Samsung Pay’s U.S. launch - let battle commence.

The highly anticipated launch of the third big mobile “Pay” player finally happened last week in the U.S. Just weeks after Android Pay announced its debut into the mobile payments ecosystem and about a year since Apple Pay’s launch, Samsung Pay sets its sights on the US mobile payments market. This time, however, things could turn out a little different. The question everyone is asking is, will Samsung Pay, with its different approach to payments using mobile at the physical point of sale (MST - Magnetic Secure Transmission), be the payments player that makes consumers reach for their phones and not their plastic cards?

To mark the launch, Samsung will be embarking on a tour in seven of America’s ‘most vibrant and iconic cities’, says the accompanying press release: “Samsung will give consumers in Austin, Dallas, Atlanta, New York, Chicago, San Francisco and Los Angeles a special opportunity to unlock special offers and prizes through Samsung Pay. At each stop, Samsung will partner with local retailers to provide discounts on items, hands-on activities and other experiences to give consumers an opportunity to interact with Samsung Pay to demonstrate the convenience and safety of the service, which can be used to pay almost anywhere you can swipe or tap your compatible cards.”

Initial partners include the major credit card networks — Visa, MasterCard, Discover and American Express — and some big issuers, including Bank of America, Chase and U.S. Bank. Samsung Pay uses digital tokenization, Samsung KNOX, and fingerprint authentication to provide secure payments. The mobile payment service is compatible with most existing and new terminals, including most magnetic stripe, EMV and NFC terminals. “Samsung Pay works with almost any card terminal from day one and Galaxy owners can shop with a wallet they never knew was always in their hands,” Injong Rhee, EVP of Samsung Electronics, Global Head of Samsung Pay, said in a company news release.

The big difference, of course, is its MST technology, which enables Samsung Pay acceptance at just about every terminal that today accepts any mag stripe or EMV card without merchants having to change anything at their points of sale to accept payments made using it. This feature works with a metal coil that is formed in the shape of a loop. As current passes through the coil, a magnetic field is formed. This allows for ‘communication’ with magnetic card readers. The functionality of MST technology is not dissimilar to the way a credit card is swiped through a card reader. With regards to MST and Samsung phones, your phone is placed above the credit card reader and ‘communication’ occurs between your phone and the POS. 

In South Korea, where Samsung Pay was piloted this past summer, it was able to onboard 500,000 consumers in just about a month, who drove 1.5 million transactions accounting for $30 million in transactions in its first month, far overshadowing prior attempts by other players in Korea to make hay at the physical point of sale using mobile devices. 

Samsung is also facing increasing competition from within its own ranks. Google recently inked a deal with telecom giants T-Mobile, AT&T, and Verizon to acquire Softcard tech. As a result, Android Pay is going to be pre-installed on multiple Samsung smartphones as well as the newest versions of Android OS. But skeptics remain. Consumers are likely to be slow to adopt the technology for several reasons, notably: There are so many available options for consumers, and Google’s pre-existing agreement with mobile operators.

Separately, Google has also updated its wallet app to offer peer-to-peer payments and wallet-to-bank transfers. Android and iOS users can now send money to anyone in the US with an email address, even if they do not use the app themselves. With bill splitting, activity notifications and the ability to set up recurring transfers thrown into the mix, it is clear to see that the internet giants are intent on taking bank disintermediation even further.

But perhaps the biggest hurdle faced by the mobile payment market is the so-called ‘Couch Commerce’ consumer (I forget where I heard that description first). Remember that Facebook has introduced the Groups feature where just about anyone can set up a Group to buy/sell merchandise. eBay already has several hundred million registered traders, and Twitter is soon adding buy/sell functionality too. These social media innovations are being designed for maximum consumer convenience and to dramatically reduce the bounce rate. With online commerce becoming the biggest drawcard, Twitter and Facebook are trying to displace eBay as the premier social media e-Commerce giants.

So while the likes of Apple, Google and Samsung may be fighting a battle over who gets used most at the physical POS, the real war could be taking a turn into a completely different field with a different set of consumer driven specs. The ‘real’ battle may not be waged over the counter - but on the couch!

Until next time,

Steve Atkins
Contactless Intelligence

The Samsung Pay hack will not be a one-off

Last week, the New York Times printed claims from the Codoso Group - or alternatively called the Sunshock Group - a collection of hackers affiliated with the Chinese government, that as early as March 2014 they had breached the computer network of LoopPay, the US start-up that was acquired by Samsung for more than $250 million at the beginning of this year.

The hack, now confirmed by LoopPay and Samsung executives, appears to have targeted LoopPay's magnetic secure transmission (MST) technology, which turns existing mag-stripe readers into contactless receivers. The MST technology was seen as a major factor in Samsung's acquisition of LoopPay, giving it an advantage over rivals Apple and Google in the mobile wallet battle by making the service available at more locations.

Will Graylin, LoopPay chief executive and co-general manager of Samsung Pay, says that an investigation appears to show that although the hackers accessed corporate networks, they did not get into the production system and that customer data does not seem to have been compromised. However, Samsung has been forced to defend Samsung Pay, confirming the hack but said there was no risk to users of Samsung Pay, which was launched in the US a couple of weeks ago. 

Samsung wrote in a blog post on the subject that, “The article raised questions as to the effect of this on the recently launched Samsung Pay service. The first thing to know is that Samsung Pay was not impacted and at no point was any personal payment information at risk. This was an isolated incident that targeted the LoopPay office network, which is a physically separate network from Samsung Pay. The LoopPay incident was resolved and had nothing to do with Samsung Pay. It’s worth reiterating that the reported incident was related to LoopPay’s office network which handles email, file servers and printing within the company. This network is physically separate from the production network that handles payment transactions and run by Samsung. The incident involved three servers on LoopPay’s internal office network.

As soon as the incident was discovered, LoopPay followed their standard incident response procedures and acted immediately and comprehensively. LoopPay brought in two independent professional security teams. LoopPay immediately identified and quarantined the targeted devices, conducted a thorough and extensive sweep of LoopPay’s entire system, and put additional safeguards in place. Again, Samsung, Samsung Pay, and Samsung users were not affected. We’re confident that Samsung Pay is safe and secure. Each transaction uses a digital token to replace a card number. The encrypted token combined with certificate information can only be used once to make a payment. Merchants and retailers can’t see or store the actual card data.”

LoopPay executives told the New York Times that the hack appeared to be aimed at stealing this technology. If so, the hackers may have been seeking to compromise the security of Samsung Pay, or to create a copycat service using the technology, said Simon Choi at Hauri, a South Korean internet security company. “Once Chinese hackers infiltrate into a corporate system, they tend to keep breaching it through back doors to get new information and technology,” he said. “Once a corporate system gets hacked, companies had better assume the worst-case scenario — that all existing information has been leaked — and try to come up with security measures to prevent further damage.”

Unlike the Apple Pay and Google wallet, which require shops to upgrade their POS equipment, Samsung Pay is compatible with the magnetic strip technology used in most existing credit card terminals found in the US. Samsung Pay launched in Korea in August 2015, where it processed more than US$30m and 1.5m transactions in its first month.

Perhaps this is something that we should get used to reading about. A survey by ISACA (Information Systems Audit and Control Association) of more than 900 cybersecurity experts shows that an overwhelming majority (87 per cent) expect to see an increase in mobile payment data breaches over the next 12 months. However, the good news for mobile wallet developers is that, according to the 2015 Mobile Payment Security Study from the global cybersecurity association, people who use mobile payments are unlikely to be deterred by security concerns.

The survey results show cybersecurity professionals are willing to balance benefits with perceived security risks of mobile payments and that only 23 per cent believe that mobile payments are secure in keeping personal information safe. Nearly half (47 per cent) say mobile payments are not secure and 30 per cent are unsure and at 89 per cent, cash was deemed the most secure payment method, but only 9 per cent prefer to use it.

