Feb 2, 2010, 11:30am

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PYMNTS.com asked industry expert and Paying with Plastic author, David S. Evans, to profile industry thought leaders and executives to find out what's next in the world of payments.

In our first edition of the Captains of the Industry series, David interviews interviews Bill Sheedy, President of The Americas at Visa.

As President for The Americas, Bill Sheedy oversees the company's client relationships with card issuers, merchants, merchant acquirers and third-party processors in North America, Central America, South America and the Caribbean. More recently, Sheedy served as president of North America and global head of corporate strategy and business development. Prior to his leadership role in Visa's corporate restructure and successful initial public offering in 2007, he was responsible for expanding merchant acceptance and consumer usage of Visa, while providing oversight of areas responsible for industry cost and revenue studies, merchant incentive programs and improving the point-of-sale operating performance of Visa products. Sheedy has also been key in supporting Visa product and brand strategies as well as other initiatives that are critical to realizing Visa's long-term growth potential.

In the interview, Sheedy talks about his work with Visa and what he believes the future has in store for the payments industry. The following is a transcript of the interview (to listen to this interview, go here).

EVANS: This is David Evans. I have the distinct pleasure of talking with Bill Sheedy, who is Visa's President for the Americas. Bill, thanks a lot for talking to me today about what's next in payments.

SHEEDY: Happy to do it.

EVANS: Before we get into the future of payments, maybe tell us a little bit about your career in the payments business. When and how did you get started in payments?

SHEEDY: Sure. I started in payments when I joined Visa in early 1993, so I've been in payments for almost 17 years. I spent most of that time in the U.S. market, but for the last four or five years, as Visa has transformed to a global company, I've spent much more time on some of the payments business issues outside of the United States.

EVANS: And you recently, as I understand it, took over from – you were President of Visa North America, and now you have South America and Central America too?

SHEEDY: That's right.

EVANS:Lots of exciting stuff going on in Brazil these days?

SHEEDY: Yes. Brazil's one of a number of markets in which we're making significant investments. We're pretty excited about the trajectory of the Brazilian economy generally. And it's one of the more dynamic and interesting payment markets for us.

EVANS: It's nice having an economy that's going up. What have your major roles been in Visa?

SHEEDY: I think – I probably became more known within Visa and within the industry early on when I had roles responsible for interchange fees which, as you know, David, has been a rather hot topic and sort of growing in exposure and prominence within the industry over the last 10 or 15 years.

I think, starting in the early 2000s timeframe, I became much more involved in broader strategy issues within the U.S. company. And then I spent quite a bit of time with the U.S. board thinking through corporate structure and ultimately spent a good two or three years working on the merger of the global companies, the IPO. And then following the restructuring of the company in 2007, I was responsible for global corporate strategy and business development, then, as you mentioned, a year and a half or so ago was responsible for North America and then earlier this year also picked up responsibility for Central America, South America, and the Caribbean.

EVANS: Let's talk about the future. What are the most significant innovations that you see coming in the next, I don't know – three, five, 10 years – whatever timeframe you'd like to speak to? And when you talk about those, you can say something about how you think they're going to make the consumers or merchants or both better off. What's your take on what's next in payments?

SHEEDY: We sort of think about it differently when you consider the United States with nearly eight million points of sale locations where Visa and cards can be used and close to a billion cards in the market. The innovation that's going to come here is going to be very different than what we're going to see outside the United States.

But if I focus on the U.S., the innovations are primarily going to come in the form of smarter devices that initially are just going to add value to the existing card-based magnetic stripe infrastructure. So we see mobile as something that is going to improve the consumers' protection of security and additional information content tied to their transactions.

We are – and have been for quite some time – extraordinarily bullish on not just the trajectory of the e-commerce business but the ability to enhance both the consumer and the merchant experience when transacting over the Internet in terms of just ease of use information flow, improved marketing. I think the things that get us the most excited over the next few years tend to be more tied to mobile and e-commerce in the main.

And then you think about more emerging businesses for us. We still have a large percentage of our population that is under-banked or un-banked. We have north of $3.5 trillion in cash volume in the United States alone and over $13 trillion globally, and so as powerful as debit and credit have been for the payments industry, we think that the ability for the industry to electronify more transactions through prepaid and other forms of commercial payment forms is pretty exciting.

EVANS:Well let me ask you a question going to e-commerce. So I moved into a new place a while back and just went through the process of ordering delivery of The New York Times and Wall Street Journal. I went online to do that, of course. And it reminded me of how, 15 or 16 years after the start of the commercial Internet, when I order things like The New York Times and Wall Street Journal, it's still a real pain to do that, because I have to go in and I have to enter my name, address, card information, and so forth. Then I go to another place and I have to do that again. When are we going to get a e-wallet that really works on the Internet? Is that coming in the next decade?

SHEEDY: It is. Yes, David. We at Visa are introducing yet another form of wallet. Our branding for it – it's called right-click. And as you know, digital wallets have been around for years. I think that it's fair to say that they've under-delivered in terms of convenience to the consumer, consistency of experience. I don't think that they worked for the merchants.

