- Forrester Councils
- Councils Overview
- log in
Posted by Benjamin Ensor on November 23, 2012
Although Visa talked a lot about contactless payments, what really struck me was what Visa said about the role of V.me in online payments. In effect, V.me will replace today’s Verified by Visa online authentication system, which is long overdue. Typing in a 16-digit card number and expiry date to pay online has never been a great customer experience, and Verified by Visa made it worse (and by taking customers away from the merchant’s site seemed much too much like a phishing attack). Visa hopes that V.me will finally provide an online payment mechanism that can compete with the simplicity and elegance of PayPal and Amazon’s 1-Click payments.
The second stroke of inspiration here is that by enabling customers to use V.me to pay online and on smartphones, Visa will encourage people to do the same in stores (even if the payment is initiated in a different way).
It seems to me that Visa has learnt the main lessons from contactless payment’s failure to take off quickly in the UK by focusing much more sharply on the needs of consumers and merchants. Forrester clients can see our framework for making new payment systems successful here and our view on digital wallets here. I think Visa has got a number of things right with its V.me strategy, including:
There’s good news for both banking and merchant eBusiness executives here. For bank eBusiness executives, Visa Europe is offering a white-label digital wallet that will meet many of your customers’ requirements while being a lot less costly to implement than trying to build your own wallet. For merchant eBusiness executives Visa Europe says that it will treat V.me transactions as fully-authenticated transactions, with the same merchant liability protection and associated lower interchange fees Visa Europe cards as Verified by Visa (see more here). Probably more importantly, a better online payment mechanism should reduce abandonment and increase conversion rates.
A lot of the attention in the race to establish digital wallets has been on PayPal, on exciting newcomers like Google’s Wallet and Telefonica’s O2 Wallet, and on the dark horse, Apple’s Passbook. But the race will be long, and Visa is a formidable competitor with deep experience and many assets. With a clear strategy now in place, Visa* has to be one of the favourites to win in the long term.
Thank you to Jonathan Vaux, Sandra Alzetta and their colleagues at Visa Europe.