Mobile Payment Magazine

Mobile Payment Strategies Report: Opportunities & Markets 2011-2015

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Mobile Payment ReportA new study from Juniper Research has determined that the total value of mobile payments for digital and physical goods, money transfers and NFC (Near Field Communications) transactions will reach $670bn by 2015, up from $240bn this year. These forecasts represent the gross merchandise value of all purchases or the value of money being transferred.

The new Mobile Payment Strategies report revealed that all segments will exhibit 2x to 3x growth over the next five years. This growth will be driven by the rapid adoption of mobile ticketing, NFC contactless payments, physical goods purchases and money transfers as people in both developed and developing countries use their devices for everyday transactions. [Read more…]

Kuapay

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Kuapay is a mobile payment application that lets users make purchases with a smartphone wherever credit cards are accepted.

Once the user has downloaded the free app and entered credit card information, they’re ready to start shopping. With a quick scan of your QR code, the bill is sent to the user’s phone and the payment is processed in seconds. The receipt is received shortly thereafter and can be viewed inside the user’s account. In the future, Kuapay will support NFC.

More information: Kuapay

Contactless Payments Landscape

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By John Rozek —

Contactless cards have been hailed as the “next big thing” in the payments industry. With more than 17 million contactless cards already in circulation and 75,000 points of sale across the UK, it’s easy to see why many in the industry believe we are reaching a ‘tipping point’.

According to Visa, 2012 is the year that contactless will become a mainstream payment method in the UK. This will be fuelled, at least in part, by the 2012 London Olympics—the “cashless games.” More and more UK retailers, including big brands like Tesco and Boots, are now rolling-out contactless across their stores and many now believe that contactless—almost seven years after it was first introduced by the card schemes—is finally on the cusp of really taking off.

Some industry experts, however, believe that celebrating the success of contactless adoption is premature. They also believe that, despite the hype, there is still a lot of work to be done before cardholders really embrace this new method of payment.

Tipping point for contactless?
For the majority of cardholders, Chip and PIN is an ideal source of payment as it is secure and can be used in all locations; contactless gives them virtually no additional benefits. In addition, many do not know which of their cards actually support contactless, or which retailers accept it as a means of payment.

As many checkout operators are not trained in contactless they are less likely to promote it, and if terminals are damaged or not working properly it further hinders mass adoption.  And although the speed at point of sale (POS) of contactless is undoubtedly a positive, the benefit is largely aimed towards the retailer rather than the cardholder.

Contactless also has a £15 maximum spend limit which experts argue is too low; many shops have a £5 card minimum spend limit, which means that cardholders need to ensure that their purchases cost between £5 and £15. Raising the contactless spend limit would certainly help increase its popularity. Larger retailers do not have a minimum limit, so in many instances cardholders will be able to use contactless most times they visit certain stores.

London 2012
While there has been much talk to suggest that the London Olympics 2012 will drive contactless adoption, experts believe that the extent to which this will happen has been exaggerated. For those lucky enough to have secured Olympic tickets, it is unlikely that they will have access to more than one session, during which they will be far more focused on the event in hand than using contactless. Due to the scarcity of tickets the majority of people will have to settle for watching the Olympics on TV, further reducing the impact the events will have on contactless adoption.

Near Field Communication (NFC) will open up contactless payments to an adoption group keen to use technology on their mobiles, but again, many believe that contactless on its own does not have the same appeal. Smart phone users expect functionally rich apps to enhance their shopping experience and are used to one-touch payments over the internet for iTunes, Amazon, Google and so on; it would be very difficult for contactless to compete with this experience.

However, NFC is widely expected to enable “higher value payments,” where the customer is able to enter their PIN via their mobile.   Industry announcements are widely expected next year, really opening up the way to contactless payments via the mobile phone.

Mobile wallets will offer dramatically more exciting options than simple contactless. Not only do they allow users on the move to access financial accounts, but they also play an integral part in the development of digital commerce and banking. Initiatives such as Barclay’s launch of Pingit will drive person to person mobile payments and experts anticipate that the winning mobile wallet offerings will go viral!

Going forward
For contactless to be truly successful it needs to be part of a wider solution and not used in isolation. It needs to be convenient and quickly become mainstream. More importantly however, it needs to be promoted by well known and trusted industries such as public transport, where people can be assured and encouraged to use it as a convenient and safe alternative to cash.

About the Author

John Rozek

John Rozek of payment consultancy, Polar Moment.

