Why Visa and Mastercard Are Coming Together to Support Single Checkout Button for E-Commerce

Mastercard and Visa are B2B firms with a B2B2C mindset, according to Mastercard CEO Ajay Banga. The two rivals announced they would support a single checkout button for e-commerce last month, and today Banga explained why. Mastercard’s Banga and Visa CEO Alfred Kelly spoke at the JPMorgan Technology, Media, and Communications conference taking place this week in Boston. But the process will take a few years, at least, both agreed. Mastercard will start testing pilots for this initiative towards the end of the year. Visa’s Kelly said that company is in the” early innings.” According to Kelly, the Visa team is currently working on “technical specifications to make sure we understand exactly what we have to do to implement it. And there’s some -- a lot of meetings going on, on things like branding and what will the actual button look like.” Reports of Mastercard and Visa coming together to build this unified checkout button first surfaced last month. This initiative further solidifies the importance of the e-commerce market to both these card providers. In fact, Mastercard’s Banga pointed out that about 70% of its transaction volume in the US comes from electronic payments and retail. The goal behind this single checkout button is to replicate the customer experience with the EMV chip point-of-sale terminals in physical stores. The purpose is to make it easier for the customer to make payments and merchants to receive them, and hopefully in the process driving transaction growth in e-commerce. Kelly predicts the transformation brought on by single checkout will be similar to the QR code transaction story in India, “where it's just a very smart thing for the industry leaders to come together through the standard body of EMVCo , and actually do something that’s good for the payment ecosystem and put our individual egos aside.” Indeed, this will require giving up some of each company’s competitive advantage in this important market of e-commerce. Visa’s Kelly puts it this way: EMVCo has now come up with this standard that we announced a couple weeks ago that we’re 100% behind that if -- and that’s going to mean compromise on everybody’s part, but it’s going to allow a merchant to connect in one way for all -- one piece of work, one set of work for all -- facilitating all networks. And it’s going to make it easier for the consumer to have a pleasurable checkout experience that they don’t have to look at all the various options and buttons they see, some kind of buy button yet to be defined and branded, it’ll open up a wallet, probably a card pre-selected, they can overwrite that, select their product and confirm their purchase, very streamlined, far less friction type of experience. The move is likely to drive payment volumes for both Mastercard and Visa. As Kelly pointed out: What we have today is the moral equivalent of having to ask them a face-to-face merchant to have a different terminal for each network. Imagine the confusion at the point of sale, if you had seven or eight terminals and the checkout person has to actually determine which card you have and go to the right terminal, et cetera. That's in essence what’s happening in e-com. On the subject, Mastercard’s Banga said: My view is that the way we’ve approached the digital business as networks and banks has not been as – we’ve not learnt our lessons from the physical world where we have one terminal in a shop, basically in most markets and you can use a Mastercard or Visa card, an Amex card or Discover card, or a Cup card, whatever card you’ve got, tic-tac-toe you can come there, it works on that terminal. You make it easier for the merchant to accept electronic payments, it's one integration, it's one simple way of working. As for what this unified checkout button means for other payment players like PayPal or Amazon, that remains undecided. Mastercard CEO Banga leaves it to these players to decide: Look, the single checkout button is a common standard button built of EMV stands and we are working with PayPal for example to give them access to physical stores using tokens, using EMV standards and if PayPal wants to play with this button as well, they are welcome. I have no – this is not a proprietary button; it’s a standard button for the industry along [with] EMV.

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Why Visa and Mastercard Are Coming Together to Support Single Checkout Button for E-Commerce

HSBC Looks to Blockchain to Solve a Major Pain Point in Trade Finance

Blockchain Technology Not Suitable for Visa’s Core Business

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