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By Trend

The technology of Visa Token Service (VTS) is available for implementation to all banks in Azerbaijan, General Manager for Caucasus at VISA Cristina Doros told in an interview with Trend .

According to her, the International Bank of Azerbaijan (IBA) was the first, as it was able to complete the certification process necessary for the introduction of this service earlier than other Azerbaijani banks.

"At the moment, other banks in the country are also working on the introduction of this technology. Each bank seeks to provide its customers with a convenient way of making payments. Visa Token Service is a step towards safe and comfortable mobile payments," she said.

The General Manager also noted that Azerbaijan’s AzeriCard processing center played an important role in the implementation of this technology, taking on the implementation of the technical part of the project.

Responding to a question about the cost of the project, Doros said that every project has its own cost, and it is no secret that developing technologies is a costly process. “However, banks understand that these projects help them grow their businesses; hence they are ready to invest in the development of technologies," she said, noting, however, that the information on financial details is a commercial secret of banks.

According to Doros, in countries like Georgia, Ukraine, Kazakhstan and Belarus, where prices for technology development are comparable to the Azerbaijani market, banks are also actively investing in such projects.

Speaking on the similarity of the Tap-to-Phone technology and the mVisa technology previously introduced by VISA in other countries, Doros noted that mVisa functioned with slight differences. The technology essentially consisted of a mobile point-of-sale (m-POS) which enabled completing a transaction without a standard POS terminal.

“This technology was needed at a certain stage, like any evolutionary process. It allowed us to make contactless payments in those regions and at those types of trading enterprises where the installation of a conventional POS terminal was either impossible for technical reasons or economically impractical,” Doros said.

According to her, the emergence of new Tap-to-Phone technology can be seen as the next stage of development, one in which additional devices are not needed for completing a transaction.

“Technology has reached a point where a phone can be used as a POS terminal by itself, without the use of additional devices,” Doros added.

Tap-to-Phone is currently a pilot project, as the developers of the technology continue the certification process.

“Certification is necessary to make the technology available for mass use. When the process is completed, VISA and banks will be able to scale it by offering the technology to their customers. As of now, it is hard to name specific dates, because it depends on the work of each vendor. However, it is expected that this process will be fully completed in five-six months,” Doros said.

As for VISA’s market share in Azerbaijan, the general manager said that this is not the main indicator of development.

"Increase in the volume of payments and the number of transactions are important indicators of the development of the payment business in the country. An increase over the first half of 2019 by 39 percent and the number of transactions by 40 percent demonstrates the speed of development of the payment business in Azerbaijan," she noted.

Doros went on to say that currency conversion during transactions is necessary so that the cardholder does not waste time exchanging currencies when being in any given country. According to her, this was, in fact, one of the reasons why plastic cards were invented.

VISA offers settlements in all possible major currencies so that banks can use accounts in these currencies for conversion. Each bank determines the conversion process independently. As such, which country the card holder is heading to is irrelevant, as VISA cards will be accepted for payment in any of over 200 countries, allowing users to make payments conveniently, quickly and safely.

“The bank itself chooses in which currency it will use the account for settlements with VISA during conversion,” Doros added.

According to her, when developing new technologies, special attention is paid to security. All security elements are embedded in the technology during the development of any payment solutions.

"The company follows the principle of responsible innovation. VISA sets meeting safety standards as a priority," added Doros.

According to her, VISA combats fraud by using a sophisticated security system, which consists of three main components, these being data protection, data devaluation and financial literacy.

"The systems are provided with a high level of cryptography and other technologies that protect data," Doros said.

According to her, an example of data devaluation is tokenization. “Data tokenization is a clear example of how data important for a payment is ‘devalued’. This is when fraud-sensitive data, for example, the card number, is stored in a secure VISA environment, and a code with a unique set of random numbers, namely a token, is used to conduct a transaction," she said.

As for financial literacy, she clarified that this is “the work that VISA is carrying out jointly with banks for informing customers (cardholders) on the proper use of technological tools."

Regarding the company's activities in the field of financial technology (fintech), Doros said that VISA understands its importance and is actively cooperating with representatives of this area.

“Fintech companies are working on solving particular problems. Banks have probably not yet learned how to focus on a specific problem and solve it because of them having a very wide range of services, problems and customers, and fintech companies build their development strategy specifically on solving such specific problems encountered by users," she noted.

According to Doros, there are three main areas in which VISA cooperates with fintech companies.

“There are currently eight innovation centers working all over the world, where VISA provides fintech companies with the opportunity to collaborate and work on solutions. At these centers, fintech companies can be provided with various resources that they themselves do not have,” Doros said.

Fintech companies are also supported through the Visa Everywhere Initiative. "Essentially, it is an opportunity provided by VISA for fintechs - it creates a platform for fintech startups who can bring their solutions and work them out with mentors from VISA and other technology companies," Doros added.

Under this area, VISA invites representatives of leading tech companies who act as mentors to such events. A competition of a sort is being held among the proposed solutions, the winner of which receives support from VISA for the implementation of their projects including financial support.

Doros further stated that the third area is the separate Innovation and Strategic Partnerships division created in the company. This team works directly with fintech companies.

"As is known, the main traditional customers of VISA are banks. Today, the company has formed a whole separate structure for working with companies operating in the field of fintech," she added.

According to her, the joint work of VISA, commercial banks, regulators and the AzeriCard processing center in the territory of Azerbaijan allows to introduce latest technologies.

"Continuing our close and fruitful cooperation, VISA, together with all its partners, will be able to effectively increase the level of cashless payments in the country," the General Manager concluded.

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