Payments company Visa is expanding its seamless smart payment solution, Visa Ready, targeting 50 billion connected IoT devices by 2020.
The Visa Ready Program, previously only used by mobile point-of-sale acceptance (mPOS) providers, mobile NFC-enabled device manufacturers and chip and platform providers, will include other IoT companies such as manufacturers of wearables, automobiles, appliances, public transportation services and clothing.
Visa Ready has been designed for companies to integrate Visa’s payment services into their products and services and uses any available internet connection to carry out a transaction.
In a statement, the company said that the Visa Ready Program for IoT will also enable device manufacturers to evaluate, develop and potentially adopt new payment methods that are already approved by Visa.
According to Visa, those who join the program have access to R&D resources, and Visa’s Digital Enablement Program (VDEP), which includes streamlined access to Visa Token Service (VTS).
The VTS allows mobile and digital payments where there is an internet connection and replaces sensitive payment account information found on payment cards, such as the 16-digit account number, with a unique digital identifier that can be used to process payments without exposing actual account details.
Initial partners include Accenture, Coin, Giesecke & Devrient, Fit Pay, and Samsung, who will now be joined by wearable makers Chronos and Pebble and smart payments provider Coin.
To use the system, a consumer can load a Visa card to his/her connected device. The device will then send a card load request to a token requestor, who will then request a payment credential from VTS.
Once this has been done, a Visa Risk Manager (VRM) will make a decision on whether to carry out the payment or not based on approval rules established by the Visa card issuer.
If approaved, a VTS generates and delivers a token to the device and the device will be activated for payments.
Jim McCarthy, EVP of innovation and strategic partnerships at Visa, said: "By adding payments to these devices [smart appliances and connected devices], we are turning virtually any internet connection into a commerce experience – making secure payments seamless, and ultimately more accessible, to merchants and consumers."
Kanishk Parashar, CEO of Coin said: "Our partnership with Visa is significant because of how it enables payment functionality on everyday devices. This is a big opportunity for the rapidly growing wearables market, projected to reach $53 billion in sales by 2019 [according to Juniper Research]."
John Benjamin, partner of intellectual property and technology group at legal firm DWF, said that the announcement is an interesting development from VISA as the core services of its business come increasingly under threat from alternative payment systems.
He told CBR: "One of the main issues with IoT devices is the fear among consumers of data security and the risk of hacks. It will be interesting to see whether the use of "VISA ready" will have a significant impact on consumer choice and in turn affect buying patterns.
"Clearly there is a risk here to brand reputation (even where it is only be association) where one of the devices it is associated with is subject to a hack."