Visa Wants Your Car to Pay for Gas at the Pump
February 16 2017 - 10:36AM
Dow Jones News
By AnnaMaria Andriotis
Visa is adding payment capabilities to gadgets most people would
never think about shopping on: cars, washing machines and fitness
bracelets to name a few.
The largest global card network by number of transactions is
betting that it needs to think beyond regular credit-card and
mobile-phone payments to maintain its dominance. The company on
Thursday said it is partnering with International Business Machines
Corp. to add payment capabilities to a slew of internet-enabled
devices, the so-called Internet of Things.
Visa's goal: create additional points of sale where they didn't
exist previously and that go beyond smartphones that already have
payment options like Apple Pay or Samsung Pay. The company believes
this will result in more transactions on its network.
Visa is partnering with IBM because it needs the distribution,
in the same way banks have served as Visa's main distribution for
credit cards. IBM's Watson platform, which the company launched two
years ago, is connected to more than 6,000 companies, including BMW
and Whirlpool. Consumers will soon be able to make purchases on
some of these brands' cars and appliances.
For example, consumers will be able to pay for gas from their
car rather than inserting their card at the pump. Cars will alert
drivers if specific parts need to be replaced and drivers will be
able to order those through the car's internet connection.
Similarly, fitness bracelets will eventually tell consumers when it
is time replace their sneakers and allow them to make that purchase
on the bracelet.
In this process, Visa says consumers will choose which Visa
card, whether debit or credit, they want tie to a particular
device. Rather than inputting card information to make each
purchase, consumers will be able to press a button on the device to
complete the transaction.
The partnership also is an attempt to change the way consumers
purchase big-ticket items. One futuristic hope: instead of leasing,
consumers drive cars off dealers' lots and payments will be
triggered based on the miles they drive.
Visa has just come off a strong quarter in which it posted large
year-over-year increases in payment volume, total processed
transactions and cross-border volume growth. But the company has to
keep investing in technology where it is aiming to make payments
"frictionless" to increase the ways consumers can get onto Visa's
rails, finance chief Vasant Prabhu said at a conference
Wednesday.
"We cannot afford to scrimp on investing in the capabilities we
need for the future," he said, later adding "If we need to step up
the level of investment and raise the rate of growth expense a bit,
we'll have to consider doing that."
Write to AnnaMaria Andriotis at annamaria.andriotis@wsj.com
(END) Dow Jones Newswires
February 16, 2017 10:21 ET (15:21 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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