John Rozek has over 16 years of experience working at the forefront of the payments industry. Working with Royal Bank of Scotland and NatWest, John led an industry leading cross-border implementation and ATM service delivery programme. He also led the team that introduced Chip and PIN to over 120,000 points of sale across UK. John was one of the founding members of Polar Moment and has played a key role in developing the organisation to become a leading provider of payments consultancy. He is a recognised name across the sector, delivering payment industry consultancy and business development services.

The ath Power 2012 Mobile Banking Study

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Mobile Banking Research

Key findings in the recent ath Power Mobile Banking Study reveal that banks are not adequately promoting their mobile banking offerings, and that Remote Deposit Capture is the missing feature most sought by customers. The National study ranked customer satisfaction with today’s mobile banking offerings, and USAA earned the top spot with 73 percent of its users claiming high satisfaction. [Read more…]

Canadian Bank CIBC Launches Mobile Banking App for iPad

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CIBC today announced the launch of a Mobile Banking App designed specifically for the iPad.

The launch makes CIBC the first major bank in Canada to deliver a native iPad mobile banking app, building on CIBC’s leadership in mobile financial services. The app enables CIBC clients to bank on their iPad using new interactive graphics and visuals, and leverages the full screen and capabilities of the iPad.

“Just as we did when we launched the first Mobile Banking App in Canada in 2010, CIBC is moving quickly to deliver banking services to our clients through the technology they use everyday,” said Michael Martin, Senior Vice President, Alternate Channels, CIBC. “Our new Mobile Banking App for iPad offers engaging features that utilize the iPad’s large, high resolution Retina display, and rich interactive graphics and visuals, making it easier to understand and manage your finances.”

“Clients are increasingly looking for greater flexibility and an anytime, anywhere connection to their banking, allowing them to take care of day to day transactions at a time and place that works for them,” added Mr. Martin.

Just as they can on CIBC’s award winning Mobile Banking App for the iPhone, clients can use the new CIBC Mobile Banking App for iPad to check account balances, transfer funds, pay bills and send Interac e-Transfers.

Clients can visit to view an online demonstration of the new CIBC Mobile Banking App for iPad, and download it for free. Clients can also download it from the App Store.

Source:  CIBC

Glenbrook Payments Boot Camp: May 16-17, 2012 – Palo Alto, CA

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The Glenbrook Payments Boot Camp is an in-depth view of the payments landscape. The program provides an intensive, two day “deep dive” into payments systems in the U.S. – providing a unique cross-payments system view of this important industry. Throughout the two days, the Payments Boot Camp will focus on ensuring an understanding of how current trends and issues will affect the status quo and on how new and emerging players may complement – or threaten – the industry incumbents.

The program uses the U.S. payments industry as the basis for the course, but will also explain how other country payments systems differ from those in the U.S.

What’s on the Agenda?

The two days are divided into four sections. Each section is designed to encourage interactive participation by the audience.

  • Day One: The Payments Systems
    • Overview – Payments systems designs, functions and uses; payments systems volumes and the dramatic shifts in actual and projected payments usage; key trends and issues in payments systems in the United States; how payments systems compare by economic model, regulatory environment, processing support and risk management
    • Perspectives – How each of the key constituents of the industry view payments; economic and other motivations; how behavior is changing and why. Constituents include consumers, banks, merchants, billers, enterprises, networks, processors, and service providers
    • International Payments – How other country payments systems compare to the U.S.; major trends in payments systems worldwide; cross-border payments

 

  • Day Two – Emerging Payments
    • Framework – What are emerging payments; success factors for payments startups; key “building blocks” used for emerging payments products and solutions
    • Thinking Mobile – Ways to think about payments in a mobile world; key questions across the domains of payments
    • Emerging Payments by Domain
      • The eCommerce Domain – This has been the focus of innovation over the past 10 years in the U.S .payments industry.  Includes an overview of the global eCommerce marketplace; eCommerce market segmentation; a PayPal case study; other online wallet providers; bill-to-mobile providers; virtual currencies and social payments
      • The POS Domain – Where the action will be for the next 10 years!  Includes chip cards and the U.S. shift to contactlesss and EMV; mobile at POS (both NFC and other technologies); mobile card acceptance; mobile marketing
      • Bill Payments – Multiple consumer options, all growing at the expense of check; a surprising set of emerging payments solutions and related PFM (personal financial management) solutions
      • P2P Payments – Bank and non-bank offerings; business model challenges; cross border remittances
      • B2B Payments – New ACH and card products; why checks are still important; handling cross border payments
      • Income Payments – Payroll cards and direct deposit onto prepaid cards

More information: Glenbrook Payments Boot Camps — Payments Essentials

Research Report: Positioning for Payments in the New Mobile-Social Technology Era

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We are at the beginning of a new technology cycle as consumer adoption of mobile and social media extends the reach of the web and integrates those media into the physical world.

