Monday, July 21, 2014

Visa Checkout for Online Purchases

Visa has announced the launch of Visa Checkout, a payment service that replaces and enables consumers throughout the United States, Canada and Australia to pay for goods online, on any device, in just a few clicks, according to a press release. 

Consumers can enroll any Visa debit or credit card, plus other branded cards, in Visa Checkout to make purchases from a PC, mobile device or within a mobile app. by entering their username and password to complete the payment process directly on the merchant’s website.

A new mobile SDK (Software Development Kit) is available, allowing developers to build and implement a native in-app checkout experience for iOS and Android-based devices. This can be downloaded from the Visa Developers website at

The Marketplace Fairness Act and the Internet Tax Freedom Act Would Kick The Can Down the Road

As Multichannel Merchant magazine has reported, the Marketplace and Internet Tax Freedom Act, which was introduced in the U.S. Senate on July 15 by Senators Mike Enzi (R-WY), Dick Durbin (D-IL), Lamar Alexander (R-TN), Heidi Heitkamp (D-ND), Susan Collins (R-ME) and Mark Pryor (D-AR), if passed, would keep the Internet free of across-the-board sales taxation for 10 years, while giving states the ability to enforce their sales tax laws on businesses selling to consumers located within their borders. Currently, based on the 1994 Quill decision, Web purchases are taxable only in states where the merchant has a "nexus," i.e. a store, warehouse, or other physical facility.
There are three salient issues here:
1) From the point of view of the consumer, if they are active direct purchasers now (via their computer, tablet, catalog, or phone), they may notice higher purchase prices on many items because the Nexus requirement will be eliminated. I doubt that this will depress sales much, however, since the convenience of direct sales will not be hurt by this. If you live in a state that collects sales taxes, it will eventually bring price parity to the marketplace.
2) From the merchant's point of view, this will place an even greater premium on free shipping than exists already, in those states with sales taxes (and likely in all states). 
3) From a systems perspective, the imposition of sales taxes on items shipped to virtually every state will mean that third-party sales tax management solutions will become even more popular (or necessary). Keeping track of all the rules and regulations is not something that any OMS vendor is going to willingly embrace, while the third-party sales tax collection services obviously excel at this. Since these packages are typically rather expensive (mid-five-figures), we may see more entries into this niche, which will give merchants more choice and potentially lower the pricing on them. 
Overall, though, it will make direct sales more expensive, and shift the complexity from keeping track of nexus for each merchant to keeping track of tax rules in each of the 44 states that collect sales taxes.
Ultimately, a universal direct sales tax, by being simpler, would reduce overall costs, level-the-playing field, and most likely result in higher direct sales revenues across the board. Like many compromises, the proposed legislation just kicks the can down the road.

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