Visa announced some upcoming changes during its annual Payments Forum in San Francisco, which took place in May 2024.

Visa is implementing several significant changes to how people use credit cards in the near future, aimed at enhancing convenience and security for consumers.

1. Flexible Credential System: Visa is introducing a new feature called the Visa Flexible Credential, which allows users to access multiple credit and bank accounts with a single card. This system will also support “Buy Now, Pay Later” options, making it easier for consumers to manage their finances with fewer physical cards in their wallets (Fox Business) (NerdWallet: Finance smarter).

2. Expanded Contactless Payments: Visa is expanding its tap-to-pay technology, enabling customers to use any device as a point-of-sale (POS) device. This includes new ways to confirm identities and make person-to-person payments with a simple tap, further integrating mobile devices into everyday transactions (Fox Business).

3. New Surcharging Rules: Visa has updated its surcharging rules, which require merchants to provide proper signage and disclosure of surcharge fees at multiple points within their business. This change ensures transparency for consumers regarding additional fees applied to credit card transactions (Merchant Cost Consulting).

4. Interchange and Pass-Through Fee Adjustments: Starting April 2024, Visa will implement new fees and increase some existing ones. This includes a new Commercial Assessment Fee and a High Integrity Risk Fee for high-risk transactions. These changes may affect merchants and, indirectly, consumers, as businesses adjust their pricing strategies to accommodate the new fee structure (EPSG Stop).

5. Payment Passkey Service: Visa is also rolling out a Payment Passkey Service, which allows for facial recognition or fingerprint scans to replace traditional passwords for online transactions. This move aims to streamline the checkout process and enhance security (Fox Business).

These changes reflect Visa’s effort to modernize payment systems, improve security, and provide more flexibility and convenience for both consumers and merchants

The consumer reception to Visa’s new changes is likely to be mixed, with both positive and negative reactions depending on individual preferences and needs.

Positive Aspects

1. Convenience: The Visa Flexible Credential allows users to carry fewer cards, which simplifies managing multiple accounts. This can be especially beneficial for those who juggle several bank and credit card accounts (Fox Business) (NerdWallet: Finance smarter).

2. Enhanced Security: The introduction of the Payment Passkey Service, which uses biometric authentication (facial recognition or fingerprints), offers a more secure and streamlined way to make online payments, reducing the reliance on passwords and potentially lowering the risk of fraud (Fox Business).

3. Innovative Payment Methods: Expanded contactless payment options and the ability to use any device as a POS system make transactions faster and more flexible, which can enhance the overall shopping experience (Fox Business).

Potential Drawbacks

1. Adjustment Period: Consumers may need time to adapt to the new system and understand how to use a single card for multiple accounts effectively. This learning curve might initially cause some frustration.

2. Privacy Concerns: While biometric authentication increases security, it also raises privacy concerns among some users who may be wary of sharing their biometric data with Visa (Cardratings.com).

3. Fees and Surcharges: Changes in surcharging rules and new fees introduced by Visa could lead to higher costs for consumers if merchants pass these fees on through higher prices. This might be viewed negatively, particularly by those already sensitive to transaction fees

While the enhancements in convenience and security are likely to be well-received, some consumers may be hesitant or resistant due to privacy concerns and potential cost implications.

The success of these changes will depend on how well Visa can address these concerns and effectively communicate the benefits to its customers.