Visa says it will move payments technology ‘brains’ to the cloud in a bid to boost acceptance

Visa Inc. is betting on the cloud in a move it says will make the process of enabling card payments easier for small businesses.

The company is widely launching a platform that moves the “brain” of payment processing software to the cloud, Visa V,
-0.33%
exclusively says MarketWatch. While payment software has typically been built into hardware devices, the new program will create a cloud-based alternative that Visa says will allow more devices to accept card payments.

Integrated payment software has helped create a variety of new financial experiences, but it also has drawbacks, according to Mary Kay Bowman, Visa’s global head of payment and platform products. Devices hosting embedded software need specialized components, and the process of manually delivering software updates can be cumbersome, she said, because it requires accessing each device.

The new Visa Acceptance Cloud, which the company plans to announce later Thursday, could further incentivize businesses and other parties to equip devices with payment technology, Bowman continued. Companies or cities may have been reluctant to package parking meters with smart payment capabilities because it was too expensive to stick specialized hardware in each and manually run software updates, but she thinks a cloud-based option will be attractive as it could run on cheaper hardware and provide automatic updates.

The move could also provide accessibility benefits, according to Bowman. Instead of paying thousands of dollars for dedicated point-of-sale hardware, businesses could choose to use lower-cost equipment that takes advantage of Visa’s cloud technology. The company opens the platform to developers who can create solutions tailored to different industries and business needs.

Visa has been running pilots of the program since early 2020, but is now making the platform available to all partners globally. The platform includes features around security and interoperability, payment areas that “people don’t even know exist because they’re below the waterline of the iceberg,” though they are critical to the smooth running of transactions, Bowman said.

The program leverages lessons learned from Visa’s existing Tap to Phone initiative, which enables sole proprietors and other small business owners to turn Android phones into payment acceptance devices by leveraging field communication technologies close.

The larger cloud platform, however, provides the ability to “[take] payment responsibilities on the owner’s phone, so business owners don’t have to pass their personal phones to employees when they make sales. Instead, business owners can choose to make payments on centralized, low-cost hardware that’s available to all employees.

There are “a lot of headwinds against” micro, small and medium-sized businesses, Bowman said, but Visa’s program goal is to make it “easier and cheaper to accept payments and easier to maintain those solutions upgraded over time”.

While various companies already offer hardware and software aimed at small businesses, Bowman argued that Visa’s cloud platform could be a tool for these targeted players to leverage Visa’s expertise in payments. and to rely on less expensive hardware for future iterations of card readers.

“Innovators who haven’t been experts in payment hardware technology for 30 years don’t need to be,” she said. “They can innovate on what’s best for restaurants.”

Bowman also saw ways for the platform to enable more futuristic payment experiences, giving the example of a retailer who might want to launch smart mirrors in their stores. Cloud-based payment software will become more “accessible” to developers looking to create these kinds of experiences, she said, which could eventually lead to a world where customers can try on clothes, pay the items on the dressing room mirror, and leave the store wearing the new outfit.

About Matthew R. Dailey

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