|by Jason Steele|
I have written before about how Visa and other companies are working to deploying new systems that will allow you to use your phone as a credit card. I am not so hot on those systems for all sorts of reasons. What I am excited about is the standardized one click payment system that they are now developing. As an Amazon customer, I have gotten used to the idea of purchasing things without going through pages and pages of forms. I am constantly astonished at how much time and effort it takes to something through PayPal. It is something like an 18 step process that includes such valuable experiences as signing in again, clicking through ads, specifying the payment method (the love to default to your checking account), and reconfirming your choices a few times. There has got to be a better way. By shooting for a single login, one click system, Visa has the potential to be a real disruptor to the PayPal monopoly. If they integrate this system with some sort of chip in your telephone, so much the better.
How This System Will Work
Currently, you can pay for your stuff online either by using PayPal (ugh!) or by entering all of your information to each individual web site. Some sites may store the information, allowing you to make repeat purchases without re-entering everything, but there are several problems with that approach. First, you must still enter everything in at least once. Next, they can’t really store your credit card information as that would promote fraud. Usually you will have to re-enter the last four digits of your card and the expiration date. Through in another verification code, and you really aren’t saving much time. Finally, you still have to have a user name and password for each of these sites.
Visa’s system will work with other web sites to provide a common interface. Us computer guys call this an API, or Application Programing Interface. This will allow each merchant to easily customize their web site to utilize Visa’s system. To the user, you will have to enroll your cards in the system and create some kind of username and password. It is even possible it could use the authentication on your own computer. Because of Visa’s penetration and near saturation of the market, it is not hard to imagine that merchants will quickly adopt this system, especially if Visa follows through on making it easy for them to do so.
Interestingly, they are planning to roll this system out first to online gamers. That is a curious choice considering all of the problems that Apple has been having when children have been making (unauthorized) expensive purchases on their parents phones while playing silly games. If you want to understand how that can happen, just do a search on the term “smurfberries.”
How This System Could Fail
If they go with some kind of system that allows anyone using your computer to make purchases to your account, this will be a recipe for disaster. Sure, many people password protect their computers, but most people just leave it blank. Imagine a world where anyone who steals your computer, or even uses it without your knowledge has been given control of your credit cards. Given that possibility, it is truly astonishing that the first group of people they are going to roll this out to are teens playing video games!
How Electronic Payments Will Shake Out
In the race to provide an electronic interface to your credit cards, I am willing to put some faith into Visa. American Express is also set to roll out a similar system, but I haven’t heard much about it. I haven’t heard a peep from Mastercard or any other payment processor. Likewise, the mobile phone service providers are working on a system, but I have a hard time believing that they can command the adoption of their system the way a giant like Visa can. No matter how you look at it, it appears that they way we pay for our goods and services is about to undergo a huge change.