Facebook is only eight years old, and yet its planned $5 billion IPO is the largest Internet IPO ever. As in every new technology cycle, network effects make room for new players and the creation—and destruction—of vast amounts of wealth.

The Gang of Four—Apple, Amazon, Facebook, and Google—is a group of network players entering the banking and payments environment. How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers? Surprisingly, PayPal rates on equal footing with the Gang of Four when it comes to innovation and emerges as a possible leader in the next tech cycle.

Research & Markets recently released a report entitled Positioning for Payments in the New Mobile-Social Technology Erathat  focuses on the relationship of brands to consumer perceptions of trust, innovation, and privacy in order to identify opportunities and threats.

Primary Questions

  • What is the newest technology cycle? Which brands are positioned to take advantage of the next cycle?
  • What models are developing that will intersect with the financial services space?
  • How will the strengths and weaknesses of the Gang of Four play against those of major financial institutions, payment networks, and wireless carriers?
  • How well do consumers trust the Gang of Four compared with the major financial institution, payment network, and wireless carrier brands when it comes to their financial information?
  • How do consumers rate the Gang of Four compared with the major financial institution, payment network and wireless carrier brands when it comes to protecting their private information?
  • Which brands are viewed as most innovative?
  • How do customers of the primary financial institutions rate their own institutions on the issues of trust, innovation, and privacy?
  • How should brands position themselves to best compete in the new technology cycle?


Methodology
The report is based mainly on data collected online from a random-sample bank benchmark panel of 5,878 consumers in December 2011. The survey targeted respondents based on proportions of gender, ethnicity, age, and income representative of those of the overall U.S. online population. The margin of sampling error is ±1.28% at the 95% confidence level.

It is also based on a survey of 5,211 consumers conducted online in October 2011 on KnowledgePanel. This sample is representative of the U.S. census demographics distribution and is recruited from the Knowledge Networks panel. Data is weighted using 18+ U.S. Population Benchmarks for age, gender, race/ethnicity, education, census region, and metropolitan status from the September 2011 Current Population Survey (CPS) and household Internet access from the October 2010 CPS Supplement. The margin of sampling error is ±1.73% at the 95% confidence level.

Table of Contents

  • Overview
  • Methodology
  • Executive Summary
  • Platforms That Are Able to Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each
  • Technology Cycle
  • Mobile + Social Defines the Newest Technology Cycle
  • Wealth Is Created—and Destroyed—During Each New Technology Cycle
  • Apple, Amazon, Google, and Facebook
  • Platforms That Gather the Biggest User Base Usually Gain the Most Power and Wealth in Each Technology Cycle
  • Mobile Platform
  • Two Diverging Views of Mobile Success—Open (Google) vs Protected (Apple)
  • Social Media Platform
  • Mobile-Social Integration Opens Opportunity for Competitor to Move on Facebook
  • Game-Changing Business Models Rapidly Emerge During Times of Technological Upheaval
  • Tablets
  • Alliances Can Use Mutual Strengths and Weaknesses Can Fill Gaps to Respond Faster and with Better Products
  • Javelin TIP Model for Mobile Wallets
  • Trust
  • Apple Leads in Innovation—at Least for Now
  • Innovation
  • Privacy
  • Don’t Count out the Financial Institution’s Primary Relationship with the Consumer
  • No Brand Reaches the Gold Zone—Without an Alliance
  • Appendix
  • Related Research
  • Companies Mentioned

– Amazon, American Express, Apple, AT&T, Bank of America, Chase, Citibank, Discover, Facebook, Google, MasterCard, Microsoft, PayPal, Research In Motion, Sprint, Twitter, U.S. Bank, Verizon, Visa, Wells Fargo, zvelo

More information: Research and Markets

Glenbrook Payments Boot Camps: April 10-11, 2012 – New York, NY

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The Glenbrook Payments Boot Camp is an in-depth view of the payments landscape. The program provides an intensive, two day “deep dive” into payments systems in the U.S. – providing a unique cross-payments system view of this important industry. Throughout the two days, the Payments Boot Camp will focus on ensuring an understanding of how current trends and issues will affect the status quo and on how new and emerging players may complement – or threaten – the industry incumbents.

