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Flexible credential: A credit card change that may thin wallets

Flexible credential: A credit card change that may thin wallets

  • PublishedJune 10, 2024

Visa, the world’s largest payment processor, has some big changes planned in the U.S. and elsewhere around the world over the coming year.

NEW YORK — Mark Nelsen, Visa’s global head of consumer payments, sees a world where the plastic card in your wallet becomes increasingly obsolete and the standard 16-digit account number becomes worthless.

Nelson spoke to The Associated Press about what Visa, the world’s largest payment processor, is changing to payment processing in the U.S. and elsewhere around the world over the coming year. The biggest changes in the U.S. will be allowing Americans to access multiple accounts from the same bank from one bank card, be it checking or savings, debit or credit. The interview has been edited for length and clarity.

Q: It used to be when it comes to payments, it was credit or debit, checks or cash. Now it feels like we have so many choices, it’s hard to keep up.

A: There’ve been more changes in the last five years than in the last 50 from a payment perspective. And so rather than trying to pick a winner, like here’s the way people are going to pay in every market, we are trying to support all these different ways to pay. Just allow for the choice.

Q: What is the new feature known as “flexible credential?”

A: I’m someone who has, like, three cards from one bank alone. That’s a remnant from when a card could only be one thing: debit or prepaid or credit. And so the concept of this flexible credential is that a card can be whatever the consumer wants. You can come into your bank and say, ‘Hey, if this transaction is less than $100, I’m just going to use it as a debit card.’ And so I’ll just pay for it immediately. But if it’s over $100, apply it to my credit card. Or you could come in and say, ‘Hey, I want to pay for points with my next transaction, or pay with installments or pay with crypto.’ It’s making a card do multiple things instead of just one thing.

Q: Sounds like having one account number for each card is going away.

A: I think we’re getting past the point where consumers need to manually enter a credit card number at each merchant. So visually a consumer would still have a piece of plastic and it would have a 16 digit number. But when it comes to e-commerce, you’ll be able to link multiple accounts to a unique credential, so you can still have your Chase Sapphire and it has a unique number on it. No more storing cards with merchants. Instead a unique transaction number will be created.

Q: When will consumers start to see these changes?

A: Flexible credential is already available in Japan. It’s been very successful there. For the U.S., it would simply be a matter of time, months or so. Banks will take these features and figure out how to integrate them.

Q: Tap to Pay is also changing, how so?

A: Today, if you want to add a card into a merchant, you have to manually enter it in. But if you’re on your phone, you can just tap your card to the phone. And that would automatically add your card details to the merchant. Or let’s say you want to add a card into Apple Pay or Google Pay or Wallet. You used to have to take a picture of it, or maybe type it in. Now you’ll just tap your card to your phone and it automatically provisions the card into your wallet. And so it’s a way to create an easier to deploy technology for consumers, that the banks also then have real cryptographic proof that this is the genuine card that’s being used.

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