Consolidating our cards into a convenient credential

There are thousands of innovative ideas that hold the potential to transform the way people go about their daily lives. We all strive for convenience and simplicity to make things easier, but often these ideas are confined to one use case or a certain market, needing scale and resilience to deliver value.

Consumers’ expectations have evolved with the advancements of technology, on the one hand demanding greater choice to deliver a more personalised solution, but on the other hand wanting simplicity and a frictionless user experience.

When it comes to payments, there have never been so many products, providers and platforms to choose from. While choice is important for consumers and businesses, it can sometimes create complexity in certain situations. For consumers, it can mean more products to manage, more providers to deal with, and more details to keep track of. And, for banks, it can mean customer primacy is under constant pressure.

The idea of a flexible credential, powered by Visa, is a solution to all these issues. Visa Flexible Credential enables choice and eliminates complexity, effectively turning a single card account into a dynamic credential that can access several different funding sources. empowering people to choose the payment methods right for them and their personal circumstances.

Putting choice and control into the hands of consumers
Consumers can define the parameters for paying immediately or paying over a longer term. So, they can budget for planned and unplanned expenses while allowing for better cash flow managements. All of this provided on the safe, secure and global Visa network they know and trust.

The process is simple. By pre-selecting how they want to pay, VisaNet automatically routes the transaction to the correct funding source. Using Visa Flexible Credential, they can easily set parameters or choose whether they pay by debit, credit or even using rewards points.

The rationale behind an all-in-one solution like Visa Flexible Credential is strong, with Accenture¹ finding that 56% of consumers want a single app for all payments, and 60% want a single app which tracks all payments, giving them greater transparency and control. A US survey from pymnts.com found 76% of people with six or more banking products wanted bundled solutions that provide payment method recommendations for specific transactions².

Although Visa Flexible Credential is new to Europe, it’s had a rigorous road test in the Asia Pacific region. For example, since debuting the ‘Olive’ card in Japan with Sumitomo Mitsui Card Company, Limited (SMCC) just over a year ago, there are over 3 million SMCC cardholders taking advantage of the Visa Flexible Credential. Since launch, 70% of Olive cardholders are flexing between different funding sources.

To support the European launch and help clients to craft their own Visa Flexible Credential proposition, Visa commissioned a full programme of quantitative consumer research. This confirmed a strong pan-regional rationale for a proposition across multiple product areas. But it also revealed significant local nuance – driven largely by differences in attitudes and behaviours in each market, and also by the prevalence of existing financial product holdings and applications.

The trends we’re seeing
The whitepaper identified a number of trends that financial institutions can factor in, when future-proofing their businesses, with those that can seamlessly integrate payments into consumer lifestyles and behaviours may be best positioned to gain preference and primacy.

1.  A proliferation of dedicated single-function, stand-alone apps, often with low usage is emerging.
2.  Payment choices are becoming more dynamic and more embedded in purchase journeys.
3.  Digital wallets are transitioning from superior UX to a financial tool of choice.
4.  AI-enabled hyper-personalisation is emerging as a viable way to deliver seamless choice and experience.
5.  With the promise of low switching costs, a greater UX, and the ability to meet more needs, consumers are willing to consider additional products from alternative providers.

For more information on research findings and what they can mean for consumers and financial institutions, click here to access the full whitepaper.