“Mobile payments represent the latest frontier for the ongoing choice we all make to balance security and privacy risk and convenience,” says John Pironti, risk advisor with ISACA and president of IP Architects. “ISACA members, who are some of the most cyber-aware professionals in the world, are using mobile payments while simultaneously identifying and contemplating their potential security risks. This shows that fear of identity theft or a data breach is not slowing down adoption — and it shouldn’t — as long as risk is properly managed and effective and appropriate security features are in place.”

Do you hear that, Samsung? Nothing to worry about…

Until next time,

Steve Atkins
Contactless Intelligence

Contactless? Big in Japan? How Boris Johnson put his foot in it…

According to the 2015 World Payments Report, there were a staggering 390 billion non-cash transactions made throughout the world in 2014. This was an increase of 8.9% versus year ago levels, and a 45% jump from 2009. Think about it for a moment - 390 billion non-cash transactions! Unbelievable!

The study, done as a joint venture between the Royal Bank of Scotland and Capgemini, focused on purchase data from different parts of the world. The data revealed people in Finland made the most non-cash transactions. The average person makes 450 cash-free payments during the year. The United States finished with the second highest level of non-cash payments with an average of 390 transactions per person.

Brits will make 120 million payments a day by 2024 and Payments UK went on record saying that they expected 44 billion payments to be made in 2024, up 3.4 billion over 10 years and representing an average of 679 transactions per adult. Credit card growth will be more modest, with the number of annual payments per person rising from 41 to 53. Meanwhile, the number of automated credit payments will soar from an average of 20 a year for UK adults in 2014 to 37 a year. In contrast, the number of cash payments is set to decline 30% over the next 10 years, from 18.1 billion to 12.6 billion. This would see cash represent around 33% of the total volume of consumer payments, down from 53% in 2014. 

To put this into perspective, consider that China only had an average of 50 non-cash transactions per person in 2013. That was 37% higher than the data from 2012. One of the main contributing factors to this growth is the increase of mobile payment technology around the world and the increase in mobile phones in rural areas of China. 

While on the subject of China and contactless cards, last week saw some security concerns over contactless cards. Bank of China Hong Kong said it has stopped issuing new contactless credit cards that could easily leak the cardholder's data via mobile apps. The bank will also arrange replacement of such cards in circulation as soon as possible, and notify customers once the details are confirmed.

The other six banks involved, namely DBS Hong Kong, China CITIC Bank International, ICBC (Asia), Bank of Communications Hong Kong Branch, OCBC Wing Hang Bank, and Dah Sing Bank were also asked by the Hong Kong Monetary Authority to take similar action. The authority said these banks' contactless credit cards do not meet the requirements set in 2012. DBS said its credit cards with Visa payWave were affected. Concerns were raised after some card reader apps managed to obtain credit card numbers, expiry dates and even the cardholder's name from some contactless credit cards within seconds. The contactless credit cards work similar to Octopus cards and can be used to settle sums of less than HK$1,000.

However, even this ‘blip’ should not see a slow down in contactless payment adoption on a global scale. After all, the technology brings so many benefits. Benefits that the Mayor of London, Boris Johnson, was keen to explain to a Japanese audience during his Japan visit. Holding court to a tech crowd of Japanese businesses, he proceeded to tell them how innovative Transport for London had been using contactless technology. ‘Fintech wizardry’ was the term used - in case the Japanese imagine that the whole of the UK is some kind of Harry Potter theme park. 

Just in case some of the audience were a little slow on the uptake he took pains to explain things slowly and clearly. "I can get on the tube, I can get on a bus and just wave it in the general direction of the cashless receiver and, completely painlessly, very small amounts are deducted from my bank account,”said the Mayor. He clearly didn't know that Japan's been doing this for, literally, decades, and it wasn't invented by a man in an office in Transport for London.

The Japan Times, for example, pointed out in 2014 how bizarre it seemed to the Japanese that Apple made such a big deal about supposedly innovating in the contactless field, when local operators there have been letting people pay with pre-loaded mobile phones since 2004, back when most of the world was still struggling with the idea of Chip & PIN.

Luckily for all though, Boris was soon playing rugby and trying on a pair of shinto priests shoes, so it looks as though he has been forgiven for the techno ‘faux-pas’.

Until next time,

Steve Atkins
Contactless Intelligence

Is a cashless economy really that safe?

Five months ago, I wrote an editorial about how the Danish had plans to turn their economy into a cashless one by pushing through governmental economic reforms (Brits vs. Danes in “First to go cashless” 18.05.2015). Last week, however, it would appear that Sweden is beating everyone to the punch.

According to a new report from Stockholm's KTH Royal Institute of Technology, Sweden is on track to becoming the world's first cashless society. "Cash is still an important means of payment in many countries' markets, but that no longer applies here in Sweden. Our use of cash is small, and it's decreasing rapidly,” said Niklas Arvidsson, a researcher in industrial economics and management at KTH, and points out that the widespread and growing embrace of the mobile P2P payment system Swish is helping to hasten the day when Sweden replaces cash altogether.

In a country where bank cards are routinely used for even the smallest purchases, there are less than 80 billion Swedish krona in circulation (about EUR 8 billion), a sharp decline from just six years ago, when the total in circulation was 106 billion krona. "And out of that amount, only somewhere between 40 and 60 percent is actually in regular circulation," continued Arvidsson, “the rest is socked away in people's homes and bank deposit boxes, or can be found circulating in the underground economy.”

The result of a collaboration between major Swedish and Danish banks, Swish, is a direct payment app that is used for transactions between individuals, in real time. But if Swish starts to be used on a larger scale and grows to include retail transactions and e-commerce, Arvidsson says the prospect of a cashless future will come ever closer to reality.

That sounds like great news, but for every editorial of good news there is a always a column of caution (I’m using an article-based pun system here…). For instance, let me re-cap ‘The curious case of the carriage-based contactless mugging’, that was written about last week on SC Magazine’s web site:

Telling his story on the magazine’s website, Roi Perez recollected that, “A train journey to work is a very innocuous thing. But when a man slowly bumped into me and my pocket for a bit too long, it took me a second to realise what had just happened. I called my bank and found out that said individual had managed to steal £20 from my account via a contactless card payment; my bank promptly reimbursed me.”

It get’s even more interesting when you realise that for something like this to happen the thief would have to get a ‘Merchant' account to start processing the payment. The card readers are readily available, but you can buy an iZettle contactless reader for under £80 these days. 

PayPal and BarclayCard are also entering the arena of accepting payments through a mobile app. Extrapolating this out further, what’s to stop someone taking the money from the account the stolen money goes into, converting it into Bitcoins and the money is never to be seen again as all Bitcoin transactions are anonymous?

Of course, the first step would be to get the name of the merchant account that the unauthorised contactless payment would have been credited against - surely that would be the first step of tracking down these nefarious villains? So far no-one appears to have thought of that…

Probably because the powers-that-be were too focused on the Talk Talk hack. I guess now that cyber-crime is being added to the official crime statistics we are going to see much more of a crackdown on these sorts of crimes. One can but hope, because I moan enough about having to carry around a laptop - imagine how it would be if I had to lug around a portable Faraday cage every where I go (just to be sure). 

Expect the cashless economy to deliver its own set of problems. That is, unless we can redefine what a payment really is. Something that we intend to introduce at our 2016 Contactless Intelligence Conference (April 26 — 27th) so look out for our provisional agenda soon!

Until next time,

Steve Atkins
Contactless Intelligence

Money 20/20 and more big numbers…

It was Money 20/20 last week in Las Vegas and, if we know anything, it’s money talks. Although in this case, mobile payment people talk more. The numbers that were being thrown about ranged from mobile payment users, to transactions, to actual customers who could, potentially, be users of said systems. But whatever systems were being talked about - according to their respective companies, the future is very, very bright.

