The Future of Payments

This article is sponsored by Visa

In Europe, Visa transactions account for €1 in every €7 spent. However, most of this involves consumers, not businesses. Only a small proportion of €22tn business spending travels via Visa or our competitors. Why is this? Businesses see electronic payments as a cost rather than an opportunity. But this could soon change as the commercial world discovers better ways to pay.

Until now, most electronic payments have been enabled by physical cards. Authentication by signing the magnetic strip on the back has given way to Chip and PIN, adding greater security.

Now three new developments – contactless, mobile and the V.me by Visa digital wallet – promise to revolutionise electronic payments. Individually, or within packaged services offered to SMEs by issuing banks, each presents real opportunities for business.

Contactless payment is already boosting speed and convenience at 1.1m terminals across Europe, with low transaction limits and frequent PIN requests protecting users and their money. Companies can also reap the rewards by capturing expenses data on spend that would historically have been lost in petty cash, now enabling this spend to be included in MI reporting, indicating who has spent what, when and with whom. This technology delivers numerous benefits starting with less reliance on ATM withdrawals, quicker checkout at tills and an improved insight into petty cash spends.

Visa contactless is on a roll. Transaction volumes quintupled in 2012 as outlets from Olympic stadium retailers to vending machines went contactless. Transport for London has now fully rolled out contactless on their buses in London, with the tube network planned to follow in 2014.

At the same time, a second breakthrough is gathering pace: mobile. Virtual cards are being built into smartphones, enabling these mobile devices to add another level of convenience to payment on the move.

While contactless adds convenience for any business, mobile has equal or greater potential to galvanise corporate interest. Touching a smartphone to a contactless enabled payment reader, with the advantage of automatically recording transactions for auditing and reporting purposes. As a finance director, that puts you firmly in control of expenditure.

The third innovative development, V.me by Visa, will be offered to consumers by leading banks. The service will be available across Europe with rollout due in the UK and Spain from the end of 2013, with other markets to follow. 

The fast and simple V.me by Visa payment experience allows consumers to complete online transactions through the internet browser on a PC, laptop, tablet, or smartphone in a simple and easy manner. Full customer card details are not passed on to the retailer, helping encourage consumers to feel safe when shopping online. In addition, the improved customer journey streamlines the online checkout experience in order to reduce basket abandonment and, in turn, increase sales conversions for merchants. Future enhancements will enable in-store payments with a contactless enabled smartphone and much much more.

V.me by Visa can release even greater potential for SMEs to sell efficiently online. Visa Europe is now working closer with Issuers and Acquirers to deliver this exciting innovative payment technology to enable consumers and in time companies to benefit from a far superior online buying experience.

Visa has enjoyed a great past: thanks to these new contactless, mobile and digital wallet services, we’re gearing up for an equally impressive future.

Nigel Eaton is the Vice President of Visa Commercial

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