V.me by Visa is 10 years too late and gets an F for failure
From what seems like the past decade, the envious and lethargic credit card companies have been hinting that they would be entering the online payment space by providing their own service to compete with PayPal.
As everyone knows, PayPal has been providing credit card sourced online payments for the past fifteen years. Over the years, the credit card companies got their noses out of joint as PayPal built their monopoly into a highly profitable worldwide business, driven by very high fees for the merchants that use their system to accept online payments.
Most merchant transaction that are internationally sourced credit card payments via PayPal will pay 5-10% in fees, and naturally the credit card companies decided that they too wanted a piece of that very lucrative pie.
So here we are in mid 2013, and Visa has finally rolled out their own online payment solution called V.me, in what can best be described a very flacid response to a now saturated and mature online payment market. Let’s get to the meat and potatoes of the V.me offerings.
As a consumer, you can register your various Visa cards (and other cards) with the V.me system. This way you will be able to use any of the registered credit cards with an online merchant who is also set up with V.me, without having the provide the merchant with your credit card details, simply by logging into your V.me account with an email and password in the exact same way the PayPal works to process online credit card based payments. So it is hardly revolutionary.
It is not clear to us if consumers can register any credit card issued on planet earth to the V.me network, or if only participating acquiring bank’s Visa, Mastercard or Amex cards can only be used by the system. This is not explicitly explained on the V.me website. Not that we could see.
From the merchant side, it appears that an online seller must already accept credit cards (thus must have an existing merchant account), and then he or she has to register with the V.me service and add payment code to their online check-out. And no matter how much you look you cannot find any indication of fees on the V.me website.
So let me get this straight. As a consumer I need to register my credit cards on another system, but I don’t know if my bank is participating or not. So I could be wasting my time jumping through all these hoops. As a consumer, do I get any benefit using V.me over using my existing PayPal account? Nope. Absolutely zip. So why bother.
And from the merchant side, I need to have an existing merchant account to use the new V.me service. In addition, I need to waste my time messing about with their system to determine if my merchant account provider is participating in the V.me system. And even if I am eligible to participate in the V.me system, nowhere on the V.me website does it tell me what it will cost to use the system. With PayPal an online seller can accept credit card payments without having a merchant account. That is the beauty of their system.
In summary: zero benefit for the consumer. And zero perceived benefit to the merchant. There is no apparent business case for anyone who is already using PayPal (as a consumer or merchant) to jump through the hoops and waste time with V.me .. none that we can see.