For starters, representatives of Samsung took to the stage to share a handful of updates about Samsung Pay, an offering that company reps have continually reminded us is “the most accepted mobile payment system.” And while Samsung is anything but shy on Samsung Pay’s coverage due to its MST and NFC capabilities, the company’s announcement did not reveal the actual figures needed to back it all up. What Samsung DID share was that U.S. consumers who are using Samsung Pay are using it repeatedly, reportedly to the tune of eight transactions per active user. Data also showed that three out of four Samsung Pay transactions were made via MST.

“After one month, the numbers say it all: Consumers who have used Samsung Pay are using it repeatedly because it works almost anywhere you can swipe or tap a card,” Thomas Ko, global co-general manager of Samsung Pay, said in a statement. “We’re thrilled to introduce new partners that will build on our early success, and move us even closer to a world in which your mobile phone is a true mobile wallet.”

Not to be outdone during their record-breaking fourth quarter announcement (OK, I admit it, making $53.4bn (£35bn) in the last 12 months is pretty impressive), Apple also announced that they will partner with American Express to bring Apple Pay to Spain, Australia and Canada, among others in a global expansion. Chief executive Tim Cook said the mobile payment platform would arrive in Australia and Canada before the end of 2015, with Hong Kong and Singapore following in the new year, joining the UK and US. “We are thrilled to announce today that we are partnering with American Express to bring Apple Pay to eligible customers in key global markets so even more people can experience the easy, secure and private way to pay,” he announced during the investors call. “Apple Pay will be available to eligible American Express customers in Canada and Australia this year and is expected to expand to Spain, Singapore and Hong Kong in 2016.”

Cook also said that 1m credit cards were activated for Apple Pay use within 72 hours of its availability in the US last year, making it the largest mobile payment system to date. “Apple Pay is seeing double-digit growth in transactions month after month, and we continue to add major businesses, including Starbucks, which will roll out Apple Pay support to all its U.S. stores in 2016. Apple Pay now supports merchant rewards programs. We also look forward to announcing several popular retailers coming online in the next few weeks,” added Cook.

The company was quick to point towards research from eDigitalResearch suggesting that Apple Pay users are more satisfied than other contactless payment users, with over a third of shoppers who owned an Apple device using the service. Said Cook, “We completed our fiscal year in September, and we are proud to report revenue of $234 billion, an increase of 28 percent and $51 billion over 2014. This is our largest absolute revenue growth ever. To put that in some perspective, our growth in one year was greater than the full year revenue of almost 90 percent of the companies in the Fortune 500.” Showoff…

Finally, not to be out done, Merchant Customer Exchange (MXC - remember them?) announced that it would be the premier partner for the newly unveiled mobile payments platform Chase Pay from JP Morgan Chase. Described as a “closed loop network,” Chase Pay will allow Chase’s 94m credit, debit and pre-paid card customers the ability to make in-store, in-app and online purchases, beginning in 2016.

Chase touts a number of advantages it has over some current mobile payment systems, noting that Chase consumers will be able to use the service on “virtually all” smartphones, and will be able to pay at places where other mobile payments don’t always work – like gas stations and drive-through windows, for example. Plus, in some locations, Chase says that consumers will be able to use their smartphone to take a picture of their receipt to pay. Chase brings to the table a large number of potential users, noting that one of every two U.S. households is a Chase customers. 

Thanks to Chase Pay’s MCX backing, the platform will be rolled out mid-2016 to merchants who represent over 100,000 retail locations across the U.S. The MCX consortium, backed by retailers like Walmart, Target, Best Buy and Shell, have stores in the big-box, convenience, pharmacy, fuel, grocery, quick- and full-service dining, specialty-retail and travel categories. The retailer support is something that the consortium hopes will allow Chase Pay to topple Apple Pay and others’ growing traction in the payments space.

That being said, there’s one huge drawback with regard to Chase Pay: unlike Apple Pay, Samsung Pay and Android Pay, which are NFC-based (tap-and-pay) solutions, Chase Pay uses QR codes. That means shoppers have to show the QR code to the cashier, who then scans it. I think we all know what we think to that.

Finally, as MCX is a pro-retailer solution, merchants do have the advantage of a network that includes no network or processing fees and no merchant fraud liability. But they’re also getting shoppers’ data – something that today’s more privacy-minded consumers are fighting back against. Especially when there is no guarantee as to how safe that data will be kept. Just ask Talk Talk… Or better still -  don’t.

Until next time,

Steve Atkins
Contactless Intelligence

Can people over 50 understand contactless payments?

Sounds stupid, doesn’t it? I first read the piece of research from Saga Group (the UK-based company specialising in holidays and insurance for the 50+ age market) with a bit of a grin.  It sounded so stupid and had nothing to do with me. That is until a few people in the office pointed out that I would soon (very soon) be in that age range, making me leap from amusement to outrage. How dare they make a thing about over-50s and their contactless card usage!

It’s not bad, though - Saga say that rather than paying with traditional cash, the research found that 19% of over-50s are embracing the technology by paying with contactless up to three times a week. The survey also showed that more than 4 out of 10 people aged between 80 and 89 have used their contactless card. While many over-50s said they like the way that using contactless speeds up their checkout payments, 31% appreciate not having to carry cash with them and 24% like not having to remember a PIN number to key in.

However, 7 out of 10 people said they worry about the security of contactless credit or debit cards. Though I think that in this day and age that’s perfectly normal and hardly age-related. 

Paul Green, director of communications at Saga, said, "Contactless cards are making it easy for people to buy their morning coffee or lunchtime snack. And it's clear the over-50s are seeing the benefit of not having to carry cash or worry about remembering their Pin. But people should use their contactless card wisely and only buy things they really need with it as it can be easy to get a bit too tap-happy with your bank or credit card. Keeping an eye on your bank account can help you keep your spending in check and stop you from worrying about the security of contactless cards."

As surveys go though, at least this one had a large number of people taking part - more than 6,000 in this case, rather than the paltry 200 - 300 groups we see in a so many of these research pieces. 

Another number that took me a little by surprise this week was the news that 21% of payment transactions at Starbucks are completed over a smartphone. The successes that the coffee chain has seen has propelled it to the top of the mobile payments list, making the company the example for the way that mobile technology can be used to boost business and raise customer engagement. It has managed to accomplish this goal more effectively than any other company in the food and beverage service marketplace. It is precisely this message that was being shared along with the announcement from execs that the company had met the expectations of analysts for its fiscal fourth quarter earnings report. It reached a record breaking revenue of $4.9 billion, with profits of about $969 million.

The mobile ordering option was rolled out in the U.S. last December. This allowed consumers to be able to skip the line by placing their coffee orders in advance through the app on their smartphone. By September, the feature reached all 7,400 stores across the country. The feature has since been making its way into additional markets with tests being launched in Canada and the United Kingdom.

According to Strabucks execs, there have already been five million monthly transactions completed by customers who have been using the Mobile Order & Pay feature. President of North American operations for Starbucks, Cliff Burrows, explained that “It has been incredible to see the adoption by customers across the country,” adding that “With each wave that we launch, the ramp rate has been quicker for adoption.”

It’s clear that even beyond mobile payments, Starbucks is leading the way in customer engagement and in revenue generation by way of customers smartphones. Now I look forward to the Saga report confirming that people over 50 can also use their mobiles to make payments. Although perhaps for a nice cup of tea and a good sit-down, in our case!

Until next time,

Steve Atkins
Contactless Intelligence

The 2016 Contactless & Mobile Awards nominations are open!

Despite the upbeat headline I know that many of our readers will be attending CARTES 2016 in Paris this week and it would be completely obtuse of me not to acknowledge the terrible and shocking tragedy that befell the citizens of this fine city last Friday. What springs to mind is the city’s motto ‘Fluctuat Nec Mergitur’ - Tossed by the waves, but not sunk. Paris is immortal.

