Visa: how smart payments will drive our digital future

Image Credit: Pixabay (Image credit: Image Credit: Pixabay)

Driverless cars and autonomous vehicles have the potential to change how we live, work and travel. However, before we reach a future filled with smart cities and connected transportation, the payments industry needs to first lay the groundwork. Being able to easily pay on any form of transportation, whether it be by car, bus, train or subway, helps facilitate travel and benefits consumer's everyday lives.

Visa understands that payments are at the heart of transportation which is why the company chose to focus on the future of transportation at this year's Mobile World Congress in Barcelona. TechRadar Pro spoke with Visa's Head of Product and Solutions for Europe, Mike Lemberger to better understand the role smart payment technology will play in our digital future.

Visa was looking to focus on the future of transportation at MWC - how are your technologies helping enable this?

Payments lie at the heart of every form of travel, and will continue to become more integral as cities continue to grow and infrastructure becomes more strained. One example of how Visa is helping address this is contactless technology,  It’s already helping to reduce the need for traditional tickets or travel smartcards and therefore reducing the operating costs for cash acceptance, making it faster and easier for consumers to ride on mass transit while making it less expensive for operators to run their network.

Visa and our partners are helping streamline the payment experience for millions of commuters around the globe, and supporting public transportation authorities in their quest to build sustainable and convenient transportation solutions. We’ve recently launched a technology with smart card company, Planeta Informatica, that helps transit companies that currently accept fare cards to add contactless payments easily without necessarily needing to purchase new hardware. Visa Secure Access Module (SAM) enables transit companies to convert their turnstiles to accept contactless payments using their debit or credit cards or smart device, while also keeping their current farecard solution.

Drivers shouldn’t be forgotten as part of the travel ecosystem, in fact, in the UK, they represent the biggest chunk of commuters. In our recent study looking at the future of transportation we found that over half (57%) of UK drivers find it frustrating trying to find parking spaces and half (47%) of these have concerns about receiving a fine for parking longer than anticipated. This is something Visa is working hard to address with new technologies, such as Visa’s partnership with AppyParking making it possible to drive in and out of a parking space and be automatically charged for it. 

Most importantly, these ecosystems need to work together.

Image Credit: Pexels

Image Credit: Pexels (Image credit: Image Credit: Pexels)

What benefits will consumers see from smarter payment technologies in their everyday lives in the coming years?

As we look to the future, journeys will become increasingly multi-modal – in other words, when people get around town, it will involve more than one type of transportation.  Car, bus, train, tram, scooter or bike – even though these types of transportation compete against each other, the customer is going to decide when and how they incorporate them into their trip.  They should function together, seamlessly, making it easier for people to plan and pay for a single journey without having to buy multiple tickets.  The key advantage of smarter payment technologies is the ability to streamline the way consumers pay across all form of transportation – including trains, buses, cars and public bikes. This will make it far easier for consumers to plan and pay for a journey that might include more than one type of transportation, improving the overall experience.

Visa has a valuable role to play here, acting as the ‘connective tissue’ that helps cities understand the broader patterns of consumer behaviour. Frictionless transport payments are just one of the many benefits that consumers are experiencing from the rise of smarter payment technologies. The key advantages of digital payments are convenience, security and the fact that they’re easily traceable.  

Image Credit: Shutterstock

Image Credit: Shutterstock (Image credit: Image Credit: Jamesteohart / Shutterstock)

How will this evolution feed into the wider growth of smart cities?

In the future, technologies such as AI and Machine Learning – the increased integration of these technologies, as well as the continued expansion of 5G, will help process more data faster, helping provide both cities and the people who live there with real-time data. This means that cities will have a better understanding of when and where to deploy transportation services, both helping understand the current state of play as well as providing valuable information to plan for the future.

This ‘always on’ capability of services will greatly improve the overall customer experience through better access to real-time information. For instance, if someone is planning their journey home, they can analyse all sorts of key information to help them choose the best route. They would have the ability to analyse available capacity on various modes of transport such as trains or buses, allowing them to make an informed decision on alternatives.

How is the retail industry changing to embrace new payment technologies, and how can Visa enable this?

Consumers are always looking for a faster way to pay, and this has been seen by the vast increase in contactless card and smartphone payments over recent years. At Visa we’re focused on supporting small merchants and enabling new payment experiences that allow consumers and merchants to engage in seamless, simple and secure digital commerce.

Adapting to offering multiple payment methods is key for keeping up with market trends - retailers could risk losing potential sales by not making these options available. We see winning retailers using technology to enhance and deepen their customer experiences. It’s also a challenging time for the high street – with many consumers opting for the convenience of online and big brands. Smaller brands that are not as quick to adapt to digital trends are at risk of getting left behind.

With billions of people still un-connected to online services, what is Visa doing to help their everyday lives?

As an industry, we have to think beyond the individual and consider entire societies.  We have to look at the role that electronic payments can and should play in the digital world. As a trusted brand in payments, Visa has responsibility to use our business to connect the world – enabling economic growth and strengthening economies while also helping improve lives and create a better world. We are a leader in the private sector in developing programmes to help improve financial literacy for the unconnected and the unbanked – educating on the basics of personal finance.

The Visa Foundation, the philanthropic arm of Visa, works with charitable organisations to support underserved people and communities. As its central focus, the Visa Foundation is committed to helping low-income, financially underserved micro and small enterprises around the world to thrive and prosper. The Foundation made its first financial commitment earlier this year with a grant of $20 million to Women’s World Banking and its 49 member institutions from 32 countries.

We’ve recently partnered with Lloyds on an initiative where retailers will be paid to offer cash back services to customers – as bank and cash point closures have prompted concerns around access to physical money. Currently business owners do not receive a fee when providing cashback to their customers. The new fee will offer more support to retailers and increase the number of places where people can withdraw their money.  The scheme is aimed at creating more availability where access to cash is challenging and customers will still have the choice to pay with their cards and mobile devices as they do today. 

Image Credit: Shutterstock

Image Credit: Shutterstock (Image credit: Image Credit: Shutterstock)

What do you think will be the next big breakthroughs in payment technology? How will Visa help support this?

Consumers are increasingly looking for two key things when it comes to finance and banking – speed and ease of use. They need payment experiences to be frictionless, without any hassle or unnecessary hoops to jump through. AI and Machine Learning continue to grow in importance when it comes to powering commerce, and these technologies have become increasingly embedded in our products and infrastructure.

For us, this means continuing to utilise AI for cutting edge fraud detection and network operation, but also to power advances in consumer facing technologies – such as chatbots, loyalty programmes and voice assistants. As AI and machine learning developments continue to advance how we fight fraud on the back-end, consumers will reap the benefits of greater simplicity and seamlessness that biometrics offer on the front-end which will ultimately, help fuel the adoption of new ways to pay.