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Visa brings connected car payments to life

At the Mobile World Congress Shanghai 2015, the financial services company revealed its plans to bring mobile payments into consumer vehicles, a feature that can create an even more seamless purchasing experience for customers. Visa is likely developing the connected car payments to further its place as one of the leading payment services, the more places customers are using their services the better it is for the company.

“Visa recognizes that smart cars, and the Internet of Things more generally, represent an opportunity to increase the number of payment transactions conducted on the Visa network,” said Tim Sloane
vice president of payments innovation at Mercator Advisory Group. “Since Visa gets paid by transaction, this is a great opportunity for Visa.

“Note that other participants are almost certainly involved,” he said. “If Visa implements the solution with the auto manufacturer it will add the manufacturer to the payment value chain.

“If the payment token is provisioned into a Android system, then Google will control the consumer up to and including the payment. This introduces new choke points into the payment environment.”

Moving mobile payments
The financial service company is currently developing a platform in which consumers can pay for numerous services and products with their vehicles. While technology continues to grow, payment services and mobile payments continue to evolve along with it.

It is vital for Visa to sense these changes coming and adapt quickly. Although through mobile devices is a growing trend, car commerce is a service that has not been seen as much.

A large company name, such as Visa, may have the resources to bring these services into the forefront of the industry, causing an upheaval in the industry yet again. Continually innovating features and services is important for companies such as Visa, so as not to be left behind when consumer behavior shifts.

Although services such as Apple Pay and other various mobile payment service have been slow to catch on, they have shifted consumers behavior and experiences. The retail and payments industry is continually adjusting and retailers and payment services need to be cognizant of that.

As of right now it is unclear how Visa’s connected car commerce will operate and what this means for smartphone users. Visa is focusing on making sure the system will be a secure form of payment, as security issues are a huge swaying factor for consumers.

The service can be used at various retail facilities access while still in a vehicle, such as gasoline stations, fast food restaurants, transit and parking services.

Securing mobile payments
Visa is also continuing to expand the availability of mobile payments services in Europe, as the credit card company strives to keep up with consumers who want to be able to pay simply wherever they are, with whatever device they choose (see more).

Also, Virgin America was the first United States airline to integrate with Visa Checkout, a platform which does not require consumers to enter in credit card information while completing a purchase online or on a mobile device, proving that the airline industry continues to move quickly into the mcommerce sector (see more).

“I have suggested that Visa and MasterCard added Google, Apple and Samsung into the US payment value chain without a strategy for the card issuers,” Mr. Sloane said. “This can be extended to IoT.  Card volume is always good for the network, but card volume for issuers is only good until it becomes so consolidated by single entities that the transaction fees become negotiable, which greatly reduces profit.

“I have urged all my member issuers to review their options and develop a strategy now,” he said. “Ultimately they may decide they have no options, but I would argue that the lack of options is driven more by their acquiescence, not by the lack of partners ready to step up and provide alternative solutions.”

Final take
Brielle Jaekel is editorial assistant at Mobile Marketer