ON NFC AND CONTACTLESS
“NFC for payments is officially dead”
Apple’s unveiling of iOS7 was the final nail in the coffin for NFC, according to Matt Witheiler, Principal, Flybridge Capital Partners. Although Tim Cook didn’t outright announce that the next iPhone wouldn’t have NFC, he said as much, Witheiler argues, with announcement of the AirDrop technology that allows two phones to share content wirelessly. The new sharing technology is relevant because the NFC supporters have been arguing that once Apple launches NFC the technology would finally take off.
Read the full story on pymnts.com
Mobey’s comment: Very interesting view on Apple’s way of working, and analysis on non-chip based payment ecosystem. The author, Matt Wittheiler, claims that Apple’s assumed decision not to implement NFC in their next iPhone will send NFC as payments technology to the graveyard of payment technologies. We are wondering why the writer has chosen to evaluate only the non-chip&pin –based payment area, e.g. leaving the entire continent of Europe outside? That is where NFC’s major benefit, compliance with existing payment system, sees the biggest benefit. We still have the issue with contact versus contactless, and admit there are big challenges with NFC as a payment technology, but it is quite one-sided to claim it is “officially dead”. It maybe goes into coma every now and then, but it is not yet dead.
Starbucks goes contactless
Starbucks stores in the UK have started accepting Visa contactless payments. The coffee chain, Visa Europe and Barclay Card Global Payment Acceptance joined forces to enable the 550 coffee shops in the UK to accept contactless payments. Starbucks is the latest addition in the lineup of UK retailers moving into contactless. Other major high street chains accepting contactless payments include Marks and Spencer, Co-Op, Post Office, Boots, McDonalds.
Read the full press release
Mobey’s comment: as a ‘counter comment’ to the previous news, Starbucks has announced they go contactless in all of their shops in UK. Nothing about mobile yet, but the expansion of contactless technology certainly paves the way for the mobiles as well –in case mobile succeeds in solving some of its biggest challenges. One of those is the issuer of the secure element: the issuer has a controlling role in the chain of payments. We have a workgroup starting to discuss about these issues now: Mobile Wallet workgroup headed by Jordi Guaus, who just kicked off the new chapter in mobile wallets and the usage of secure element. Please join the group if the complicatedness of NFC keeps you up at night. Contact us or Jordi Guaus or Zafar Kazmi directly to join the group.
Oberthur’s secure element for Samsung Galaxy
Oberthur Technologies announced it has been selected by Samsung Electronics to provide PEARL, the NFC embedded secure element for the GALAXY S4 handset. The technology offers the largest memory in the market and is certified by Visa, MasterCard and Google. PEARL enables deployment of secure NFC payment, strong authentication, transit, access and loyalty applications.
Read the full press release
Mobey comment: the raise of embedded secure elements has been amazing, and has a possibility to change the market structure. Of all the NFC enabled phones about 60% have also the embedded secure element! This might be a surprise to some of the opponents of NFC. Now that almost all Samsung’s NFC phones has a possibility to support two if not three secure elements, the importance of time-to-market will play a significant role. We do acknowledge that they say quite directly this being targeted to only specific markets, where majority of the phones are not subsidized (read: “We don’t want to hurt our customers’, MNOs, businesses). This topic will also be one of the main discussion topics in the currently starting mobile wallet workgroup on secure elements: the meaning for service providers (e.g. banks), its life –cycle management, the way forward.
ON SECURITY and BIG DATA
US banks join forces for security
The Clearing House – the oldest banking association and payments company in the US – will launch and operate an open platform to make mobile payments more secure, it was announced. The platform, called Secure Cloud, will change how cardholder data is transmitted and stored by tokenizing cardholder data behind a bank’s firewall once a bank customer has registered their mobile wallet with that issuer. The Clearing House and its 22 member banks, including Bank of America, Citi and US Bank, are currently developing a program to test an open standard system that will improve security for mobile transactions.
Read the full story on Pymnts.com
Mobey’s comment: This small story is possibly the most interesting piece of news during this summer, and the Clearing House the most credible party as a trusted operator of the Secure Cloud. Secure Cloud strengthens the position of banks in leveraging mobile payments. It is very simple: it tokenizes and encrypts the card data, by giving everyone (involved) the same information without the cardnumber data being exchanged in cyberspace. So one platform and open standard for all issuers to leverage. The Secure Cloud operated by Clearing House (issuers) also steps a bit on the toes of traditional TSM infrastructure –and says to all that the cloud is the word for today. You may just ask when this will be made in other countries as well. Mobey Forum sees EBA Clearing as the potential European counterpart for putting up Secure Cloud infrastructure.
Barclays to sell anonymized data
Barclays has made it possible to sell anonymized data of its customers. The bank group has made a change in its terms and conditions that will allow it to resell anonymous, aggregated data to third parties. Barclays will start offering the insight to customer behviour from October this year. The bank has also said it will start using customer transactional data internally to increase its understanding of services and products that its customers may wish to use.
Read the full story on Information Age
More on banks and Big Data at Forbes
Mobey’s comment: Big data is finally tamed by the banks! Twist and shake, analyze and de-personalize, use and learn –and finally, sell it. The quantitative analysis shall get a strategically important position next to business decisions in all financial institutions, which will possibly lead to better understanding of customers. The understanding is the key: correlation does not imply causation! As a side remark, obviously the big data companies have a bright future ahead –so will the students of statistics and quantitative analysis.
