CBA holds fire on Visa's digital wallet
Commonwealth Bank was the only major bank not to publicly embrace Visa's digital wallet at the official Australian unveiling of the V.me service yesterday.
While ANZ, NAB and Westpac have joined more than 40 other financial institutions which have agreed to offer their customers V.me when it is officially activated, CBA was a notable absentee from the list.
In contrast, CBA did sign up, in February, to be an early partner for MasterCard's MasterPass digital wallet.
Nevertheless, CBA described V.me yesterday as being "a positive development for the evolution of online payments in Australia."
A spokeswoman for the bank said CBA remained in discussions with Visa as it assessed "relevant digital wallet choices for its customer base, including V.me, and will be guided by customer appeal, the "seamless, consistent and secure" payment principle and compatibility with our own payments strategy."
Australia will be only the second market in the world to take on V.me, which was initially launched in the US late last year.
Like the MasterPass digital wallet, V.me is an open wallet, and users will be able to store Visa and other branded payments cards when it is officially activated in Australia "in time for Christmas".
According to Visa country manager Vipin Kalra, "It is critical we don't make this a Visa-centric app."
It isn't actually an app but on online service, which can be accessed from the browser of a desktop, tablet or smartphone.
Greg Storey, Visa's head of V.me in Asia Pacific, said Visa had learned from its initial US launch that the more financial institutions were prepared to do in terms of marketing the service and educating users, and pre-populating V.me with customer information, the more likely consumers were to adopt the digital wallet.
"It has got to be simple for the consumer," he said.
Initially, V.me will be marketed as a secure system for online purchasing - users are protected by Visa's zero liability policy. But, over time, Visa expects it could be extended to be used to both store and redeem loyalty points; to store pre-loaded foreign currencies; and, on an NFC-enabled smartphone, to make payments using a contactless payment card.
A number of local merchants, including JB HiFi, Lorna Jane and City Beach have already agreed to accept V.me payments.
According to Kalra, digital wallets will allow merchants to overcome the problem of "shopping cart abandonment", which afflicts as many as 67 per cent of online merchants when the payment process is either considered insecure or too complex by consumers.
Kalra said that the merchant cost of the service would be negotiated between the banks and merchants - there is no charge to users to enrol or make purchases using V.me. But, he said, merchants would benefit from additional online payment security and, potentially, higher revenues as a result of less shopping cart abandonment.
In terms of the consumer insights that Visa might glean from the service, Kalra said these would be no different to the data already collected from the 30,000 transactions Visa handles each second on its existing payments network.
He said that because the service acted only as a gateway to other card-processing systems Visa did not expect to have much more insight regarding customer spending patterns.
However, as loyalty cards and extra consumer information is loaded into the digital wallet, Visa could build an incredibly valuable real-time picture of consumer spending habits the world over.