Fintech
Visa changes mean Americans will carry fewer credit and debit cards in their wallets
NEW YORK (AP) — Your wallet may soon be thinning.
Visa on Wednesday announced major changes to how credit and debit cards will work in the United States in the coming months and years.
The new features could mean Americans will carry fewer physical cards in their wallets and make the 16-digit credit or debit card number printed on each card increasingly irrelevant.
These will be some of the biggest changes in how payments operate in the United States since the United States launched chip-embedded cards several years ago. They also come because Americans have many more options for paying for purchases beyond “credit or debit,” including buy now, pay later, peer-to-peer payment options, direct payment with a bank, or digital payment systems like Apple Pay.
“I think (with these features) we’re past the point where consumers will never need to manually enter an account number again,” Mark Nelsen, Visa’s global head of consumer payments, said in an interview.
The biggest change coming to Americans will be the ability for banks to issue a physical payment card that will be linked to multiple bank accounts. That means no longer carrying, for example, a Bank of America or Chase debit card and their respective credit cards in a physical wallet. Americans will be able to set policies with their bank, such as having all purchases under $100 or with a certain merchant go to the debit card, while other purchases go to the credit card.
The feature, already used in Asia, will be available this summer. Buy now, pay later, Affirm company is the first of Visa customers to implement this feature in the United States
Some of Visa’s new features are in response to online payment fraud, which continues to increase as more countries adopt digital payments. The San Francisco-based company estimates that payment fraud occurs about seven times more often online than in person, and that there are now billions of stolen credit and debit card numbers available to criminals.
Other new elements are also in response to features that non-payment companies have implemented in recent years. The Apple Card, which uses Mastercard as its payment network, does not come with a 16-digit printed account number, and Apple Card users can request a new credit card number at any time without having to dispose of the physical card.
Visa executives see a future in which banks issue cards in which the 16-digit account number, if the new cards come with them, will be largely symbolic.
Among the other updates revealed by Visa are changes to tap-to-pay features. Americans will be able to link their credit or debit cards to their smartphones to add the card to mobile wallets, instead of using their smartphone’s camera to scan card information, or tapping the card on their smartphones to approve an online transaction. Visa will also begin implementing biometrics to approve transactions, similar to the way Apple devices use a fingerprint or facial scan to approve transactions.
The features will take time to filter down to the banks, who will decide when or what to implement for their customers. But because banks and credit card companies are Visa customers and issue Visa-branded cards, these are the features that financial institutions have long been asking for.