'Visa has no plans for digital wallet fee at this point'

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By Reuters | Updated: 22 March 2013 14:18 IST
Visa Inc has no plans to implement a "digital wallet" fee at this point, Jim McCarthy, global head of product at the payment network, said on Thursday.

The comment came amid concern Visa might follow MasterCard Inc's recent move to impose a new fee on operators of digital wallets, such as PayPal, owned by eBay Inc.

During a Barclays investor conference on Wednesday Visa Chief Executive Charlie Scharf said that the payment network's relationship with digital wallet operators is changing as they move more into physical stores.

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A Visa spokesman said on Thursday that Scharf's comments were about evolving relationships with payment industry participants, rather than the potential for a specific new fee from the company.

Digital wallets are electronic versions of real wallets that store card and bank information and can be used to buy things online quickly and anonymously. These digital wallets are increasingly moving into the physical world, through consumers' use of smartphones while shopping in retail stores.

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As a payment option in physical stores, PayPal will be a bigger threat to networks like MasterCard, Visa and American Express, analysts say.

"PayPal has a great relationship with the card networks and we are in fact one of their largest customers," a PayPal spokesman said on Thursday. "We continue to work closely with both Visa and MasterCard as the market evolves and technology changes how consumers shop."

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eBay shares rose 0.9 percent to $52.88 in afternoon trading on Thursday, even as the Nasdaq Composite index fell 0.9 percent.

Still, PayPal could end up paying an extra fee to Visa, if the payment network changes its mind later, according to Gil Luria, an analyst at Wedbush Securities.

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"If MasterCard is successful at implementing the fee, Visa will join them," Luria said. "All they said today is that they are not doing it yet."

© Thomson Reuters 2013

 

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Further reading: eBay, digital wallets, PayPal, Internet
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