The CARTES team have put out the following message, which I will repeat here in case someone has not seen it; “Following the tragic events in Paris, CARTES Secure connexions and its organisers are putting in place increased security measures (bag checks, entry controls and security personnel) and are working with the law enforcement authorities to optimize security at the event. Obviously, the French government might decide to introduce further measures in the next few days. The exhibition will open as planned and the Comexposium teams are at the disposal of exhibitors and visitors to answer their questions and concerns. For any further information please do not hesitate to contact +33 (0)1 76 77 11 11.”

I wish them well and our team looks forward to speaking with the many attendees that will show resolve and embrace a ‘business as normal’ attitude, rather than be influenced by a group of extremists. Fluctuat Nec Mergitur.

In other news, I am excited to announce to opening of nominations for the 2016 Contactless & Mobile Awards! With this being our tenth year we have made a few changes to our categories by merging some older categories and creating new ones. This year we have decided to combine the categories to a grand total of just 10 categories; 9 categories to be judged by a panel of industry experts, 1 category to continue to be voted for by the industry and 2 categories selected by Visa Europe – the Winners being announced at a prestigious evening ceremony organized in London following the Contactless Intelligence Spring Conference on evening of the 26th April 2016.

Full details on how to nominate can be found by following this link but the categories are as follows;

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.

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 & loyalty to the next level.

Transportation and 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.

Contactless & Mobile City Initiatives - 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.

Unattended; Vending & Parking - In an increasingly convenience-focused market, we will look at the customer driven, practical innovations and how it creates new solutions. From interactive services, to multimedia output and online connectivity, today’s service oriented kiosks, ticketing and self-service applications may be one of the key drivers for contactless and mobile implementations.

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.

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.

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.

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.

We would ask that all those who are interested in registering their interest use the forms provided on the Contactless Intelligence site by 31st December 2015. As always, all CMA entries are free and you can enter as many categories/solutions as you like. (DISCLAIMER: This does not apply to the Visa Contactless Awards as these categories are not open to nominations). Should you have questions, I would first direct your attention to our FAQ section on the site here.

That’s all for this week’s editorial, as the team will hopefully speak to as many of our readers as possible during the CARTES event. If you see us, please say ‘Hello’ or perhaps ‘Bonjour’.
Safe travels.

Until next time,

Steve Atkins
Contactless Intelligence

Apple Pay launches in AU & CA - AMEX steals lead

Before we get into this week’s editorial, a word to all those who braved CARTES last week: Not easy. Not easy at all. If it wasn’t the horrific event the Friday before, then the raids on Wednesday morning certainly gave one pause for thought and it really couldn’t have been easy on Thursday morning with the constant threat of evacuations. To those who attended, who ‘kept calm and carried on’, and showed some backbone - well done. Now onto more mundane but relevant musings.

This last week saw the shutting down of Norwegian mobile payments service Valyou by its owners Telenor, DNB and SpareBank, who blame a lack of NFC-enabled payment terminals and support from their fellow banks and telcos for their project’s failure – despite only launching the mobile payments platform at the Mobile World Congress in 2013.

A statement issued on Valyou’s site reads; “After careful consideration of all options Valyou’s owners have decided to wind down the company. The combination of slower than expected activation of NFC enabled POS terminals and the engagement of more banks & mobile operators into the cooperation has resulted in a much lower than expected end user uptake.”

“We in Valyou are convinced that this type of mobile payment solution is the future and that Valyou has built the most user friendly and future proofed mobile payment technology on the market today, that Apple and Samsung have also chosen this technology only confirms that we made the right choices. That said we must accept that, while users of Valyou have been very satisfied with the payment experience the market is not yet ready for this kind of solution and the closure of the company is a sad consequence of this fact.” 

I find this surprising considering how the company is still insisting that it had built the “most user friendly and future proofed mobile payment technology on the market today” and pointing to the arrival of Apple Pay as vindication of NFC-based services. Perhaps the three main wallet drivers were simply overtaking them.

And, as one wallet closes in one country - another opens in others. Last week also saw the ‘soft’ launch of Apple Pay in Australia and Canada. I say ‘soft’ launch because while Apple has been attempting to bring its mobile payments service to Australia and Canada for months, there have been setbacks with the banks. Banks aren’t necessarily on board with Apple Pay because of the fees associated with transactions. Negotiations have reportedly been going on since. Plus, at the moment, there hasn’t been a lot of financial perks (or perhaps consumer demand) motivating them to support the service.

The launch itself is a very limited launch as those looking to use Apple Pay in those regions can only do so using American Express. And they can only use American Express cards issued by Amex, not from the banks themselves. Amex has about 17 per cent market share in credit cards in Australia, with an estimated 6.8 million cards in circulation out of about 42 million cards in total. There are also estimated to be about 1.9 million so called companion cards, which are Amex cards issued by banks with Visa and MasterCard linked to the same account.

Banks have been in negotiations with Apple since the launch of their mobile payment solution, but have resisted its demand for a substantial cut of the $2.2 billion in interchange fee as well as from Amex for issuing its cards. It is not known whether Amex is giving Apple some of its fees.

Industry consultant Grant Halverson, from Mclean Roche, said Amex would be hoping to get access to a new, younger market with the relationship with Apple. "Amex's cardholders are generally older, more corporate customers," he said. "The image of branding with Apple helps them to look more tech savvy and enables them to target a younger demographic. It also gives them a new angle to talk to all their merchants on what they can offer."

We spoke to Mike Matan, Vice President of Network Capabilities at American Express, last week, who admitted that Amex working with Apple Pay was a long term strategy as Apple Pay launches in other countries. “Next year,” says Matan, “We will be looking at Hong Kong, Singapore and Spain.” 

Amex may deserve some of the criticism they have had in the past, keeping a low profile on the mobile payments stage but they are making up for lost time now. “A couple of years ago there were a lot of questions and speculation about mobile payments; ‘Would mobile payments ever take off?’, ‘Is NFC the right technology to get behind?’. I personally always thought they would take off and the launch of Apple Pay was a tipping point in this respect and gave mobile payments a real momentum. Mobile payments will happen but I believe it will still vary from country to country as the maturity of the NFC and contactless merchant landscape continues to evolve. We will see a real change in this respect over the next few years. But ultimately, whatever happens, we want to be where our customers want to be,” Matan told Contactless Intelligence.

Sounds like a plan.

Until next time,

Steve Atkins
Contactless Intelligence

Is the German mobile payment market giving mixed messages?

Two weeks ago, we saw the shutting down of Norwegian mobile payments service Valyou. Its owners Telenor, DNB and SpareBank blamed the lack of NFC-enabled payment terminals and support from their fellow banks and telcos for the project’s failure – despite only launching the mobile payments platform at the Mobile World Congress in 2013. This seems to be a thing now. Last week saw the shuttering of Luxembourg-based (but Germany focused) mobile wallet provider Yapital.

Yapital was a little bit of a success story and heralded the rise of mobile payments in Germany. It was not, alas, to be. Last week saw closure of the “First European cashless cross-channel payment solution”, which is how Yapital described its offering. On the topic of closure, they had this to say: 

“We would like to thank you for placing your trust in us as a mobile payment pioneer. However, a pioneer’s role is not always easy. Unfortunately we have not succeeded in revolutionising the payment market as we had planned. We therefore regret to inform you that Yapital will cease to operate its cross-channel payment platform as of 31.01.2016. As a consequence of closing Yapital’s operative business we are also obliged to terminate existing contractual relationships and to give Notice of Termination of the contracts underpinning these. We will issue this Notice in a separate e-mail. Essentially, you may continue to pay via Yapital up to 31.01.2016 at all retail partners partnering the Yapital platform. All other Yapital platform functions will also remain available until this date. Thank you for using Yapital”.

A stark reminder of how far Germany still has to go in this particular market.

