Visa, Mastercard, Amex, and Discover Plan Combo Checkout Button to Compete With PayPal

Visa, Mastercard, American Express, and Discover are planning to combine their online payment options into "a single button," hoping to make customers' shopping easier and reduce friction in the checkout process. The button will be a major competitor to PayPal, and combat what's called "the Nascar effect," where multiple payment logos and options dot the purchasing interface on online marketplaces "like the side of a race car" (via Bloomberg).

The new project is being headed by Visa and Mastercard, which announced during an industry conference that they will integrate the Visa Checkout and Masterpass payment options into the button. Afterwards, spokespeople for American Express and Discover announced they are joining the project as well. With all of these platforms located behind one button, users who already have payment options saved in each will be able to checkout "with a few clicks."


Still, the project is in early stages, with a name and the visual design of the button still undecided. Visa and Mastercard hope to start moving customers enrolled in Visa Checkout and Masterpass to the new program by the end of this year, and expanded checkout support is expected in 2019.

With all of the major credit and debit card companies joining forces, the new button is believed to be a direct competitor to PayPal, which amalgamates a customer's credit cards, debit cards, and bank accounts into one place for easier checkouts.
The aim, according to the card networks, is to make online shopping simple, letting people finish with a few clicks -- an experience pioneered by PayPal Holdings Inc. Yet some analysts say the coordinated effort may ratchet up competition between cards and PayPal, something long seen as a potential risk to that company’s meteoric growth.

“This is always kind of a looming threat to PayPal,” said Thomas McCrohan, an analyst at Mizuho Americas after the first announcements this week.
In a recent survey, 58 percent of merchants said they accepted PayPal in 2017, followed by Apple Pay at 48 percent, Visa Checkout at 26 percent, Masterpass at 16 percent, and AmEx Express Checkout at 9 percent. By providing a less splintered landscape for online shopping, the credit card companies hope to increase visibility among the "one-button concept" marketplace, where people currently "think of PayPal and Amazon Pay," analyst Raymond Pucci said. "People don't really say, 'Oh yeah, Visa and Mastercard.'"

PayPal has been facing increased pressure from rival payments processors recently, with eBay in February detailing plans to phase out its 15-year-long partnership with PayPal to integrate Adyen as its primary payments platform.

PayPal and eBay have an operating agreement to stay partners through mid-2020, so the Adyen alliance will begin slowly by educating buyers and sellers about the new processor in late 2018 and throughout 2019. By 2021, eBay wants to have "transitioned a majority" of its marketplace customers to Adyen, at which time PayPal will be relegated to a secondary checkout option.

Mastercard, Discover, American Express, and Visa also plan to make checkouts simpler in physical stores, this month eliminating the signature requirement for purchases.


Discuss this article in our forums

Visa Dropping Signature Requirement for Chip Cards and Apple Pay Starting in April

Visa today announced it will eliminate its signature requirement for EMV payments beginning April 2018 in the United States and Canada.


The change will apply to both chip-and-signature credit and debit cards, and contactless payment solutions like Apple Pay when linked to a Visa credit or debit card. The change is designed to allow for a more consistent, streamlined, and quicker checkout experience for both merchants and cardholders.

For years, customers have been required to sign the receipt when making a purchase to verify they own the debit or credit card they are attempting to use. A cashier is supposed to match the signature on the receipt against the one on the back of the card, but in reality, this process is often skipped nowadays.

Currently, even when using Apple Pay, a signature can be required on occasion for purchases over $25 made with a Visa card in the United States. But with EMV technology and other modern safeguards, Visa is now moving to fully eliminate this requirement, in line with Mastercard, American Express, and Discover.

The signature requirement is already much less common in Canada, where customers insert their chip card into a payment terminal and verify ownership by entering a four-digit PIN. You also can't use contactless payments for transactions over $100 in Canada (update: excluding American Express — thanks Gary Ng!)

Visa says its partners have deployed EMV-chip enabled readers at more than 2.5 million locations around the world. Less than two years since the technology launched in the United States, counterfeit fraud declined 66 percent at EMV-chip enabled merchants, according to the company.

Merchants will remain able to collect signatures if required to do so by an applicable law in a particular jurisdiction.

Related Roundup: Apple Pay
Tag: Visa

Discuss this article in our forums