Mastercard, Visa and the end of credit cards

Mastercard, Visa and the end of credit cards

Acclaimed by merchants increasingly reluctant to take on the transaction fees imposed on them, Visa and Mastercard hope to save the day by presenting themselves as the best bulwark against bank fraud these days, while paving the way for the outright demise of a credit card.

Visa and Mastercard will pay Canadian merchants $131 million for transaction fees deemed excessive beginning March 23, 2001. In addition to being able to claim up to $600 individually from the two issuers in connection with this settlement following class action, merchants will be able to pass on to their customers the additional costs that will continue to be imposed on them from next October.

Starting next fall, consumers who will see their bill inflated by a few percentage points if they decide to pay the bill with their credit card instead of another means of payment will surely be tempted to leave their Visa or Mastercard on their wall.

Fearing this possibility, the two companies want to redefine their role in the payments market to remain essential at 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 sure of the identity of their virtual customers. Consumers in stores need not fear that their personal information will be 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 con, users alike.

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Visa and Mastercard, therefore, deal with computer security, because too many Internet users use the same passwords for most of their accounts, passwords that are sometimes too easy to guess. Thus, the issue of bank security goes beyond identity management.

The adoption of hybrid online and in-person payment systems by merchants is accentuating this trend. In its campaign to strengthen the security of its systems, Visa announced in April that it had invested more than $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 opened 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 hub oversees work done in other parts of 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 to a technology company,” he 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 a center of this type. Its mandate will be to intercept cases of fraud due to card cloning or malicious use of prepaid cards. Its deep learning algorithmsdetecty 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 around the world in the past year. The company believes it can more than double this performance by 2025 thanks to its Vancouver hub.

Towards the end of the credit card

This expansion beyond the credit card gives Mastercard a glimpse into a not-too-distant future—fans of contactless mobile payments are already experiencing it—where the credit card will no longer be an item you keep in your pocket. your wallet Following the opening of its center in Vancouver, the company announced the launch in Brazil of a facial recognition payment technology that it hopes to soon be able to commercialize in Canada and elsewhere.

Advertised as cheap for merchants, this technology uses the camera of a simple digital tablet to confirm the identity of the buyer and send the note to his credit account. Mastercard is committed to handling the 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 identification method would allow, for example, to authenticate the identity of people who make purchases virtually in the metaverse. One day, maybe, we’ll quickly add on Mastercard. Because there is no more urgent at this time. How to meet the most pressing demands of customers (traders and consumers) that are already present in the real world.

This report was produced at the invitation of MasterCard Canada in Vancouver.

#Mastercard #Visa #credit #cards

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