Forget the mobile; Google looks to Hands Free payments

Last week I spoke about the imminent arrival of MasterCards ‘Selfie Pay’ in the UK. This week we appear to have continued the theme of biometric enabled mobile payments with the release of a new Google app: Hands Free.

It’s a mobile payment solution that doesn’t require you to take your phone out of your pocket and also relies upon facial recognition. Specifically, Hands Free uses face biometrics and your phone’s location as two identifying factors to ensure it’s you making the payment.

 The user downloads an app called Hands Free from Google Pay or the iOS App store. The consumer fills out a profile and uploads a picture

Leveraging the phone’s location sensors, Bluetooth and Wi-Fi, a consumer’s presence can be immediately picked up once they enter a store that is enabled with Hands Free. The consumer walks up to the checkout and simply tells the cashier “I’ll pay with Google.” The cashier asks for the consumer’s initials, and authenticates the consumer via those initials and the picture. “It’s instantaneous,” said Pali Bhat, Senior Director of Product Management at Google said in a recent interview. “We’re able to instantly make sure the transaction is processed with no friction at all.”

“While the pilot is still in early stages, we’ve come to a point where we're ready to invite people in the South Bay to test Hands Free with us. Hands Free is currently available on Android and iOS devices and is rolling out to a small number of McDonald’s, Papa John’s, and local eateries in the area.

Once you’ve installed and set up the app, Hands Free uses Bluetooth low energy, Wi-Fi, and location services on your phone to detect whether you’re near a participating store. When you’re ready to pay, you can simply tell the cashier, “I’ll pay with Google.” The cashier will ask for your initials and use the picture you added to your Hands Free profile to confirm your identity. 

At select stores, we’re also in the early stages of experimenting with visual identification so that you can breeze through checkout even faster. This process uses an in-store camera to automatically confirm your identity based on your Hands Free profile picture. All images captured by the Hands Free camera are deleted immediately”, writes Bhat in the Google Commerce blog.

Once the transaction is finished, the user receives a notification on their phone letting them know the payment went through This can also be used to head off any suspicious activity on your account. Hands Free works with Android devices running version 4.2 (Jelly Bean) or higher, and the iPhone 4S and up. Interestingly, Google is at pains to point out that new pilot program is not a part of Android Pay.

The release of Hand Free is certainly serendipitous. Figures released by Google last week showed that since the launch of Android Pay, the company has averaged 1.5 million new registrations each month in the US alone, with over 2 million locations that accept tap and pay. 

In fact other research numbers released last week from investment firm Piper Jaffray indicate a thawing in consumers attitudes towards mobile payments in the US. In a survey of 507 value added resellers and independent software vendors, the firm found that 44% of their point-of-sale merchant customers are already using or have requested more information about NFC payment terminals.

Among those interested in contactless payment solutions, 67% of merchants expressed a desire to support Apple Pay. That was by far the most popular option among merchants, the poll found, easily besting second-place finisher Android Pay.

Coming in third with just 8% was PayPal, while only 7% of merchants expressed a desire to support Samsung Pay. "We believe it is telling that PayPal, who has been the leader in digital payments, so significantly under-indexed Apple Pay and Android Pay," analyst Gene Munster wrote in a note to investors. While the survey reflects poorly on PayPal, Munster said it's an encouraging sign not only for Apple, but for digital wallets in general.

Still, he doesn't expect Apple Pay to greatly impact the company's bottom line — Piper Jaffray's estimates call for less than 1 percent of Apple's revenue and earnings in 2017 to be Apple Pay related. "Apple Pay's significance is an engagement tool, which longer term is a must-have for any successful phone as cash slowly goes away," Munster said.

If there is anything that I take away from the last few weeks of news releases covering mobile payments, its that there still no ‘one size fits all’ solution out there yet. In order to keep innovation moving forward  - perhaps thats a good thing. Ultimately though, it going to be the users that choose exactly what size is the best fit.

That’s how it should be.

PS - One last thing. On a re-read of this editorial I couldn’t let it go. This so reminds me of a joke I heard recently and how apt it was for me, living in Berlin. It’s just that I recently took out all of the German names from my phone’s address book and now it’s ‘Hans free’.

Boom. Boom.

Until next week.

Steve Atkins
Contactless Intelligence

Announcing the 2016 CMA Finalists!

In a normal week, this editorial looks at a specific pieces of news highlights from the week’s headlines. However, this week we are paying it forward by announcing breaking news that is being released right now. Namely, the Finalists of the 2016 Contactless & Mobile Awards.

As always, it was a tough decision to break it down to the four finalists in each category and made harder so by the fact that this year we compressed the categories somewhat - thanks in part to the fact that NFC and contactless technology is now included in many everyday services. However, technology never stands still and this year we have cast our net wider to include breakthrough applications, platforms and foundation technologies (including bitcoin and the blockchain) that will shape the face of FinTech for years to come. 

So, without further ado, here are the 2016 CMA categories and the finalists;

Payment Innovation
Awarded for innovative schemes and applications, as well as technology. This category looks at disruptive approaches and the smart use of technology in the contactless and mobile payment space.

• Bank Pekao – Multi–currency debit card (Poland)
• Smartlink – Contactless Companion Platform (Switzerland)
• Beijing Mobile Payments Solutions – Mobile Payment Module (China)
• PayKey – Social network payment enablement (Israel)

Retail & Loyalty
The retail industry is the front line for all consumer oriented technology innovation. Rewarding customers for brand loyalty is core to the retail industry and there are many innovative contactless and mobile implementations out there. The judges are looking for forward thinking, integrated solutions that take retail and/or loyalty to the next level.

• Vix Technology – Vix SmartSite® Stadium (Australia)
• Red Ant/Halfords – Smartwatch-enabled click-and-collect service (UK)
• Advanced Card Systems Ltd. – ePLUS (Hong Kong)
• Ingenico Group/schuh – iSMPi5 (UK)

Transport & Ticketing
Awarded for the best use of contactless / NFC technology within the transportation and ticketing environment. Be it public transport or tickets for events, this award is aimed at those companies who have embraced the new contactless / NFC technology to deliver their specific products to a mass audience.

• Kentkart – Open Loop NFC Payment (Turkey)
• Masabi – JustRide (UK)
• Oberthur Technologies/Smartlink – MyCityGo mobile application (France/Switzerland)
• Penrillian – Voyager (UK)

Contactless & Mobile City Initiative
Awarded for the most ambitious and widespread initiative to implement mobile or contactless technology. Applications can include mobile payment, public transportation, hospitality and tourist schemes.

• Tedipay – MultiPass (UK)
• Československá obchodní banka – ČSOB ticketing solution (Czech Republic)
• Cork City Centre Forum – Cork Cashes Out initiative (Ireland)
• Tech Mahindra – MoboMoney (India)

Payment Security
There is no payment without security. In this category, we are looking for the most convincing examples of smart security mechanisms used to secure transactions – from the use of cryptocurrencies to biometrics.

• 2C2P – One-Time-Card (Singapore)
• Spire Payments – inSPire mPOS API (UK)
• HYPR Corp.– HYPR Biometric Tokenization (USA)
• Keypacso – Keypasco PKI sign (Sweden)

Next Generation Ecosystem
In this category we are looking at block chain ecosystems and use cases such as cryptocurrency platforms, supply chain or identity management. Cutting out ineffective banking intermediaries, these technologies could save billions for consumers and the financial services industry.

• Epiphyte – Chain Reactor (USA)
• Ledger – Ledger Blue (France)
• Plutus.it – Contactless payments powered by the Blockchain (UK)
• Yoti Ltd. – Yoti: Digital Identity System (UK)

ID & Authentication
Secure Authentication is key when it comes to securing people’s identity. Contactless and mobile technology adds the convenience to ID applications, facilitating the use of government and/or private sector issued schemes. Awarded to the most prolific secure ID system out there.

• Bank Pekao – Electronic Student Identity Card (Poland)
• Tatra Banka – NFC overview (Slovakia)
• Orange – Mobile Connect (France)
• Oberthur Technologies/Hatton Nations Bank – Sathkara pensioner card (Sri Lanka)

Mobile Wallet
Awarded for the smartest, most consumer-friendly and easy-to-use mobile wallet implementation. Judges will be looking at security, privacy and stability as well as convenience.

• fastacash – fastacash social platform for payments (Singapore)
• Cashcloud – cashcloud mobile wallet (Luxembourg)
• Points – Points Loyalty Wallet (Canada)
• VUB Banka – VUB Wave2Pay (Slovakia)

Started in 2013 and back by popular demand, the Contactless Intelligence ‘Industry Choice Award’ will be opened on April 6th 2016 and run for ten days. The nominees of this award are the finalists in the eight categories outlined in this year’s CMAs. Voted for by the industry at www.contactlessintelligence.com, this award allows the mobile, NFC and contactless industry to vote on who they think should get recognition. The winner will be announced on the 26th April, during the Contactless Intelligence Conference Awards Gala.

Visa Europe will also present the winners of two further awards on 26th April: The ‘Visa Contactless Award for Business Leader of the Year’ and the ‘Visa Award for Contribution to Contactless’.

So if you are a finalist - best of luck and if you didn’t make it - so sorry, but better luck next year.

Until next week.

