Mobile payments will be a “great driver” for Visa, CEO Charles Scharf has told analysts during the company’s Q4 earnings call, and Apple Pay is just the beginning. “A proliferation of exciting mobile and digital solutions” leveraging Visa’s capabilities will hit the market soon, he explained.
“As we look to the future, we continue to see great growth opportunities for payments; we have our traditional channels and traditional ways of doing business, but we sit here today and we see the mobile opportunities in both the developing, the less-developed and the developed world as being great drivers for our mission,” Scharf told investors.
“This quarter, we’ve started to see some tangible progress as we have begun to introduce new digital solutions into the marketplace. First, a reminder that online purchase transactions for us are 19% of our business today and also, that in the US, online, tablet and mobile purchases are growing at high double-digit to triple-digit rates versus a face-to-face rate of single digits.”
“We are aggressively pursuing this market with the expectation of growing our share; we’ve seen several things to support this; Visa Checkout, Visa Token Services, Visa Digital services and Apple Pay,” Scharf explained. “We’re excited about Apple Pay but for us, as we think about what’s going to be coming into the marketplace, it’s only the beginning. We expect a proliferation of exciting mobile and digital solutions leveraging our capabilities.
“In October, we launched our sandbox development and testing environment for Visa Digital services as well as updated our SDKs that will enable issuers to begin embedding new forms of contactless payments in their Android applications. Eventually, merchants and approved third parties will be able to harness the safety and security of Visa payments to create new proximity payment experiences for their users.
“These services will be commercially available in the US in January of 2015. Clients have already begun integrating to our development environment and are building and testing their applications in advance of a full commercial launch in 2015.”
“As far as Apple Pay goes, just a couple of quick comments,” Scharf continued. “We’re excited about our participation. We believe it’s good for consumers, it’s good for merchants and it’s good for our industry. Our focus has been on security, scalability and inclusiveness. To the last point, we’re working with over 1,000 financial institutions today and hope to see all of our issuers participate.
“On Monday, Tim Cook announced that over one million cards had been loaded to iPhone 6s in the first 72 hours. Visa represented over 600,000 of those requests. Early days, but very encouraging.”
“There’s been much talk about disruption in payment and what it means for us,” Scharf added. “Most of the disrupters are great enablers for consumers, merchants and our industry. Apple is the first great example. We and our clients can be great enablers of great consumer and merchant experiences. You’ll see many other enablers evolve that we will partner with and we’re doing this all in support of our existing clients.
“We also stand back and we look at the growth and the growth rates of transactions done online, on tablets and on mobile are multiples of what’s done face-to-face. So, the things that we’re doing from Visa Checkout to Apple Pay to the things that are going to be using our token services and our digital solutions are all about having the best products in the marketplace to capture where the growth is which is in the digital channels.
“We’re looking at this as an opportunity. One, to both be where the natural growth is but two, to help migrate all those cash transactions, whether they’re big value transactions or small value transactions, into the electronic space where we’ll hopefully capture more than our fair share. This is the future of commerce, we want to be there.”