Visa expands UK mobile payments service

Visa Europe is expanding its so-called "digital wallet" service to make online shopping easier for thousands of people in the UK as the shift towards mobile payments gathers pace.

The card provider has formed partnerships with a number of the largest high street banks while some of the biggest retailers in the country, such as Topshop, Iceland and Costco, have signed up to Visa's digital payments service V.me. More than 60,000 consumers will be able to use the service from June.

The launch comes as competition in digital payments intensifies, with Google and PayPal among a number of technology companies creating digital wallets.

Visa's wallet, which was initially launched in conjunction with Nationwide in 2013, allows people to make online purchases without needing to give their card details each time.

Once people add their credit and debit cards to the application, they can shop online from any mobile device with a few clicks.

Visa said the wallet saved time and effort when shopping online, as it just requires customers to enter an email address and password, and claims the service is secure because it shields card details from the retailer's website.

Wendy Martin, executive director of V.me, said the launch of the wallet "responds to the huge growth of online payments", noting that the sector is expanding three times faster than face-to-face payments.

"The experience of paying in store and online is far from ideal, as you constantly have to enter details," she said. "The key online shopping trends are that people are looking to spend on mobile and tablets and that more are doing it on the go."

Consumers are increasingly turning to mobile phones and tablets to make purchases, as more retailers open up to digital payment providers, such as Paym and Zapp.

Research by Barclays suggests that people are set to spend £54bn a year using phones and tablets by 2024 compared to £9.7bn spent last year. It said that nearly 42 per cent of all retail sales will involve a mobile device, making mobile the fastest-growing retail segment.

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Richard Lowe, a managing director at Barclays, said: "The size of the retail opportunity is clear for all to see. The question every retailer should be asking themselves is what they are doing about it to not only satisfy today's consumer but, also tomorrow's".

But security and fraud concerns are mounting as new payment systems launch and retailers open up access, providing additional entry points for hackers.

Even sophisticated biometric security involving fingerprints for authentication, for example, is susceptible.

Thomas Bostrom Jorgensen, chief executive of Encap, an authentication software provider for banks, said Touch-ID, a fingerprint recognition feature used by technology giant Apple, was hacked less than a month after introduction.

"One hacker has claimed to be able to recreate fingerprints from high-resolution photos. And while you can issue a new PIN or password you can't issue a new fingerprint," he said. "A single factor will always be vulnerable to attack."

Ms Martin at Visa says V.me has a number of security layers, one of which includes not sharing card details with merchants.

"V.me also has a sophisticated fraud engine, which looks at patterns such as whether a consumer has used this device for payment before. It allows us to make a better set of risk decisions," she said.

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