Steve Atkins
Contactless Intelligence

NFC tech gets a shot in the arm at CeBIT

Last week saw two major international exhibitions get underway in Europe - one in Germany and the other in Switzerland. Namely, CeBIT and Baselworld. At first glance, they look unrelated - one being technology oriented and the other catering to the more horological-minded individuals (that’s watches for the rest of us). Both had something in common though. In both exhibitions contactless or mobile payments were making themselves known.

At Baselworld, the fusing of payment technology with a whole slew of new watches was in evidence. There was news that watch maker Swatch will be focusing its smartwatch activities on its plastic Swatch brand before bringing the technology for its pricier models. “Making progress in the smartwatch market is crucial for Swatch, which is seen as the most vulnerable of the Swiss watchmakers to inroads by the Apple Watch and similar watches produced by Samsung Electronics and others,” said a report in the The Wall Street Journal.

Mondaine and Oberthur technologies were also talking about their work in bringing payments to the Mondaine Helvetica No1 Smart watch (as we reported on last month). Mastercard and WISeKey followed up on their partnership to enable contactless payments on select luxury brand watches and wearables (announced a few weeks ago at MWC 2016) with the news that contactless payment capabilities will be embedded within the first-ever “intelligent mechanical luxury watch” – the Bulgari Diagono Magn@sium. 

Bulgari (BVLGARI ?) were very excited about it all -  Jean-Christophe Babin, CEO of the BVLGARI Group said, “The cooperation between BVLGARI, MasterCard and WISeKey on the Diagono Magn@sium intelligent watch perfectly embodies Bulgari’s vision. We believe that technology and craftsmanship can be artfully combined to deliver a valuable and unique benefit to our clients without compromising the integrity of a timeless mechanical luxury watch. With the new Bulgari Magn@sium, our clients will have the luxury to forget their wallet and pay securely with only their Bulgari watch. This is extraordinary and part of the luxury experience.”

Meanwhile at CeBIT, Vodafone Germany demonstrated the first NFC mobile payment transaction made with a Girocard — the country most used debit card — stored in a Vodafone Wallet. “The transaction was made using a smartphone and a POS terminal with NFC, initiated and successfully authorised by the Girocard system,” the vodafone said in a prepared statement. “In a next step, the partners will explore concrete possibilities of joint implementation in the market.” Who knows - this may be the creaking rollout of mobile payments in Germany at last.

However, much more exciting was a visit to the Digiwell booth where Contactless Intelligence was treated to some demonstrations of NFC implants into willing conference visitors. I kid you not. Acting as a distributor, the company sells two types of implant: the newer xNT, which operates at 13.56MHz, and the 125kHz xEM, compatible with older RFID access control systems. It normally costs €69 including the special syringe to insert it. It's possible to do it yourself, but Digiwell recommends you have it done by someone qualified - like tattooists or veterinarians (!).

You could get chipped for free at CeBIT if you were willing to submit to the procedure on stage during what Dr. Patrick Kramer Digiwell’s CEO, refers to as "happy hour." They started at 10 a.m. and 4 p.m. every day till the show closed last Friday. The show gets about 200,000 visitors last year, but only 10 or 15 of those are likely to submit to the chipping process, Kramer admitted.

“When we were first invited to CeBIT, a lot of people said that Germany would not be interested in implantable chips but I stuffed my suitcase full of chips and we are now down to the last five, so its been a pretty amazing response and I think people really understand what it is we are trying to do. We’ve been approached by the ‘techs’ who really understand the technology all the way to people who don’t really understand the technology but are interested in some of the applications, such as access control. Right now we are actively selling the ‘x’ series and  have beta out on our ‘FlexNT’ series and our ‘crypto’ series that we hope to fully release very, very, soon, “ commented Dangerous Things Founder, Amal Graafstra, a supplier of biohacking chips to Digiwell.

For the record, one of the Contactless Intelligence team was up for an implant right there and then, but we unfortunately ran out of time… and I really don’t want a wife who thinks she’s a Jedi Knight.

Finally, there was a lot of reporting in Ireland last week on the Cashless Cork initiative (Cork Cashes Out), in which recently released figures show that the number of contactless payments in the area increased by a staggering 522% in the last three months compared to the same period last year. While the amount of contactless payments across the country did also rise, it rose at a considerably less rapid pace (an increase of 364%), putting Cork well ahead of the curve when it comes to paying without cash. Cork Cashes Out was led by the Cork City Centre Forum, a group of stakeholders including Cork Chamber of Commerce, Cork Business Association, Cork City Council, An Garda Síochána as well as a host of key local business people.

The good news is that we have representatives from the Cork Cashes Out initiative speaking at the Contactless Intelligence conference on the 26th April, So, if you want to know more about this successful rollout, come along and speak to the people in charge of the whole thing. Registration can be found here.

Next weeks News Review will be postponed due to Easter Monday but we will be back the following week on the 4th April. 

Happy Easter!

Steve Atkins
Contactless Intelligence

Is Apple Pay apathy causing a payment strategy rethink?

Last week saw news that various financial institutions were gearing up for the ‘imminent’ arrival of  Android Pay in the UK as a beachhead for further European expansion. The mobile payment solution will also be joining the likes of Apple and Samsung, not to mention solutions from the likes of Barclaycard and even the releases of various superstores’ attempts to carve out a mobile checkout niche for themselves in one way or another (see the release of Tesco’s PayQwiq).

However, despite all of the hoopla and hype that has gone into these mobile payment platform releases, are people actually using them? And perhaps, more importantly, are these platforms expanding their reach within the payment environment to make up for lacklustre results? Let’s be honest, in the first nine months since Apple Pay’s launch in the UK, there has been precisely zero information given out by Apple on its success (or lack thereof). 

The only indication we have about Apple Pay’s popularity in the UK comes from Transport for London (TfL), which in January 2016 said it had recorded 3.2m journeys using “mobile devices” in the six months since Apple Pay launched. Assuming these are all Apple Pay (a safe assumption given iPhone is the only mobile device with the ability to make contactless payments), that indicates just 0.4% of the daily pay-as-you-go journeys on TfL used Apple Pay, or just 35,000 of the 13m trips made every day.

So is it fair to assume that Apple is looking to cast its net wider in looking for both, an increase of users for Apple Pay and opportunities for Apple Pay to be put to use?

Case in point - Apple’s announcement in the last few weeks that they are preparing to bring one-touch online shopping to the mobile Web later this year, enabling consumers with Safari browsers running on the consumer electronic group's phones and tablets to use Apple Pay and TouchID to make a purchase. Apple has already introduced the one-touch feature to in-app purchases for iOS mobile apps, but the integration with Safari would extend the experience to conventional online shopping sites. 

Apple will be competing directly with PayPal, whose One Touch payment system has experienced rapid adoption since it was first introduced ten months ago. The company says 18 million consumers have now opted-in globally, and that more than 50 percent of the Internet Retailer 500 in the US and more than a million merchants around the world have enabled the service. PayPal One Touch may be the most obvious success story, but exploiting the one-click shopping experience is also a major target for the card schemes and other Internet giants like Google and Amazon.

However, perhaps the problem is that iPhones are still relatively expensive, meaning that, unlike Android-based phones, the user level for Apple Pay could still be fairly small. That could, of course, change with the release of the iPhone SE and a starting price of £359, meaning that the SE is the cheapest iPhone in Apple’s lineup to come with Apple Pay, that was previously reserved for Apple’s iPhone 6 or 6s which start at £459.

Apple has also been more visible with their in-store marketing for Apple Pay. With stores such as Pret a Manger, McDonald’s and Marks & Spencer apparently embracing the payment solution by allowing promotions reminding iPhone users to try paying with Apple Pay.

To return to the headline, perhaps it’s not really apathy that is causing the Apple strategy expansion but a more realistic view of the number of iPhones versus Android-based phones out there. To some extent being the smaller, more successful, niche offering out there never bothered Apple before. However, to succeed in the payment market one of the key requirements is that of volume and customer access. Perhaps this is why we are now seeing Apple re-align their Apple Pay strategy into pastures new as they face up to the fact that sometimes to combat customer apathy you have to increase volume penetration. A hard lesson for the like of Apple, no doubt.

On another topic -  this week sees the start of voting for the Industry Choice Awards. It all kicks off on the 6th April so please be ready to whip your company and your customers into a frenzy and vote for you. After all, this is another area where volume counts because every vote does. Remember. Every. Vote. Counts. Understand?

Good Luck!

Steve Atkins
Contactless Intelligence

Is the humble British pub causing a contactless payment boom?

When we first started reporting on contactless payments about, oh, a hundred years ago (give or take a decade. Well, it seems like it anyway…) we were constantly referring to the act of purchasing coffee as the springboard to mass contactless payment adoption. We were only part right. Purchasing beverages was the springboard to mass adoption but we should have known that for the UK it wouldn’t end up revolving around coffee. Beer, yes - Coffee - not so much.

You see, last week saw the release of the latest Visa Europe figures on contactless and guess what? The figures show that the UK’s decision to increase the contactless spending limit from £20 to £30 six months ago has proved popular, particularly with those customers in the pub. Contactless transactions over £20 saw an average monthly growth rate of 19.1% between October 2015 and March 2016, double the growth rate of tap and pay under £20.

