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Visa has officially launched its new brand for its digital wallet, called V.me, as the credit card company also works to court app developers to help further is mobile payment platform.
Early next year, Visa will start marketing its digital wallet as V.me, a brand that is differentiated from its Visa credit card brand. The new digital wallet, which works a lot like PayPal by allowing users to link the wallet to other forms of payment like an existing credit card, will make it easier for customers to make online purchases, especially from their mobile phones.
Instead of typing in a 16-digit account number to complete a transaction from a smartphone, users can simply sign into the V.me digital wallet with a user name and password and buy something.
Visa’s V.me digital wallet is in closed beta testing today. But the company has said that it will be generally available to the public in early 2012. There are, of course, plenty of other e-wallets on the market, from eBay’s PayPal to Amazon’s one-click checkout.
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In an effort to spur adoption of its new digital wallet, Visa also announced Wednesday a new developer program that will allow retailers, merchants, financial institutions, gaming developers and others to access its payment system. Visa’s vision for the V.me digital wallet is that it will be open, meaning that consumers will be able to fund it using a variety of credit cards, not just Visa cards, and they’ll be able to use it pay for things anywhere.
The idea behind creating the developer program is that it will give these developers APIs and other tools that can help them create easier ways to accept and initiate payments on mobile phones. For example, game developers may use the tools to create simpler in-game purchases. Big brand retailers like Target or Wal-Mart could use the tools to make it easier to purchase goods from their sites via a mobile phone.
In addition to making mobile payments easier, Visa is also hoping developers can use the tools to make it easier for people to use the V.me platform to make person-to-person payments both domestically and internationally.
Visa’s credit card rivals have also been exploring opportunities in the digital wallet and mobile payment market. American Express announced it would start a $100 million fund to invest in digital commerce opportunities. And instead of creating its own digital wallet, Mastercard has been working with others to drive the mobile payment market. Mastercard was the launch partner for the Google Wallet.
There are also other companies building their own digital wallets. Isis, a joint venture formed by three of the four major U.S. wireless carriers – AT&T, T-Mobile USA, and Verizon Wireless – is also developing a digital wallet. And it seems like the credit card companies are hedging their bets a little by striking deals with the company. Visa, Mastercard, American Express and Discover have all signed on as Isis partners.
And then there is Google. It’s also developed an “open” digital wallet that it calls Google Wallet. The service launched commercially earlier this fall, but it’s still in its early days. Mastercard is currently the only credit card company working on the Google Wallet, and the service is limited to one device on Sprint Nextel’s network.
Google is taking the concept of a digital wallet further than Visa is initially with its V.me service. Instead of restricting the digital wallet to e-commerce, Google Wallet allows people to pay for things with their cell phones in the physical world, simply by simply by tapping their phones to special payment terminals. A special near field communications (NFC) chip is needed inside the phone for the service to work.
Visa executives have said that they plan to offer a similar tap and pay solution toward the end of next year.
In fact, earlier this year in an interview with CNET, Bill Gajda, head of Visa Mobile Global, said that Visa wanted to get consumers hooked on its digital wallet before introducing the NFC component, since many phones still don’t have the required technology embedded.
Instead he said that Visa would initially market the digital wallet service through banks. A bank like Citibank or Bank of America could offer the digital wallet application as part of their online banking service. Banking customers will be able to add any of their existing credit cards to their digital wallet as well as rewards cards.
The online application will allow them to track their spending across all their cards as well as make one-click purchases online, eliminating the need to type in credit card information.
By marketing the service first to online banking customers or directly through its own Visa Web site to online users, Gadja said in August that the company will have a chance to build an audience before it introduces its NFC tap-to-pay solution.
Jennifer Schulz, Visa’s head of product, strategy and innovation, said that focusing on the e-commerce aspect of its digital wallet and mobile payments first is important because NFC technology is not yet everywhere it needs to be.
“We’re tackling the online aspect of mobile payments first,” she said. “Then we’ll tackle the rest of the market when there are more NFC devices and terminals in the market. But we believe there is still a lot to be done to optimize the check-out process on mobile devices.”
Updated 11:50 a.m. PT: This story was updated with comments from Jennifer Schulz, Visa’s head of product strategy and innovation.
