Six months after launching its Visa Flexible Credential (VFC) in Japan with Olive, Visa’s taking the all-in-one payment credential into two new use cases, both announced Tuesday (Nov. 12).
According to the payments network, the VFC is being rolled out in the U.S. with the Affirm Card (already in the market), the buy now, pay later (BNPL) provider’s debit card that allows consumers to opt to pay over time for transactions made through the Affirm app. And elsewhere, United Arab Emirates (UAE) neobank Liv is debuting VFC to enable users to switch between multiple currency accounts from one card.
The appeal of having a single payment credential able to link and toggle between several funding source, from credit to debit to checking and back again — without having to access different apps or shuffle through plastic cards — is already showing up in the numbers.
In an interview with PYMNTS’ Karen Webster, Mark Nelsen, chief consumer product officer at Visa, observed that the company has 3 million customers using VFC with the Olive card from Sumitomo Mitsui Card Company issued in the region in April of this year.
Consumers, he said, “are actively using the product, and they’re actively switching between their debit and credit cards or buy now, pay later … and we’re seeing about 70% of customers are actually ‘flipping’ to credit.” Individuals are using debit more often for everyday spend, and credit for larger ticket items.
Nelsen observed that Visa and Affirm have been working together for two years, and Affirm will be leveraging VFC to create a new account that lets the 1.4 million Affirm Card-wielding consumers use a virtual debit product to either pay now or pay over time, wherever Visa is accepted.
“What we’re doing is helping Affirm get to as many customers as they can … allowing them to pay in the ways that they want,” Nelsen said.
In terms of the new account itself, Nelsen said that consumers have the ability, depending on the issuer, to set parameters for their transactions, where they might automatically opt to use debit for transactions under a certain amount and BNPL for payments above that threshold. There’s no change in the flow of funds to the merchant, which are paid immediately.
The credential, Nelsen said, “gives people a way to responsibly use different lines of credit,” including BNPL “and pay over time.”
In the UAE, digital bank Liv will use the Flexible Credential to simplify cross-border payments by accessing multiple currency accounts from a single card. Nelsen said the combination of Liv and Flexible Credentials eases the friction of having to fund, access, and use different accounts, each with its own 16-digit number and attendant piece of plastic. Visa data shows that UAE cross-border outbound volumes are one of the fastest growing among its largest cross-border countries.
“Now you have one card number and one credential that can actually tap into those accounts behind the scenes,” said Nelsen, who added, “It’s a nice innovation from a consumer perspective.”
At launch, Visa will support six currencies including the British pound and the dollar, Nelsen said, to make it easier for Liv’s customers who might be living abroad and want to transact locally, or have kids studying outside the country to move money cross border using their local currency.
“Liv wanted to make sure that when [their customers] are abroad [they] can use a local currency in an easy way,” Nelsen said of Liv. The Visa Flexible Credential automatically routes the transaction to the account with the appropriate transaction currency for in-store or online purchases.
Nelsen told Webster that there are 15 more countries with banks and FinTechs working on different use cases for the Flexible Credential. One area of promise lies with small to mid-sized businesses, where in Japan (and with Olive), SMBs can use VFC to access business and personal accounts — and toggle between the two — within the single credential.
In addition, “We’ve [also] thought that paying with points, and potentially even paying with crypto, could be among the multiple ways even more utility [could be added] to the credential,” he said.
No matter the use case or the spending patterns, Nelsen told Webster, “We want to make the user experience as convenient as possible for the consumer — to let them control how they want to fund a transaction.”
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