Visa has unveiled a suite of services designed to “facilitate secure payments across a broad range of internet-connected devices and wearables”. The announcement of the new Visa Digital Solutions service comes amid reports that Apple is in talks with the payments network to enter the mobile payments market this year and includes the news that Visa’s cloud-based tokenization service will go live in September 2014 — the same month that the next iPhone and the first iWatch are expected to launch.
It also comes just a week after Visa cancelled work on the development of its own mobile wallet, clearing the way for it to act as a partner rather than a competitor to hardware manufacturers seeking to bring their own mobile wallet services to market. Visa already has a mobile payments partnership with Samsung, signed during Mobile World Congress 2013.
“Apple’s future mobile wallet for iPhone is expected to get support from Visa,” says Amir Efrati, a reporter for The Information which published an in-depth report on Apple’s mobile payments plans today.
“Conversations between Apple and payments industry companies have heated up in recent months, with several people briefed on the talks saying that Apple executives have discussed launching a mobile ‘wallet’ as soon as this fall for people to use their iPhones to pay for goods in physical stores,” the article says.
“Apple has long been expected to make such a move, but it’s been cautious so far amid failed efforts by Google and others to enable payments and other transactions by phone. Now, though, the company’s plans are coming into greater focus.
“Apple has told some partners its system would involve a so-called secured element in the phones — a piece of hardware where sensitive information such as a phone owner’s financial credentials can be stored. The company also aims to run the system without giving up any control to wireless carriers.”
Apple has already built a “secure enclave” into the iPhone 5S’ A7 processor which is currently used to store Touch ID fingerprint templates and a January 2014 patent application outlines how the iPhone maker could use the technology to enable consumers to make payments via a combination of NFC, Bluetooth Low Energy (BLE) and WiFi.
The Visa Token Service to be introduced in September is expected to be based on a final version of the EMV Payment Tokenization Specification first released in March this year and will include support for QR code-based payments. Key features include:
- Tokens replace the 16-digit account information found on plastic cards with a numeric substitute, facilitating payment transactions without sharing sensitive account information.
- Tokens can be stored directly in mobile devices, online ecommerce applications and cloud-based mobile applications.
- Tokens can be limited for use with specific merchants, mobile devices or types of purchase.
- Tokens linked to lost or stolen mobile devices can be instantly reissued without changing account numbers or reissuing plastic cards.
- Tokens are based on existing ISO standards and can therefore be processed and routed by merchants, acquirers and issuers like traditional card payments.
“Visa Digital Solutions provides the standards, tools and services to turn any internet-connected device into a secure vehicle for commerce,” says Visa SVP Sam Shrauger. “Smartphone manufacturers can securely load a Visa account within a device, merchants can directly embed Visa payment functionality into their mobile apps and financial institutions can offer mobile and online payments as part of their mobile banking applications.”