And yet, all is not doom and gloom. Volker Koppe over at Visa Europe wrote an article detailing the results of the NFC City Berlin project that took place earlier this year and was driven by standardisation company GS1. Germany‘s largest mobile payment initiative was launched last year in the capital with the mobile network operators O2, Vodafone and Deutsche Telekom teaming up with major retail groups to upgrade POS terminals to support NFC payments. Volker writes that, “With approximately 60,000 activated NFC terminals (out of a total of 800,000) the German market still lags far behind other European countries. However, it will become mandatory for every Visa accepting merchant in Europe to replace all of its terminals with NFC-ready terminals by 2020. But we might not have to wait that long. Recently, countrywide retail chains such as Karstadt, Aldi Nord, Media Markt and Saturn activated the acceptance of contactless payments across their store networks. Industry experts also estimate that around 500,000 terminals in German stores are actually NFC-enabled – they’ve just not been activated so far.”

He finds reasons to be optimistic, though “Of the surveyed retailers, 56 % say that they will accept contactless payments nationwide by 2017. And 94 % of the experts across all surveyed industries (banking and finance, retail, MNOs, smartphone manufacturers and wallet providers) agreed upon mobile payment not being hype anymore, but a real trend establishing itself in the retail industry. According to the research results (in German), there is no doubt that NFC is set as the transmission standard for mobile payments. In addition, the German mobile operators are forecasting that by 2017, more than 50 % of all smartphones in the market will be NFC-ready.” You can read Volker’s piece here.

In other news centred around that most contactless savvy place of them all - London - it was announced that all black cabs will accept cards and contactless payments from October 2016, after plans for the industry to accept new ways to pay gained overwhelming support from the public. However, the minimum fare of £2.40 will rise across the board by 20p to accommodate the costs of using the new technology. The fare rise will cover the cost of the transaction so that cabbies are not left out of pocket, but customers, even if they use cash, will bear the burden of costs. The fare rise will come into force as early as April next year if approved by the Transport for London board.

My piece was immediately commented upon by cabbie Marcus Ardeman who wrote, “Your article is slightly unfair. The initial amount on a taxi meter is reviewed every year, but is not always increased. Although this is being reported to be taking into account the cost of the credit card machines, it will also include any annual increase that they might receive. 20p per journey is not going to allow a driver to retire!!”

Sounds as though the issue remains contentious amongst cab drivers who, by the way, we are inviting to next year’s Contactless Intelligence Conference - titled, ‘Managing the Convergence of Intelligent Payment Solutions’ (see the provisional agenda here) to air their thoughts. It must be a cabbies dream. An open stage and the chance to vent face-to-face to an audience. I for one am looking forward to that!

Finally, our call for papers is going out so if you are looking to speak at the 2016 Contactless Intelligence Conference, taking place from April 26-27 2016, let us know by the 11th December by emailing your request to directorate@contactless-intelligence.com and we will get back to you. We look forward to your submissions.

Until next time,

Steve Atkins
Contactless Intelligence

Did Black Friday turn to Gold for Apple Pay?

Last week was overshadowed by the marketing and shopping bonanza that reaches its peak with Black Friday and then continues with the elusive Cyber Monday. These days are hot on the heels of Thanksgiving. A holiday that seems to have encroached into the European (well, UK) calendar and totally mystifies my mother who cannot for the life of her understand why the present government has created another holiday. Sorry, I digress.

Let’s put our focus back on the US. There were reports that Black Friday could end up being a big thing for Apple Pay with tech-savvy shoppers, utilising the power of their iPhones to make purchases left, right and centre. Great things were expected. Except that didn’t happen. At all. Didi it turn Gold for Apple Pay? 

No.

The latest data from the shopping research firm InfoScout suggests that use of Apple Pay may actually be decreasing, adding to concerns that Apple Pay could end up being a flop. Over the Black Friday weekend, only 2.7% of the people who were in a situation to buy with Apple Pay actually used the service, which is a drop from the previous year's usage rate of 4.6%, according to the report. That's nearly a 41% decrease from last year's Black Friday, a disappointing figure given the fact that Apple has been aggressively expanding Apple Pay's availability over the past year. The report noted that the drop could be due to a larger base pool of people using the iPhone 6 compared to last year, when the research was done shortly after the phone launched. Also, the research was done only relying on 300,000 people who submitted actual copies of their payment receipts, meaning it may not be representative of the whole country.

In fairness, payment schemes on Android phones were also feeling left on the shelf. Just 2% of Android owners used their device to make a mobile payment for eligible transactions during the day. In total, 79% of iPhone users and 74% of Android users opted to pay with a plastic credit or debit card. 18% of iPhone users and 24% of Android shoppers did not choose to pay with either their mobile device or plastic card.

InfoScout commented on their findings that, “(this) was our first time investigating mobile wallet usage among Android owners and we were interested to see that, of all the mobile wallet options available, it was actually PayPal that came out on top on Black Friday. Since Android Pay and Samsung Pay were both released within the last three months, we may see this picture change as time goes on. We found Apple Pay usage at its lowest rate since we’ve started tracking it, being used for only 2.7% of Apple Pay-eligible transactions. This is a fairly marked decrease from what we saw last year on Black Friday. Of course, back then, the primary owners of Apple Pay-enabled devices were early and technologically curious adopters, whereas now the technology is in the hands of the broader population.”

However, back in the UK and everyone’s favourite Xmas TV advert maker, John Lewis, has been named as the UK’s top retailer on mobile for the second year in a row. The Episerver Mobile Commerce report has revealed the top 20 retailers in the UK, scoring each retailer a percentage based on their performance against a range of criteria, as judged by a survey of 1,000 smartphone and tablet users in the UK. The average score across all retailers was 57%, an improvement on the 47% average seen last year. Retailers were assessed based on their mobile sites as well as any Android or iOS apps. John Lewis scored 84%, followed by Argos in second place with 75%. Beauty retailers in the top 20 included Amazon in fourth place (67%) and Marks and Spencer at number five (65%).

John Lewis was said to have a “consistently good mobile strategy” with smooth experiences reflective of the main desk top site. UK beauty retailer Boots also scored higher than average with a score of 77.8%, ranked at number ten. Elsewhere, Asda and Tesco also scored highly, ranking in sixth and seventh place respectively. David Bowen, Director of Product Management for Commerce at Episerver, said, “The top performing retailers in 2015 have demonstrated their ability to evolve their mobile strategies to meet the demands of consumers, offering added value features that mix clicks with bricks, personalised content and a consistent, quality experience to every user, regardless of the device and platform.”

Something must be happening though, to decrease the use of cash in Europe because last week saw the world’s biggest producer of cash say it will cut its production lines in half. De Le Rue, which prints money for dozens of countries around the world, said its Malta plant will close, while production will reduce from eight lines to four at its centres in Gateshead, Kenya and Sri Lanka. The closures are aimed to save the business more than £13 million a year but not until 2018 at the earliest and sees investment cut to less than £30 million.

It means capacity falls from 8 billion banknotes to 6 billion, although the company management insist this could be ramped up to 7 billion if needed.

The company has struggled in recent years, particularly due to the rise of contactless and cashless payments. Also, De La Rue recently won the contract to print new plastic banknotes in the UK from the Bank of England. However, the new notes will be stronger and not need replacing as often, slowing demand.

This Black Friday mobile payment results may not be encouraging but overall it seems that there is definitely a move towards cashless. When, what and how much remain pertinent questions but one can’t ignore a trend.

Just like the adoption of US holidays in the UK.

Finally, our call for papers is going out so if you are looking to speak at the 2016 Contactless Intelligence Conference, taking place from April 26-27 2016, let us know by the 11th December by emailing your request to directorate@contactless-intelligence.com and we will get back to you. We look forward to your submissions.

Until next time,

Steve Atkins
Contactless Intelligence

Is Walmart going it alone with mobile payments?

Walmart began testing its new mobile payment system last Thursday at stores around Bentonville, Arkansas, where the retailer is based. It plans to launch the payment feature in all 4,500+ US stores in the first half of next year. The app - called Walmart Pay (that’s original!) will allow shoppers to pay with any major credit or debit card or its own store gift card through its app at the cash register. Walmart claims it has become the first retailer to launch its own mobile payment system that works with an iPhone or Android device and with a major credit or debit card.

