Finance

- Consumers’ preferences to be shared via proprietary tokens - Firm competing with fintech newcomers, fellow giant Mastercard - The payments company also is aiming to make it easier for consumers to make purchases by a facial recognition-triggered click-to-pay experience

Visa Inc. is rolling out new technology that will allow the payments giant to share more information about customers’ preferences based on their shopping history with retailers as it seeks to remain a top player in the competitive e-commerce space.

The data will be shared via the payments giant’s proprietary “tokens,” which provide an added layer of security between a consumer’s bank information and a merchant. Shopping inclinations and other information based on past transactions — such as preferred categories, like movies or golf — will be shared via token with retailers with the consent of consumers.

“It’s almost entirely blind to almost all consumers,” Visa Chief Executive Officer Ryan McInerney said in an interview of the company’s token technology. “They just know their payments work better.”

The sharing of shopping data via token is one of a handful of innovations Visa unveiled at a conference in San Francisco, where it’s based. Visa, one of the largest e-commerce technology companies in the world, is finding itself increasingly fending off competitors seeking larger slices of the fees merchants must pay to carry out consumer transactions.

In order to tailor a shopping experience using artificial intelligence, Visa relies on massive amounts of data. While the company is promising “better shopping experiences” through the information sharing, consumer consent for turning over that data to technology companies to power their AI models — and whether customers know they’re allowing such information to be shared — has raised concerns among consumer advocates and lawmakers.

McInerney said he hasn’t heard any complaints about the data tokens because they’re designed with consumer consent “as the foundational premise.” Consumers will have the option, through their bank app, to revoke access to their information, he said. “It’s all about putting the customer in control of when and how to share that data.”

Visa’s token technology – different from that used to develop stablecoins, a type of cryptocurrency – has been scrutinized by the US Justice Department after vendors who eschewed the tokens were charged more than those using them. The new sharing of shopping data through tokens is set to be piloted later this year, Visa said.

Facial Recognition

The payments company also is aiming to make it easier for consumers to make purchases by introducing a payment passkey — a quick, facial recognition-triggered click-to-pay experience. It’s much like Apple Inc.’s Apple Pay, but works for every browser and mobile device, using facial-recognition capabilities built into most recent mobile devices. Consumers often abandon their transactions when slowed down by security prompts meant to verify their identity, and Visa’s new service is meant to minimize that friction.

“Making a payment should be as simple as unlocking your phone,” McInerney said. “That’s essentially what we’re doing — leveraging common standards that are kind of already embedded into all of the phones and operating systems and browsers.”

Visa also will allow US consumers to use a single credential for multiple payment methods, rather than requiring a bank to issue separate card numbers for credit and debit, for example. Already available in Asia, the flexible credential will be live with Affirm Holdings Inc. later this year, according to a statement. That will make it easier for a bank to add products to a consumer’s account without creating new account numbers or sending more cards in the mail.

Visa’s Competitors

Visa not only competes with rival payments giant Mastercard Inc. but also with financial-technology firms such as Stripe Inc. and Plaid Inc.

“If you just look at the number of companies, the number of payment alternatives that are out there, in the US and around the world, the number of options that people have to pay and be paid, it’s never been greater, and the number of options continues to accelerate,” McInerney said.

Visa is partnering with fintechs, he said, to take advantage of payments developments rather than being pushed aside.

“If we do our job well, we can put our network to work — open our network for people to do what it is they’re trying to do, to innovate and build products on our network,” McInerney said. “We’ve had really good success partnering with both fintechs and big tech players to drive their goals.”