Visa Explores Future of Buying without Plastic

By Patricia Riedman Yeager |  November 16, 2015

When most people talk about connected products or the “Internet of Things,” they mean a new generation of devices that can communicate with one another wirelessly. But what if devices could buy stuff, rather than just conveying status or the need for maintenance?

“In many cases, what these devices would like to do with each other is conduct commerce,” posits Bill Gajda, Visa’s Senior VP of Innovation and Strategic Partnerships.

A lot has happened since we last spoke with Gajda in 2014. He oversees Visa’s one-year-old One Market Center, an 112,000-square-foot innovation center at One Market Plaza in San Francisco, a futuristic open-space designed to foster innovation between local tech developers, clients and Visa software engineers.

The company recently came in second to Apple in’s first Payment Innovation Index, a ranking of companies in the payment innovation space. The ranking takes into account the number of patents, acquisitions, and investments that up-and-coming payments companies have made in the last year.

One Market Center now has dozens of people working in innovation—everything from security to payments and authentication. Gajda, who reports to head of Innovation & Strategic Partnerships Jim McCarthy, has several prototypes and pilots in process, and he covered some of these in a recent interview.

A New Kind of Drive-In Experience

One of the first ideas that Gadja’s team at One Market Center explored was how a connected car might order and purchase a take-out dinner on your drive home from work. They felt the concept could extend to paying for parking, fuel, or countless other on-the-go purchases where speed was important.

Rolling out soon is a Northern California pilot with Pizza Hut, in which beta-testers will be able to order pizzas directly from their cars using Visa Checkout, the financial payment provider’s mobile platform, which will be integrated into the vehicle’s dashboard. Once the drivers enter the Pizza Hut parking lot, their orders will be delivered directly to their cars, thanks to a Bluetooth beacon at the restaurant that alerts the restaurant clerks to the purchaser’s arrival and location in the lot.

Visa is working with Accenture, which is handling the technology integration aspects. Visa has one dedicated executive and a staff of a half dozen stakeholders working on the project, including security, authentication, and payments specialists. “It’s a drive-in experience, without a formal drive-in,” Gajda says. “You don’t have to take the wallet out. You don’t have to go through point of sale. We use the car to initiate the order, the tracking, the location, payment authentication and overall provide a really seamless experience.”

Also in the works is a parking pilot in an undisclosed U.S. city. Parking garages involved in the pilot will have parking spaces equipped with a beacon, so that when someone puts a car in park, the car communicates with a meter that starts ticking.

As soon as the person puts the car in drive again, it signals to the meter that the driver is leaving, and the flat fee or fee calculated by the hour is debited from the driver’s account, with a digital receipt sent to the individual. No walking around to look for a payment kiosk, and no fiddling with cash as a line forms behind you. “It’ll really change the way people think about” parking,” Gajda says.

Technical Challenges

Gajda said the Pizza Hut prototype used a BMW, but that Visa is collaborating with a number of car manufacturers, as well as with the major phone operating systems. He says new services that Visa develops need to work whether you’re using a smartphone linked to your car, or the dashboard system that uses an automaker’s own software. The pilot system also can accept spoken input — “Two large veggie pizzas and two Diet Cokes” — or input from buttons on the dashboard screen.

With the Pizza Hut project, working with different automobile operating systems proved to be a challenge, Gajda says. “When we think about mobile apps, a lot of us think, ‘Oh if I develop for Android and I develop for Apple, I pretty well have 80 percent or 90 percent of the devices covered,’ and that’s true in a mobile phone.”

“When you talk about cars, there are those two operating systems, and then several more operating systems that are proprietary to car manufacturers. So, that’s a complexity we had to wrap our heads around. Things like, ‘How do you link the GPS and geo-location capabilities of a car to provide that location-specific service that can be really intuitive?’ That was an interesting challenge.” (See the video below for a demonstration.)

Why Involve the Car at All?

With mobile phones now essential accessories, one might ask, why introduce a car when you can use your phone to do the same thing? Visa is pursuing both paths, Gajda says, but connected cars do have advantages. “Unlike your phone, your car has a lot of information about you in terms of your location, where you go and where you’ve been,” he explains, noting things recorded by a vehicle’s on-board diagnostics, such as a GPS history, mileage, etc. And by 2020, some 250 million vehicles will be equipped with some form of connectivity, according to research firm Gartner.

The other advantage of using a car, he says is that Visa found it was easier to integrate commerce with the car’s interactive voice response system, which was developed with a heavy emphasis on hands-free communication. One obstacle was the issue that in most cars there’s more than one driver, he says.

“So, there’s some services that you want, not all services, that are linked to the automobile, or linked to the consumer or both,” he says. The team was able to personalize the commerce experience through things such as seat adjustments which are set to particular drivers, so a car knows which driver is behind the wheel. Plus, Gajda says, if you left the house without your phone or wallet, you’d be able to buy gas, park, or order food using the system embedded in the car.

Biometric Identification

Biometric identification—using your fingerprints or iris scans for secure identification—is another area of interest. Partnering with biometrics provider Morpho, Visa built a prototype “coffee shop” in San Francisco where visitors can register their fingerprint or have their iris scanned; the info is then linked to their Visa cards. When they order a beverage, a passive iris scanner begins to scan their irises. “These very sophisticated iris scanning devices are scanning your eyes—you don’t even know it — 10 times a second. So, by the time you’ve ordered your coffee and got your coffee, they’ve scanned your irises maybe 600 times, and so they know it’s you,” Gajda says.

The iris scan or fingerprint reader can even pull up coffee preferences, so by the time you get to the front of the line the barista can ask if you’re having your usual. The payment automatically gets processed and you can walk out with your coffee. And while buying coffee with an eye scan might seem like a futuristic sci-fi demo, Gajda is quick to point out that testing new ways to streamline payment is vital for the company.

“It’s not Visa getting into crazy new businesses; this is all about how we can use our network, our relationships with banks, our relationship with merchants, and our brand to provide new kinds of payments and a new kind of consumer experience. It’s really related to our core business, which is commerce.”