Walmart’s move into mobile payments comes after Apple announced that Apple Pay was expanding to other merchants such as Best Buy and KFC and comes several months after Google launched the Android Pay mobile wallet app and Samsung came out with Samsung Pay. Walmart obviously believes it is a better strategy to build its own payment system to custom fit with its needs - sorry, its customer’s needs - despite backing the ‘CurrentC’ payment solution from the ten retailer alliance called Merchant Customer Exchange (MCX).  Neil Ashe, president and CEO of Walmart’s global e-commerce group is reported to have said, “We are creating a seamless shopping experience that includes payment. It’s fast. It’s simple, and it’s a secure way for customers to use their smartphone.”

For those not familiar with the CurrentC solution - on which Walmart Pay appears to be based - it eschews NFC technology for, wait for it - QR codes! 

Walmart U.S. senior vice president for services, Daniel Eckert, said in a Walmart Corporate video that existing mobile wallets are limited to certain types of phones, operating systems or payment types, which places constraints on users. He added that Walmart Pay has been designed to be integrated with other payment wallets as well. Hence the QR code scanning approach. A promotional video also exists touting the benefits of the app.

Customers at the store have to open the Walmart app and choose the pay feature. After activating the camera, the user can at any time during checkout scan the code displayed at the register to connect Walmart Pay. The process is complete when a store employee scans and packs the purchases. An electronic receipt will be sent to the app and can be viewed at any time, Walmart said. The soon to be released Chase Pay (seriously, no-one can think of a better name?) from bank JPMorgan Chase, will also forgo the use NFC when it debuts next year. Rather, it too will rely on QR that can be scanned by a register.

Interestingly, Walmart Pay users will be able to set the feature to prioritise payments using just gift cards and use credit and other cards as the second payment option. They can also set the app to pay by a combination of cash and Walmart Pay. Walmart is apparently counting on demand for the payment system from the 22 million customers that use the Walmart app each month, and more than half of Walmart’s online orders are now coming from a mobile device. This holiday season, Walmart added new features like allowing online shoppers to check in once they got to the parking lot so they could have their online orders ready for pickup. The app ranks among the top three retail apps in the Google and Apple app stores. “Millions of the company's customers used their smartphones for shopping in the last holiday weekend and nearly half of online customers used their mobile devices,” commented Ashe.

Ashe and Eckert told reporters the system is designed to integrate with other payment applications like Apple Pay if the retailer decides to include them. They also said they were still excited about being in the Merchant Customer Exchange program. “We are listening to the needs of the customer,” Eckert said. “We are looking at innovating the checkout experience and using payment to do that.”

Maybe so, but I can’t help but think that MCX is going to feel that they had the rug pulled from under them, so to speak. Or is the fact that Walmart appears to have ‘jumped the gun’ an indication of just how factious the MCX and their CurrentC solution really is? Either way - QR codes? Really?

Finally, a reminder of all of you looking to enter the CMAs for 2016 will need to register your interest before December 31st. Nothing else needs to be done at this stage - just a notification of intent. And yes, that even includes you with a QR code solution. Prove us all wrong!

Until next time,

Steve Atkins
Contactless Intelligence

2015 is approaching its end - how did we do?

I am not sure how many of you, dear readers, will open and read this final editorial of the year, coming as it does in Christmas week. However, it would be wrong of me not to write a quick sum up of the highlights of 2015 as that would definitely be an intolerable loose end.

So, here we are, taking a brief a look back at the year that redefined the term ‘pay’ as a noun when proceeded by a brand name and showed us that, as long as we have a small micro payment card on our person, it is now acceptable to touch the contactless payment terminal with any part of the body. Oh, I can but imagine the numbers of would-be Jedi Knights who are going to be out in ‘force’ (the pun was intentional) waving their hands over a payment terminal and paying  - thanks to a bPay from Barclaycard secreted in their robe. Incidentally I once saw a video of a man dressed as Dumbledore get on a bus in London and pay by waving his wand over the terminal (the wand had a Oyster card chip in the end of it - but I digress…)

So, as well as the release of Apple Pay, bPay, Samsung Pay, Android Pay, Walmart Pay, and the announcement of Chase Pay for mobiles, we were also expected to accept ‘en masse’ the role of wearables as payment devices, too, thanks to the release of the Apple Watch. This challenge to the status quo was also taken up in 2015 by threatened ‘traditional’ watch companies looking to transform their watches into payment devices. One only has to look at the work that Swatch is doing to see that the industry is getting very serious on this topic.

We also saw a couple of giants stumble in 2015. A massive data breach at Gemalto came to light concerning their SIM cards and Softcard finally gave up the ghost and was taken over by Google - never to be heard of again. Something that did not give up the ghost in 2015 was the ten retailer alliance called Merchant Customer Exchange (MCX) and their payment solution, ‘CurrentC’. They railed against Apple Pay and continue to do so - albeit with more inclusive language - telling reporters the system is designed to integrate with other payment applications like Apple Pay – if the retailer decides to include them.

As well as the further development of contactless and mobile payment on public transport in, and around, London, one area that also saw great in-roads was that of charity collection. It’s an area with fantastic, innovative payment implementations from the likes of Save The Children and Cancer Research with their window payment innovation.

Looking ahead to 2016, we have a few topics that will be explored more fully. Card-On-File and In-App payment is going to be HUGE! (that’s my prediction, hence the capital letters). It’s already very big, but I am predicting that Card-On-File will be the mainstay of payment in the very near future - just look at certain Taxi apps and you will see what I mean. I am also predicting that Biometrics and payments will get even closer. A quote from the latest Gemalto blog reads, “Biometric technology will eliminate the need to carry a payment card, smartphone or a wearable by allowing users to authorise payments with a fingerprint, handprint, face or retina scan. It’s just a matter of time before we become the payment method, rather than our devices”.

We have been told that in 2016 London Taxis will take contactless payment as standard as well as the spread of such payment methods to street traders, stall holders and market vendors. We will be looking to cover these topics at the 2016 Contactless Intelligence Conference, along with some more future elements such as the ‘blockchain’, the reasons why bartering as a payment option may be making a comeback and the rise of ME2B (look it up - it could well be the future).

Finally, the news story that summed up payments in 2015 for me didn’t come from the trade journals or the national newspapers but from online satirical website, ‘The Daily Mash’, who put out an article claiming that “Retail staff have complained that contactless payment means they no longer get to stare intensely at customers while their card goes through”. The piece goes on to say;  ‘Nikki Hollis, who works in a garage, said, “The only good bit about this job was messing with people’s heads in that seemingly endless few seconds between PIN entry and PIN acceptance. They would look at me, I would look at them, they would look at the floor. Sometimes they would say something about the weather, which I would ignore. Then they start to shuffle uneasily, at that moment they want nothing more in the world than to take their Ginster’s product and flee into the night. About a third of the time I would pretend something was wrong with the machine, just to make them do it again. The rest of this job is shit, but for those few seconds I was a minor god.” A CBI spokesman said, “Soon your debit card will be a miniature drone which flies out of the window at night and makes aspirational purchases of Japanese denim and French horns. Look at your own payment history. Are you honestly saying we couldn’t spend it better?”’ 

This is the last Contactless Intelligence editorial of 2015. I'll be honest, some weeks the editorial writes itself, some weeks it's pure blood, sweat and tears (not mine). However, I hope you feel that we have touched upon some salient points in the industry and at the very least have acted as a spring board to your week. 

The next Newsfeed will be on Monday the 11th January 2016. So, until then, all that remains for me to do is to wish all our partners, contributors and, of course, our readers a very Merry Christmas and a Happy and Prosperous New Year! 

Until next year.

