February 6, 2015
In any industry, there are influencers whose opinions matter the most for all stakeholders involved. The Payments Industry is no different and the top executives in this sector drive the goals for many organizations. When it comes to payments, brands like Visa and MasterCard are the pre-eminent leaders in the current ecosystem, so what have the senior most leaders of these two giants been saying about payments? We have compiled some exclusive comments from Charlie Scharf, CEO of Visa, and Ajay Banga, CEO of MasterCard, as they relate to various aspects of the industry:Opinion on: Visa CEO – Charlie Scharf MasterCard CEO – Ajay Banga Apple Pay We continue to see good success with Apple Pay. I think the work that Apple has done and winding up in-market with their solution, it certainly accelerated people’s thinking. We are very excited about what Apple is doing. We think it’s a very elegant solution that we are thrilled with our participation in. You saw Apple Pay talk about their mobile payment growth, and at the end of the day, yes, they’ve done a great job and it’s excited the market, but it’s still a very small percentage of what the total number of transactions are. Tokenization On our tokenization efforts, we are very actively working with issuers in other parts of the world and would expect to see some tokenized solutions in the marketplace this calendar year. To date, 43 of our issuing partners have enrolled in our tokenization services. We are very focused on tokenization; it’s a very important aspect of where we’re going for safety and security. We’re putting it into MasterPass, just regular MasterPass, over the next period of time. Electronic Payments We are laser focused on investing to drive cash to electronic payments, partnering with those who will drive commerce in the digital world and creating platforms to embed ourselves in that digital commerce. Visa Checkout, Visa Token Services, Visa Digital Solutions and enabling Apple Pay, these are things that we’ve done so far and there is much more to come. We will continue to be at the forefront of our industry by driving payment innovation with solutions such as MasterPass, and by increasing electronic payments usage globally as demonstrated by our significant expanded acceptance footprint across Africa. Mobile Payments Mobile payments will be a great driver for Visa. 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. I think you have to think of mobile and digital as a very wide space. One aspect to it is are you going to put your credentials on the phone, are you going to do it through host card emulation, or are you going to do it through NFC, or is it in app or is it browser based like others. However there are many other elements of mobile payments and we are working with all of them. And our strategy has been to work with all players to ensure that we have the capabilities to meet the needs of different market models and make choices available to consumers. EMV Chip Technology The data breaches at retailers highlight the need for new security technologies as well as the adoption of chip. Visa is committed to ensuring our network operates at the highest level of security available and will continue to move the industry towards the adoption of new safeguards including EMV chip. We also will work with all participants to look beyond these technologies. Everyone needs to be on the bandwagon. Banks need to be there, merchants need to be there, governments are clearly there. We need to get the networks there and the acquirers there, and I think there’s a lot of progress on that front. Chip technology would make stolen data much, much, much less valuable to a fraudster, because it’s tough to counterfeit the card, and it’s almost impossible to duplicate all the unique data that flows for that transaction to get approved.
The two thought leaders have also shared their opinions on certain other areas of the payments industry as well:
Charlie’s perspective on Bitcoin:
Bitcoin is two things, right? Bitcoin is a currency, and it is a way to create a network. And the two today aren’t associated. People (ask): ‘Are you going to accept the coin?’ And the answer is, we’ll think about it when our clients actually want to use it. So when we have banks and merchants saying ‘Hey, our clients really want to pay in Bitcoin,’ then it becomes a meaningful question for us to answer. Until then, it is just theoretical would we do it, and we have – I forget a couple of hundred currencies or 170 currencies that we do business in. If we chose another one, we can certainly do that.
Ajay’s perspective on Lending:
You are seeing really good trends on credit. Part of that is caused by borrowers having learned what they have lived through [and] part of that is caused by the banks, who over the past few years have cleaned up some of their books and now are focusing on more middle-class and affluent borrowers. I am excited about the idea of it being another market that is available but it is just one more market.
Ajay’s perspective on NFC:
My sense is you’re going to get NFC growing decently, particularly with terminalization, and I believe terminalization will happen with all the EMV and chip migration as well as the fact our new terminals are coming contactless-equipped, so you’re probably seeing a two or three-year cycle of a fairly dramatic increase in contactless-equipped terminals.