- Lying to the boss
- What is a Business Strategy?
- What is a Corporate Strategy?
- What is a Product-Market Strategy?
- What is a Business Unit Strategy?
- What is CRM?
- What is Architecture?
- What is Enterprise Information Architecture?
- What is Strategic Design?
- What are business benefits and value?
- What is DevOps?
- What is Cloud Computing?
- What is a Banking Multi-Channel Architecture?
- What is Gamification?
- What is Crowdsourcing?
- What is a Segment Strategy?
- What is a Business Model?
- What is an Operating Model?
- What is a Target Operating Model (TOM)
- What are Strategic Guiding Principles?
- What is Service Design?
- What is a Customer Archetype?
- What are Digital Natives and Digital Immigrants?
- What is technology-driven change?
- What is a Digital Footprint?
- What is a Potential Trend?
- What are Cloud Standards?
- What is VisaNet?
- What is User Context?
- What are IBM CCRA and CCMP?
- What is PCI DSS Compliance?
In the interview with Jim McCarthy (Global Head of Strategic Partnership and Innovation at Visa) and Ginni Rometty (IBM Chairman, President and CEO) they discuss Visa in particular and payment processing companies in general.
The Visa brand is shown on about 2 billion cards. Visa’s clients include about 14 thousand banks, who issue cards. Visa’s traditional business model is to provide the network (VisaNet) to connect these client banks to about 36 million merchants who take payments using cards via a point of sale (POS) terminal. Visa did about 92 billion transactions over VisaNet in 2013, which is about 20% of consumer transactions by value. Visa transmits the payment information to the bank in real-time and returns an authorization (payment guarantee) back to the merchant. Visa also provides a risk score and risk condition code with each transaction in real-time. The performance, scalability, security and reliability of VisaNet is key to the value proposition. Visa has had zero down time during busy holiday seasons over the past 20 years.
Visa infrastructure is centered around IBM mainframes as it has been for some 50 years. They connect to banks with “Base I/II” which stands for Bank of America System Engineering (I’ve also heard the “E” once referred to “Experiment”).
Visa is watching changes in the industry which seek to enhance the user experience of making payments for consumers and companies by moving the payment from a card to a mobile device (there are about 7 billion mobile phones in existence). As payments shift from cards to phones the Visa business model changes. Visa needs to extend their network to include 3rd parties who are shaping these consumer/merchant interactions of the future. Square is one such partner in the Visa ecosystem.
An example of fully digital payments is making a payment on iTunes. These payments also involve a card and Apple has about 800 million cards on file. Another example of digital payments using a credit card is Uber whose mobile apps connect passengers with drivers of vehicles for hire and ride-sharing services.