Steve Atkins
Contactless Intelligence

CES 2016; smart belts and even smarter fridges

First of all, a belated Happy New Year to our readers and subscribers. This time of year all eyes turn towards Las Vegas and the wealth of useful (?) and amazing (??) technological achievements built into everyday items that we will most definitely be using in the near, near future (???). Or so we are lead to believe.

Some are unusual but I can see them taking root in the family home. For instance, the Smart Fridge from Samsung coupled with a MasterCard app called Groceries that allows the owners to order new food items while actually standing in front of the fridge. "Groceries", claims MasterCard, "will redefine the family grocery shopping experience by allowing households to share, build, manage and modify their grocery lists and shopping carts throughout the week".

Groceries was developed in partnership between MasterCard Labs and Samsung and will come preloaded in Samsung’s Family Hub refrigerator. At launch, consumers will be able to shop and select their needed items and favourite brands from leading online grocer and key integration partner FreshDirect, and ShopRite, the largest supermarket cooperative in the country with more than 250 stores in the Northeast. Fridge plus the Groceries app will only be available in the States for the moment but I can see it catching on in Europe. This is a potential winner. See the fridge is empty, order via the in-fridge app and the groceries will be delivered to your door.

Alternatively at CES we can move into the real ‘contactless’ technology sphere of in-car gesture commands delivered by BMW’s AirTouch platform. BMW describes their system as "Intuitive control of entertainment, navigation and communication functions using simple gestures made with a flat hand. AirTouch allows the display in a vehicle to be operated like a touchscreen without actually having to make contact with the surface. Sensors record the hand movements in the area between the central console and the interior mirror. This enables drivers or passengers to change the focus on the surface of the large panorama display. Simple confirmation selects the relevant menu item or activates an icon.” 

As a driver, I am aware of the amount of hand gestures that happen while navigating traffic on the roads but not all of them are going to work a panoramic display. Still, I mention it as gesture movements have been suggested in the past as the way forward for payments. Let’s see how BMW gets on with this new field first.

My CES coverage last year was concerned with the smart belt that was being launched at CES 2015. I was pretty sarcastic about it as a wearable that was unlikely to catch on. Once again, what do I know? This year we have the WELT - a ‘smart wearable healthcare belt’ from Samsung. 

WELT is a smart-belt that looks like a normal belt, but offers users a more ‘discreet way of using smart sensor technology’ to monitor their health. WELT is capable of recording the user's waist size, eating habits and the number of steps taken, as well as time spent sitting down. It then sends this data to a specially-designed app for analysis, where it is digested (like what i did there?) and a range of personalized healthcare and weight management plans are then discharged…

The belt may indeed be discreet but anyone in a relationship knows that it’s the job of your partner to tell you that you are fat and unhealthy - I don’t need a smart-arsed belt to nag me about it. I could burn calories and get some exersice by going shopping for the food.

Oh, wait a minute - Samsung and MasterCard have already got that covered.

Finally, we still have a little ‘wriggle’ room in terms of timing for any companies looking to enter the CMAs for 2016 but we ask that you put your nominations in before the middle of this month. Further details on categories can be found by following this link and the link to the nomination form can be found on the same page. I’ve said it before but time is really running out now - so please, act soon to avoid disappointment!

And, of course, if it is not already in your calendars - please note the date of the 2016 Contactless Intelligence Conference, taking place in London on April 26th and 27th. Registration will be opening up later this week so please check on the Contactless Intelligence site for more information.

Until next week.

Steve Atkins
Contactless Intelligence

Contactless ticketing is moving on in 2016

Last week, contactless was all about travel. Be it buses or trains, 2016 sets out to be the year that paper-based systems evolve into contactless card and mobile tickets. Or even, as some would have us believe, into digital currency.

First up came the news that the Oyster zone in London was being extended to Gatwick airport. The airport's station has been added to Transport for London's newly expanded rail network map for the first time, meaning barriers will now accept pay-as-you-go Oyster and contactless cards. It puts paid to a long-term gripe of passengers, who were previously required to buy a separate ticket from East Croydon if travelling from another station in London to Gatwick. 

According to Gatwick Airport’s Chief Commercial Officer, Guy Stephenson, Gatwick’s passengers will welcome the introduction of Oyster and contactless payments because it is the most convenient way to pay for onward rail travel to London. It means a single ticketless system will link Gatwick with the whole of Greater London so passengers can benefit from seamless connections to and throughout the capital.

The way people took to Twitter to express their joy was truly confusing for the the rest of us, but as long as they were happy.

Last week, Visa reported that cardholders made more than a million contactless journeys on London’s transport network on a single day in the lead up to Christmas. “In December alone, Visa Europe saw an 166% annual increase in the total number of journeys by people who used their Visa card to pay as they travelled, and a total spend for the year of £339m,” says Kevin Jenkins, regional managing director for the UK and Ireland at Visa Europe. “That’s 7x growth in total spend on the year." Visa say they expects to see usage grow, particularly with the growing popularity of wearables like bPay and the Apple Watch, as well as the uptake of mobile NFC payment services.

Transport for London are also very pleased with themselves. Shashi Verma, director, customer experience, TfL, said, "Contactless payments on TfL services has been a huge success. A quarter of our pay as you go customers use contactless payment already because it is so quick and easy and there have been more than 250 million journeys made using cards from over 80 countries."

In the coming years, public transport users in other parts of the UK will be able to pay for journeys via contactless. Earlier last week, the UK Cards Association set out a framework to enable transport operators across the country to implement contactless payments on local pay-as-you-go journeys, including single trips, such as a bus journey, or combined travel on more than one type of transport. 

Melanie Johnson, Chair of The UK Cards Association, said, “Payment cards play a key role in our lives and we believe this work contributes to making public transport more convenient for millions of passengers. Our collaborative project with the transport industry aims to transform the way customers pay for their travel and supports the Government’s objectives. This framework sets out how contactless payments can be used to support any journey, whether a single bus ride or a cross-country trip”.

Contactless travel could also be put in place on every bus in Britain by 2022 under a multi-million-pound plan unveiled earlier this week, developed by five major bus operators in the UK. Stagecoach, First Bus, Go-Ahead, Arriva and National Express are working together to produce a business case which is expected to be completed by late spring 2016. The scheme, funded predominantly by the private sector, could see new EMV contactless technology installed on every one of the UK’s 32,000-plus buses outside London. It would offer cashless travel for those who want it and capped pay-as-you-go-fares in all urban areas.

This new project would complement the framework, covering more than 1,200 bus operators in England, Scotland and Wales, and making contactless travel available for 5.2 billion bus passenger journeys a year across Britain. Associated government legislation would be needed to ensure contactless ticketing was offered by all individual bus operators. The development of the bus contactless plan comes just weeks after the major operators completed the introduction of smart multi-operator bus ticketing in all nine of England's smart city regions with support from local transport authorities. It is making public transport more accessible in regions which account for around 15 million people - over a quarter of England's population. A similar project is now underway in Scotland to deliver the same benefits to Glasgow, Edinburgh, Dundee and Aberdeen. 

Robert Montgomery, Stagecoach UK Bus Managing Director and chair of the major operators’ steering group on smart ticketing, said, “This contactless initiative would be the biggest smart ticketing project ever delivered in Britain and a major milestone in providing simpler travel for the millions of people who rely on buses. Smart bus ticketing is already widespread across the UK, with ourselves and Go-Ahead having over 1.5 million smart cards in circulation.”

The government was quick to pass praise on these initiatives and frameworks with Transport Minister Andrew Jones commenting, “The smart ticketing revolution is helping to build a modern, affordable transport network that provides better journeys for everyone. By working together, industry, city regions and government have been able to ensure more and more people can use smart ticketing to get around. We are determined to continue driving progress so passengers get the quick and simple journeys that they want and deserve.”

