Visa Introduces New Data Sharing Technology for Enhanced E-commerce Experiences

Visa introduces token-based technology to share customer preferences with retailers, enhancing e-commerce with consumer consent.

By Athena Xu

5/15, 17:46 EDT
Mastercard Incorporated

Key Takeaway

  • Visa Inc. introduces technology to share customer shopping preferences with retailers, enhancing e-commerce experiences through "tokens."
  • The new feature emphasizes consumer consent and control, with options to revoke data access; a payment passkey and flexible credential system are also planned.
  • Despite regulatory scrutiny over token technology, Visa proceeds with a pilot, aiming to stay competitive against Mastercard, Stripe Inc., and Plaid Inc.

Visa's New Data Sharing Technology

Visa Inc. has announced the introduction of a new technology designed to enhance e-commerce experiences by sharing more detailed customer preferences with retailers. This technology utilizes Visa's proprietary "tokens," which safeguard consumer bank information during transactions. With consumer consent, these tokens will convey shopping inclinations and preferences, such as favorite product categories, to merchants. Visa CEO Ryan McInerney emphasized the technology's transparency and consumer consent foundation, stating, "It’s almost entirely blind to almost all consumers. They just know their payments work better." This initiative is part of Visa's strategy to stay competitive in the e-commerce sector, amidst growing competition.

Enhancing Consumer Experience

Visa's move to share consumer shopping data aims to tailor shopping experiences using artificial intelligence, promising "better shopping experiences" for users. However, the consent mechanism for data sharing and its implications have sparked discussions among consumer advocates and lawmakers. McInerney reassured that consumer control is paramount, with options available through bank apps to revoke data access. Additionally, Visa plans to introduce a payment passkey for easier purchases via facial recognition, and a flexible credential system in the U.S. that simplifies multiple payment methods under a single credential.

Regulatory and Competitive Landscape

The token technology, which is distinct from cryptocurrency-related tokens, has come under scrutiny by the US Justice Department. Concerns were raised after it was found that vendors not using the tokens were charged more. Despite this, Visa is proceeding with a pilot of the new shopping data sharing feature later this year. Visa's competitive environment includes not only traditional rivals like Mastercard Inc. but also fintech firms such as Stripe Inc. and Plaid Inc. McInerney highlighted the importance of partnering with fintechs to leverage Visa's network for innovation and to meet the company's goals.

Management Quotes

  • Ryan McInerney, CEO of Visa:

    "It’s almost entirely blind to almost all consumers. They just know their payments work better." "It’s all about putting the customer in control of when and how to share that data." "Making a payment should be as simple as unlocking your phone. That’s essentially what we’re doing — leveraging common standards that are kind of already embedded into all of the phones and operating systems and browsers."