Visa bolsters mobile payments strategy with Stripe investment
Visa’s determination to double up on its mobile payment strategy is evident in the company’s decision to invest in Stripe, a start-up that accepts debit and credit cards for merchants who have previously not accepted them.
Visa will also be working side-by-side with Stripe to develop more ways to improve digital transactions, a move which may place the credit card marketer on a higher level with merchants and retailers as well as customers. Its recent introduction of the Visa Checkout mobile payment option also suggests the brand is ready to compete with the likes of Apple Pay and PayPal.
“Visa continues to invest in innovative technologies that help expand the brand,” said Chester Ritchie, senior vice president at Worldpay, Atlanta. “Stripe has been successful at aggregating smaller merchants who traditionally did not have access to electronic payments due to their size.
“An investment into the company should help them continue to serve this market.”
Credit card-friendly efforts
Stripe recently secured new funding from brands including American Express in addition to Visa, highlighting the company’s possible contributions to the mobile payments space.
“As new technologies are adopted by consumers and merchants, Visa will continue to innovate, partner and invest in payments to enable access to simple, convenient and safe ways to pay,” said Jim McCarthy, executive vice president of innovation and strategic partnerships at Visa Inc., San Francisco. “Whether you are in a store, online, or using a mobile phone, Visa will continue to be the engine of commerce – making it as easy to pay on any device as it is to swipe a card.”
Stripe is attempting to stand out among other major platforms, such as PayPal or Square, by offering developer-friendly software and enabling online merchants to accept credit card payments quickly.
The amount of Visa’s investment in the start-up has not been publicly revealed. However, the credit card marketer has also inked a separate deal that will enable the two companies to develop initiatives regarding new products and payment security.
Visa also may be trying to appeal more to app developers.
“Visa is doing a good job providing access to the technology of the platform to developers,” Mr. Ritchie said. “Large companies struggle to innovate in the way small companies do.
“By providing access to the technology platform, and encouraging development through investment, Visa is helping to evolve the overall payments ecosystem.”
Visa’s mobile push
The brand has been making a well-documented push for mobile as of late. It recently introduced Visa Checkout, which enables consumers to complete a purchase with a one-click checkout on digital devices.
Several weeks ago, Visa tested a service designed take mobile payments one step further down the road toward reaching scale through connected vehicle commerce (see story).
The brand is also continuing to expand the availability of mobile payments services in Europe, as it strives to keep up with consumers who want to be able to pay simply wherever they are, with whatever device they choose (see story).
“From our perspective, we think Visa is making a significant bet as part of their mobile payments strategy,” said Ted Fifelski, president of SimplyTapp, Austin, TX. “Because Stripe is a gateway, an investment from a payment network would make one believe that Visa wants to better understand the role they could play as a gateway in the mobile and ecommerce space.
“When it comes to fostering developer relationships Visa has historically been at a disadvantage in this regard and this merger might change that,” he said. “Up to this point Visa has had to serve the interest of their card brand and as a result they cannot be a payments services aggregator, which is the role that Stripe plays.
“We believe Visa’s announcement may indicate their intent to solidify ways to play a larger role in the mobile commerce ecosystem.”
Tokenization will also likely be a paramount focus for Visa and Stripe’s partnership.
“Over the next year expect Visa to continue exploring adjacent space technologies and providers for consideration in their portfolio of offerings, including tokenization and additional issuer and merchant services,” Mr. Fifelski said.
“What remains to be seen is how quickly Visa can execute on these new initiatives and how likely they are to find acceptance of an expanded role for their brand within a marketplace driven by extreme innovation and competition from more agile vendors.”
Alex Samuely is an editorial assistant on Mobile Commerce Daily, New York