Hailed by merchants who are increasingly reluctant to assume the transaction fees they impose on them, Visa and Mastercard hope to save the day by presenting themselves these days as the best bulwark against bank fraud, while preparing the ground for the pure and simple disappearance of the credit card.
Visa and Mastercard will pay Canadian merchants $131 million for transaction fees deemed excessive since March 23, 2001. In addition to being able to claim up to $600 individually from the two issuers in connection with this settlement following collective actions, merchants will be able to pass on to their customers the additional costs that will continue to be imposed on them from next October.
As of next fall, consumers who will thus see their bill inflated by a few percentage points if they decide to pay the bill with their credit card rather than with another means of payment will certainly be tempted to leave their Visa or their Mastercard in their wallet.
Fearing this possibility, the two companies therefore wish to redefine their role in the payment market to remain essential at the checkout. The digital shift of recent years has shattered the payments industry. This turn is full of opportunities for the two giants.
In a word, in their eyes, it is necessary to restore confidence. Cyber-merchants must be reassured about the identity of their virtual customers. Consumers in stores should not be afraid of having their personal information stolen.
In recent weeks, the two credit companies have also announced massive investments in the security of payment systems to regain the confidence of banks, retailers and consumers alike.
Live from Vancouver
Visa and Mastercard thus deal with computer security, because too many Internet users use the same passwords for the majority of their accounts – passwords that are sometimes too easy to guess. Thus, the question of banking security goes beyond identity management.
The adoption of hybrid online and in-person payment systems by merchants is accentuating this trend. In its drive to strengthen the security of its systems, Visa announced in April that it had invested more than US$9 billion in its cybersecurity and fraud prevention arsenal. The company says it blocked $26 billion in fraudulent transactions in 2021 alone, thanks to artificial intelligence (AI) tools, among other things. Visa says it can reduce credit card fraud by another 28%.
Mastercard, for its part, officially inaugurated a technology center in Vancouver a week ago, also dedicated to cybersecurity. Part of a major total investment in Canada of half a billion dollars, this technology center oversees the work done elsewhere in the country by the company to strengthen the security of credit card transactions.
“We are in the process of transforming ourselves from a financial company into a technological company”, explained to the To have to for the occasion the president of MasterCard Canada, Sasha Krstic. “We rely heavily on Canadian technologies to innovate and make the payments industry more secure. »
Vancouver thus becomes the seventh city in the world where Mastercard has such a centre. Its mandate will be to intercept cases of fraud by card cloning or the malicious use of prepaid cards. Its deep learning algorithms detect seemingly suspicious transactions in a fraction of a second and no matter where in the world they occur.
Mastercard says it has already blocked $25 billion in fraud worldwide over the past year. The company believes it can more than double this performance by 2025 thanks to its center in Vancouver.
Towards the end of the credit card
This expansion beyond the credit card gives Mastercard a glimpse of a not-so-distant future — fans of contactless payments via their mobile are already experiencing this — where the credit card will no longer be an object that you put in your wallet. In the wake of the inauguration of its center in Vancouver, the company announced the launch in Brazil of a facial recognition payment technology that it hopes to be able to market soon in Canada and elsewhere.
Advertised as inexpensive for merchants, this technology uses the camera of a simple digital tablet to confirm the identity of the buyer and post the note to his credit account. Mastercard promises to handle information securely and confidentially. She sees great potential in biometric identification as a payment tool. It even produced a version of this technology that recognizes users by the movement of their eyes.
This method of identification would allow for example to authenticate the identity of people making purchases in a virtual way in the metaverse. One day, perhaps, we quickly add at Mastercard. Because there is more urgent at the moment. Like meeting the more pressing demands of customers — merchants and consumers — already present in the real world.
This report was produced thanks to the invitation of MasterCard Canada in Vancouver.