In total, contactless usage between £20 and £30 now accounts for more than 10% of all face-to-face card transactions within that spending band. Bars and pubs have seen a surge in contactless transactions in the £20 to £30 band. Average weekly growth was 30% between October 2015 and March 2016. This compares to a growth of only three per cent for contactless purchases under £20, suggesting larger rounds or more expensive bottles of wine are now being bought via tap and go.

In supermarkets, where the average basket is £25, the data shows a 100% increase in contactless transactions compared to the six months before the £30 limit was introduced. Restaurants have enjoyed a similar boost as a meal for two has come more into range when paying this way – spend there has risen 155%.

Similarly, consumers have turned to contactless when filling up their cars at service stations. The average contactless transaction at the pump has increased by £2.22 since the £30 limit began, rising from £8.47 to £10.69. Kevin Jenkins, MD, UK and Ireland, Visa Europe, said “Overall, we have seen 36 million contactless transactions over £20 in the first six months; which amounts to nearly £900m of transactions made easily and safely, in less time, freeing consumers from the need to carry cash.”

Of course, it could be argued that those enjoying time in the pub and buying rounds of drinks could fall into a particular age range that have wholeheartedly accepted contactless payments. Others though - not so much. Future Thinking, a business intelligence research consultancy, and Toluna recently carried out an online survey and analysed the results of 2,315 respondents across the UK.

Findings include that 31% never pay by contactless as they don’t trust it; 14% don’t know if their cards are contactless and 27% think the current limit of £30 is the maximum amount payments should be. Age also plays a key role in usage - 22% of under 35s never pay by contactless as they don’t trust it compared to 43% of over 55’s.

Noreen Kinsey, Senior Research Director at Future Thinking, commented, “It is clear from recent figures that there has been a huge increase in the number of purchases using contactless technology. This reflects consumer desires for quicker payment methods and increased convenience. As with all new technologies there is still some reluctance towards this technology, particularly amongst older age groups, who may be further isolated as we move towards mobile pay and other tech-enabled purchase solutions.”

From what we are learning, more time spent down the pub could bring them on board a lot faster than any advertising and educational campaign could ever do.

On another topic -  this week sees the end of voting for the Industry Choice Awards. It all ends on the 15th April so please continue to whip your company and your customers into a frenzy and vote for you before midnight CET time on Friday. Remember, this is an area where every vote counts. Remember. Every. Vote. Counts. Understand? And if you think you’ve done enough, let me tell you - you haven’t. Everyone has to keep going because this year the results so far are very close. I expect no more than maybe 5 to 10 votes between the winner and the losers. So keep voting!

Good Luck!

Steve Atkins
Contactless Intelligence

Payment security by behaviour?

I saw two interesting stories last week, both related to payment authentication and both having deep roots in biometrics and behavioural science. It seems that the days of the PIN could soon be over.

For a start, Nationwide Building Society has developed a prototype within a mobile banking app, which could provide an extra layer of "behavioural biometrics" security by recognising unique patterns from people's natural interactions with their smartphone or tablet. The prototype is being developed by Nationwide's "innovation team" in partnership with technology companies BehavioSec and Unisys. It gives people a certain percentage score.

People would have to achieve a certain percentage likeness to the way they personally use their phone or tablet to get the go-ahead within the app. James Smith, head of innovation at Nationwide Building Society, said: "Behavioural biometrics monitor the patterns and habits that are unique to each mobile banking user - everyone holds and interacts with their mobile device in a different way. The prototype provides an exciting insight into what the future may hold, as we investigate new ways to enhance security."

New research from Nationwide has also found that the average UK adult now has to remember six different passwords - and one in four people has more than ten passwords to remember. While the prototype is still in the early stages, Nationwide said that eventually it could be used as additional security for mobile banking alongside more "traditional" methods such as PINs and passwords, as well as using other technology such as fingerprint scanning and voice recognition. Currently, it is being used as a way of authenticating payments made within an app as an extra layer of security, but it could be used in future as a way of logging in alongside other security methods.

Nationwide's research among 2,000 people found 70% of those surveyed want more security but do not want to add to the number of passwords or PINs to remember. When asked what the future could hold for mobile phone security, nearly 60% think retina scanners would be built into devices within 10 years, with nearly 30% suggesting that a whole face scanner will be the way to unlock the mobile phones of the future. 

However, in Japan there are big payment plans for tourists. The Japanese government has announced a new pilot program that will allow tourists visiting the country to pay for their transactions with their fingerprints. The program, which will initially be rolled out in 300 locations, will let tourists register their fingerprints, credit and debit card information and personal details on kiosks set up at the airport.

Once past that step, tourists will be able to securely shop around the registered stores, which will be located in some of the most popular tourist pockets of the country, by just scanning two fingerprints. It will also eliminate the need for tourists to present their passports when checking into hotels. A similar system was reportedly put in place last year by the Huis Ten Bosch theme park in Sasebo, Nagasaki Prefecture, that allowed tourists to make payments using fingerprints at 30 stores and restaurants.

The Japanese government plans on rolling out the program across the country by the spring of 2017, as part of its goal to attract 40 million visitors annually by 2020. Personally, I’m not sure what to think about this - seems a little too ‘big brother’ - but of course I could be wrong and at the end of the day so few of us speak or read Japanese. Still, the idea of ‘if in doubt - touch it’ seems like a recipe for all kind of trouble. 

On another topic -  the voting for the Industry Choice Award has now ended and the results have been calculated -  a close thing this year but we do have a winner. The announcement will be made on the evening of the 26th April at the Contactless and Mobile Awards. We still have a couple of spaces available so follow this link if you require tickets.

If you haven’t registered for this year’s Contactless Intelligence Conference & Forums, make sure you do so this week. The line-up (to use trendy festival speak) is impressive with keynotes from Visa’s Sandra Alzetta and Barclaycard’s Tami Hargreaves. This year’s theme is “Managing the Convergence of Intelligent Payment Solutions” - and we have an agenda stuffed with inspiring implementation insights and and forward looking talks on the future of payment. Day Two is split into two Forums: both are extremely worth attending. The Mobile ID Forum looks into what is holding back government-sponsored Mobile ID schemes (and why the private sector is doing so much better in this field), whereas the Open Standards Forum returns to the debate of the, well you guessed it, relevance of truly Open Standards. We are very pleased to have NokNok Labs with us this year to share some insights behind the tremendous success over the last months of the FIDO standard. Make sure you have booked your place for one or both days - 26th -27th April. 

Finally, you may have noticed that the format of the newsfeed has changed somewhat. This has been is response to feedback we have received recently based on the amount of links and other articles we cover in the last part of the newsfeed. We have been asked if it would be possible to cut down on quantity and point our readers towards about a dozen articles we consider to be ‘must reads’ over the previous week. For this reason we have created a ‘Contactless Intelligence Recommended Reading’ section instead of the usual sections. We’re going to try this out for a few weeks and see what kind of feedback we get. 

So please let us know what you think of this idea/approach. As I know you will.
Until next week,

Steve Atkins
Contactless Intelligence

Roll up, roll up, the CI Conference is in town this week!

The 10th (TENTH!) Contactless Intelligence Conference is taking place in London this week, co-hosting the Contactless & Mobile Awards, the Open Standards Forum and the Mobile ID Forum. Two days and one evening of full-on information sharing, networking and hands-on interaction with some of the brightest individuals in the industry today.

I kid you not. This year we are delighted to have keynotes from Sandra Alzetta, Executive Director Product Enablement, Visa Europe and Tami Hargreaves, Director of Digital Consumer Payments, Barclaycard. We are following that with presentations from UK charity Cancer Research UK and from drinks company Lucozade Ribena Suntory as well as hearing the story behind Cork’s move to go ‘cashless’. We have a panel session with the CEO of creditcall, the National Association of British Market Authorities and the founder of the latest taxi-app - cab:app.

Ticketing remains incredibly relevant and right up there on the agenda with input from the UK Cards Association, Transport for the North, La Société des Transports Intercommunaux de Bruxelles and Masabi, with the Association of Train Operating Companies (UK) and Infineon joining for the panel session.

After lunch we are looking at the future of payment  - blockchain, bitcoin wallet  and so forth - with TrialPay, Epiphyte and Plutus. Even the company names are futuristic. This is followed by input from more old-school heavyweights, such as the GSMA, Visa Europe and Samsung.

Hands-on working groups this year are covering charity, services within the mobility sector, small business usage of mobile payments, alternative payment methods and the future of wearables, facilitated by the UK Cards Association, Miura systems, Smart Card Networking Forum, P.A.ID, and ABI Research.

This will be followed in the evening with the annual Contactless and Mobile Awards 2016, sponsored by Visa Europe and Visa Europe Collabs. Trust me, places are now at a premium and a whole lot of interest in the categories this year especially in, Next Generation Ecosystem and Mobile Wallet. We had the greatest number of votes cast for the Industry Choice Award this year than we have ever had and I can reveal that the difference between first place and second place was less than ten votes - which gives you an idea of how tight everything was!

The 2nd day's in-depth forums concern Open Standards and Mobile ID. 

