Steve Perry
Steve Perry, the creator of the Visa Europe Collabhandout

Visa Europe's Collab, an arm of the company's digital innovation programme, has begun to look at bitcoin start-ups within the area of digital payments - a space dominated by the big card providers.

Visa's Collab has been operating what it calls "a religion of a 100-day sprint proof of concept", and since February 2015 has established relations with some 200-odd start-ups and taken 45 of them through the proof of concept stage, to be bench tested at Visa Europe.

In addition, the Collab opened its doors to operators in the bitcoin/blockchain space back in June for an "ideas jam". It's clearly early days in this regard, but IBTimes asked Steve Perry, chief digital officer and the founder and co-creator of Visa Europe Collab, what Visa is doing in the cryptocurrency space. Here's how the conversation went:

Perry said: "We have just started to meet some start-ups in blockchain. We still haven't put any into proof of concept yet. They are under non-disclosure agreements."

IBT: "What are the blockchain companies like?"

Perry: "Still ideas."

IBT: "What sort of ideas?"

Perry: "We haven't got to that."

IBT: "In the payments space?"

Perry: "Yes, in the payments space – but blockchain extends much further than payments."

IBT: "Are these bitcoin ideas?"

Perry: "Yes. But what I still question, with respect to blockchain, is the whole concept of a new settlements system that seems to work adequately well today, that is regulated and controlled for the benefit of the ecosystem and society.

"Take something outside of that – who is going to regulate it, authenticate it? If we skip a heartbeat of settlement here – can you imagine us saying: 'We can't settle the Lloyds cards today'; 15 million cards don't work. That cannot lend itself to a blockchain, unregulated, uncontrolled, secretive, managed by a handful of people, process."

"So we will come back to blockchain when we have done our research, as opposed to me just reading stuff and chatting to a few people about it."

IBT asked if any specific people had been brought in to help with that research, and how it was being conducted. Tim Harrison, communications officer for Collab, replied: "We had the ideas jam. We are talking to people, working with a few different people, but it's very early days."

Disrupting technologies

Perry believes there are many disrupting technologies coming from every angle, but that no single thing will be completely disruptive.

"As entities on their own they will not disrupt payments. The jury is still out on blockchain. And we will be in a better position to describe that and understand that in the next three to six months.

"I don't want to bet on five or so start-ups that will disrupt the industry. That is because technology will leapfrog them, consumers will move because they are promiscuous and canny. What I would rather do is give you the image of an Apple App store – so we are like Apple for payments," he said.

The Collab was able to talk in more detail about other innovations happening within payments, many of which have yet to reach proof of concept stage, such as an "onable" transfer tattoo with payment capabilities.

Temporary tattoo

"It's still being tested on the bench; it's not even in proof of concept. It's a temporary tattoo. You wear it on your skin. So imagine going to Glastonbury with today's trendy tattoo, or a continuation of the one you have got, which is a real tattoo, and it allows you to have access, get to the pyramid, and also have a drink.

"Another we haven't moved into proof of concept yet – it's still a little academic but I love the concept – involves your mobile to make a purchase in say a Next store or somewhere but without queuing.

"The clothes and jackets have the security tags on, which usually the shop assistant has to put into a magnet to get off. Those can be opened with your mobile phone, while also committing you to making the purchase.

"So the moment you put your phone next to it, and it's your size, you can walk out of the shop – you haven't got a carrier bag of course but if you don't want to queue, you can be in and out."

Perry went on to run through a ream of technologies Visa Collab is looking at, from biometrics that scan the thread veins in your thumb to data analytics fighting fraud on the dark web.

Visa Europe's digital innovation programme, which has as its cornerstones the likes of Apple Pay and contactless on the Underground, culminated with the V.me digital wallet earlier this year. It is a story of bewildering scale – being able to handle 2,000 transactions per second, 24/7, 365 days a year.

That size and complexity comes with a cost however. In a recent article IBTimes was told that merchants who were thinking of offering bitcoin payments had to spend all their time and resources integrating the likes of the V.me wallet and MasterPass. IBTimes asked Perry what he thought of these reported problems with Visa's legacy systems.

"I agree with you up to the point, but it's not a legacy system that has been built in Europe. It is the fastest, newest settlement clearing system.

"What I would say to that retailer is, yeah, integrating V.me and MasterPass isn't a walk in the park. But if you want two billion card holders and 2,000 transactions a second and guaranteed payment and settlement of money in your bank tomorrow even if the issuer doesn't pay up – you had better get up and get out of bed and do that properly.

"If you want to go down the bitcoin route, go fill your boots. But when you unwind it, and have a problem – I don't want to hear from you."

Regarding the threat posed to large players in the payments space by bitcoin and blockchain-type solutions, Perry said: "The way I describe payments is almost like a normal distribution of data, and we are operating in the 80-85% of core, which is face-to-face transactions, e-commerce transactions, and for most people it's just like a utility and they don't think about it.

"Things at the edges, like PayPal used to be, move into the core. One will find blockchain in those areas, and as they become bigger, they will become more interested in the core and will also be included in the regulation.

"Consumers don't get out of bed and think what transaction payment vehicle shall I use this morning. They are buying stuff and looking for the quickest way to check out on their mobile. And that's what we do."