Credit card giant Visa plans to roll out the most extensive digital wallet system ever attempted by a credit card processor, bank or carrier that will focus on NFC in its implementation across Canada and the US. To kick the service off they need to see a greater adoption of NFC readers from merchants, those willing to pay transaction fees back to Visa or its partner banks whilst using the service.
Visa already uses NFC readers (about 150,000 of them) in conjunction with its PayWave service but this new scheme sees Visa make far greater use of its existing reach. There are currently over 1.8 billion Visa cards in use worldwide, usable at over 30 million stores, with more than 50% of credit card transactions in the US being handled by Visa followed by MasterCard, American Express and Discover as the next largest companies.
Visa’s credit card network expands across 16,000 banks and they have selected a combination of 14 banks and other financial institutions to test-run the new initiative. Jim McCarthy, head of global products for Visa said, “We believe [payment] convergence is here, primarily driven by the mobile phone. Reliability, security and interoperability are critical to drive the electrification of payments. [This] will fundamentally change the way we interact with merchants.”
It’s apparent that Visa sees NFC as the means of convergence within payment technologies and they want to bring it more in line with existing payment methods such as desktop- PC e-commerce payments systems and person to person transactions through social networks. With more and more smartphones and tablets using an NFC chip, this does make their job easier, however the added transaction fees to merchants on top of the existing 1% – 3% credit card transaction charges might be a sore point for some.
All the same, Visa seem confident that there are those who will want and will genuinely use NFC payment technology but again, this is purely speculation. Using the service in its current state is reserved to the US Bank and the TD Bank Group (along with some of their subsidiaries), but assuming you’re not in the US and don’t have access to the these companies you’ll have to wait a little longer to try the service out for yourself.