The Open Standards Forum will have input from Russian transport company Udobnji Mashrud  and the OSPT Alliance as well as input from La Société des Transports Intercommunaux de Bruxelles / Calypso Network Association and Creditcall and ITSO. After that we are looking at the topic of Authentication with Nok Nok Labs and the GSMA. The final session will be covering the topic of wearables for payments and will include speakers from Edgar Dunn & Co, Smartlink, Carta Worldwide, Visa Europe and Samsung.

Over in the Mobile ID session we have speakers from the Open Identity Exchange UK, the Institut für Informatik / Fachbereich Mathematik und Informatik, Freie Universität Berlin, Identité Numérique, GIE SESAM-Vitale, Yoti, HID Global, Orange and Nok Nok Labs, all covering aspect for mobile identification and verification.

To be honest, it has taken nearly a year to bring these speakers together in one place and to cover the subjects that really matter to todays implementers and we are really, really happy with the level of speakers and this year's agenda.

Of course, we want to thank all our speakers in advance and look forward to seeing the attendees tomorrow. Please say ‘hello’ - however stressed we appear!

There is no newsfeed next week (especially as it will be a bank holiday in the UK) - we are all taking a well earned break but will be back on Monday 9th May, so see you then.

Steve Atkins
Contactless Intelligence

A big ‘thank you’ from us all at CI…

First off, I would like to thank all of our readers who attended the Contactless Intelligence Conference, the Contactless and Mobile Awards and the Open Standards Forum the other week. Some of you may be reading this newsfeed for the first time because of attending and I really hope that I can keep your attention through these editorials for the foreseeable future. If not, hit the unsubscribe button below (we’ll never know). However, I hope you don’t do that and you find this weekly news review a decent start to your week. 

To all our attendees, thank you from myself and the Contactless Intelligence team. It takes us easily about eight to nine months to put something like this together and then in a less than 48 hours it’s all over and we start again. However, I hope that the topics and subject matter covered during these two days have a lasting effect and were both informative and entertaining. To our editorial council, moderators and speakers - thank you so much - you make the event what it is and we are, as always, very honoured to have you take time out from your busy schedules to spent time with us and speak on your topic. Words cannot express our gratitude - thank you one and all.

Now back to a topic that appears to be growing at an exponential rate - that of contactless donations. Last week saw London-based marketing agency, Earnest, team up with lunch venues in and around the capital to help some of the world’s poorest children attend school and eat a proper meal while they’re there. Earnest Labs (the innovation arm of Earnest) has created a bespoke contactless payment terminal – Lunchbox – to enable those buying lunch in the city to make a small donation to Mary’s Meals, quickly and easily, using their contactless card. 

Current statistics show that 80% of people in the UK already donate to charity regularly, and Earnest’s Lunchbox initiative aims to facilitate spontaneous generosity in a no-pressure environment. By placing the Lunchbox terminal at the point of sale, vendors make it easy for customers to donate. In this case, tapping the Lunchbox terminal will give a thirty pence donation to Mary’s Meals, providing five life-changing meals to hungry children in their place of education.

The box itself is completely stand-alone, so it’s not connected to a shop till or payment systems and provided by Payter – a technology company with experience specifically in charity payments. The payment side is made possible by Elavon – an acquiring bank in the vanguard of charity contactless donations. The technology launched on Tuesday May 3 through partner vendors Reynolds, ICCO, Mortimers Cafe in London and Lynwood Cafe, Oxfordshire.

The thing is, this is not a one-off story or theme. The Barbican gallery in London is also piloting contactless giving by installing their own contactless donation points. Visitors to the Barbican are now able to donate with contactless card or phone and the gallery will fix a donation point at the entrance to its free Curve gallery, which is currently showcasing Imran Qureshi's 'Where the shadows are so deep'. Reports say that initially, donations will be set at £2 (art is more expensive than kids meals) but the level can vary depending on the audience and project on show. If the trial is successful, it is reported that the Barbican will add terminals to other areas with high visitor footfall. On the back of this pilot I can imagine other galleries, museums and the like, to follow in the Barbicans footsteps.

Contactless Intelligence is planning a Roundtable in London in the next few months to cover exactly this topic and to bring in interested parties who will be looking at just such a form of contactless collecting. And let's be honest - there is probably a whole lot of interested parties out there. As we reported above, 80% of people in the UK already donate to charity regularly, so there is obviously going to be a demand for such a payment structure. If you are interested in getting involved in the event - please let us know as soon as possible.

Finally, getting back to the last conference, Karen has written to all attendees informing them that the presentations and working group outputs are now available. You should have received and email with the URL and Password to allow you access. If for some reason you attended and have not received the email, please let me know and we will rectify the situation immediately.

If you have any feedback or thoughts and comments that you would like to share with us concerning the events, or the upcoming one, please don’t hesitate to get in contact and let us know.

Until next week.

Steve Atkins
Contactless Intelligence

Maybe the children ARE the future of payment after all...

Mention the word ‘prepaid’ to anyone at the big payment technology companies and you can, more often than not, elicit a kind of inner groan. It’s similar to walking into a phone shop and claiming that you are not looking for a 2 year contract but are more interest in pay-as-you-go. The smile becomes fixed on the shop assistant’s face and you are led to the back of the shop to a counter manned by someone obviously wishing that they worked elsewhere. Or you could just get a 'Lidl Connect card'... *shudder*

Don’t get me wrong, I have nothing against ‘prepaid’ and neither does anyone else - it’s just that it’s, well, not really sexy in our industry. And yet it should be - it has a high take-up rate. In fact, reports say that the prepaid card market is one of the fastest growing non-cash payments markets with growth expected at an annual rate of 22% through 2017 and prepaid opportunities around the world are expected to reach US$822 billion by 2017. (Source). 

You see, beyond those users who like to keep a tight hold on their spending, there is another section of the market that is a prime prepaid target - the youth market. Actually, perhaps not the adolescents themselves - more their parents. A similar report a few years back revealed that “… parents are attracted to the concept of prepaid youth cards by the possibility to keep control over their children’s spending and by the fact that the youth card is safe and secure. They also like that the card can be blocked in case of loss or theft and are reassured that a secured pin code is required’. (Source)

Now, these reports were originally aimed at the prepaid card format only but that could be changing in the near future. Various companies out there seem to think so. For instance, last week, Stockholm’s mobile wallet company - Seamless - was granted authorization by Sweden’s financial supervisory authority, Finansinspektionen, to issue electronic money. This means that SEQR users can send and receive money, worldwide, in real time. Interestingly, under the terms of the authorization, SEQR can also be used by minors. 

Peter Fredell, CEO of Seamless said, “Authorization to issue electronic money is strategically important since it further broadens SEQR’s sphere of application and user audiences. This authorization allows SEQR users to send each other money in real time, independent of banks and regardless of where they are in the world. One example of how it can be used is that parents can transfer funds to their children’s phones, money that can then be used to make instant purchases in stores all over the world. The option of depositing money into a SEQR account in real time coupled with the rapid, global expansion of NFC technology means that SEQR will become an alternative means of payment wherever the user is.”

See what I’m getting at here? Companies are aware that the pre-teen market is already a huge potential for prepaid but coupled with fund transfer to minors’ mobile  phones (or wearables) could mean a generation being exposed to new forms of payment right from the get go. 

Samsung Semiconductor also thinks this could work. They are currently working with Switzerland’s SmartLink to develop the Contactless Companion Platform. This innovative platform is a direct result of the previously introduced, CIPURSE-based, OCAP (Open Contactless Application Platform) but with a dedicated focus on wearables and standards. As explained at the Contactless Intelligence Conference a few weeks ago, this system would enable the transfer of a token with limited validity from your phone to say, a bracelet (wearable). 

Using this method you could, for instance, transfer money to the wearable of your kids for usage at school or outdoor activities. Here you could add more token properties, such as validity, amount, and the shopping location. Based on the backend system intelligence, the money loaded onto the wearable can then only be spent at, for example, the school canteen or designated tennis club. Samsung was keen to point out that it wasn’t just about payment. 

With the same process, transport or event tickets, vouchers, coupons, door keys, and many more could easily be transferred from an NFC phone to a wearable, a key fob, or any other form factor of choice equipped with a minuscule chip and antenna. Apart from NFC phones, other load and top up options can of course also be used. Merchants could use the POS and activate services during the payment process, for example. An IT-infrastructure equipped with a contactless reader could distribute services; this could be anything from your laptop up to your local ATM.

Visa Inc. have also been experimenting with this idea, although from their point of view this is more about control and monitoring. Their solution is called the Visa Consumer Transaction Controls, which is available to Visa card-issuing financial institutions, enables account holders to set simple, convenient, and effective spending controls, receive transaction alerts, or even temporarily suspend their accounts using a simple on/off feature.

“By putting the account holder in charge, Visa card issuers can provide their consumers peace of mind through innovative spending controls, and more effective fraud prevention,” said Mark Nelsen, Senior Vice President of Risk Products and Business Intelligence, Visa Inc. “With new digital commerce experiences emerging daily, it’s important that we provide easy and convenient ways for consumers to direct and monitor how their accounts are used and help better secure the payment system.”

Interestingly, the video that explains the service once again uses a minor to explain how parents can define individual controls or alerts for primary cards as well as companion cards that are given to family members providing real-time control and visibility into spending. For example, a parent can share a Visa account with a child by providing a companion card with spending limits and transaction alerts that are sent to the parent’s mobile device.

