Visa's digital wallet seems to take a different path from 3D Secure. If it's "digital" I wonder if it's interoperable online and how might it work over Internet?
The digital wallet will store Visa and non-Visa payments accounts and support NFC through payWave, letting customers complete transactions online, with their mobile, on social networks and at the point-of-sale.
Customers use an e-mail address, alias or online ID and password for payments, instead of a billing address, account number and expiration date, making it more convenient and safer to use, says Visa.
Getting rid of the billing address and expiry date to corroborate identity is a great move (so long as the new system doesn't expose alternate personal information like e-mail address to thieves).
I'm interested to know what impact the digital wallet has on the rest of the backend payment processing system. One of the problems with 3D Secure and any number of other anti-fraud designs is they mess with the long standing Four Party model, often introducing
new entities like authentication servers. Perhaps the digital wallet is simply a new way of feeding PANs into the Acquiring side, with no deep changes required to merchant contracts and interfaces?