We've heard a lot about the notion of a digital wallet, but the tech itself seems slow to arrive apart from one or two regional experiments, and the promise of more exciting tech in the future. Now Visa's changing all that with a new plan to make the e-wallet, including wireless payments, a reality—and soon, too.
Visa, which calls itself a "global leader in electronic payments" has just announced what it's calling the "next generation of payments solutions." It means, quite specifically, the technology and financial data infrastructure that'll supplant the little card payment machines we're all used to swiping our card through to pay at a checkout or restaurant—a tech that's being swiftly overtaken by digital commerce, mobile commerce, and "burgeoning social networking commerce environments." Basically Visa's seen the writing on the wall for the way its credit card systems currently work, and is planning to reinvent everything into a "secure cross-channel digital wallet" and a "range of customized mobile payments services" tailored to local markets around the world. This is a good thing for us consumers, and probably a shrewd business move by Visa itself.
The new digital wallet will arrive in the U.S. and Canada in the fall of 2011, and it'll work by storing Visa and non-Visa payments data. It will support NFC payments through Visa's payWave system and it'll cover all sorts of payment situations, including e-commerce, mobile commerce, micropayments, social networks, and person-to-person payments. A long list of financial institutions are already on board, including U.S. Bank and the Royal Bank of Canada—indicating this really is a thing that's happening, rather than a far-fetched patent.
But what will it actually do for us as consumers? It's pretty clever, actually. First is a system called "click-to-buy" that simplifies the entire process of e-shopping a little like Amazon's "one click" does, only across all sorts of platforms. Visa's acting as your online financial ID manager, meaning that instead of typing in a billing address, payment details and so on into a shopping site, you'll simply enter an email address or some kind of ID. Visa will handle all the transactional details and security verification, instead of each different online store doing so, which is potentially more secure.
Then there's the cross-channel bit, which means you'll be able to associate non-Visa payment systems with your digital wallet. When you chose to pay using Visa's new system, it'll handle all the behind-the-scenes finances so you don't have to think about them, and it'll work, to borrow some old-school marketing jargon, wherever the new wallet is accepted—be it an e-shopping site or a real retail store. There's an extensive preference manager, of course, which controls privacy settings and comes with a filtering array so you can chose which account is billed from which retailer or purchase size.
And here's the potential killer app that'll perhaps have Groupon and others worried: merchant offers. Because the digital wallet is a data-rich transaction, with more information changing hands than the mere numbers printed on your credit card, merchants will be able to deliver money-off coupons actually during the payment process itself, and have them stored by Visa—assuming consumers opt-in (which will mean sharing demographic and other data with merchants for marketing purposes, we assume).
This really does sound a lot like the next-generation payments system we've been hearing about—and its inclusion of NFC will be of great interest to Apple (which has patent plans and, we imagine, real hardware plans too) and Google, which spoke at the IO conference yesterday to explain how it's not ready to fully embrace NFC payments tech yet.
Although the hardware angle hasn't been detailed by Visa, save for a few mentions of apps and its payWave system, the fact the credit card giant is putting all this infrastructure in place is very important to the tech's future. We contacted Visa's head of global mobile product Bill Gajda about the plan, and he noted "People are changing the way they connect and transact worldwide. There are more digital transactions happening each day," which explains Visa's motivation—and then he positioned Visa in the race to this sort of next-gen NFC tech against competitors like Apple: "As the largest payments company in the world, we’re in a position to simplify a key part of those transactions without sacrificing security. Your payments go with you wherever you are."