Visa Checkout Hits 7 Million Users, and Visa Europe Should Push That a Lot Higher

  • JJ Hornblass
  • November 3, 2015
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canstockphoto2093660PayPal, take notes.

Visa yesterday disclosed that it has “more than 7 million registered users” for its Visa Checkout service, a PayPal competitor. PayPal counts 173 million active users.

Visa Checkout was launched in Aug. 2014. MasterCard, by comparison, has not announced how many registered users it has for its Visa Checkout-like MasterPass.

The current Visa Checkout userbase amounts to about 0.29% of Visa’s total card users of 2.44 billion. That minimal penetration rate implies that Visa Checkout will grow significantly in the coming years — and not just because of Visa Inc. Yesterday, Visa also announced that it was acquiring Visa Europe for $23.4 billion. One of the primary to-dos after the acquisition is, you guessed it, offering Visa Checkout to Visa Europe’s 509 million accounts.

Here’s how Visa’s CEO explained it yesterday:

One of the strategic benefits of the transaction is that we will be able to deliver enhanced digital and mobile capabilities in Europe so this will be an important focus post-close. Our plan is to provide access to our Digital Solutions roadmap and partners. VE had already announced plans to roll out Visa Checkout and we’re already working with them on that in the context of our existing partnership. We can extend to Europe all that we’re doing to open our technology platform, which will enable collaboration and co-development of innovative payments experience.

Even presuming that Visa does not improve on its current penetration rate, Visa Europe will add around 1.5 million Visa Checkout users, presumably within a year, by our calculations.

Visa said it would also offer the ability for issuers and merchants to tokenize Visa Checkout transactions. Visa said it would begin doing do in early 2016, “as merchants and some issuers complete the work required to enable token acceptance.” This tokenization effort supports Visa Checkout, too.

It appears that the opportunity to extend Visa Checkout to Europe is crucial to Visa. Charles W. Scharf, Visa’s CEO, said yesterday that digital, not pricing, is the company’s means of future growth:

We do not view pricing on its own as the best mechanism to grow. So, I strongly believe in focusing on long-term value creation and that our future is about growing electronic payments and commerce broadly, and ultimately expanding into new or underpenetrated segments.

This approach is echoed at MasterCard, which has been pushing its MasterPass service, now available at 250,000 retail outlets. Still, Ajay Banga, MasterCard president and CEO, said during the company’s earnings call last week, that the company’s digital endeavors require the long view.

“Don’t judge MasterPass or the digital payment system as a whole by a sprint,” he said. “Judge it as a marathon. Otherwise by that logic, none of the current mobile payment or digital payment systems have reached any scale. Don’t do that, because I think it’s a cumulative effect over a period of time. That’s the way I’d look at it.”

No doubt, that’s the way Visa would look at it, too.

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JJ started the first iteration of Bank Innovation back in 2007, and has been working on it ever since. He also serves as President & Chief Executive Officer of Royal Media, Bank Innovation’s parent. He founded Royal in 1995 and oversees all aspects of the New York-based diversified media company. Prior to forming Royal, JJ was on the editorial staff of American Banker, the daily newspaper, and worked as an editor of a business magazine in Hong Kong. As a reporter and editor, he has won journalism awards from the National Press Foundation, Newsletter & Electronic Publishers Foundation, and the Reader’s Digest Foundation. He has a BS in Economics from Yeshiva University and a Master’s from the Columbia University Graduate School of Journalism. He was also a Fellow at the University of Wisconsin-Madison Graduate School of Banking. He lives in New York City with his wife, two daughters, and son. He counts among his accomplishments one New York City Marathon, two New York City Triathlons and the 2010 Father’s Day 5K, the first race he ever ran with his daughters. He can be reached at or 212-564-8972.

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