Either way, the idea of exerting a certain amount of influence over your childrens’ spending be it via amount, timeframe or location is inherently attractive to parents, while at the same time, children are being exposed to new payment methods as standard - a win-win boom for the industry, surely.

Me, I just look forward to the days when I can finally get my small change back from the kids after I let them have money to buy something!

Until next week.

Steve Atkins
Contactless Intelligence

Did Walmart stab MCX in the back?

Last week the Merchant Customer Exchange (MCX), a retailer-backed mobile wallet venture of over three years in the works, announced that it had postponed its plans for a national rollout of its mobile wallet, called CurrentC. After nearly a year of testing the CurrentC mobile wallet in Columbus, Ohio, and generally reporting that merchant and customer feedback was positive, Brian Mooney, CEO of MCX, issued a statement that the effort behind the mobile wallet is postponed – for now. 

The news came the same week that Walmart, one of MCX's most prominent backers, began its rollout of its own payment solution called Walmart Pay (again, that name!). The mega store has begun the roll-out of  its QR code-based mobile payment service in Arkansas and Texas and the payment solution is now available in all 480 Walmart stores across Texas and at its more than 110 locations in Arkansas. 

“With this launch, Walmart becomes the only retailer to offer its own payment solution that works with any iOS or Android device, at any checkout lane, and with any major credit, debit, prepaid or Walmart gift card — all through the Walmart mobile app,” Walmart said in a prepared statement. “Checkout using Walmart Pay happens in three easy steps. Visit any register, open the Walmart app and choose Walmart Pay. Activate the camera. At any time during checkout, simply scan the code displayed at the register. Walmart Pay is now connected. An associate scans and bags the items and it’s done. An eReceipt will be sent to the app and can be viewed at any time.”

MCX had announced earlier this year that it was working with JPMorgan Chase to allow Chase Pay (I give up…), which has not officially rolled out nationally, to be part of the CurrentC wallet. But for years, MCX executives had presented CurrentC as a product that would be part of retailer mobile wallets as a consumer option, or carry financial partners that would bring their payment mechanisms within the scope of CurrentC. 

“Utilizing unique feedback from the marketplace and our Columbus pilot, MCX has made a decision to concentrate more heavily in the immediate term on other aspects of our business including working with financial institutions, like our partnership with Chase, to enable and scale mobile payment solutions," Brian Mooney, CEO of MCX said. "As part of this transition, MCX will postpone a nationwide rollout of its CurrentC application. As MCX has said many times, the mobile payments space is just beginning to take shape – it is early in a long game. MCX’s owner-members remain committed to our future."

The news of this postponement also meant that MCX will reduce staff, letting approximately 30 employees go. Essentially, members of MCX have now turned their attention and resources to enabling payment in their own respective mobile shopping apps. The MCX members that are competitors to Walmart were pushed to make this move upon the launch of Walmart Pay, which has just started its national rollout," said one industry analyst.

Considering that Walmart were the initial drivers behind MCX, they appear to see no irony in announcing the roll out of their individual solution the same week as MCX announces the ‘postponement’ of its solution. “More than 20 million customers actively use the Walmart app each month,” Walmart wrote in an up-beat news release. “The Walmart app enhances the shopping experience in Walmart stores with features including checking in to pick up an online order at a Walmart store, refilling pharmacy prescriptions and finding an item’s store location.”

“Walmart Pay is a powerful addition to our app, a tool that we’re using to transform the shopping experience by seamlessly connecting our online assets and our stores for customers,” says Daniel Eckert, senior VP of services at Walmart. “The service opens the door to new and better ways we can serve the 140m customers who shop in our stores each week.”

It’s hard to believe that MCX will be feeling as buoyant with their new strategic direction. 

In other news, we would like to announce that we are are continuing our Contactless Britannia Roundtable series. For the next event, Contactless Intelligence is working with The UK Cards Association to bring interested companies together to the discuss how the third sector can benefit from contactless technology. 

On July 6th, this roundtable will take place at the Urban Innovation Centre, One Sekforde St., London. 

“How can contactless payments boost charity fundraising?” is the question that will be discussed in detail by UK-based charities, payment and retail experts as well as technology providers. 

If you are interested in attending this event, please contact Veronica.Atkins@krowne.tv. Official information will be online soon, so please save the date if this topic is of interest to you. 

Until next week.

Steve Atkins
Contactless Intelligence

Charity starts the 2016 Contactless Britannia Roundtable Events

I understand that this is going out on a Spring Bank Holiday Monday in the UK, so that means for our UK readers, you are either reading this on a mobile device while sitting in a deckchair on your lawn enjoying the sunshine or reading it on a laptop while glancing out at the grey, drizzly wet weather outside (welcome to the English Summer - all 10 days of it). Alternatively, you might simply be reading it at your desk on a Tuesday – either way, I hope you had a great Spring Bank Holiday.

Last week I promised some more details concerning our Contactless Britannia Roundtable on the 6th July in London, featuring as a topic; The Third Sector (or charities, to the uninitiated). Entitled ‘How can the Third Sector benefit from Contactless Technology?’, we are holding this roundtable in conjunction with the UK Cards Association. 

One special topic will be that of the organisation's work on the Contactless Charity Donation proposition. This market sector has the potential to be another example of contactless excellence in Great Britain as it leads on technological innovation for fundraising. The UK Cards Association will give an insight into the increasing importance that contactless is having in people’s lives and an overview of the Contactless Charity Donation framework providing a good indication of what has been worked on so far.

We have invited leading UK charities to share with the attendees what contactless donations mean to them and the outlook over the coming years. We are also looking for a “wish list” from the charities present on the day to give to the representatives of the payment industry and technology vendors. Those charities so far invited to speak from the Charity Perspective are; Cancer Research UK, DEC, Save the Children, Sue Ryder, Comic Relief, National Gallery and the Barbican. 

Another topic of interest is how smaller charities can be brought into the contactless movement. Leading technology vendors from the payment and unattended sector will present their visions for the coming years and what the tech industry is doing to make large-scale contactless charity donations a reality.

An important – and costly – part of the investment considerations remains the POS (Point Of Sale) infrastructure. During the day, we will be discussing different financing models to make this more affordable for charities and how corporate sponsors could be brought in to make a tangible difference through contactless technology. POS leasing or sharing models may present an answer to the cost of POS infrastructures. 

The obvious next step after contactless is to start giving donations using the mobile phone. Most of the POS infrastructures supports both cards and mobile, so the implementation could be achieved using clever, incentive-backed apps. During the day we will be discussing this approach. Also using the mobile phone as a contactless terminal for the collection of donations may be a cost-saving aspect worth investigating.

We have all the relevant information online now, at the Contactless Intelligence website and the event will take place at the Urban Innovation Centre, One Sekforde St., London. If you are interested in attending this event, please use the forms now posted on the site.

Sorry about turning this editorial into a bit of a pitch for the July roundtable – however, with tickets already selling fast it looks like it will be one not to miss. Normal service will resume next week. I promise.

Until next week.

Steve Atkins
Contactless Intelligence

The real ‘Issue’ behind contactless over cash

In 2015 cash was used for less than half of all payments by consumers in the UK and is expected to be overtaken by debit cards and contactless payments by 2021. Readers of our blogs, posts and editorials know this, as it is a topic we report on regularly. It’s good news for our industry. It is not good news, however, for those who rely upon the spare change in our pockets. Spare change that can make a real difference to their lives.

Some charities are being hit hard by the move to contactless payments. One in particular is the Big Issue. Street vendors of the the Big Issue say that Britain's move towards a cashless society is contributing to declining sales. It is, however, about to start trials of contactless payments to help the homeless sell more magazines again.

The Big Issue magazines, which are sold in the UK by homeless people, have suffered as a result of people walking up and down Britain's high streets without coins and notes in their pockets, as they now rely on cards and mobile phones for payments. In 2001, the magazine sold nearly 300,000 copies but between 2007 and 2011 its circulation declined from 167,000 to less than 125,000.

Earlier this year, a Big Issue seller in London who got fed up with people saying they didn't have any spare change became the first in the UK to start accepting contactless payments and Apple Pay. Simon Mott, a former London Underground driver, has been selling The Big Issue outside South Kensington tube station for the past five years and started noticing a decline in loose change about two years ago. He invested around £59 in a mPOS card reader from Swedish firm iZettle, which allowed him to take card payments using his smartphone and has been using it ever since.

Stephen Robertson, CEO Big Issue Foundation, said the charity is working with a number of mainstream banks and technology firms to install a cashless system which will be rolled out nationwide to let customers pay by tap-and-go technology. “It’s similar to an Oyster Card payment, you tap the badge, the money goes into the vendors bank account and you get a fantastic magazine in return. Bingo,” commented Robertson.

The move will also give homeless people the chance to have a mainstream bank account, a facility they usually struggle to obtain due to not having a home address. It will be interesting to see how this trial works and what the results are. I am also sure that there will be some lingering questions over the taking of payments using these contactless card readers beyond that of selling the Big Issue. Before we get to that level of cynicism though, we should embrace the positive aspects of the trial and the acceptance of contactless payments that are now being disseminated through all strata of society.

Good luck to them, I say. I look forward to seeing them on the street of London soon.

Until next week.

