As the mobile payment competition heats up, so does the rhetoric. According to the Wall Street Journal, Jim McCarthy, Visa's global head of product, criticized PayPal's new offline strategy. He made his comments at a Goldman Sachs conference in San Francisco on Wednesday.

"I think there's real issues around security," McCarthy said of PayPal's new service.

PayPal is currently testing a new digital wallet that allows account holders the option of paying at brick-and-mortar stores using their PayPal accounts by simply typing in the associated mobile phone number and a PIN at the point of sale. According to the WSJ piece, McCarthy said the method is not secure since someone could simply look over a shopper's shoulder to see the payment credentials.

McCarthy also said he doubted whether PayPal could handle a volume competitive with Visa. Last year, PayPal processed more than $100 billion online. Visa's worldwide transaction volume topped $3.7 trillion.

"We're now capable of doing 20,000 transactions a second in real time," McCarthy said.

Visa is looking to offer its own competitive digital wallet called v.me sometime in 2012. The company also recently launched a new suite of services allowing financial institutions to offer more mobile services via Visa's processing platform

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