Amid the continuation of the tussle between Visa, and Wal-Mart Stores Inc., the former continues to remain focused on the expansion of its merchant base to drive profitability. Despite a challenging business environment, the global payments network business model has proved to be resilient, in part driven by the market penetration of Visa Checkout.
Most recently, Visa Inc. (NYSE:V) has announced the addition of a diverse set of merchants for its Visa Checkout in an industry retail show, Shoptalk today, as per Business Wire. The merchants include Cole Haan, Wyndam Hotel Group, Chick-fil-A, and Alaska Airlines. Through the collaboration, these companies aim to integrate fast, and convenient online mobile payments solutions.
Visa Inc. senior VP of digital solutions, Shrauger, highlights: “Visa Checkout is the cornerstone of our digital product suite and is complemented by an array of innovative solutions we have built for today’s merchants that are targeting the connected consumer.” The senior executive adds that “Visa Checkout is how we’ve reengineered the card that people already know and love to work as well online and mobile devices as it does today in physical stores.”
During the earnings call for the company's second quarter of fiscal 2016, Visa CEO, Charles Scharf, emphasized that: “we continue to be encouraged by the growth we see with Visa Checkout.” The product offering has nearly 12 million registered users in 16 countries, above 675 national institution partners participating globally. Visa Checkout contributed $113 billion in volume on the back of its availability to more than 250,000 merchants.
The service has more active online shoppers as they complete 30% more transactions per person than the total online shoppers. Moreover, the company plans to expand it this year and it is expected to be available to merchants and consumers in France, Ireland, Poland, India, and Spain.
Sanford C. Bernstein & Co. LLC analyst, Lisa Ellis, raised the question whether the company expects a steep acceleration in adoption of Visa Checkout. CEO responded that the company does not expect exponential growth, but continued growth, both, in user base as well as merchant locations. Moreover, both the sides are essential for the success of the offering. Mr. Scharf emphasized that the firm is focused on growing the merchant side.
New partners are confident about the ability of Visa Checkout to make their payment systems more efficient, secure, and convenient for customers and merchants. Cole Haan president and COO, Michael Prince, asserts: “the entire retail industry is changing-and we’re partnering with Visa to ensure we are offering the best payment options for our customers.”HSN marketing and digital commerce executive vice president, Ryan Ross, highlights that it has “helped simplify the payment experience for our current customers while driving thousands of new customers to HSN.” Wyndham Hotel Group senior VP of worldwide loyalty and engagement, Noah Brodsky contends “we understand traveler’s time is precious and this integration offers an easy, fast and secure mobile booking option for any of our nearly 8,000 hotels worldwide.”
During the second quarter of fiscal 2016, the volume of payments witnessed a growth of 12% year over year (YoY). Meanwhile processed transactions and cross-border volumes growth remained in single digits; 9% and 5% YoY, respectively. Through increased merchant acceptance of Visa Checkout, the company plans to achieve processed transaction volume, cross-border volume, and payment volume growth. Amid difficult market conditions, Visa’s resilient and stronger business model has proved to be successful in the last quarter.