Steve Atkins
Contactless Intelligence

Biohacking with Meow Meow and a Kiss connection

We have run some serious articles in the past on the topic of biohacking and one member of the team almost (almost!) had the chip implanted but ran out of time at the last minute. The biohacks involved NFC chips that could be programmed for a number of actions but no matter how much we spoke on the topic it seemed we were a lone voice covering this subject.

With the arrival of the silly season - how things change. Last week the trade press was reporting on the Australian founder of Biofoundry, a community lab in Sydney, Australia (he’s also running in Australia’s elections as a Science Party candidate) who has had an NFC chip implanted in the back of his thumb so he can make contactless payments. We’ve seen similar stories before, but not from someone called - wait for it - Meow-Ludo Meow Meow. Read that name again - it’s his legal name (he changed it last year). Really.

Meow’s vision (I never thought I would write that!) is to have his biohack ultimately work with PayPass — MasterCard’s contactless payment system — as it would allow Meow to use his thumb to pay at most Australian retailers. However, to make that dream a reality, Meow will have to update his thumb chip to one with more memory. His current 868-byte chip isn’t enough. I bet MasterCard can’t wait for THAT phone call.

But Meow isn’t just thinking about payments. No, he has a vision set firmly in the future. For instance, what if your payment chip was connected to health sensors, for example. “If you hadn’t exercised enough in a day, it might stop you from eating [bad] foods,” said Meow. “If it had a sensor that could detect blood glucose or heart rate or it connected to a Fitbit, so that the Fitbit says, ‘Oh, you haven’t run today; we’re not going to let you buy a Mars bar. I’m very interested in challenging people’s conception of bodily sovereignty and their ideas around how you interact with technology.” 

There is no way that my thumb is going to dictate things like that to me. It sounds like a case of the tail wagging the dog (or cat in this case). Did the trade press jump on this for the technical feasibility of the innovation - which we already knew existed - or the fact that it sounded like it was being pushed by an Australian cat from the outback? I wonder…

I also read about a new connection solution last week called ‘Kiss’ from a company called Keyssa. This is like NFC connectivity on steroids. While NFC can't really be used for data transfer as it tops out at a fairly slow 424 Kbps, Kiss is quicker than USB 3.0 and can provide up to 6 Gbps of wireless data transfer when you place one connected device directly on top of another. At last week’s Computex, Keyssa showed a prototype phone docking cradle for a Samsung Galaxy Note, where a phone was placed on top of the cradle and immediately showed up as a drive letter on the computer it was connected to and it also began charging. The same pad can carry both Kiss signals and wireless charging power, using any wireless charging standard.

Keyssa has also demonstrated how quickly Kiss can transfer files from an external storage device. A demonstration involved placing an external SSD on the deck of a Keyssa-enabled laptop, the drive appeared in Windows Explorer and then copied a full-length HD movie in just 2 seconds. Unlike NFC though, devices using ‘Kiss’ have to be physically touching so there's little chance for hackers to intercept the data or interference to prevent a solid connection.  It also doesn't require special software to activate. 

While it seems unlikely that Kiss will overtake well-established connection standards such as USB, Thunderbolt and WiGig anytime soon, the contactless technology could lead to some really useful accessories in the near term. As with wireless charging, the biggest short-term impact will probably come in the form of accessories like docks and pads that you can attach to your existing devices. However, if those are successful, we may see Kiss built directly into future phones, tablets and laptops. 

I fully expected a new connection technology to encroach on NFC’s space someday but it could happen a lot sooner than anyone imagined - and the data volume… amazing!

Now that really IS new technology; I believe that the Kiss beat the cat.

Until next week.

Steve Atkins
Contactless Intelligence

Has Apple Pay taken the fight to PayPal?

Last week saw news emerge from Apple concerning their plans for iOS 10. What caught my eye though was the announcement that they were expanding their Apple Pay payment system from apps to websites. Originally, back in March this year, it was reported that Apple was considering bringing their payment system to mobile websites by this autumn and that it was considering making it work for desktop websites, too. Looks like both are happening this year.

The new feature sees Apple move beyond in-store and in-app payments to the web, where it will join the likes of PayPal in the quest to help online sellers reduce the still-high percentage of abandoned shopping carts. Mac users will be able to pay online in Safari using a “Pay with Apple Pay” button, and authenticate their purchase using Touch ID on their phone or watch. Previously, Apple Pay could only be used in select iOS apps, as well as at physical retail stores.

The news that Apple Pay is going online to websites could have a much bigger impact than either the Apple Pay wallet or use for iPhone app purchase at the App Store. Retailers had 20 percent more visits to their mobile websites than their mobile apps during last year’s holiday shopping season, according to comScore. And the majority of retail traffic still happens on desktop websites. For transaction validation, users shopping on a website on a Mac computer who want to use Apple Pay will get a notification on their iPhone to confirm the transaction. Pressing their finger to the phone’s fingerprint sensor will authenticate the transaction on the computer.

By bringing Apple Pay to the web, Apple is introducing their payment method to an entire new segment of shoppers – those that don’t shop in apps, or just prefer shopping on the web. Many people abandon a purchase on their phone when they have to type in all their payment and shipping details on a small screen — a roadblock for online retailers that Apple Pay can eliminate.

Many observers have drawn comparisons between the way PayPal operate and its target markets and user strategy and what Apple is saying they will do. However, the market may be far bigger than the both of them, allowing them to both operate in their respective fields. After all, it's important to note that Apple Pay users have to own a Mac computer and an iPhone if they want to use the payment service on desktop websites. They also have to be using Apple's Safari web browser. PayPal cuts across all browsers, service providers and hardware systems.

And, as usual, Google with Android Pay won’t be far behind. The company announced at its developer conference in May that it was working to bring its payment system, Android Pay, to websites as well.

Meanwhile, Apple Pay is also coming to new countries, arriving in France, Switzerland and Hong Kong within the next few weeks. No mention of how the web checkout will rollout in countries outside of the US though…

Until next week.

Steve Atkins
Contactless Intelligence

Is the London Fintech scene over?

I don’t know if you, dear reader, are in a state of shock over the Brexit vote held last week in the UK or are perhaps very happy with the result. I hold my hands up to the fact that I am a British ex-pat who lives and works abroad but has a keen focus on the state of the UK fintech market (as a catalyst for fintech across Europe and the world) and is a little worried/confused about what will happen now, both privately and with the business we have grown over the last decade.

I will put my private concerns as a UK citizen to one side, and look upon initial concerns surrounding the London fintech scene and what commentators are forecasting will happen in the near future. First, it is important to understand that the fintech market is far from over - especially for contactless technology. In fact, growth for this market can now only come from the rest of Europe as the UK has convincingly fulfilled it role as catalyst for this technological area. 

But what of other fintech-related areas that are currently residing in London? What is expected to become of them?

Well, according to many commentators including startup management and venture capitalist, the Brexit result will mean that London will fall from its position as the most favoured fintech hub on the planet. There are, I am told, three main reasons that support this view. First is that companies rely on rolling out products across Europe in order to grow and maintain momentum. Second, many technology companies rely on developers from all over the EU. Third, the fear and uncertainty surrounding the UK will stifle investment pouring into the capital's tech scene.

However, let’s not get too downhearted about this. Start-ups are small, agile and burn through funding rounds quickly. The cost of living in London is extremely high, so if you can no longer be sure about rolling out your products across Europe, or freely attracting the right applicants, why not move on? Somewhere in Europe perhaps?

There are around 500 fintech companies in the UK, averaging £25m revenue and a profit of £5m; paying 20% tax this equates to about £5bn over the next ten years. Players in the fintech arena predict the most likely winners would be cities like Amsterdam and Dublin which already boast a progressive regulatory environment, tax advantages and growing technology clusters.

Simon Black, CEO, of digital payment platform PPRO Group, said, "Dublin would probably benefit most within Europe: It has a big tech scene, taxes are particularly low with a 12% corporate rate and major fintech companies such as MasterCard, Apple, PayPal and First Data already have significant operations there providing critical mass.

Black said in an emailed statement that fintech firms "will see their status as financial institutions recognised across the EU and EEA under threat, all of these businesses will not wait for trade deals to be resolved. They will immediately begin forming plans to relocate at least some of their operations, and the majority of new jobs will be outside of the UK".

Not everyone sees the fall of UK/London-based fintech though. Tudor Aw, head of technology sector at KPMG UK said, "Great infrastructure and facilities; first class universities, a stable legal system; appropriate fiscal incentives; and an ecosystem of advisors that support the needs of tech companies. Technology is a sector that will only increase in importance and works without borders, I therefore continue to see the UK Tech sector as one that will not only withstand the immediate challenges of the referendum result, but one that will continue to grow and thrive."

Nice words but perhaps easy to dismiss as wishful thinking. The reality is much better summed up by financial services and technology law specialist Yvonne Dunn of law firm Pinsent Masons who commented, “The EU's rules on the free movement of workers across the trading bloc means fintech companies have been able to attract talent from a larger pool of people than is available within the UK alone. There is now a need for the UK government to quickly negotiate and agree a system that replicates the benefits of free movement of workers, before other financial centres in Europe look to exploit any lingering uncertainty about the environment in which UK-based fintechs will be operating in."

