TAMPA, Fla.—Adding a digital wallet to the credit union’s portfolio just got a lot simpler, according to one payments expert who says the new Visa Digital Enablement Program (VDEP) eliminates the hassles many FIs experienced when they enrolled with Apple Pay.
With VDEP, CUs avoid contract negotiations, the wait to go live with a digital wallet, and transaction fees that come with Apple Pay.
“Instead, they enroll with VDEP and when a new digital wallet comes along, the credit union simply says, ‘Yes, I want to play,’ and with a click of a mouse through the VDEP platform they go live with the new payments solution,” explained Tom Davis, senior vice president of finance and technology at CSCU. “It’s simple.”
According to Visa, VDEP is in place to streamline access to the Visa Token Service and connect issuers to current and future wallet providers of the issuer’s choice without the need to directly contract with them. Although VDEP does not provide quick access to Apple Pay at this time, future wallets, such as Android Pay, will be available through the VDEP Program.
No Red Tape
“Think of what credit unions, which have been the biggest players in Apple Pay so far, have had to go through,” said Davis, who noted that most credit unions, outside of the very largest, had a long wait to go live with Apple Pay. “Now they enroll in VDEP, and when Android Pay comes out, they can go live with the new payments solution quickly—just like Navy, Chase and BofA. All of the red tape and waiting just went away.”
Tom Davis, CSCU
The CU, as well, won’t have to consider adding staff or dedicating more employee time to managing relationships with mobile payments providers, which Davis asserts would likely happen at many credit unions if they had to manage through negotiations and deals with each new digital wallet that emerges.
In the now rapidly growing mobile payments space, Android Pay is expected out soon, and Samsung Pay is projected to launch later this summer.
Visa explains that the VDEP “framework is designed to simplify the implementation of the technology globally, eliminating the need for bi-lateral agreements between payment providers and financial institutions — ultimately accelerating the delivery of secure digital commerce solutions and protection of consumer data.”
Davis said VDEP is Visa’s attempt to have one interface for all tech providers to access all financial institutions, and one interface for all FIs to access all tech providers.
“This is a big, big deal from the credit union perspective,” said Davis.
Davis recommends that CUs not already enrolled in Apple Pay should do so before enrolling in VDEP.
“That’s important, and if it works with the credit union’s payments plans, it should enroll now in Apple Pay, despite the time it will take,” said Davis. “To take advantage of VDEP, the CU has to have tokenization. Right now, the easiest way to get tokenization is through Apple Pay.”
No Fees
Davis said payments solutions aligning with VDEP won’t take a cut of the transaction, as does Apple with its current 15-basis-points fee. He also thinks the program will eventually place downward pressure on Apple’s charge.
“VDEP is a very good thing for the payments ecosystem,” said Davis.
Davis said VDEP is attractive for both issuers and technology providers.
“Google creates Android Pay and wants quick, easy access to 14,000-plus financial institutions—VDEP gives Google that,” said Davis. “FIs want easy access to new digital wallets—VDEP gives them that.”