Visa Reinvents the Card, Unveils New Products for Digital Age

Rhea-AI Summary

Visa has revealed innovative products at its annual Payments Forum in San Francisco, aimed at addressing the future of commerce. Key technologies like Digital Identity and Generative AI are central to these innovations. New products include the Visa Flexible Credential, enabling users to switch between multiple payment methods using a single card, and various 'Tap to' features enhancing contactless transactions. Visa's Payment Passkey Service uses biometrics to streamline and secure online transactions. The company is also introducing Pay by Bank to digitize account-to-account payments and Visa Protect for A2A Payments to reduce fraud. Visa's data tokenization will offer consumers better control over their data.

Positive

• Visa Flexible Credential offers users the ability to switch between payment methods using a single card, enhancing flexibility and convenience.
• Tap to Everything features aim to improve contactless transaction experiences, potentially driving higher user adoption.
• Visa Payment Passkey Service leverages biometrics for secure, streamlined online payments, potentially reducing fraud.
• Pay by Bank digitizes and enhances account-to-account payment processes, providing more options to consumers.
• Visa Protect for A2A Payments utilizes AI to mitigate RTP fraud, potentially increasing trust and security in real-time payments.
• Data tokenization empowers consumers with greater control over their data and provides personalized shopping experiences.

Negative

• Challenges in consumer adoption of new technologies like Visa Flexible Credential and Tap to Everything could impact overall success.
• Integrating Visa Payment Passkey Service may require significant updates to existing systems, potentially incurring higher costs for merchants.
• AI-based fraud detection systems like Visa Protect for A2A Payments might face initial resistance due to privacy concerns.
• The success of Pay by Bank could be hindered by competition and consumer preference for traditional payment methods.

Insights

Financial Analyst

Visa’s unveiling of new digital payment products has the potential to significantly influence its financial performance and market position. The introduction of Visa Flexible Credential caters to growing consumer demand for customizable payment options. This innovation aligns Visa with modern payment trends such as Buy Now, Pay Later (BNPL) and rewards-based payment, which are increasingly popular among consumers.

Furthermore, the Tap to Everything initiative leverages the growing penetration of NFC-enabled mobile devices, enhancing user convenience and further cementing Visa's dominance in the contactless payment space. This could drive higher transaction volumes and, consequently, increased revenue for Visa.

Moreover, the Visa Payment Passkey Service, aimed at improving online payment security and reducing fraud, addresses a critical issue in the digital payments ecosystem. By increasing security and reducing friction, this service could enhance user trust and encourage more online transactions via Visa's network.

However, it's essential to monitor the rollout and adoption rates of these new products. If they resonate well with consumers and merchants, Visa could see a substantial boost in transaction volumes and revenues, positively affecting its stock price in the long term.

Tech Expert

Visa's integration of Generative AI (Gen AI) and advanced biometrics into its payment solutions demonstrates a forward-looking approach to digital payments. The Visa Payment Passkey Service utilizes the latest Fast Identity Online (FIDO) standards, which could revolutionize how identity verification and online payments are conducted. By replacing traditional passwords with biometrics, Visa is enhancing both security and user convenience, which could lead to wider adoption of its services.

The introduction of data tokens for better control over personal data is a timely response to increasing consumer concerns over data privacy. This aligns with emerging data regulation trends and positions Visa as a leader in consumer data protection. The ability to revoke data access easily provides consumers with unprecedented control, potentially increasing trust and loyalty towards Visa.

However, the success of these technologies will depend heavily on their implementation and user education. Ensuring seamless integration and ease of use will be critical to achieving widespread adoption.

Market Research Analyst

Visa's latest innovations reflect a keen understanding of evolving market demands and consumer preferences. The Visa Flexible Credential and Tap to Everything initiatives address the increasing need for flexibility and convenience in payment methods, catering to the digital-first consumer mindset.

Moreover, the introduction of Pay by Bank services and the expansion of Visa Protect for A2A Payments show Visa’s commitment to enhancing security and user experience in non-card payments. This could help Visa capture a larger share of the account-to-account payment market, which is currently underdeveloped compared to card-based transactions.

