Bill Gajda, global head of mobile products at Visa, recently sat down with Fierce Mobile Content to discuss the mobile payments landscape and where NFC fits into the equation.
Since Visa’s 2011 purchase of Fundamo, the financial services giant has been beefing up its mobile wallet efforts. One of the concerns surrounding mobile payments is the fragmented nature of the market landscape. When asked about Visa’s plan of action in a competitive payments market, Gajda feels confident that the financial goliath will play a number of roles.
Depending on the provider — a mobile network, carrier, Foursquare, etc. — Visa’s role will likely vary different contingent upon who the financial giant is partnered with at the time. Gajda feels that Visa removes the complexity from payments and scalability and effectively plays the crucial middleman role.
Using Isis as an example, Gajda states that Visa provides its payWave application. Helping to certify devices prior to launch, Visa worked to make sure that merchant terminals in Salt Lake City and Austin— Isis’ pilot cities — work properly.
In addition to Isis, Visa’s took on a support role with key issuer Chase to forge the prepaid account component comprised in every Isis wallet.
When asked about Visa’s possible competition in the mobile commerce sector, Gajda looked first and foremost to the other household names — American Express, MasterCard, Discover.
Each of the major financial service providers has their own iteration of a mobile contactless system, and Gajda sees these offerings as Visa’s key competitors in mobile payments. Gajda is aware of the newer startups from Google, Isis and Square, but does not see these solutions as direct competition to payWave.
Citing Square’s success, Gajda states that giving smaller merchants the capacity to accept Visa cards or others is not competition. Initiatives like Square actually work to drive growth and allow Visa to connect with previously unreachable merchants.
It is widely accepted that in order for mobile payments to realize its full potential, NFC will also need to succeed in some capacity. Gajda echoes this sentiment stating that NFC will give mobile payments the best possible chance to go mainstream.
Also key to NFC’s potential success, according to Gajda, is that the NFC standard was developed in conjunction with credit card companies, the banks and the mobile industry.
Gajda points out that though the various cards differ to some degree, only one merchant terminal is needed to accept Visa, MasterCard, American Express and Discover NFC payments because they all adhere to the same EMV standard.
What this provides, as Gajda states, is a level of certainty that has led to all the largest handset manufacturers incorporating the same NFC radios in each of their devices. Gajda believes that other, better technologies will surface in the future but that for the time being NFC has the best chance to reach scale.
Gajda feels that mainstream mobile payments are still two to three years removed and that other markets— Australia, Hong Kong, Singapore, Japan, Korea and Canada — will likely make the move before the U.S.
The framework for mobile payments is being laid as we speak, and Gajda points out that every merchant acceptance terminal is now shipped with both chip and contactless functionalities. The burden falls to the merchant to activate these features once they get it in their stores. Gajda remains optimistic stating at least the technology is there, ready and waiting.
Bill Gajda’s full interview with Fierce Mobile Content can be found here.