But we have launched over the last few months in early-stage trials a new form of electronic wallet. And it will become, we think, much more visible and significant in the U.S. marketplace over the course of 2010. So later in 2010 we think it's something that you're going to see more generally in the marketplace. And we think that it's something that, as we layer on over time improved ability for the consumer to transact more securely and for the merchant and the merchant community to participate more successfully in the marketing to consumers, that it can be powerful.

In the meantime, you're right. The first thing that it needs to deliver are the basics associated with form fill and just a more efficient consumer shopping experience, which, for the merchants would also reduce the abandon rate, which I think all e-commerce merchants – is one of the core metrics that they measure against.

EVANS: Yeah, it's pretty high. Does Visa have anything in the works – and of course, remember this is ultimately going to become public and you're really not in a position of killing me and Justin – do you have anything in the works that you think could really transform the payments business in the next decade?

SHEEDY: Well, I think one of the things we try to consider as it relates to innovation and transformation vision for the industry is – the fact is that people have been calling for the expiration of the death of the magnetic stripe for years, for as long as I've been at Visa. The terminal infrastructure, the point of sale in the U.S. – all of those things work largely the same today as they did in the early '90s. What we've seen here is that the consumers' needs are largely met.

And what we consider when we think about innovation and the transformation of the industry in the United States is less around trying to improve the experience in the traditional face-to-face, mag-stripe-read environment, because we really do think that the merchant and the consumer are being well served there. What we would like is to expand the number of participants in the system through product innovation – so prepaid products, integration of bill payment, and improving the consumers' experience and perception of security in e-commerce.

Those kinds of things you're seeing very clearly today. And we don't see anything transformational in the United States as it relates to the payment market that will be landscape shifting.

I do think outside the United States we see many markets that are underserved from a point-of-sale infrastructure standpoint, that we see many markets that experience way too much risk when unknown parties are transacting, consumers and merchants. And so we think that there's quite a bit of transformation that can come into those other markets. But there all you're doing is you're just addressing some of the barriers of moving cash transactions to electronic payments, which, as you would agree, everybody wants.

EVANS: As a publicly traded company, Visa is pretty much a baby, pretty much a newborn. How do you see the company evolving over the next decade as a new publicly traded firm?

SHEEDY: Yeah. We are, as you mentioned, we're less than two years old as a publicly traded, for-profit company. But at the same times, we are a company that – you go back to our origins as BankAmericard, we've been around for over 50 years. So we are old as far as the consumer is concerned. The brand, the product, and the network hopefully delivers to merchants and consumers what they've always experienced.

But you're right – it wasn't too long ago where we were a federation of six different bank-owned entities around the globe and two different service companies that have been merged together recently. Much of our management team is newer. And we're going through, I think, a transformation to operate the company with all the promise of the global franchise.

The good news is we're starting from a position where there's a lot of momentum in the industry, and we like our position in the industry. I think that the things that are going to change within Visa over time are – we continue to, every day, think about the possibilities that exist beyond the wonderful environment that was created as an association of acquirers and issuers that owned us. So in that environment, you had a great connection with their clients, and you were able to pull together the players – the acquirers, the processors, the issuers – and you were able to move the business. I think we collectively achieved quite a bit.

One of the things that held us back in that model that we're moving towards now as a public company – we're able to invest much more uniquely and specifically with individual clients and for specific opportunities that would relate between Visa and a partner where those kinds of investments – be they setting up a joint venture to go after commercial payments or building a processing solution in a developing country – those kinds of investments weren't possible before.

So I think that one of the things that's driving change within the company right now is to take the processing infrastructure, the brand, the 13,000-plus financial institution client relationships we've got and try to figure out how to leverage those and drive those in ways that we just didn't or couldn't in an association structure.

EVANS: Bill, our listeners are mostly people in the payments industry, so let me finish with this question. Is there anything about Visa that you'd like these more-or-less experts to know that they probably don't already?

SHEEDY: I think one of the risks associated with the transformation that we've undertaken over the last few years is there's a weaker connection between the company now, which now has – as all public for-profit companies do – we have a fiduciary responsibility to shareholders.

And so I think if there's one theme – one thing I'd like the listeners to understand is that Visa's always been a network. We put together financial institutions, merchants, cardholders who want to transact. We succeed ultimately when the parties in the payment value chain succeed. So the way that we've defined success today and the thing that's driving the business today for us is the same as it's always been, which is – we want more cardholders and more merchants to come together to drive transactions through their processors and through their financial institutions. And when that happens, we win.

So the way that we define success, the role that we have as a company – as much change as there's been for us, the core elements of who we are, the core elements of our strategy and the way that we define success hasn't change.

EVANS: That's very helpful, Bill. Bill, thanks a lot for your time today. This has been really great. I hope you and Visa have a great 2010. So thanks again for your time today.

SHEEDY: Thank you, David, and congratulations on your program. It's something I watch every day.

EVANS: Thanks very much.

SHEEDY: Bye now.

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