Visa Fills Out Its V.Me Digital Wallet Strategy: Signs PNC As First Bank Partner; Adds 1-800-Flowers To Retailer List

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Visa is gunning against MasterCard’s PayPass, PayPal, Square and others to become consumers’ default digital wallet for online and mobile payments, and today it’s announcing two pieces of news in that strategy: it is adding PNC as its first U.S. banking partner, and 1-800-FLOWERS as a key retailer, to its V.me digital wallet scheme.

The PNC deal will see V.me integrated into PNC’s existing digital wallet service, marketed as Virtual Wallet, while the 1-800-FLOWERS deal looks like it is the biggest retailer yet to join V.me. In both cases, its a sign of how Visa is working hard to make sure that it gets a good share of what Forrester estimates will be an e-commerce market worth $226 billion this year, and $327 billion by 2016.

PNC’s Virtual Wallet — similar to those offered by many banks — is an online money management tool that lets users check their balances, monitor their charges and other basic banking services both online and on mobile devices. Adding V.me into the mix means that PNC will introduce a payment element, and purchases made using the name-plus-password V.me authentication can automatically show up on a person’s Virtual Wallet balance, rather than having to manually enter in card and other payment details each time a purchase is made. That makes digital wallets potentially more secure and convenient. The service works not only with Visa cards, but also those from other issuers.

Visa says the deal will initially cover 1.2 million Virtual Wallet users, and will be available to 6.3 million by 2013.

Whether or not users take PNC and Visa up on the Virtual Wallet offer, however, is another matter. Merging services like this is inevitable in the race for one digital wallet to rule them all, and it’s crucial for companies like Visa and MasterCard, which do not act as bankers themselves, to link in more closely with those who do, since this is often a consumer’s primary point of contact when it comes to watching how they spend their money, and makes the process of using services like this more seamless.

At the same time, it’s important for banks to get with the program and offer the same kinds of payment services online as they do in the physical world through debit and credit cards — and all the more important for banks like PNC, which is the sixth-largest in the U.S. and therefore fighting against consolidation and being crowded out by bigger players.

“Consumers are shifting to a digital economy, and we believe the emergence of simple, secure payment technology will play a key role in helping customers manage their money,” said Tom Kunz, SVP and head of e-business and payments at PNC, in a statement. “We continue to use innovative technology to give our customers convenient access to their money when and where they want.”

A Visa spokesperson tells me that this is just Part One: there are other (bigger) banks being added to the V.me scheme soon.

Just as adding more banking partners to V.me makes it more relevant to consumers, widening the amount of retailers that accept V.me authentication is another big hurdle to mass acceptance. Visa announcing 1-800-FLOWERS is a step in that direction.

Visa says the online flower retailer/delivery giant becomes the 23rd e-commerce partner to accept V.me, and perhaps the biggest to date. Others include Shoebuy.com and Cooking.com as well as the shopping aggregator Buy.com.

More on how V.me compares with MasterCard’s PayPass here.