Visa Wants Your Car to Pay for Gas at the Pump

By AnnaMaria Andriotis 

Visa is adding payment capabilities to gadgets most people would never think about shopping on: cars, washing machines and fitness bracelets to name a few.

The largest global card network by number of transactions is betting that it needs to think beyond regular credit-card and mobile-phone payments to maintain its dominance. The company on Thursday said it is partnering with International Business Machines Corp. to add payment capabilities to a slew of internet-enabled devices, the so-called Internet of Things.

Visa's goal: create additional points of sale where they didn't exist previously and that go beyond smartphones that already have payment options like Apple Pay or Samsung Pay. The company believes this will result in more transactions on its network.

Visa is partnering with IBM because it needs the distribution, in the same way banks have served as Visa's main distribution for credit cards. IBM's Watson platform, which the company launched two years ago, is connected to more than 6,000 companies, including BMW and Whirlpool. Consumers will soon be able to make purchases on some of these brands' cars and appliances.

For example, consumers will be able to pay for gas from their car rather than inserting their card at the pump. Cars will alert drivers if specific parts need to be replaced and drivers will be able to order those through the car's internet connection. Similarly, fitness bracelets will eventually tell consumers when it is time replace their sneakers and allow them to make that purchase on the bracelet.

In this process, Visa says consumers will choose which Visa card, whether debit or credit, they want tie to a particular device. Rather than inputting card information to make each purchase, consumers will be able to press a button on the device to complete the transaction.

The partnership also is an attempt to change the way consumers purchase big-ticket items. One futuristic hope: instead of leasing, consumers drive cars off dealers' lots and payments will be triggered based on the miles they drive.

Visa has just come off a strong quarter in which it posted large year-over-year increases in payment volume, total processed transactions and cross-border volume growth. But the company has to keep investing in technology where it is aiming to make payments "frictionless" to increase the ways consumers can get onto Visa's rails, finance chief Vasant Prabhu said at a conference Wednesday.

"We cannot afford to scrimp on investing in the capabilities we need for the future," he said, later adding "If we need to step up the level of investment and raise the rate of growth expense a bit, we'll have to consider doing that."

Write to AnnaMaria Andriotis at [e-mail]

(END) Dow Jones Newswires

February 16, 2017 10:21 ET (15:21 GMT)

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