Visa sets standards for on-chip loyalty data
Visa International has developed a specification, 'Visa Smart Secure Storage' (also know as VS3), to allow value-added services such as loyalty programmes to store and update data on Visa smart cards. VS3 is Visa's latest enhancement to is Visa Smart initiative, which supports global migration to EMV chip cards.
The VS3 specification creates a common environment for value-added services on any chip card including EMV cards, allowing card issuers to more easily establish new partnerships and manage multi-function chip programmes. The specification caters for the creation of pre-formatted 'cells', which issuers can offer to their partners to populate with data related to their loyalty rewards programme, personal identity service, club membership, etc. VS3 can reside on a static chip or a GlobalPlatform multi-application chip.
Recent research conducted by Visa International in the Asia-Pacific region found that 75% of those surveyed were attracted to smart cards because of their ability to consolidate payment functions and value-added services. With VS3-compliant software on the chip, the issuer continues to own the overall cardholder relationship while allowing each partner to dynamically manage its own programme and partner relations.
"From Seoul to Moscow, consumers are embracing multi-function smart cards for the added convenience and security they bring to their everyday lives," said Gaylon Howe, executive vice president of consumer product platforms for Visa International. "The future success of these types of smart cards globally will be determined by how easy and cost-effective we can make the process of adding and adapting value-added services for issuers and their partners."
Fewer changes needed According to Visa, the VS3 specification reduces the back-office systems changes that need to be made by the issuer and the partner in order to integrate multiple programmes on one card. Also, depending on the preferences of each issuer, partners can share data with each other directly. For example, an issuer may offer space on the chip to two partners: a cinema chain and a quick service restaurant (QSR). VS3 will allow the cinema chain and the QSR to dynamically share information so that the cardholder can receive a coupon for a free drink at the restaurant when he buys a cinema ticket.
This approach removes from the issuer much of the burden of managing the details of each programme, while allowing the partner to control how its programme is run, and reduces the need for costly changes to support a partner's programme.
Host management In the past, one major challenge for combined payment/non-payment smart cards has been the need for all the functionality to be included on the chip, such as updated rewards and cardholder profiles. The new specification allows the issuer and the partner to store only the most recent data in the allocated cell, while all of the programme's functionality resides in the issuer or partner's host system. This reduces the cost and complexity of managing multiple services on one chip.
"Visa's smart card strategy is closely tied to our vision of universal commerce, whereby our card platforms can be used to pay anyone, anywhere, at any time, using any device," added Howe. "And multi-function chips are a cornerstone of that strategy: they deliver greater choice and convenience to cardholders, they create new opportunities for businesses to communicate with their customers, and they can increase customer retention and revenue for issuers."