Consumers tired of fumbling with their personal information each time they make an online purchase will soon see the day when typing in your credit card number is obsolete.
In a move expected to become a standard for online and mobile transactions across several credit card brands, Visa is launching a service this fall that will allow consumers to pay securely online with just a few clicks.
The strategy is geared towards a future when online purchases such as airline tickets and gifts are completed on the fly through smart phones. But moving online shopping beyond the computer involves taking the "friction" out of the checkout process, said Mike Bradley, head of products at Visa Canada.
No specific launch date has been announced for Visa's "digital wallet," but the company expects to have most banks and many retailers signed up to the service. Upon checkout, consumers shopping online will be able to pay with a user name and a password, rather than the traditional method of entering card number and other data. Some retailers, such as Amazon.com, already offers such a service for their own customers.
"You have a different buying experience with a lot of different retailers online. Some keep your card information on file, and your ship-to and bill-to address, because you've got a relationship with them. But many others you have to go and type in all of that information," Mr. Bradley said. "This is a much more mass-market way for people to pay conveniently and securely."
Royal Bank of Canada, Bank of Nova Scotia and Toronto-Dominion Bank have agreed to take part in the launch, but Visa expects to have agreements with most major banks within the next year.
The move is part of a bigger evolution in digital payments. In addition to making online purchases simpler, the new system will also be used when a different kind of payment technique is launched in Canada involving paying at stores with a smart phone.
Over the next year, telecom companies will begin rolling out phones containing chips that can be used to pay at a cash register. By holding the phone up to a special receiver, and then entering a password or security number, the payment can be billed to a credit card. Visa will use the "digital wallet" concept as the backbone for that system as well.
The evolution of mobile payments is a particular area of focus for Royal Bank of Canada, said David McKay, head of Canadian banking at RBC, in a recent interview.
"The real focus is in investment in the mobile device as a payments tool, displacing the physical credit card," Mr. McKay said. "Most smart phones over the next two years will deploy with chips in them."
RBC, TD and CIBC have been working with telecom companies in Canada on how to roll out the technology, taking a page from the Netherlands where the country's major banks worked with phone companies to develop a single payment system, rather than compete against each other with rival systems.