And there you have it; ‘The need for the UK government to quickly negotiate…”. With whom by who? As far as I can see right now the whole of Westminister appears to be imploding. The leave campaign were very adamant about the need in times of uncertainty for ‘British Spirit’. That now roughly translates to ‘keep calm and carry on’. Something that is very difficult to manage in the fast moving and highly excitable high technology industry.

But let’s not get ahead of ourselves - its only been a few days since the result and emotions are still running high. We’ll see where the UK stands come October (!). What I CAN say is that the Berlin fintech scene is rubbing their hand and making all all kind of ‘cooing’ noises at the moment. Could Berlin be the new London for fintech? 

Considering the EU Brexit crisis meeting that took place in Berlin this week – that really WOULD be ironic.

Until next week.

Steve Atkins
Contactless Intelligence

Meeting in London - charity and the contactless industry

This week our industry roundtable devoted to contactless fundraising in the charity sector takes place in London at Catapult’s Urban Innovation Centre. CI initially started the roundtables to highlight trailblazing contactless implementations, made in Britain, and how the rest of the industry in and beyond the UK can listen and learn. Hence the title, Contactless Britannia. 

With the current political climate in the UK, this title seems nearly ironic. Luckily for us, the upcoming event addresses a topic that should cut across both camps within the UK with its innovative and growing charity sector and so the political uncertainties surrounding the Brexit vote will probably have a lesser impact on discussions on the day. On the tech side, we are happy to welcome vendors from across Europe, such as Igenico, iZettle, Payter and many more. 

Creditcall, the official sponsor of the event, will be presenting its contactless proposition, which as been very successful used in recent schemes such as the Cancer Research UK World Cancer Day. “It is crucial to offer consumers a secure and hassle free method to make donations” Lars Pedersen, CEO of Creditcall, told Contactless Intelligence back in February. We are looking forward to finding out more on Wednesday.

The charity sector is very well represented with 17 organisations present. We have speakers from Cancer Research, DEC, Save the Children, Sue Ryder, Comic relief, National Gallery and Mary’s Meals as well as Simon Mott (the most successful Big Issue Seller using an mPOS for payment) and representatives from the Big Issue. Our moderator for this day is Contactless Intelligence favourite and charity sector expert, Ram Banerjee.

We will also have speakers from Visa (with or without Europe now? PC would be without) and our partner in this roundtable - The UK Cards Association. Both will be speaking during the day and offering insight to the charities present. 

What are we hoping to achieve in the course of the day? 

Well, the aim is to facilitate the communication between the vendors on the one side and the charities on the other. Contactless donation-giving seems a no-brainer on paper with the use of contactless growing so much in the UK. Visions of a cashless society will mean there is little or no spare cash for needy causes. But the landscape of charities is very diverse, with different business cases, different infrastructures and fundraising methods and, of course, different budgets. 

During the Contactless Britannia Roundtable we will be listening to the charities’ experience using contactless and their wish-list for the tech industry. The tech industry present will have a better understanding of the blocking points and priorities charities have. During the last discussion of the day, we are hoping to discuss how a contactless infrastructure can be made affordable to any charity through different financing models, such as leasing, POS-sharing, corporate sponsorships or others.

We at Contactless Intelligence feel that it is essentially an obligation of the industry to make the technology available for the charity sector and on Wednesday we are hoping to move towards making that a reality. We can’t only celebrate the profit-turning implementations and not look towards help a cash-dependent sector, now can we?

We are pretty much sold out now, but if you really want to attend, please contact me as soon as possible and we’ll see what we can do. For those who are attending, I look forward to meeting you in person on the day.

Until next week.

Steve Atkins
Contactless Intelligence

With Alipay making a European entry, what's happing with Apple Pay?

There has been quite a bit of excitement in the last week about the fact that Alipay (the third-party online payment platform with no transaction fees, launched in China in 2004 by Alibaba Group) is now making its presence known, albeit in limited form, in Germany. This is good news for Chinese tourists on trips to Germany who can now pay with their Alipay app at authorised retailers.

You can read more about this move of Alipay into the German retailers here and the usage of Alipay in certain German airports here. Actually, with the pound dropping so dramatically - perhaps UK retailers should be the ones accepting Alipay for all those Chinese tourists in London. Sorry, i digress…

What it did make me think though is that we have yet to see any kind of report from Apple over the state of Apple Pay in the UK. Now a full one year after its UK launch, Apple has yet to release any data on the payment service’s performance with British consumers. Not only that, as well as offering a new to pay, Apple Pay also offered customers security measures to give them peace of mind when when doing so. The fingerprint recognition software massively reduced the chance of thieves being able to access money in your account while an in-built tokenisation mechanism prevents retailers from receiving personal information about customers. 

The fact that Apple CEO Tim Cook was quick to sing Apple Pay’s praises, when it was first launched in the US, does raise some questions as to why no data has been released pertaining to its performance in Britain. Due to typical Apple secrecy, it’s impossible to determine how well Apple Pay has performed in the UK.

The only figures we’ve been able to obtain come from the Transport of London’s figures from January 2016, showing a total of 3.2 million journeys were paid for using “mobile devices” in the first six months after Apple Pay was launched in the UK. At that time, the iPhone was the only mobile device with the ability to make contactless payments, so therefore we can assume Apple Pay was the payment method for these figures. 

If Visa’s latest forecast is to be believed, the use of mobile payments by British consumers will grow by 60% in the next four years. This is enabling businesses, who may initially have had reservations about introducing Apple Pay, with a window of opportunity as we begin to see changes in consumer paying behaviours.

Recent research by Apadmi – exploring the relationship between the retail sector and mobile app technology – found that not only do 97% of British consumers bring their smartphones with them when shopping, but also that almost half (49%) are open to using mobile apps that can offer them modern payment options – such as Apple Pay.

With so much research pointing to the fact that UK consumers are open to new and innovative ways to pay and from what I am seeing, as we start peak tourist season, perhaps we should also be looking to non-UK/Europe centric payment applications to rival Apple Pay, too. Alipay, anyone?

Finally, a big thank you for all of those who attended the Contactless Britannia Charity Roundtables in London last week. Sorry that I had to pull out at the last minute due to unforeseen circumstances but I understand that it was a highly successful and educational session with great input for all involved.

Overall, the consensus was that the use of contactless in fundraising is less a question of if but rather when and that massive steps have been taken in the last 12 months. Cancer Research’s keynote on the day gave an impressive insight into how bright the future of contactless could be. Many of the technology experts present took away the wish lists from the many charities present - with the #1 wish being some sort of “contactless fundraising regulation secretariat” that would help all charitable organisations to overcome the regulatory obstacles in an aligned manner.

A big thank you to all the speakers and participants as well as our content partners on the day, the UK Cards Association, and I hope you all found it worthy of you time and attention. Thank you from the Contactless Intelligence team.

And a final, final thing... This newsfeed will now move into its bi-monthly format for the next seven weeks as annual leave comes around for the industry and news grows scarce over the mid-summer months. We will be returning to our full weekly schedule at the beginning of September so for the next few weeks I will see you fortnightly. 

Until then,

Steve Atkins
Contactless Intelligence

TfL goes global while Semble closes shop

There has been quite a lot of excitement in the last two weeks. A bona-fida Republican presidential nomination in the shape of Donald Trump (face palm), a new British government headed up by Theresa May, mass murder in France and, to top it all off, a failed military coup in Turkey. All this happened since my last editorial! It seems as though things are happening without rhyme or reason on a global scale.

Thankfully, things are a little more predictable and stable within our industry. In 2015, at the Contactless Intelligence Conference, Transport for London’s Matthew Hudson announced that they were looking to export the technology and learnings of running a contactless ticketing solution in London to markets outside of the UK. This has come to pass…

Last week TfL announced that its contactless ticketing system is set to be used by other major cities across the globe as part of a deal worth up to £15m. TfL signed the deal with Cubic Transportation Systems (CTS), allowing them to adapt the capital’s contactless ticketing system worldwide. It is the first of a number of planned agreements to sell TfL’s expertise both at home and abroad – a key manifesto commitment for the Mayor of London, Sadiq Khan. The licence will grant CTS access to London’s contactless system, allowing it to be specifically tailored for other world cities’ transport systems. 

TfL and CTS have a long-running partnership, having introduced the Oyster card system in 2003 as well as working together with the UK card industry to make TfL the first public transport provider in the world to accept contactless payment cards. The contactless payment system was first launched on London’s buses in December 2012 and expanded to cover Tube and rail services in London in September 2014.

Since then, more than 500 million journeys have been made by more than 12 million unique credit and debit cards from 90 different countries, as well as using contactless-enabled mobile devices. Around 1 in 10 contactless transactions in the UK are made on TfL’s network, making it one of the largest contactless merchants worldwide.

“Access to TfL’s technology gives us a major competitive advantage as the transit sector continues to move in the direction of open and mobile payments and account-based systems,” said Matt Cole, president of Cubic Transportation Systems. “Now we can blend the best elements of technology that has been proven at scale in the world’s two largest open and account-based payment transit systems—London and Chicago—both delivered by Cubic, and bring the best-of-breed to all of our customers as a single, global, product suite.”

The present system is also open to all kinds of innovations: Central Saint Martins fashion student, Lucie Davis, has painted a set of acrylic nails in the familiar Oyster colours and embedded a RFID chip to one. The chip, linked to an Oyster account, means that, rather than fumble for their card or phone, the wearer can breeze through the gates at the tube and literally ‘touch and go’.

