Is Visa the Future of Payments? Biometrics, Blockchain & Tokenization

An Innovation Leader…

“Innovation has been core to Visa’s DNA since the company was founded in 1958. Since that time, Visa has championed innovation to further payment acceptance, convenience and security for everyone, everywhere.”

Year after year Visa ends up on the lists of “most innovative.”

This year Fast Company placed Visa on its Top 10 Most Innovative Companies in recognition of Visa’s efforts to “empower mobile payment through wearables” and other IOT integrations including real-time payments through Visa Direct. “The announcement reflects Visa’s dedication and leadership in the payments technology industry and continued investment in payment innovation.”

But is Visa the Future of Payments?

“Unlike some companies that have rolled out digital wallets, payments are not just a side business for us. It’s not a casual foray into a hot new space. It’s our core business.”

According to TechTarget, “Biometrics is the measurement and statistical analysis of people’s physical and behavioral characteristics. The technology is mainly used for identification and access control, or for identifying individuals that are under surveillance. The basic premise of biometric authentication is that everyone is unique and an individual can be identified by his or her intrinsic physical or behavioral traits.”

But are biometrics the next frontier of mobile payments?

According to Juniper Research, there will be 770 million biometric authentication apps downloaded annually by 2019. Juniper credits this growth to the increase of touch ID hardware in mobile phones, in addition to the connection between hardware and the tokenization of NFC payments to mobile commerce. Security analysts point out that as more apps enter the market, fingerprint-scanning technologies will improve and even more biometric methods will become prevalent.

“Passwords may soon become obsolete.”

By 2020, Visa believes mobile payments will become the preferred method of both consumers and merchants. In addition, the ability to authenticate a payment via fingerprint, eye scan, or voice recognition may increase digital payment conversion rates. The proliferation of sophisticated mobile devices, equipped with fingerprint sensors and high-quality cameras, has triggered a surge in biometrics.

Visa has partnered with BioConnect to provide ways to authenticate payments that work across many devices and operating systems, without passwords and instead enabling multiple biometric technologies. With multiple types of biometrics supported by an app, it becomes possible to make the password a thing of the past.

“Our collaboration introduces an elegant alternative, one that, for example, enables your newly downloaded mobile banking application to identify and authenticate you by using one of your previously enrolled biometrics. Because the technology can work across multiple devices, you would simply sign in using the biometric to gain access to your data, without need for a keyboard, password, or setup—all possible in the first few moments of unwrapping your new device.”

“Biometrics for everyone, everywhere”

Enabling a wide range of authentication capabilities is an extension of Visa’s broader strategy: to make payments more secure and convenient for everyone, everywhere. There is no global, one-size-fits-all approach, which is why Visa is not choosing a single biometric solution or implementation. “Rather, we’re focused on enabling a broad range of technologies to address the varied needs of Visa’s clients and cardholders worldwide.”

However, it will take time until PINs and passwords can be completely eliminated, as they are integral to the payment infrastructure of many countries. 

Blockchain:

According to Fortune, the Blockchain is actually a way to “structure data, and the foundation of cryptocurrencies like Bitcoin. This coding breakthrough—which consists of concatenated blocks of transactions—allows competitors to share a digital ledger across a network of computers without need for a central authority. No single party has the power to tamper with the records: the math keeps everyone honest. Forty of the world’s top financial firms are experimenting with the tech.”

Visa: New kid on the Blockchain

In looking closely at Blockchain technology and the potential it has to transform the world of payments, Visa realized that one of its biggest opportunities is in corporate international business-to-business payments. In an effort to offer pilot financial institutions a simple, fast and secure way to process B2B payments globally, Visa recently partnered with Chain.

A new solution—Visa B2B Connect—will emerge.

Using Chain Core, an enterprise blockchain infrastructure, Visa B2B Connect will offer participating pilot financial institutions a consistent process for managing settlement through Visa’s standard practices. “Visa B2B Connect will have what it takes to move the needle and make meaningful improvements in the way corporate clients are able to make payments around the world.”

Tokenization:

According to Square, “Tokenization is the process of protecting sensitive data by replacing it with an algorithmically generated number called a token. Often times Tokenization is used to prevent credit card fraud. In credit card Tokenization, the customer’s primary account number (PAN) is replaced with a series of randomly-generated numbers, which is called the ‘token.’ These tokens can then been passed through the internet or the various wireless networks needed to process the payment without actual bank details being exposed. The actual bank account number is held safe in a secure token vault.”

Tokenization not only reduces the chance of fraud, but also helps encourage payment innovation. By building on a foundation of security, more trust can be brought to Payments as capabilities expand to mobile devices and the Internet of Things.

Payments in the Internet of Things (IoT)

The Internet of Things (IoT) is changing the way businesses, consumers, even whole cities interact through connected devices. Forecasts show that 50 billion connected devices will reach the market by 2020. Ninety percent of cars are expected to be connected, as well.

Visa is collaborating with IBM and other partners, including Giesecke and Devrient, Gemalto and Inside Secure, to allow businesses to introduce secure payment experiences throughout the Internet of Things (IoT), making wearables, cars, appliances and many other connected devices potential points of sale. “IBM and Visa share a vision to embed payments into any device—imagine a washing machine that can reorder laundry detergent or a car that can pay for gas or a ring that can pay for anything, anywhere.”

Visa: “Ready” for Tokens

“The Visa Ready Program for Internet of Things now provides IoT device manufacturers with a path to embed secure payments into their connected devices, enabling anything from a watch to a car to initiate payments. Through Visa Ready, device manufacturers can implement the industry standard for digital payments, EMVCo’s payment tokenization specification. In doing so, Visa Ready partners act as token requestors through Visa Token Service (VTS).”

Clearly, Visa deserves its title as an innovation leader.

With the weight to purchase additional companies, technologies, and brains, I feel that Visa will continue to dominate in the Payments sector of the Fintech industry.

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