale perspective, you could say that PayPal has a quick and easy way to check out and they seem to be winning in the online space," Oglesby says. "The financial institutions are not thrilled about that, so Visa is thinking about how to do deal with that one problem and solve it right."
Visa's earlier attempts at addressing this problem were perhaps too heavy-handed. Products such as Rightcliq in the U.S. and Payclick in Australia (which were developed independently but launched at the same time in 2010) were designed as portals that took over every aspect of the online shopping experience.
With Visa Checkout, the company wanted to "make sure that this was the simplest way to get through checkout, period," said Sam Shrauger, senior vice president of digital for Visa, in a July 16 presentation. "In the process, we took out all of the bells and whistles."
The simplicity of Visa Checkout extends to merchant integration as well, Shrauger says. "The technical integration required for this, relative to many other things out in the market, is extremely simple, and it fits well within our existing business operations."
Because of its speed and simplicity, Visa Checkout will fit well with the United Airlines mobile application, says Tom O'Toole, senior vice president of marketing and loyalty at United Airlines. O'Toole was part of Visa's July 16 presentation when it unveiled Visa Checkout.
A mobile device plays a key role in airline bookings and purchases of other products important to the airlines, O'Toole says. "Visa Checkout is exceptionally well designed and well-suited to enabling that, which is why we will have it on our mobile app and our website in the fourth quarter."
In addition, United Airlines expects to accept Visa Checkout payments on the plane, O'Toole says. "The on-board portal is the next digital channel for us."
Visa will deploy the same layers of security for Visa Checkout as it does for all other transactions.
"We look at up to 500 data points on any given transaction to evaluate the likelihood that the transaction is by the person who they say they are for a legitimate purpose," Shrauger says.