Visa's Digital Wallet Comes a Step Closer to the Point of Sale via AJB

AJB Software Design Inc. plans to announce Friday its participation in the Visa POS Solutions Program (VPSP), which AJB says could allow it to link Visa's digital wallet, V.me, to the point of sale.

AJB, a Canadian middleware company, has some noteworthy experience in adapting digital payment systems for the point of sale. It played a role in adapting PayPal's system for retail stores, initially due to demand from AJB's own customers. In November, Guitar Center integrated PayPal at the point of sale using AJB's technology.

The Visa program "provides the opportunity for merchants to be able to take advantage of V.me," says Pat Polillo, AJB's vice president of sales and marketing. "Being first-to-market in this field can provide strong market advantage for our client community."

V.me is an online payment system Visa designed to be friendlier to issuers than many alternatives. The card account used to fund a purchase is the one presented to merchants — it doesn't fund a stored-value account, like PayPal does, or pass funds through a virtual debit card account, like Google Wallet does.

However, Visa does not plan to proactively adapt its system for mobile payments at the point of sale unless a merchant requests it. AJB's integration with Visa makes such a development possible. The companies started developing support for the program three months ago.

"Speaking from a merchant perspective, the focus today is on multi-channel retailing, and as such if one looks at the V.me offering from a merchant's perspective it would need to be supported across sales channels  both online and POS," Polillo says in an email.

Digital wallets struggle to "cross the chasm" between online and offline payments, says Zil Bareisis, a London-based senior analyst for research firm Celent.

Wallets based on near-field communication technology, such as Isis and Google Wallet, are designed to work at the point of sale but were not initially meant to be used online. Google enabled online payments by having Google Wallet absorb the separately developed Google Checkout online payment system.

Though each technology is designed to address a specific use case, "it is clear that the industry as a whole is working to make digital wallets universal," Bareisis says.

He gives PayPal as an example of a company that has made commendable efforts in bringing a digital payment system to the physical point of sale.

V.me's transition to the physical point of sale could come slowly, largely because V.me was designed to address pain points specific to online payments.

"Visa does recognize that right now there is more friction in the online payments market than at the physical POS where plastic works," says Bareisis. "Customers don't like having to type in card numbers and shipping addresses on their mobile phones and V.me was designed to address those issues as a priority."