However, not all travel innovations aimed at contactless ticketing are doing so well. Semble, the SIM-based NFC mobile wallet launched in New Zealand by two banks, three carriers and payments network Paymark, is to be discontinued, the mobile wallet company has confirmed. Semble says it now aims to “refocus the business to develop and build new services”.

The company is jointly owned by Paymark, 2degrees, Vodafone and Spark and signed up New Zealand banks ASB and BNZ for its launch in March 2015. Those using the service to make public transport payments through Snapper will be able to continue using Semble, but without the mobile payment function.

“Semble and its key stakeholders 2degrees, Spark, Vodafone, ASB and BNZ have jointly undertaken a review of Semble mobile payment services, following which they have mutually agreed to discontinue Semble’s mobile payment services, which will also affect Snapper services,” the company said.

“Even though we are discontinuing the current payments service now, Semble remains committed to creating other new services and is planning to extend capability to include for a more flexible, modular and future proofed technology platform which offers even more capability than today, enabling companies to digitise a wide range of wallet services for mobile devices,” the company added.

That’s a shame as, at the time, it appeared that the mobile wallet company was doing everything right by bringing all stakeholders together - including banks and transportation companies. Pity that it didn’t work out in the long run.

Another pity is the demise of Droplet – a mobile payment app which was piloted in the Norwich Lanes and had 40,000 users nationally, including 7,000 in Norwich. Steffan Aquarone who founded Droplet in 2011, said the company had been dependent on new investment for growth, but had suffered in the aftermath of the EU referendum. He stated that the business had not failed and he remained “optimistic” he could raise money from the sale of its technology to return money to shareholders – who took stakes through two crowdfunding rounds which raised £1m.

“We had to make the choice: do we do what a normal start-up would do and hang on until we run out of money? Or do we do the responsible thing and make sure staff are paid and we can return funds?” said Aquarone. “We remain optimistic that by doing the decent thing and remaining masters of our own destiny we will increase the probability of our sale,” he said, adding he hoped there would be an investor “with the clout to make it a success”. In the wake of the Brexit vote, investors had pulled out while currency volatility had delayed the way Droplet received payments, he said. “Medium to long-term prospects have been worsening steadily since the referendum, in particular for fundraising,” he added.

I am genuinely sorry to see this fail as I have spoken to Steffan Aquarone and had the pleasure in hearing him speak at a couple of events and never questioned his commitment and enthusiasm. However, I do question the fault being laid at the door of Brexit – surely a crowded and highly competitive market for this kind of offering is more to blame? 

I am sure that this will not be the last we hear of a withering away of European investment and currency volatility as reasons for project closure. It will be an interest second half of the year.

Provided the world settles down a little, that is…

Steve Atkins
Contactless Intelligence
 

Apple Pay magic refuses to work in Australia

Apple Pay now apparently represents 75% of all contactless payments in the U.S. In an earnings call with media and investors on Tuesday 26th July, Apple CEO Tim Cook said Apple Pay user numbers jumped 450 percent last month from a year earlier, but as usual the company is refusing to give out actual total number of users.

With the service currently available in nine countries, Cook says adoption has been “explosive,” and more than half of “transaction volume now coming from non-U.S. markets.” In the U.S., there are now 3 million retail locations that accept Apple Pay. However, still no actual user numbers…

Apple Pay is now currently available in the U.S., the U.K., Switzerland, China, Australia, Canada, France, Singapore, and Hong Kong with Spain opening up in the very near future. I’ve also mentioned in past editorials that Apple will be launching the service on Macs in the final quarter of the year, when MacOS Sierra and iOS 10 are released, and it will also come to the web as a PayPal competitor.

With such a positively spun analyst call you would be forgiven for thinking that everything is plain sailing for Apple but you would be wrong. In fact, a little mutiny is brewing in the land of Oz and it is directed squarely at Apple Pay.

Australia’s three biggest banks, Commonwealth Bank of Australia, Westpac Banking Corp and National Australia Bank (NAB) have lodged a joint application with anti-trust regulators seeking approval to collectively negotiate with Apple to install their own mobile payment applications on iPhones. Apple does not allow third-party electronic payment apps to be loaded onto its phones because, well, they already have Apple Pay. You know, that amazing, magical mobile payment app from Apple (no user figures available, though…).

The Australian banks are seeking to be able to negotiate jointly for access to Apple‘s phones without themselves being accused of violating anti-competition law. The three banks have resisted signing deals to use Apple Pay and want iPhone users to be able to install the electronic wallet systems they have already developed and financed themselves. They contend that while Apple allows apps on iPhones using other commonplace technology, such as Wi-Fi and Bluetooth, restricting the technology through which mobile wallets function – NFC – constitutes anti-competitive behaviour.

So far, no one is saying anything official about the legal action, but let's wait and see. Certainly Apple can’t allow this to happen. The domino effect could cause serious collateral damage at a time when the country specific rollout is going so fantastically well (no user figures, though…).

And finally, as we roll into silly season, here’s a story we first covered as a one-off last year. The man with the oyster chip in the end of his Harry Potter-esque wand is back. Only this time - he’s making a business out of it - just in time for the latest Harry Potter instalment - ‘Harry Potter and the Cursed Child’. To enable contactless payments, a chip has been embedded in the tip of the wand, which just needs to be tapped or placed near a contactless terminal to process the payment.

It’s entirely up to you if you want to mutter a spell at the same time. Although, if  you are already using this method, adding something like ‘Accio!’ is not going to make any difference to how people will see (judge?) you.

There is also a video of the wand in action with the worlds worse Dumbledore stand-in.

Eight Ollivander19 magic payment wands have been created by Card Cutters, specialists in payment terminals, and will work on any purchase up to the value of £30. But these wands are not just going to anyone - after all the wand chooses the wizard - not the other way around. Oh, just go with it - we’re already through the looking glass on this one.

If you think you might be the Chosen One, you can register your interest here. ‘We’re extremely proud to be the first contactless merchant company in the world to launch a product like this, aimed at the wizarding community,’ said Card Cutters director Paul Edwards.

The. Wizarding. Community. 

I’ll let that sink in for you business development folks out there looking for new markets.

Steve Atkins
Contactless Intelligence
 

Charity gold away from Rio

Sometimes good news really does come to those who wait. We have seen a slew of gold and silver medals for the GB team in Rio this last week but to my mind the biggest win has nothing to do with the Olympics but has everything to do with charity. Namely the confirmation that the UK Government will bring forward legislation to include contactless payments within the GASDS (Gift Aid Small Donations Scheme).

A consultation setting out potential reform options was published in April – and subsequently received 46 responses from charities, representative bodies and others. HMRC has published the responses to its consultation on simplifying the GASDS. Introduced in 2013, the scheme was designed to make it easier for charities to claim gift aid top-up payments for small cash donations. Far less has been raised for charities than was originally intended, with estimates suggesting it has failed to get anywhere near the £135m the government had expected the scheme to be raising by 2015.

In the summary of responses, the government confirmed that it will bring forward legislation to include contactless payments within GASDS. HMRC stated, “Although currently very few charities use contactless technology, the available evidence suggests that take up is likely to increase in the future. The government is satisfied that contactless donations could be included within GASDS without imposing significant extra burdens on charities who choose to use the technology. The government will therefore bring forward legislation to include contactless payments within GASDS.” It did, however, add that GASDS should “only be available for small donations in which obtaining a full gift aid declaration is not practical or feasible” and therefore other donation methods should not be brought within scope of the scheme.

Contactless Intelligence got in touch with our partner from our last Charity Roundtable - the UK Cards Association - about this news, and a spokesperson commented that the UK Cards Association, “…welcomes HMRC’s decision to include contactless payments for GASDS and is working with HMRC to identify its audit requirements for contactless payments and is also currently defining what a contactless payment is so that it can be included in its proposed legislation.”

I think we’ll all take HMRC’s feedback as a win.

And continuing with league tables and coming top, apparently there is a table that covers wearable objects that consumers would like to see payment enabled. In fact, almost seven in ten contactless payment users would prefer to add contactless functionality to something they already own or wear rather than purchasing a brand new wearable payment device, according to research from Barclaycard. Top of the the list of preferred personal items was a watch, followed by a bracelet or ring from a family member, and bringing up third place was a wedding ring.

In fourth place was a dog lead. What a great idea - think about all those dog walkers who take a trip to the local coronership or supermarket. Although someone’s not thought this one through. You usually have to tie your dog up outside of the shop so I’m not sure how that is going to work if you need to use the dog lead to make a payment. 

Anyhow, here the full list from one to ten; Watch, bracelet/ring from family member, wedding ring, dog lead, comfy jumper (as opposed to a non-comfy jumper), sunglasses, favourite hat (as opposed to just any old hat), cufflinks, vintage handbag (as opposed to a modern handbag) and finally the trusty old pocket watch (for those early 20th century dandies out there). I have a feeling that a closet steampunk made this list up but it is August after all and we had to report on something.

As we move into September, I am looking forward to having something more meaty to dissect in my editorials. You, dear reader, probably feel the same way. 

Don’t misplace your pocket watch, now…

Steve Atkins
Contactless Intelligence