For decades, different payment cards existed to serve different purposes: Credit cards have offered the option to pay in full or revolve and pay the minimum balance, and rewards and loyalty programs have varied wildly. Debit cards provide access to funds on hand.
We’ve seen innovation now evolve to reinvent the credit experience with installments and buy now, pay later (BNPL), and debit evolve to an account-to-account (A2A) relationship via open banking. Rewards cards become platforms for creating new ecosystems. But now, as commerce spans the digital and physical realms, Visa Issuing Solutions SVP Kathleen Pierce-Gilmore told Karen Webster in a PYMNTS TV segment, payments are being embedded into a variety of online and offline use cases.
As she noted to Webster, “the pace of change across the last 50 years has been nothing in comparison to what has happened over the last five years.”
Along the way, the payments network is forging smart credentials that go beyond data encryption. Tokenized experiences — still in early days — bring issuers the opportunity to add relevance to consumer use of their digital credentials. The consumer is at the center of it all, building upon the trust and confidence that comes with global acceptance of transacting anywhere in the world with most any merchant.
Consumers, Pierce-Gilmore said, gravitate toward the latest technologies, and now they are looking for issuers to provide a broad range of different payment options — and the choice of how they want to settle the transaction after it’s actually been completed.
Visa earlier this year announced its Flexible Credentials offering, which lets users access several accounts and toggle between payment methods, including credit, debit and BNPL.
“We’re putting maneuverability in the hands of the consumer,” said Pierce-Gilmore, “built off of all of the tremendous infrastructure, scale and security that’s been built up over decades … we’re shifting from the physical credit card or debit card to a set of digital credentials.”
The PAN, she said, has morphed into the token that goes with consumers everywhere they go. Elsewhere, with Visa’s Click to Pay options, Pierce-Gilmore said, consumers can opt to have their preregistered Visa card be the default payment mechanism at checkout. Pierce-Gilmore added that flexible credentials also enable consumers to manage their transactions after the fact — to better understand how and where they are spending.
That level of choice is necessary, said Pierce-Gilmore, who added that “to retain the relationship, they need to give this flexibility to the consumer … and the issuer needs to go where the consumer is.”
At a high level, “the ability to get your card into your digital wallet has to be simple,” she said, “and digital issuance and provisioning has to be easy for a consumer — wherever they are — when they want to get their credentials into those wallets.”
That’s no easy task for the issuers, as they are busy grappling with new regulations, she told Webster, and a daunting technological challenge to become more “digital” across all levels of their business. There’s still work to be done as they strive to embrace digital issuance or offer individuals in-app provisioning to their favorite digital wallet. Visa’s software developer kits (SDKs), she said, can shave months off that workload.
“The SDK … is a way to make it a lighter lift for our issuers,” she said, “for digital provisioning, digital issuance, in app provisioning and subscription manager — which helps understand how consumers are engaging with brands.”
Once the cards are provisioned, she said, artificial intelligence (AI) can be and is being harnessed to create personalized experience throughout the customer lifecycle. Pierce-Gilmore said AI-assisted shopping can offer better and more prescient recommendations as consumers interact with various brands.
On the back end, she said, the merchants and issuers are able to resolve disputes more quickly or glean customer-level data that can lead to a better experience online, and in brick-and-mortar locations too.
A better shopping experience, she said, is created through AI-underpinned loyalty and rewards offerings that are contextualized in real time (and on a merchant-by-merchant basis), which in turn are informed by the use of the Visa flexible credentials.
The end result is a seamless experience across channels, she said, in the aisles (“I can’t stand watching an inefficient payment experience,” she said) and online, where no one has to click through a dozen steps in order to transact.
No matter the setting or the payments type, battling fraud is essential, she said, and the company continues to innovate in the fraud-defense space. The flexible offerings, she said, can make sure that digital credentials are provisioned to wallets almost immediately, so that consumers and issuers can protect themselves in real time.
“You can continue shopping,” she said, “and there is never the need to get a physical card — so one potential point of vulnerability is taken out of the mix.”
As she told Webster, for issuers and for Visa, as it serves those issuers, “you cannot take your eye off the ball. You have to participate in whatever the consumer is using — and with the notion of tokenization and the payment token itself … there’s a whole world of innovation that’s going to follow.”
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