Responding to company reports that contactless and digital payments have grown in 2014, especially in Europe, Visa Europe on Jan. 29 formally announced a plan to invest an additional 200 million euro into developing its digital payment technology, which had been suggested as early as last July. In addition, Visa Europe is encouraging retailers to use part of their savings from upcoming European Commission regulations on interchange fees to improve the processing of customer payments to accommodate the growth in digital payments.
According to the company's annual report, Visa Europe experienced record transaction volumes and revenues for 2014. Gross revenues grew by 9 percent year-over-year to 1.9 billion, with 344 million of that coming home as profit, an 80 million euro increase since 2013. Visa Europe saw a corresponding 9.4-percent increase in the amount spent at point-of-sale terminals throughout the continent to 1.5 trillion euro off of 37 billion transactions, record highs for the company.
The most important statistic for digital payments, though, is that of the 500 million Visa cards in use throughout Europe, 20 percent of them are now contactless cards, most notably V.me, thanks to the proliferation of digital wallets. According to Nicolas Huss, Visa Europe's chief executive, who was quoted in Finextra, 2015 will be a "defining year" for digital payments, prompting the investment. The main aim for Huss is the 70 percent of transactions that are still done in cash on the continent, a prime market for disruption.
"We will make use of the abundance of digital technology that now surrounds us to enable new digital payment solutions," Huss said.
Huss also hopes that new European Commission regulations on interchange fees, which are expected to save retailers an estimated 6 billion euros per year, can prompt speedier adoption of digital payments technology to stimulate the use of mobile wallets for more transactions.
"If retailers invest just a fraction of their savings," Huss implores, "we can truly work together to make a leap forward in improving the consumer experience.”