WHERE CASH IS NOT KING
Visa seeks digital payments
Credit card giant Visa is pouring resources into the future of payments — including contact-free mobile technology and internet-connected appliances that can order snacks or laundry detergent — in its decades-old war with cash, the company’s CEO said in Boston yesterday.
“The enemy is cash for us, our job is to convert every cash or check transaction to electronic and digitized payment,” said Alfred Kelly Jr., chief executive of Visa.
“We must be looking two, four, five years ahead to try to find the next thing that’s going to happen,” Kelly said. “There’s no area we’re investing in more than innovation.”
Speaking at the Boston College Finance Conference, Kelly said Visa is pushing to play a role in the impending wave of internet-connected devices in public, in the home and just about everywhere else. Kelly said appliance maker Whirlpool is already working on a washing machine that can order more laundry detergent with the tap of a button and the long-envisioned refrigerator that can order food without making a trip to the grocery store. Connected home appliances that can restock on demand have long been seen as inevitable and Visa is making a play to be the company that makes the money move.
“No longer will it be about businesses where you’ll use your payment capability, it’ll be about places and things,” Kelly said. “There will be places in your house you’ll go to pay for things.”
About half of Visa’s employees are now programmers, coders and other tech positions, he said. Visa recently opened an office in Palo Alto, Calif., the heart of Silicon Valley, just to recruit talent there.
Kelly said even with traditional competition from MasterCard and American Express and upstarts, Visa’s true competition is still cold hard cash. That’s why, he said, Visa is trying to help popularize non-contact payments including Apple Pay, which uses near-field communication to transmit payment details. Kelly said NFC payments are still less than 1 percent of all transactions, compared to countries like Australia, where those payments account for 88 percent of transactions.
Still, there are some emerging technologies that Kelly said Visa is not concerned about.
“Bitcoin has not really taken off,” he said. “I’m not ignoring it in any way, shape or form, but it hasn’t really taken off in any real way.”
The price of bitcoins have spiked recently, roughly doubling over the past three months. Last month, Abby Johnson, chief executive of Fidelity Investments, touted the benefits of the blockchain, bitcoin’s underlying technology.
‘There will be places in your house you’ll go to pay for things.’ — ALFRED KELLY JR., CEO at Visa Inc.