Visa Announces Major Overhaul to Credit and Debit Card Operations in the US
By Boniface Ihiasota, USA
In a significant shift for the U.S. payment landscape, Visa announced on Wednesday a series of major changes to how credit and debit cards will operate in the coming months and years, Excel Magazine International reports.
These updates are set to reduce the reliance on physical cards and make traditional 16-digit card numbers less relevant.
The new features are poised to transform payment practices in the U.S., marking the biggest changes since the introduction of chip-embedded cards several years ago.
These changes coincide with the growing array of payment options available to Americans, such as buy now, pay later services, peer-to-peer payments, direct bank payments, and digital systems like Apple Pay.
“I think (with these features) we’re getting past the point where consumers may never need to manually enter an account number ever again,” said Mark Nelsen, Visa’s global head of consumer payments.
The most impactful change for consumers will be the ability for banks to issue a single physical card linked to multiple accounts.
This means that a single card could replace multiple cards from different banks.
Consumers will be able to set preferences, such as routing purchases under $100 to a debit account while larger purchases go to a credit account.
This feature, already in use in Asia, is set to launch in the U.S. this summer, with Affirm being the first to implement it.
Visa’s updates also aim to combat the rising issue of online payment fraud, which occurs approximately seven times more often than in-person fraud.
As more countries adopt digital payments, the availability of stolen card numbers has surged, prompting Visa to introduce features to mitigate this risk.
The updates also respond to innovations from other companies.
For example, the Apple Card, which uses Mastercard, lacks a printed 16-digit number and allows users to request new numbers without replacing the physical card. Visa envisions a future where account numbers on cards are largely symbolic.
Among the other changes, Visa is enhancing tap-to-pay capabilities.
Users will be able to tap their cards to smartphones to add them to mobile wallets or approve online transactions, eliminating the need to manually enter card information.
Visa is also incorporating biometric verification for transactions, similar to Apple’s fingerprint and face recognition features.
While these features will take time to be adopted by banks, Visa’s role as a card issuer means that financial institutions have been eager for these updates.
The implementation timeline will vary as banks decide when and how to roll out these new features to their customers.
Visa’s comprehensive overhaul signals a transformative period for the U.S. payment industry, promising enhanced convenience, security, and integration for consumers and businesses alike.
