The name of Visa Inc.'s digital wallet understates its ambition for the service. That may turn out to be a smart branding move.
The handle, V.me, suggests the system is all about person-to-person payments. ("Want to send me the money? Just 'V' it to me!") Visa says the platform is meant to go well beyond P-to-P — its primary focus is enabling retail payments via financial institutions. The company is laying the groundwork for a digital wallet system that would work on the Web, on mobile devices and at the point of sale.
But there is value to a brand that stresses the personal aspects of payments. PayPal Inc., for example, focuses on e-commerce payments but still runs ads about splitting dinner checks.
Visa has "struggled a little bit to figure out how to reach consumers … and therefore branding has been a challenge," says James Van Dyke, founder of Javelin Strategy and Research of Pleasanton, Calif.
The world's largest payments network has learned from its experience with Rightcliq, the nearly forgotten digital wallet Visa launched last year. Rightcliq was designed to be the ultimate end-game for digital wallets on the Web: it had coupons, a browser add-on, social tools and a payments hub.
But by jumping straight to the finish line with Rightcliq, Visa missed out on the race entirely. It shut down Rightcliq two months ago.
"Rightcliq was never a true digital wallet," says Jennifer Schulz, Visa's head of product, strategy and innovation. "What we learned through the Rightcliq application is" consumers' fondness for a social spending experience, she says. "That sense of social shopping is definitely a part of the vision for the digital wallet."
So when it named the new service, "we needed to invoke the consumer being at the center of choice and payment preferences."
Van Dyke says that even though person-to-person payments are not V.me's focus, Visa was smart to pick a brand that addresses consumer frustrations with the difficulties of tracking such payments. "If money is moving in paper form, it's very routine for us to find … unaccounted costs," he says.
Visa is in a spot where it has to "put up a competitive defense against PayPal" and the other alternative payment companies, he says.
"If you look at something like Dwolla," an alternative payments provider that moves money for just 25 cents a transaction, it "has just got to scare the crap out of Visa and MasterCard strategists," Van Dyke says.
Whereas Rightcliq had a sweeping (yet inflexible) approach to the Web, V.me has an affiliated software-development platform that allows programmers to narrow the technology's uses to their specific needs. If an issuing bank wants a rewards program interface for smartphones, it can use V.me to build one without also forcing users to sign up for an array of other functions.
V.me's name shares its brevity with X.com, PayPal's name for its development platform (and the name of its former Internet bank).
PayPal, a unit of eBay Inc., had some immediate successes when it launched the X.com platform in 2009. Though the company has for years been viewed as a competitor to banks, with X.com it was able serve banks via prominent bank vendors such as S1 Corp. and Fidelity National Information Services Inc.
Visa has a number of developer platforms in use already. V.me joins platforms from CyberSource, Authorize.net and PlaySpan, companies Visa bought over the past two years. V.me's focus on digital payments is closest to that of PlaySpan, which facilitates spending within computer games.
The current developer tools are "built from existing VisaNet technology and the acquisitions," Schulz says. "What we're doing is combining the reliability of our network and databases, in conjunction with the functionality of the digital wallet and checkout of PlaySpan," as well as the fraud-management technology and merchant connections of CyberSource.
V.me exists alongside these various platforms, all of which coexist under the Visa development center, which Schulz describes as its development umbrella.
"We're starting to see the results of all these acquisitions that they did over the past couple of years," says Aaron McPherson, a practice director at the Framingham, Mass., research firm IDC Financial Insights.
V.me and PlaySpan operate by storing payment details remotely rather than tying them to a specific device.
"That approach makes a lot of sense," McPherson says. "One of the things that banks want to get away from is being tied to some secure element or wallet software on a phone," since that often puts them at the mercy of the hardware or software provider that designed it.
With tools like V.me, "we might be seeing a shift away from apps toward mobile Web-based" technology, he says.