The commerce life of a consumer is becoming more digital by the day, given the proliferation of mobile wallets, eCommerce destinations and the emerging plethora of IoT-ready devices now capable of enabling commerce for them.
And while these ever-connected consumers also create many new opportunities for issuers and merchants to do business, there is a downside: the more places to engage in commerce, the more consumers start to feel they’ve lost control of where their account information is being stored.
Keeping track of, and putting the consumer in control of, their digital commerce lives is a problem set that Visa spent the better part of the year working to help consumers overcome. Visa’s announcement last week of its Digital Controls platform was the culmination of that work and introduced two new offerings built on top of its Visa Token Service (VTS) to enable that set of capabilities. These two offers — a tokenized network card provisioning and card-on-file APIs — will soon allow Visa issuers to power a customizable suite of digital account control services within their native mobile banking apps.
The unifying concept behind the platform, Visa’s Global Head of Issuer Digital Solutions, Natalie Hyche Kelly, told Karen Webster in a recent conversation, is to give consumers both a way to manage digital payment activities in one central location and a trusted, secure place to do it in, through their trusted issuing bank.
“Basically we stepped back and saw that consumers are becoming more and more connected through digital wallets and IoT and eCommerce through the merchants they have relationships with — and that they really need [is] a centralized way to look at all the ways they can pay,” Kelly said.
Those digital controls, Kelly explained to Webster, put the consumers in control of their digital lives by giving them three distinct ways to manage those account credentials, while ultimately building a stronger, more customized relationship with their customers for their issuer partners. They include:
- Who they pay
- Where they pay
- How they can pay
Who They Pay
Kelly explained the capabilities Visa has incorporated into its digital card controls by using an anecdote familiar to many parents: a child that isn’t old enough to have a credit card, not really even old enough to carry a credit card but one who is old enough to require the independent access and use of money from time to time.
Solutions exist currently, of course. There’s the old-fashioned handful of cash or prepaid card — but both have downsides: they can be a hassle to procure, come with the risk of being lost or stolen and, in the case of a prepaid card, possess a lack of transparency about how much money is left to spend on that card.
Further, Kelly pointed out, the parent who wants to send money to their child (or nanny or dog walker or tutor) misses out on gaining reward points, since they are sending money off their card and onto another — while the issuer misses out on a transaction.
One of the things that Visa’s digital controls can power is for issuers to allow cardholders to give restricted card access — place and amount — to another user.
“What we have done is make it possible to push a payments token to another user,” Kelly explained. “So in the case of my daughter, that might mean pushing her a token from my issuer app to her Android Pay or Samsung Pay with a designated spend limit. I get to decide, in this case, who I’d like to pay, and once I do, a tokenized extension of my existing digital account is passed to them so that they can make payments for that amount, for the things they need to buy, and I want to be able to use my account to pay for.”
Kelly also stated that when that happens, the cardholder gets the points, since it’s her card being used, just in a tokenized instance on her behalf, and the issuer gets one more reason to be moved to top of wallet status and more transactions.
That capability, she notes, is device agnostic: a tokenized credential could be pushed from an issuer app to Apple Pay or Samsung Pay or to an IoT-connected device.
“We think the ‘Who You Pay’ component of digital controls really could drive commerce,” Kelly said. “Instead of giving my daughter cash, I can allow her to pay using my cards, while keeping control of what is spent and where under my control,” she added.
Moreover, by offering consumers such tailored control of the use — and movement — of their digital payment credentials, issuers can begin to get consumers into the habit of monitoring and “controlling their digital footprint all in one place.”
But for that control to be possible, Kelly noted, issuers must provide users a full view of what that digital footprint looks like.
Where They Pay
While it is often written about like it is still a new thing, at this point most consumers have had some kind of relationship with eCommerce over the last decade. And while a decade may not seem like a long time, it is certainly sufficient for consumers to put their card on file in a lot of places.
So many places, Kelly noted, that it is actually pretty easy to lose track of all of those places.
“If you look at the capability we are building out for where you pay, it is about looking for and then giving visibility to all those cards on file that consumers already have out there,” she said.
The goal, she noted, is to give consumers a “commerce homescreen” for all their commerce — and how that card credential is being used: paying a utility bill, connecting to a subscription, on file with a merchant. And those relationships, Kelly said, are visible to the system whether the data comes via PAN (card number) or tokens.
“Using POS Entry Mode 10, the established relationship between merchant and consumer will be sent through in all cases — whether it’s token or a PAN — without interfering with the existing acquiring workflow so that the appropriate information can be updated on backend of any transaction,” Kelly explained.
But more than letting consumers get that centralized snapshot of where they pay, Kelly noted, the system also allows consumers to control how those payments flow.
How They Pay
Consumers, apart from wanting to simplify the tracking and access of their (now very fragmented) digital lives, also want to centrally manage payment preferences wherever they are stored. And, Kelly said, that’s where the Network Hub comes into play.
Visa Network Hub Push Provisioning is designed to make it easier for issuers to access push provisioning capabilities, by providing one integration point to interface with participating VTS token requestors.
“So today if an issuer wants to push credentials in Apple Pay or Samsung Pay or Android, they have to develop a different connection to each one, which does not scale easily,” Kelly explained. “The issuers have huge tech queues they have to get in line behind with multiple token requestors to support.”
It’s a situation that, Kelly said, quickly becomes insanely time-consuming.
To help manage that — and at the same time build a scalable operation — Kelly explained that Visa will be taking on that “heavy lifting” and become the single connector.
For customers, that will mean no longer having to go wallet by wallet, merchant by merchant and IoT device by IoT device to register and update digital credentials. Instead, Kelly noted, that can all be managed centrally from an issuer’s mobile app.
“Visa Digital Controls allows consumers to have insight into where their updated account information is sent to get a card replaced,” Kelly emphasized. “So you see all your trusted merchants and if your card is reissued you can see whether they've received updated card details. This wouldn't change the relationship between merchant and cardholder, but it does give the cardholder additional visibility into how they're using their card and where they may need to update it.”
Issuers, Kelly noted, are excited by the prospect of these services going live.
“They can’t have it fast enough. They want the tech specs and to get merchants on board, and they just want to get it out there and start using it.”
Visa plans to test the service in the U.S. market in limited runs with partners for the rest of 2017 — and will start with some limited international outreach in early 2018.
The service is expected to be open for business for issuers in general later in 2018.