The program uses the U.S. payments industry as the basis for the course, but will also explain how other country payments systems differ from those in the U.S.

What’s on the Agenda?

The two days are divided into four sections. Each section is designed to encourage interactive participation by the audience.

  • Day One: The Payments Systems
    • Overview – Payments systems designs, functions and uses; payments systems volumes and the dramatic shifts in actual and projected payments usage; key trends and issues in payments systems in the United States; how payments systems compare by economic model, regulatory environment, processing support and risk management
    • Perspectives – How each of the key constituents of the industry view payments; economic and other motivations; how behavior is changing and why. Constituents include consumers, banks, merchants, billers, enterprises, networks, processors, and service providers
    • International Payments – How other country payments systems compare to the U.S.; major trends in payments systems worldwide; cross-border payments

 

  • Day Two – Emerging Payments
    • Framework – What are emerging payments; success factors for payments startups; key “building blocks” used for emerging payments products and solutions
    • Thinking Mobile – Ways to think about payments in a mobile world; key questions across the domains of payments
    • Emerging Payments by Domain
      • The eCommerce Domain – This has been the focus of innovation over the past 10 years in the U.S .payments industry.  Includes an overview of the global eCommerce marketplace; eCommerce market segmentation; a PayPal case study; other online wallet providers; bill-to-mobile providers; virtual currencies and social payments
      • The POS Domain – Where the action will be for the next 10 years!  Includes chip cards and the U.S. shift to contactlesss and EMV; mobile at POS (both NFC and other technologies); mobile card acceptance; mobile marketing
      • Bill Payments – Multiple consumer options, all growing at the expense of check; a surprising set of emerging payments solutions and related PFM (personal financial management) solutions
      • P2P Payments – Bank and non-bank offerings; business model challenges; cross border remittances
      • B2B Payments – New ACH and card products; why checks are still important; handling cross border payments
      • Income Payments – Payroll cards and direct deposit onto prepaid cards

More information: Glenbrook Payments Boot Camps — Payments Essentials

KOBIL Systems mIDentity App Security Toolkit Secures Any Online Mobile Application

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KOBIL Systems, a provider of mobile IT security and digital identity solutions, introduced the new mIDentity App Security Toolkit, (mID AST), which protects mobile users from multiple security attacks.

Kobil’s core product is mIDentity, a smardcard-reader in the shape of a USB-stick. With mIDentity, a user simply inserts the USB-stick into the USB port of any Windows, Mac or Linux computer and the
required applications (such as an internet-browser) are pre-installed and so there is no need of further installations. Once the secure browser launches the user is given access to their online account, and
may safely execute all desired e-banking transactions – this is all done without any software, driver installation or footprint left on the machine when the USB stick is removed.

The integrated and custom-configured smartcard makes communications safe and convenient while preventing non-authorized third-party access. mIDentity is currently deployed by millions of users worldwide and many banks and corporations rely on Kobil technologies, such as Deutsche Telekom, ING Bank, Rothschild Bank, UBS, German parliament and German Federal Office for Information Security (BSI).

Kobil recently introduced the mIDentity App Security Toolkit, (mID AST), which protects mobile users from multiple security attacks. mIDAST is a software development kit which secures any online mobile application, such as mobile banking applications. Kobil offers two reference implementations of this toolkit: mIDentity Trusted Web View (mID TWV), an application for secure authenticated mobile web browsing and the mIDentity Trusted Messages Sign (mID TMS), an application designed to replace weak and costly text/short message (SMS) online services and phone callback OTP services with authenticated
transaction messages that cost less.

“We see an exponential increase in the use of enterprise apps in mobile space,” said Ismet Koyun, CEO of KOBIL Systems GmbH. “KOBIL is helping app developers  and organizations who use apps as portal for secure online transactions by leveraging the company‘s military grade security technology for popular mobile platforms to protect these transactions against cybercrime and unauthorized access.”

”KOBIL’s new offerings at RSA 2012 provide highly secure and convenient solutions to protect the digital identities of mobile end users,” said Tan Sarihan, CEO of KOBIL Technologies USA, Inc., “We have demonstrated our effectiveness around the world by securing millions of online banking users. These new products extend KOBIL’s vision of enabling different technologies into convenient security solutions that solve real mobile computing problems.”