These innovations could lead to greater consumer and merchant adoption, driving transaction volumes and reinforcing Visa's market leadership. However, Visa must navigate potential challenges related to technological integration and consumer adoption to fully realize these benefits.

• Visa invites industry leaders to its annual Payments Forum to set agenda for the future of commerce
• Digital Identity and Generative AI (Gen AI) take center stage at San Francisco’s Moscone Center
• New innovations close the gap between in-person and digital commerce experiences

SAN FRANCISCO--(BUSINESS WIRE)-- The way people pay and get paid has changed more in the past five years than in the last 50. Consumers have evolved, adapting to new payment experiences – from the advent of embedded, digital commerce to the rapid adoption of “the tap.” Today at the annual Visa Payments Forum in San Francisco, Visa (NYSE: V) unveiled new products and services that will revolutionize the card and address the future needs of businesses, merchants and consumers and the financial institutions that serve them.

“The industry is at a pivotal point - new technologies like Gen AI are rapidly shifting how we shop and manage our finances,” said Jack Forestell, Chief Product and Strategy Officer, Visa. “We’re announcing the next generation of truly digital-native payment card experiences. Today we unveiled new card features and digital innovations that will bring consumers into a more customized, convenient and secure future.”

The new products and services Visa unveiled today, which will begin to roll out later this year, include:

Visa Flexible Credential

A Visa study found that more than half of card users want the power to access multiple accounts through a single credential.¹ The Visa Flexible Credential will allow a single card product to toggle between payment methods, putting the power of choice in the hands of the consumer. Now people can easily set parameters or choose whether they use debit, credit, “pay-in-four” with Buy Now Pay Later or even pay using rewards points. Visa Flexible Credential is live in Asia and will be launching with Affirm later this summer in the U.S.

Tap to Everything

There are six billion mobile devices in the world² providing consumers with a versatile NFC enabled device primed to be “tapped.” At the end of 2023, Visa’s tap to pay penetration reached 65% globally, up two times the penetration we saw in 2019, cementing tap as one of the best commerce experiences today.³

This year, new ways to “tap” on a mobile device will become an integral part of the Visa experience.

• Tap to Pay: Any device can now be a POS device
• Tap to Confirm: Easily authenticates identity when shopping online
• Tap to Add Card: Enhances security when adding card into a wallet or app
• Tap to P2P (person-to-person): Allows money to be sent between family and friends

Visa Payment Passkey Service

Identifying a person in the digital world has become incredibly complex and has resulted in a significant increase in fraud. Today, online payment fraud is seven-times higher than in-person payments.⁴

Built on the latest Fast Identity Online (FIDO) standards, the Visa Payment Passkey Service confirms a consumer’s identity and authorizes online payments with a quick scan of their biometrics like a face or fingerprint. When shopping online, Visa passkeys replace the need for passwords or one-time codes, enabling more streamlined, secure transactions.

“There is a global desire to find commonality, interoperability and simplicity for online payments. Our passkeys, designed specifically for payments, represent a massive paradigm shift in our industry because it confirms identity without interrupting the checkout experience,” said Forestell. “Visa Payment Passkey Service increases security while reducing friction when you pay online, across any device or website, globally.”

Click to Pay + Visa Payment Passkey Service

As its first deployment of passkeys, Visa is integrating Visa Payment Passkey Service into Click to Pay, powering a more seamless and secure checkout experience at scale. Additionally, in many markets around the world, Visa will partner with issuers to enable Click to Pay and Visa Payment Passkey Service on new Visa cards, reducing manual entry of card details and passwords from the moment the card arrives.

Pay by Bank

Non-card payments don’t deliver the same experience, security and protections as card-based payments. Electronic payments, like ACH transfers, have been left out of the digital revolution. With pay by bank, Visa is digitizing and streamlining the account-to-account (A2A) payments experience, giving people more choice over how they want to pay, whether that’s an A2A transfer, applying for a loan or paying with another funding source, like a credit card. Since its acquisition of Tink, Visa has expanded across Europe, giving millions of bank customers innovative financial management tools and removing friction from their payment experiences. Visa is bringing this new technology to the U.S. to help its clients deliver additional seamless, protected banking experiences.

