Visa Aims for Starbucks Experience with QR Codes

Mobile wallets may not have won over consumers (yet), but as anyone that’s recently visited a Starbucks could tell you, QR codes certainly have.

That’s why Visa is taking a closer look at the payment method, according to Jim McCarthy, executive vice president, innovation and strategic partnerships.

“The QR codes allow us to remove not only the plastic [card], but the terminal,” said McCarthy yesterday, during the company’s investor day. McCarthy also noted that Visa is working on “standards” alongside EMVCo that will allow Visa customers to use QR codes globally.

The key, according to McCarthy, is to ensure that the code method supports both “push and pull” — i.e., that merchants can safely “pull” funds from the consumer, and that consumers can safely push them.

There are two main benefits to using a QR code for a company such as Visa (or for Visa’s over 40 million merchant clients): the transaction is easy and familiar to consumers, and it carries the added security of tokenization technology.

Visa, McCarthy noted, has been in the tokenization business for 50 years, essentially since the first iteration of Bank of America’s “bank card.”

“The consumer can get a [tokenized] QR code — think of it like a Starbucks experience, where I get a code on my phone and I present that to the merchant,” said McCarthy. “Or the consumer can scan the merchant QR and push their funds to the merchant’s account — again, eliminating fraud, but also digitizing the entire transaction end to end.”

The rising consumer comfort with digital finance, like QR codes and P2P payments, means an entirely digital transaction process is now a necessity, according to Visa. Mobile wallets will get there, eventually.