17 January – Good news.. the right thing just happened.
This week we finally saw the “official death” of Visa Checkout and Mastercard’s “Masterpass”. Do you remember all those Superbowl commercials with Arizona wide receiver Larry Fitzgerald? Per my April 2018 blog, this “branded button” approach makes no sense at all at a time where Visa/MA are positioned to play a much more critical position as the central token directory. This means we will no longer see the “NASCAR like Checkout” I referenced 5 yrs ago when JPMC launched the much ridiculed ChasePay. Visa’s top 5 brand will no longer have an appended “checkout” on it (which no one used or understood).
The competing schemes are complex and warrant a more in depth blog. For example,
- Google’s inability to leverage VTS led them to create their own custom tokenization process directly with merchant acquirers (encrypted FPAN).
- TCH is in the middle of a successful pilot of faster payments, with Paypal as the principle pilot participant.
- ApplePay (in App) has become the dominant payment method (with their own standards and now their own card).
The new SRC/Tokenization scheme is an open standard that all merchants will run toward. I see it enabling Apple like ease of use across all eCommerce, and merchants will run to it. The biggest unknown? Will the networks enable either liability shift OR Card Present rates for use?
ApplePay enjoys card present rates on ALL transactions (at least in the US). It may have been unintentional.. but this dynamic creates great incentives for merchants to continue to steer toward ApplePay.