VocaLink to launch Zapp mobile payments
VocaLink has announced the launch of a new company to build a service allowing Brits to link their bank accounts to their mobile phone numbers to make payments. The company, called Zapp, is set to launch in early 2014 and is currently looking to get banks and retailers on board the service. Banks that agree to take part in the service will integrate Zapp into their mobile apps and invite people to link their bank accounts to their phone numbers to enable them to use the service to make payments at participating retailers.
Read the full story and more on Daily Mail
Mobey’s comment: UK’s version of Clearing House’s Secure Cloud, but without card-only scheme: with this you will be able to pay directly from your bank account. This is what true mobile payments are all about: securing a fast on-line payment with a better infrastructure than has ever been in non-internet era. Long-awaited solution for those tired of credit card transaction fees. We will all follow the story of Zapp and hope it is as easy to use as we all expect. The DailyMail article claims the success is up to the merchants signing up for the scheme, but Mobey Forum adds that the final success depends only on the consumers: if they use it, it will be successful. If they find it complicated or slow or not secure, good –bye.
CaixaBank, Santander and Telefonica create a JV
CaixaBank, Santander and Telefonica join forces to create the first JV between banks and telecom operators in Europe to develop new business opportunities based on the latest mobile and communications technologies, including a digital wallet, where customers can keep their cards and make P2P payments. The company will start its activities by developing an online community to manage offers, discounts and promotions between businesses and customers. The company will start off in Spain, but is looking to expand internationally in the short term.
Read the full press release
Mobey’s comment: The collaboration goes live. The JV between banks and big MNO is true in Spain, and the industry is holding breath on how they will succeed. What add-on benefits will the JV with add-on overhead bring for developing digital mobile services, remains to be evaluated at later stage. Good to see these collaboration efforts are put into practice: Mobey Forum has been speaking about/for these for years. It is difficult to achieve certain targets alone, and with a semi-independent company where all have stakes it may be easier. Good luck and all the best. Mobey says: “Show them!”
ON MPOS
Monitise and Lloyds sign a deal on MPOS
Monitise has partnered with Lloyds Bank to develop a suite of mobile card acceptance solutions for micro merchants, start-ups and small business owners.
As a result of the deal a suite of mobile payments products will be made available in the UK from the autumn of 2013, including the Monitise MPOS solution.
Read the full press release
Mobey’s comment: The banks are entering into the space of MPOS world. One of the first examples is this, where Lloyds signs a deal on MPOS solution with Monitise. The main purpose is simply to widen the customer base, and get a position in the market before the others do. One of the very first ones to launch MPOS was Bank of America, who offered the payment terminal for free, and an access to banks’ marketing platform, which enables the merchants to add offers and digital marketing database to their MPOS system. An interesting niche especially for acquiring banks –Mobey Forum will follow with great interest on how the market will develop.
Square expands to online
Square announced it would expand its offering to small merchants enabling them to sell their products at an online marketplace, Square Market. The idea is to get anything from handmade jewelry, housewares and merchandise to yoga lessons and beauty treatments for sale at the marketplace. Merchants can add themselves to the market place free of charge, but Square charges 2.75% fee per item sold. The new offering builds on the existing service offered by the company to small merchants, enabling them to process card payments with MPOS technology.
Read the full press release
Mobey’s comment: Square is acting just as Mobey predicted in our first MPOS white paper: going up in the value chain and offering online services in addition to card processing services. Now they have Square Register (inventory management), Square Market (online marketplace services) and Square Cash (peer-to-peer payments): an offering that many of its traditional competitors can be envy of. We may guess the next direction for the leader of MPOS market, and it is not far from targeting to a new niche: almost-mid-sized-enterprises.
Visa and Swiff sign a deal for MPOS
Mobey Member Swiff (owned by SCCP Group) announced it had signed a deal with Visa to enable merchants of all sizes to accept Visa payment using mobile technology. In addition to Swiff, iZettle and SumUp will participate in the Visa Ready Program to have their mobile acceptance hardware and software tested and approved for use with Visa payments.
Read the full press release
Mobey’s comment: The Mobey member Swiff (SCCP Group) has signed a deal with Visa for Visa Ready Program. There is indeed a growing importance of MPOS terminal as an enabler for mobile payments via mobile acceptance.
Nets announces the launch of MPOS
Nets announced it has entered into a partnership with Ingenico to introduce mobile payment solutions for smartphones and tablets. Nets will use the mobile commerce platform provider ROAM, an Ingenico subsidiary to implement the MPOS solution. A dedicated application and secure pocket format card reader with Bluetooth connection will be offered before the end of 2013, with a pilot taking place in Norway during the autumn.
Read the full press release
Mobey’s comment: Nets has entered to the world of MPOS, by partnering with Ingenico. The service will turn smartphones and tablets into payment terminals using Ingenico’s card reader, the iCMP which has a Bluetooth connection. It is interesting to see who will play in this area, and what kind of value chains those will engage. In this case NETS has chosen to partner with an established terminal provider, who have so far had challenges in entering to this fast moving market. Also it looks like the hardware is not as ‘throw-away-hardware’ (the term originally used by our chair of MPOS workgroup, Matt Calman from Bank of America), but a certified piece of hardware & software, which fulfills all the security standards.