Visa Explores Online and Contactless Payments

May 23, 2020

High risk merchant accounts should consider contactless payments during health crisis.

Visa, Inc. has witnessed a dramatic degeneration in sales for the second half of March, whereas the months of January and February experienced strong growth.  With the Covid-19 health crisis taking its toll on countless business sectors, Visa has not been immune to the new changes in consumer spending.

Beyond the limits of the March quarter, Visa revealed that U.S. payment volumes dropped 19% through April 28. With debit spending down 6% and credit spending down 31%. 

Pandemic Lockdown Impacts Major Spending Categories

The lockdown has made significant changes in certain spending categories. About one third of Visa’s spending volume in the U.S. comes from education, automotive, health care, and retail. The decline was felt from 15% to 50%, according to Visa’s Chief Financial Officer Vasant Prabhu. 

Twenty -five percent of Visa’s spending volume in the U.S. comes from the most economically devastated areas such as travel, restaurant, fuel, and entertainment. All of these categories declined at least by 50%. Travel spending was the most affected at 80%.

Visa Adopting More Tap Payments

Visa hopes to grow their “touchless commerce”  due to the crisis and the growing concerns by customers, leery of using cash and risk of spreading germs.  The card giant has already set up a website where merchants can request signs for their place of business, informing customers that “contactless payments” will be accepted. They are also working on increasing the current transaction limits for tap payments. 

According to Visa, an estimated 31 million people in the United States paid using a Visa contactless card or a digital wallet in March. This is a significant increase from 25 million back in November. The overall use of contactless payments is increased 150% since the previous March. Visa hopes to encourage more consumers to use tap payments to increase the use of digital payments. 

E-Commerce Is Exploding For Visa

The Covid-19 health crisis has not necessarily only brought gloom and doom for businesses. On the contrary, spending behavior changed dramatically as mandated lockdowns have forced more customers to make their purchase online to fulfill their needs. This has meant very good news and a bright spot for Visa’s future.

Visa Chairman and CEO, Al Kelly said, 

“We’re seeing people during these last couple of months start to buy things in the ecommerce environment that they would typically buy in-store, whether that’s furniture, electronics, in some cases apparel,” Al Kelly, Visa chairman and CEO, 

As a result online spending is on an upswing, with an increase of more than 100% in the final two weeks of April. 

Globally, payment volumes grew between 5% and 7% (not including China). With a whopping more than $500 million transactions with Visa per day for every 91 days within the quarter.

Visa is seizing this e-commerce boom by ensuring the more customers have a positive online shopping experience. One strategy is to bring more simplification to the check out process. The average transaction at present requires consumers to enter information into 23 fields. The company has switched 10,000 merchants from using the current Visa checkout button to a new “click-to-pay” button to accelerate the online checkout and validate the identities of buyers. 

Visa Is Keeping On The Sunny Side

The numbers don’t lie, Visa as well as its competitors Mastercard and American Express have all felt the pinch as the pandemic has halted consumer spending within their key categories. 

On the bright side, there is great opportunity in the explosion of e-commerce, where more consumers are purchasing online for the first time. Secondly, the pandemic-fueled concern for public health safety has also seen a dramatic surge in contactless payments.

As Visa pivots and makes strategic decisions to tap into these needs, they will be positioned to ride out the crisis successfully.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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