- PROJECT HELP
When Visa and MasterCard introduced, and later tweaked, their respective digital wallet services, some industry observers believed that it was a sign the card networks were about to enter the mobile wallet scrum. That, however, was never the intent.
What we saw from the two card networks, along with PayPal and more recently Pay with Amazon, was a way for merchants to address dilemmas such as cart abandonment, especially as consumers contiuned to move their shopping habits to mobile devices.
In Visa's case, it rebranded V.me two years ago as Visa Checkout to put its brand more front-and-center with consumers and become a mobile-first entity. Since the switch, Visa has worked to expand Checkout to new retailers, as well as make the service available to shoppers in almost 20 countries.
Mobile Payments Today had the chance to speak with Vish Shastry, the head of product strategy for Visa digital solutions, at the recent Shoptalk conference in Las Vegas about where Visa Checkout stands today, where it can go, and what he thinks about the competition in this particular corner of the payments market.
MPT: What are your thoughts about Amazon expanding Pay with Amazon checkout to other retailers' websites?
VS: We're big fans of innovation, first of all. [We're fans of] innovation with respect to consumer choice; innovation that helps consumers get through their commerce experiences quickly. We're always going to be front and center saying that we love innovation that drives better consumer experiences. From that perspective, we think [Pay with Amazon] is really interesting.
I do think there's going to be a choice that merchants are going to have to make and they're really going to have to sit there and ask themselves, what are the choices that I want to make in terms of payment acceptance. They're going to ask about the size of the consumer base, relative ubiquity, and they're going to ask about other considerations depending about the type of payment provider you're talking about.
In some cases, it's the right choice for some merchants. And in other cases, they're going to make different decisions. From what we've seen so far from Visa Checkout and the acceptance we're building around it, it is very much a universal acceptance solution and I think you're seeing that in the breadth of merchants that we're bringing to the table. You see travel, quick-service restaurants, traditional core retailers, billers. You're seeing the entire spectrum of e-commerce use cases come to the forefront with Checkout. It's something merchants are going to have to ask themselves to make sure they know what they want.
MPT: Does that add confusion at all when you're talking about these different types of digital wallet/checkout products. You can store a MasterCard in Visa Checkout, and you can store a Visa card in MasterPass. From a consumers' perspective, is anyone worried about that kind of stuff?
VS: I think that's where you really have to ask yourself, how prevalent is this brand and how educated are consumers about it? That's where we've done a lot to bring some really strong assets to the table. Obviously, our own branding on Checkout is significant in consumers' minds. It's why we built in things like showing the card art on the button itself and it aids consumers with comprehension [of the product] and has shown measurable results as well. All of that combines to enforce that point of understanding and comprehension. And yes, absolutely, there are going to be times when a consumer looks at something like this to try and understand it, but again, these are some of the questions merchants are going to have to ask themselves. Consumers will have to ask themselves these questions as well. Have I had an experience with this brand before? Do I trust the zero liability policy? There's a lot to absorb there, but I think we're really confident in the position that we have with the consumer.
MPT: What have you seen change in the industry since V.me became Visa Checkout? We hear a lot about conversion rates and cart abandonment when it comes to online and mobile checkout and how companies are trying to lessen that. Is that area one of the biggest concerns for retailers in the last two-to-three years?
VS: When we changed from V.me to Visa Checkout, we made several different changes in our direction and one of them was to really go mobile-first in a lot of ways. And not just mobile-optimized, but mobile-first. And that has led to some significant product changes and also to significant benefits.
When we integrated with Taco Bell, they told us we have this app that we're going to be putting out in the marketplace. We want consumers to be able to use it and we want to get rid of friction because typing on here [smartphone] is difficult. What we did was, we went back to them and told them we can produce a better experience. We have the card art front and center and consumers are eight times more likely to click on the card when they see it. We also told them we can go through and leverage the biometric capabilities that are present [in smartphones]. If you see here (Shastry was going through the Taco Bell app), I didn't have to enter anything accept for giving my thumbprint [for Touch ID]. It's amazing what you can do when you're mobile first and this has led us to get to near parity with desktop conversion rates for Visa Checkout.
If you talk about where we are versus a merchant's own checkout [system] on a mobile device, you're talking about a 40- even 50-percent differential. For our merchants, they love that and that's why we have that premium placement you saw with Taco Bell and others like Starbucks because they know it will convert so well and consumers will get through that experience.
MPT: Some industry observers believe remote mobile payments via app has a better chances of gaining traction with consumers over proximity mobile payments?
VS: What we've seen over the last 15 years is this explosion from the consumer who used to just swipe in the store, sign and walk out of the store and e-commerce at the time was in its early days. It's almost like a Darwinian evolution in a lot of ways because you've seen it go from one way to check out, to two ways with e-commerce, to three ways with mobile commerce, to now when you have all of these different app and wallet-based experiences. And we actually think what we're going to see over the long term is that continued diversification. We'll see app-based experiences. I'll use the Chipotle app to order my burrito, go into the store and pick it up, and to your point, not have any interaction. With Starbucks, you can have the same thing. But I think that's a portion of what consumers are going to be doing and you're still going to find a significant number of consumers who will be in the store and continue to do their traditional browsing and get into a line for that type of experience. I think there's room for all these different types of experiences along the way.
MPT: What role can Visa Checkout play with the Internet of Things?
VS: It's still early days in that ecosystem and we have to see how it starts to shake out and what some of the different models will be. I think we've demonstrated a couple of those things. The first thing we did was we said that we wanted to provide the technology platform for that ecosystem. We did that with an extension of our Visa Token Service. But we also showed a couple of different prototypes of people loading their card into a car, or another IoT type of device and you can use Visa Checkout as a way to add your card to those devices. Visa Checkout has turned into the evolved way to move your card around in the digital ecosystem.
MPT: What more can Visa do with Checkout in terms of extending its use, getting more merchants to add it, or adding different features?
VS: I believe in a lot of ways that we're just scratching the surface. A lot of it will be about expanding [Visa Checkout] in a couple of different areas. I showed you the biometric authentication with the Taco Bell app. We started with iOS and we're rolling it out to Android right now. We're big believers that biometrics and other forms of authentication will be the future. As part of that, we're always thinking about how we take risk out of the equation and we're doing a lot more in terms of taking data and incorporating that into our risk analytics. International expansion is also something that we're looking to do with Visa Checkout. And then we're also looking at different use cases. I mentioned a little earlier that we were just scratching the surface when it came to billers and cards on file and I think there's a lot of convenience to offer there, and IoT, and other ranges of use cases. And we're also starting to think about the entire distributed commerce ecosystem. I couldn't be more excited about what we're doing here because every day it's a new set of challenges.