Visa Protect for A2A Payments

Visa sees over 200 billion transactions every year and analyzes 500 data elements in every transaction to identify and stop fraud⁵ in real time. Working with Real-Time Payments (RTP) networks around the world, we are overlaying decades of Visa expertise in applying AI to help mitigate fraud for account-to-account payments on RTP networks. Live in Latin America and piloting in the UK, Visa Protect for A2A Payments is already identifying 60% of RTP fraud and scams previously undetected by financial institutions.⁶

Data Tokens

For the last 10 years, Visa has added security to the payments ecosystem by tokenizing payments, removing sensitive cardholder account information from the payment flow. Today, 29% of all transactions processed by Visa are tokenized,⁷ with widescale adoption by merchants and issuers in nearly every market globally. As new data regulations create a guide for better consumer data privacy practices, and Gen AI transforms how we discover things online, Visa believes that payment data has a role to play in delivering these new and improved experiences - and that consumers should be empowered to have more control too. Using its tokenization infrastructure, Visa will offer a new way for people to control their data and receive better shopping experiences, powered by AI.

Visa data tokens let consumers, whose financial institution participates in the program, consent to sharing their data as they shop online, then see where it’s been shared and revoke access right from their banking app. With data tokens, Visa and participating banks can enable an experience where a merchant can request consent from the consumer to get more personalized offers as they shop. If the consumer agrees, behind-the-scenes, Visa issues a private data token to the merchant complete with AI-generated insights based on the consumer’s transaction data. The data token can be used with the merchant’s AI models to deliver real-time recommendations for the shopper. Visa will also pass the data token to the consumer’s bank to capture where the data has been shared, so the consumer can easily review where it has been shared in their mobile banking app and revoke access if they choose.

About Visa

Visa (NYSE: V) is a world leader in digital payments, facilitating transactions between consumers, merchants, financial institutions and government entities across more than 200 countries and territories. Our mission is to connect the world through the most innovative, convenient, reliable and secure payments network, enabling individuals, businesses and economies to thrive. We believe that economies that include everyone everywhere, uplift everyone everywhere and see access as foundational to the future of money movement. Learn more at Visa.com.

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¹ Source: from Visa Flex Account Consumer Research Conducted November 2022: Consumer evaluation of Flex Consumer Value Proposition to support Visa’s pitch to Issuers (AP Markets only)​
² Statista Data 2023: https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/
³ VisaNet Data, December 2023, December 2019
⁴ Source: 1. Visa data. Fraud data from 3Q23. Approval rate from 4Q23.
⁵ VisaNet data, https://usa.visa.com/run-your-business/visa-security/risk-solutions/authorization-optimization.html
⁶ A Pay.UK/Visa pilot analysed more than 50% of annual UK A2A transactions over a 12-month period.
⁷ VisaNet, April 2024. Global card-not-present (CNP) and card present (CP) transactions for tokenized vs non-tokenized credentials.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240515563838/en/

jdresch@visa.com

Source: Visa Inc.

FAQ

What new products has Visa announced at the Payments Forum?

Visa announced Visa Flexible Credential, various 'Tap to' features, Visa Payment Passkey Service, Pay by Bank, Visa Protect for A2A Payments, and data tokenization.

What is Visa Flexible Credential?

Visa Flexible Credential allows users to access multiple payment methods through a single card, offering more flexibility in how they pay.

How does Visa Payment Passkey Service enhance online security?

Visa Payment Passkey Service uses biometrics to confirm identities and authorize online transactions, reducing the need for passwords and one-time codes.

What is the purpose of Visa's 'Tap to Everything' features?

'Tap to Everything' features aim to improve various aspects of contactless transactions, including payment, identity confirmation, card adding, and peer-to-peer transfers.

How does Pay by Bank improve account-to-account payments?

Pay by Bank digitizes and streamlines account-to-account payments, providing more choices for consumers in how they pay.

What is Visa Protect for A2A Payments?

Visa Protect for A2A Payments is a fraud mitigation tool using AI to detect and prevent fraud in real-time payments.

What are data tokens and how do they benefit consumers?

Data tokens allow consumers to control their data by consenting to share it for personalized offers, while also providing a way to revoke access through their banking app.