According to KOBIL, virtually all of today’s most common web browser attacks on PC platforms also exist for mobile device web browsers. Users can be tricked via phishing and pharming attacks, and mobile devices are more likely to be at risk of man-in-the-middle and man-in-the-browser attacks that can modify online transactions while accessing popular online services. The use of static passwords, text/SMS, phone callback OTP, soft One Time Passwords (OTP) or basic hard OTP tokens will not stop these attacks. KOBIL secures mobile web browsers through the mIDentity Trusted Web View (TWV) powered by mIDentity AST. The mIDentity TWV is a downloadable mobile application with all the functionality of mIDentity AST and uses mobile web browsers in a controlled way.

Mobile platforms can be used as an out-of-the-band authentication solution for PC based access to online applications. To make sure out-of-the-band authentication for both login and transaction signing is secure, mIDentity Trusted Message Sign (TMS) solution powered by mIDentity AST can be easily implemented as a reference solution. The full featured mIDentity TMS is a downloadable mobile application that offers up to 80 percent of the cost savings over traditional SMS.

The apps which are using mIDentity AST functionality can use external hardware devices such as mIDentity Air or Air+ for third factor authentication, signing and additional trust points. These devices should be used with mobile platforms for processing high risk transactions.

Source: KOBIL Systems

Embracing Emerging Technologies – US Retailers Face a “Double Whammy”

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By John Rozek —
With most regions in the world already adopting EMV – or Chip and PIN – payment solutions, there is now tremendous pressure on the US to join the likes of Canada, the UK and the rest of Europe in adopting this more secure technology, in order to combat increasing levels of customer-present fraud. The question is no longer will EMV will hit US shores, it’s when.

The introduction of EMV, a global standard for inter-operation of integrated circuit cards (IC cards or “chip cards”) and IC card capable point of sale (POS), is a significant change for US retailers, and one which will affect them greatly; it is not surprising, therefore, that many are nervous about the move.

Cost of Implementation

Undoubtedly, one of the most significant impacts on the country’s retailers will be cost and technical complexity of implementing and running EMV solutions. The implementation cost alone can be very significant and includes the software upgrade, the purchase of PIN pads and the cost of accreditation. Retailers running their own payment systems will face much higher costs. Not only will they need to ensure that they have technical staff who are skilled in both EMV and their chosen vendor’s solution, they will also need to bear the cost and effort of PCI DSS (Payment Card Industry Data Security Standard) accreditation. These retailers will, however, benefit from greater control over their point of sale processes and will be able to architect their payment infrastructure to ensure the fastest possible transaction speeds–a key feature for multi-lane supermarkets in particular.

Larger retailers will be able to absorb these costs. Others, however, may find that the cost of running their own systems becomes excessive once EMV is introduced. This will almost certainly be the case for small and mid-size retailers and may even be true for some larger retail organisations. When EMV was introduced to the UK in 2003 we saw a lot of retailers move towards hosted solutions; we can probably expect to see similar trends in the US.

To Host or Not to Host

Retailers who go down this route have two options–a hosted solution, or a shared hosted solution. A hosted solution is where a merchant processor runs a retailer’s payment system on their behalf. This still allows the retailer to retain many of the benefits of running their own system, but greatly reduces the cost and effort associated with PCI DSS accreditation. A shared hosted solution, on the other hand, is a low cost, ‘pre-accredited’ solution that is shared by several retailers. Pre-accredited means that the solution was approved when it was first introduced and new retailers can be added to the service with minimal formality.  It allows retailer to accept payments in the simplest and cheapest possible way.

Forward Planning

Whichever route they choose, US retailers will face some significant challenges over the next couple of years. In many ways they are in a better position than the early adopters of Chip and PIN; the technical standards behind EMV are much more mature and are now well understood, and expertise in this area is plentiful. On the other hand, with interest in mobile payments continuing to rise, the US retail market faces a double whammy.  Not only do retailers have to start thinking about implementing EMV solutions, they also need to carefully plan their payments infrastructure so that they are able to embrace emerging technologies. The key to success is most definitely careful planning. Retailers need to start thinking now about how they react to these changes and they need to do this sooner rather than later.

About John Rozek

John Rozek

John Rozek of payment consultancy, Polar Moment.

John has over 18 years of experience working at the forefront of the payments industry. Working with Royal Bank of Scotland and NatWest, John led an industry leading cross-border implementation and ATM service delivery programme. He also led the team that introduced Chip and PIN to over 120,000 points of sale across UK. John was one of the founding members of Polar Moment and has played a key role in developing the organisation to become a leading provider of payments consultancy. He is a recognised name across the sector, delivering payment industry consultancy and business development services.