EDCR 2.0 - Building the Infrastructure for Faster Payments
With the widespread adoption of fast and seamless digital payments, the remarkable progress achieved by the payments ecosystem over the past five years often goes unnoticed. The advancements in contactless card payments and the development of faster, more secure digital transactions have been made possible by the robust infrastructure that underpins these innovations.
As the next generation of advancements emerges, it is imperative for the infrastructure to continually evolve, ensuring that both consumers and merchants can fully reap the benefits. Here, Visa Navigate speaks to Godfrey Sullivan, Head of Product, Solutions, and Digital Partnerships at CEMEA, Visa, about how the current infrastructure can be transformed to enable faster and more innovative payment experiences for all stakeholders.
What are the most exciting innovations coming through Faster Digital Payments Infrastructure?
There are two important innovations which will help deliver the next generation of faster payments across the payments ecosystem: Click to Pay and Contactless ATMs.
For consumers consumers, Click to Pay means they will be able to make secure online payments even more seamlessly than before. Consumers will not need to manually enter their payment details to checkout when shopping online; their card details will be seamlessly retrieved, and they just need to select the card they want to checkout with.
The second, Contactless ATMs, will make it easier for cardholders to use ATMs to withdraw cash or perform other operations. Consumers will be able to tap their contactless card or even their digital wallet without the need for the physical card on the ATM, bringing it closer to the face-to-face shopping experience.
What’s really important for issuers and acquirers is that everyone progresses at the same pace because many of these innovations necessitate changes to different sides of the ecosystem to make faster payments happen.
Unless issuing and acceptance move at the same pace, it's often impossible to launch a new capability. For example, with Click to Pay, if the acquiring side is ready, but the card issuing side is not, the adoption rate will be very low.
What will the new payments infrastructure look like ideally?
What we want to see is an upgraded payments infrastructure that leads to faster, seamless, and more secure payment experiences for consumers.
An example of this would be that the majority of the cards stored on file become tokenized, and the majority of guest checkouts will go through Click to Pay. This means issuers will auto-enrol or pre-activate all Visa cards into Click to Pay and include the Click to Pay icon on card art.
For cardholders, who won’t have to manually enter card details or get a one-time passcode, the guest checkout experience is much simpler and faster than the current system of manual passcode or card entry. For merchants, more transactions go through because the process is easier for cardholders. Security is also enhanced by bringing token-enabled transactions to all cardholders.
How does the new Enabling Digital Commerce Roadmap build on what Visa has done before?
First, Enabling Digital Commerce Roadmap (EDCR 1.0) was introduced in 2018, and since then, the future of commerce in the Central Europe, Middle East, and Africa (CEMEA) region has changed significantly, driven by advancements in technology and digital transformation. For Visa, the most successful part of the first Roadmap was the contactless mandate, which achieved remarkable success. The adoption of contactless payments in CEMEA grew from around 4% in 2018 to 86% in 2023.
Most people think of the contactless experience as tapping a physical card, but contactless technology also underpins digital wallets and Tap to Phone, a new acceptance technology where you can accept payments on your mobile phone. This means merchants no longer need to invest in traditional point-of-sale terminals, which wouldn't have been possible without contactless technology.
During these years we learnt that infrastructure readiness to support money movement was a key success factor, and it will be equally important for this year's edition of Enabling Digital Commerce Roadmap (EDCR 2.0).
How will Faster Digital Payments Infrastructure accelerate the digitisation of the payments ecosystem?
Visa constantly innovates to improve and enhance the digital payments ecosystem, and the innovations under the Faster Digital Payments Infrastructure theme will be a key part of this . Take the movement towards Contactless ATMs as an example. Currently, most ATMs do not have a contactless interface, so they need to be upgraded to include this capability. Additionally, all new ATMs must be designed with a contactless interface from the start. This contactless interface needs to be part of the requirement for ATM acquirers to ensure that they are capable of handling contactless transactions.
Overall, these innovations will be extremely important in continuing to accelerate the digitisation of CEMEA’s payments ecosystem. They will enhance speed, security, and convenience for everyone involved in the ecosystem.
To learn more about the strategic themes under EDCR 2.0 please see our dedicated deep dives below:
- Cutting Edge Solutions For Seamless and Secure Transactions
- Keeping Payment Continuity and Efficiency
- Enhancing the Flexibility of Payments in CEMEA
Hear more from Visa's Godfrey Sullivan and Dan Baxter on the opportunities of EDCR 2.0 here.
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