While making payments for consumers in a developed market can be as easy as waving their mobile phones in front of a reader, thanks to the contactless payment solution, there seems to be a great number of people who haven't taken advantage of the latest technology of mobile commerce and banking – more than one billion consumers without a bank account have a mobile device in emerging economies. Realising the huge market opportunity, Visa in November launched a new mobile prepaid product for developing countries. Retail in Asia recently caught up with Bill Gajda, head of Global Mobile Product of Visa to find out more about the new product, how it benefits retailers and Visa's contactless payment application payWave.

RIA: Visa launched a new mobile prepaid product for developing countries in November 2011. How did it come about?

Bill Gajda (BG): As a global payments technology company, the most valuable contribution we can make is to help bring more people into the formal financial system. We want to create pathways to financial inclusion for the financially underserved through our products, services technology and payments expertise. Most consumer expenses in developing countries are paid in cash. More than one billion people in emerging economies do not have a bank account, but have a mobile phone, and that number is expected to reach 1.7 billion in 2012. Collaborating with MTN, a leading telecommunications provider in Africa and the Middle East, we have taken basic mobile money programmes to the next level, providing additional security, greater scale, interoperability and a wider variety of payment options. The new product, a mobile-based prepaid account, allows customers to withdraw money from ATMs, transfer money, pay bills and make purchases from a prepaid mobile account. With the introduction of the new product tailored to the needs of unbanked consumers, new opportunities are being created for financial institutions in developing markets.

RIA: How will the mobile prepaid product benefit retailers?

BG: Delivering value to the merchant community, which includes retailers, was a critical element of Visa's acquisition of Fundamo, a leading mobile money platform in developing countries, and the launch of the new Visa product. The mobile device has become ubiquitous in developing markets, where there are an increasing number of mobile financial services available that make it easier for consumers and merchants to transact. Visa's new product will bring merchants in developing markets all of the benefits of Visa – the ability to accept new payment types, the ability to easily transact with new customers on different payment networks, reduced fraud risks, etc.

RIA: What are your target markets of the new mobile prepaid product in Asia?

BG: Visa is initially targeting this product in key developing countries in Asia, including Bangladesh, India, Indonesia and Pakistan. Visa aims to extend access to financial services and electronic payments in these markets, as well as to drive economic growth and financial inclusion by migrating cash spend to electronic payments.

RIA: What's the difference between this new product and Visa's contactless payment application payWave?

BG: Visa's new mobile prepaid product and Visa payWave, are two entirely different products. The biggest difference is that Visa payWave uses a secure chip embedded on the phone to host the payment information – it is specifically designed for mature markets where contactless (wave-and-pay) terminals are already installed. Visa payWave can be deployed on cards, mobile phones, and many other devices. For now, Visa payWave enables Visa account holders to make payments by waving their cards in front of a payment terminal.

In comparison, Visa's new mobile prepaid product will use secure SMS message channels to send payment instructions to the financial institution. It's targeting developing markets where the lack of infrastructure and point of sale terminals make it difficult to offer traditional card payments, and the proliferation of mobile technology makes it possible to offer mobile-based payments.

With the recent acquisition of Fundamo, Visa has created the first globally interoperable mobile payment platform that can connect existing mobile money services with Visa's global payment network, VisaNet. Visa Mobile Prepaid product enhances mobile wallet services to provide a new set of transaction options, such as enabling account holders to send funds to each other, send and receive international remittances, make purchases at merchants in-store or online where Visa is accepted or withdraw funds at a Visa ATM.

RIA: When did Visa launch Visa payWave? How does payWave benefit Asian retailers? 

BG: The first Visa payWave card was launched in Asia in 2005 in Taiwan and gradually rolled out to other Asian markets including Malaysia, Korea and Hong Kong.

With the Visa payWave contactless payment solution, retailers can put their business in the fast lane. For retailers that benefit from faster checkout times, especially quick service restaurants and convenience stories, Visa payWave provides increased speed and convenience at the checkout counter. Lines have been reported to be reduced by as much as 23 percent. Shorter lines translate into efficiency and cost savings, while less cash handling helps reduce the costs of cash management and slippage. Well-known merchants such as KFC, Circle K and 7-eleven accept Visa payWave payments in Hong Kong today.

RIA: Google launched Google Wallet in May 2011 and there are more companies planning to launch digital wallet. How does Visa plan to be a strong competitor in mobile payment industry?

BG: Visa is fully embracing the spirit of competition, and we are pleased to see the industry's growing excitement and investment in the mobile space. Visa recognises that scalable and viable mobile payments and services can only be developed and implemented in partnership with financial institutions and the wireless industry. We're confident Visa will continue to lead the way in this important category and we have significant momentum on our side. The key to our strategy is an open, global approach.

• We firmly believe that Visa's "open loop" approach offers the best opportunity to rapidly deploy and scale mobile payments.
• Allows account holders to utilise their existing accounts.
• Does not require acquisition of new customers or opening of new accounts (which can be expensive and difficult).
• Compatible with the existing payment infrastructure that has already been deployed.

Visa is making Visa payWave, its mobile payment application, widely available on cards and mobile devices and through agreements with Google to be in Google Wallet and Isis to be in the Isis wallet.

Visa is also building its own wallet, V.me by Visa, which offers a single, secure way for consumers to pay online as well as in person with a PC, tablet, or mobile device using Visa and non-Visa accounts.

RIA: You mentioned that Visa had agreements with Google and Isis to be in their digital wallets. Why do you want to work with competitors?

BG: Visa's partnership with Google allows Visa account holders to make mobile payments through Google Wallet. In addition, Visa has licensed Visa payWave to not just Google but also Isis. The advantage of Visa payWave enabled on any wallet (Google, Isis) is that it can be used at any Visa payWave acceptance location. Visa's goal is to promote open, convenient and secure customer options by providing the right mechanism for making financial payments. Working with entities such as Google and Isis, Visa is helping to create the issuance of contactless payments and to grow the acceptance of contactless payments by working with acquirers and merchants.

RIA: How do you see the future of Asia's mobile commerce?

BG: Mobile commerce, which encompasses mobile banking, coupons, promotions, redeemable gift cards is poised to trigger huge changes to the retail experience that we are currently familiar with. Visa sees immense market potential for mobile commerce and banking in Asia, especially when we consider that there are 2.5 billion unbanked citizens across the world, with consumers with mobile phones outnumbering those with bank accounts. Most of the near-term market for mobile growth is represented by emerging-markets, many of which are in Asia. Low-income customers from these countries, in particular, require technology solutions that meet basic human needs, such as simple financial services. Hence, providing more robust and varied services to ever-increasing phone subscribers in Asia is a compelling growth opportunity.

Asia is a key growth region for Visa. We see tremendous opportunity in both emerging and developed markets. We believe that partnerships and alliances in Asia are important to Visa. At Visa, we believe that innovations in electronic payments can extend the reach of financial institutions and financial services to the underserved segments in society.

Bill Gajda is the head of Global Mobile Product at Visa Inc. Gajda oversees Visa's mobile product and commercial strategies and activities. In this role, he manages a global initiative to build alliances, develop and implement mobile services and platforms that enable the next generation of payments and financial services.

CEO Talking Shop is the Retail in Asia section devoted to interviews with brand CEOs and retail industry leaders.