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Visa Aims at Online Shoppers with Two E-Wallet Services

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Two new e-wallet services from Visa Inc. are aimed at making the payments company the focus of online shopping — even if a Visa card is not.

The two services, Rightcliq in the U.S. and Payclick in Australia, both simplify the online shopping experience by replacing a card number with a username and password. Both bear abundant Visa branding, but neither requires the shopper to use Visa-branded cards.

Observers say that Visa is trying to make its brand more relevant to a new generation of shoppers groomed on one-click online services — an audience that does not want to type a 16-digit number every time it decides to buy something.

Visa says that taking a more active role in e-commerce can make it the go-to brand, even if purchases are ultimately made with another company's card.

"The online commerce space is constantly evolving," Visa spokesman Paul Wilke said. "Our strategy is to keep pace with these changes."

Or, as Aite Group LLC Research Director Gwenn Bezard phrased it, "They are trying to play catch-up."

Rightcliq, which launches this month, is pitched by Visa as what e-commerce could be if it were being built from scratch today. Visa is pushing this message so strongly that online promotions even show a group of teens tearing down a massive printout of an e-commerce site and painting over what's left with a copy of the Rightcliq site.

The Rightcliq service itself comes in two parts: a browser add-on that fills in payment data at any merchant's site and an online shopping portal that aggregates product information from multiple merchants. Though it can be used with any card, Wilke said there are discounts that are only offered to Visa card users.

Rightcliq also has a social networking element, allowing users to get feedback from others on their planned purchases.

Last month Visa also launched Payclick, a similar but independently developed online payment system that debuted in Australia. It functions more as a conventional prepaid account that can be funded from any card; it also has parental controls so parents can monitor and limit the amount teens spend through the service.

Wilke said Visa plans to export Payclick to other countries, but would not say when that would happen or where it would launch next.

Bezard said these new services are Visa's attempt to respond to changes that have taken place over the past decade.

"They have been losing ground to competition like PayPal over the past 10 years," Bezard said. "To retain control over the e-commerce space — and potentially, down the road, m-commerce — they need to have a solid solution that consumers will go to any time they make a payment."

Bezard said that these services, paired with Visa's planned $2 billion purchase of CyberSource Corp., which handles about a quarter of all U.S. online transactions, indicate a fresh focus on improving Visa's role in e-commerce.

"Really, whether it's Payclick or Rightcliq or the acquisition of CyberSource, it's really trying to get back in the game of owning the last mile of the transaction — owning the e-wallet," Bezard said. "Over the past 10 years, Visa and even other networks … have been increasingly disintermediated by companies like PayPal."

Bezard said Visa was not slacking during that time; its attention was simply focused elsewhere. "Ten years ago, Visa saw bigger opportunities," such as putting card readers in fast food restaurants, he said.

Beth Robertson, the director of payments research for Javelin Strategy and Research of Pleasanton, Calif., said that Visa's strategy in allowing other payment cards to work with both Rightcliq and Payclick demonstrates that Visa is giving priority to its e-wallet concept.

"They hope that by properly positioning this, Visa would be the top-of-wallet choice in this wallet configuration," she said, and that it would provide additional value to those that already prefer Visa cards.

Rightcliq is "a little bit more of a wallet concept than what PayPal is … it's more competitive with something like Amazon payments, but it's different from that too" because of its emphasis on social spending, Robertson said. "It has some different features than some of the things that are in the market today."

Bezard said that whatever Visa's plan, it has to tread cautiously as it seeks to expand its presence in e-commerce.

"I don't see the game-changing application there at this stage," he said. "For them to succeed with Rightcliq or Payclick, they need to become very good at developing software for end users … that's a different ball game" from Visa's area of expertise.

"Visa has tremendous potential. They have the brand, they have cash, they have lots of good and bright people on staff," Bezard said, but "at the core, they are not an end-user software development shop."

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