Visa Envisions a World Where Your Credit Card Is Invisible
At the 2017 Wired Business Conference, sponsored by Visa, there’s evidence that the way consumers pay for goods and services is about to undergo sweeping changes.
Visa’s innovation chief, Jim McCarthy, would like physical credit cards to disappear. The company is working with tech giants Samsung and Apple to make Visa’s services more accessible to people who use gadgets like iPhones and Samsung Gear watches to pay for things.
When consumers use a device to pay instead of a physical credit card, the payment is secured through a tokenized backend infrastructure that creates a number to replace credit card details. Each credit card gets a Device Account Number that’s stored in a dedicated chip inside the device. Upon initiation of payment, a token with the information is passed to the merchant, but they never have access to the actual card number. Stores keep their customers’ tokens and domain restrictions in a Visa Token Vault. They can delete, resume, or suspend tokens both on devices and inside the payment network. An additional layer of security, Visa Risk Manager, puts controls on debit and credit products to catch high-risk transactions and detect fraud early. For consumers, locking down sensitive credit card information on Apple devices in the event that the device is lost or stolen is as simple as using Find My iPhone and putting it in “lost” mode.
While it’s understandable that security is a concern for many people, hacking the tokenization system will be a bit more difficult than installing an ATM shimmer or running credit cards through a pocket-sized reader to save the information.
Visa Token Service currently works with Apple Pay, Samsung Pay, Android Pay, and Microsoft Wallet. Payment experiences like Visa payWave, Bluetooth Low Energy, Visa Checkout online, and QR Code scanning offer retailers options never before seen in the world of mobile payments. It’s estimated that by 2020, there will be 20.8 billion connected things in the global marketplace. Activating the Internet of Things for commerce so that consumers have a convenient way to buy goods is one piece of Visa’s goal to help payment methods evolve.
In a collaboration between Visa global payments services and IBM’s Watson IoT platform, a plan is afoot to turn any device into a potential point of sale. Visa’s in charge of security. Their Token Service, which is the same technology Apple Pay uses, will make it possible for the Internet of Things to safely support payments.
So, a washing machine that automatically orders detergent when the household is running low is a real possibility. Sneakers that keep track of steps, send that information to a fitness tracking app, alert consumers to changes in the weather that may affect their plans to work out, and order new shoes as they wear out, are on the horizon.
While making day-to-day life easier for consumers is a major goal, retailers are looking forward to infusing payments into the Internet of Things to encourage and maintain both customer loyalty and their revenue streams. Instead of fighting for the attention of each individual consumer on the shelves of a big box store, a detergent manufacturer simply has to create a partnership with a washing machine manufacturer that will embed an automatic reorder system into the machines’ systems.
For many consumers, the infusion of payments into appliances, automobiles, and even jewelry has the potential to streamline everyday tasks and free up time for more important activities.