Visa will give customer data to retailers for AI-targeted ads

Visa cardholders will soon be able to consent to sharing their data with retailers using new “data tokens,” as Visa looks to remain competitive in an increasingly crowded and digitized market.

The tokens, which will be rolled out by Visa and participating banks as early as this year, will allow businesses to request consent from a customer to get real-time, personalized offers as they shop, using AI-generated insights based on transaction data, Visa announced Wednesday at the annual Visa Payments Forum in San Francisco.

Banks will also receive a token to show where a customer’s data has been shared and display it in their mobile app, so that people can decide whether they want to continue sharing data with that merchant or revoke access.

“The industry is at a pivotal point - new technologies like Gen AI are rapidly shifting how we shop and manage our finances,” said Jack Forestell, chief product and strategy officer at Visa, in a statement.

The move is part of a recent trend towards open banking at card providers and financial institutions. As payment becomes more interconnected and digitized across spaces, open banking allows people to share their transaction data with institutions other than their banks, including retailers. Mastercard, Visa’s largest competitor, acquired Finicity in November 2020 as part of its foray into the growing practice.

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Visa, which has been around since 1958, is also looking to set itself apart from some of its more modern and digitally savvy fintech rivals, like Stripe and Plaid. Visa is still the world’s largest credit card issuer, with 4.3 billion cards globally, and has more than 2.9 billion debit cards in circulation worldwide.

Visa unveiled a litany of new “truly digital-native payment card” offerings Wednesday that Forestell said will “bring consumers into a more customized, convenient and secure future.”

Among them is a new passkey service, which confirms a customer’s identity and authorizes online payments using facial recognition or fingerprint technology, replacing passwords and one-time codes. Forestell said the passkey will “represent a massive paradigm shift in our industry because it confirms identity without interrupting the checkout experience.” It will also add another layer of security to online payments, which see seven-times the number of fraud reports as in-person payment, according to the company.

It also said it will introduce expanded tap-to-pay options, including the ability to turn any device into a point-of-sale.