But why stop there? Across the pond, in New York,  contactless payments are a big part of the future of finance, according to the Metropolitan Transportation Agency in New York. If all goes to plan, both the subway and bus industry will be using contactless payments from 2018 onwards, thanks to a partnership between the MTA, MasterCard, and Citi. New York Governor Andrew Cuomo commented, “The MTA is absolutely vital to the daily functioning of New York City, but for too long it has failed to meet the region’s growing size and strength. This is about doing more than just repair and maintain – this is thinking bigger and better and building the 21st-century transit system New Yorkers deserve.”

Bitcoin enthusiasts in the US have been quick to jump on this train. They argue that contactless payment integration opens up a lot of opportunities for Bitcoin in the near future as well. In fact, companies such as Plutus have come up with a way to allow for Bitcoin transactions wherever NFC payments are accepted. This means Bitcoin users in New York should be able to use digital currency as a payment method for public transportation.

Even though New York doesn’t appear to be keen on Bitcoin by any means, these enthusiast like to think that the MTA will integrate digital currency payments in the future. When it comes to places with a lot of tourists every year, Bitcoin payments for public transportation make a lot of sense.

At least for them. Knowing the confusion created before the extension of the Oyster system to Gatwick - can you imagine having to explain a digital currency to tourists just wanting to get home!

Until next week.

Steve Atkins
Contactless Intelligence

Is Barclaycard the real winner in the mobile payment race?

Last week’s mobile-payment news was dominated by Barclaycard and the upgrade to their Barclaycard app (Android only, though) as well as their newly released contactless spend numbers that show a trebling of contactless spend in 2015 - mostly attributed to the rise in the maximum spend on contactless cards to £30 in September.

Barclaycard, which processes nearly half of all credit and debit card sales in the UK, said contactless spend by value increased 164% last year, while the volume of transactions was up 135%. The average contactless transaction value rose 26% to £8.65 following the increase in the limit. Barclaycard reported that more than a quarter of its active customers use contactless every month. Usage of the Barclaycard contactless card is highest in London: 41% of all transactions of up to £20 are made with contactless. This was followed by Cambridge, at 26%, and Northampton, at 24%. The findings come as The UK Cards Association reveals that contactless payments hit a record £1.02bn in a single month for the first time in November 2015.

Tami Hargreaves, commercial director of digital consumer payments at Barclaycard, said, “Every second counts for today’s busy shopper and, as our data shows, ‘touch and go’ payments are now the norm for an increasing number of everyday purchases. Whether it’s grabbing a coffee on the way to work – or stocking up on groceries on the way home – the speed and ease of contactless means it’s now the preferred way to pay for shoppers across the country. As the old adage goes, ‘time is money’, and we expect contactless payments to continue to break new records throughout 2016.”

Besides being able to pay for transactions of up to £30 using contactless, customers with Barclaycard’s Android Contactless Mobile can enter their PIN into the app and pay for transactions of up to £100. “With cards increasingly being used to pay for everything from the morning coffee to an evening meal, going about your life while your card is somewhere else can lead to potentially awkward situations,” says Hargreaves. “With contactless spending now over a billion pounds a month, we may even be witnessing the beginning of the end for the bar tab as we currently know it.”

Talking about bars, according to research from Barclaycard, a predicted 2.5 million British revellers will have left their cards at bars and restaurants during the festive season, with many ending up in embarrassing situations when they found they were without means to pay. Almost a 6th of 21-55 year-olds questioned (12% of women and 20 per cent of men) reported that they have forgotten their credit or debit card behind the bar, having left it there when opening a tab. Nearly half (46%) of those only realised later that day when going to pay for something else, with a further quarter (29%) discovering their mistake the following day.

And the research results continue; A quarter (24%) – rising to almost a third of men – admitted to waking up a spouse or housemate to pay for their taxi fare when they got home. 1 in 4 men was forced to abandon a purchase at the till upon realising they were unable to pay. Others may have annoyed the boss, with 18% admitting they arrived late for work after scrambling to find loose change to pay for transport.

Most importantly, though, is this; users lost their bank card permanently at least once during 2015 – accounting for almost 4.6 million  cards. Fortunately, for those truly unrecoverable cards, Barclaycard is now offering an industry-first ‘instant card replacement’ function as part of a revamp of its app and this is where Barclaycard really moves ahead of the pack.

Barclaycard will be the first in the UK to introduce ‘virtual card replacement’ for Android users, allowing customers to download a contactless version to their phone instantly. The service is part of the upgrade to the Barclaycard app. The service enables customers with a Visa card to have it immediately replaced onto their mobile phone if it is lost or stolen by simply calling the contact centre for free from the Barclaycard app. The virtual replacement card will be instantly downloaded and available for immediate use for contactless payments; a physical card replacement will then follow in the post.

“It’s amazing that nearly three weeks after Christmas, half a million Brits are still retrieving forgotten cards from their favourite bars and restaurants. With cards increasingly being used to pay for everything from the morning coffee to an evening meal, going about your life while your card is somewhere else can lead to potentially awkward situations,” added Hargreaves.  “It’s even harder when your card is lost or stolen. Barclaycard’s new Android Contactless Mobile feature is the first in the market that allows you to immediately download a new card to your mobile, and use it to make contactless payments. Customers are also able to pay with contactless for transactions of up to £100. With contactless spending now over a billion pounds a month, we may even be witnessing the beginning of the end for the bar tab as we currently know it.”

I like the sound of that!

Until next week.

Steve Atkins
Contactless Intelligence

The blockchain could take a central role in 2016

Everyone by now has heard of the digital currency Bitcoin. Like it or not, it's not disappearing any time soon and why should it? With the changing face of payment mechanics and the slow decline of cash, Bitcoin has just as much to gain as any other payment solution. However, the foundation upon which Bitcoin is based - the blockchain - continues to demonstrate why this secure and trusted digital foundation could become the real cornerstone of 21st century commerce.

To say that its time may have come would be an understatement. Last week saw reports released that pointed to the UK in particular, becoming a 'cash-second' economy as the number of contactless payments rose by 250% year-on-year in 2015 – according to the annual report from Visa Europe. 1 in 7 transactions using Visa cards in 2015 were completed using contactless payment technology, compared to 1 in 25 a year earlier and in a year when more payments were made electronically rather than with cash for the first time in the UK, Visa Europe saw point-of-sale spend rise 9.6% and the number of transactions in the country grow 11.5%. So, good news for contactless payments and, perhaps, lamentations for cash.

However, despite the surge towards non-cash payments, there are still concerns over the security of such transactions. A new study carried out on behalf of Gemalto on payment data security, reported that over half (54%) of those surveyed (3,700 IT security practitioners from more than a dozen major industry sectors) said their company had a security or data breach involving payment data, four times in the past two years on average. According to the study, acceptance of new payment methods such as mobile, contactless and e-wallets will double over the next two years. While respondents say mobile payments account for just 9% of all payments today, in two years they expect this ratio to increase to 18% of all payments. Given the issues company IT professionals are facing in securing payment data accepted today through traditional methods, their companies are likely to face even more difficulties in securing future payment methods.

Many payment technology developers are therefore now looking to blockchain technology to secure payment in the future. Blockchain creates a distributed public ledger that records all transactions in a particular system. The blocks record some or all of the current transactions and once it is completed, the block is timestamped and hashed into the permanent database or blockchain.The blocks are linked to each other in a linear, chronological order where each new block contains the hashed details of the previous block. Thus creating a chain of transactional information so that every block that is added, protects information in the previous one. There are no centralized databases in a blockchain. Complete or partial blockchains are stored in nodes where the database is constantly updated. Distribution and decentralization ensure that no one individual or party in the system has the power to modify or tamper with the data. It also removes the need for a third party or central authority to authenticate or process peer-peer transactions and increases transparency.

Perhaps that is why Gemalto is also looking to the blockchain. The company announced last week that they are to work with Symbiont to enable financial services organizations to securely execute smart contracts and other blockchain-based transactions. Symbiont’s platform uses blockchain to allow institutions and investors to issue, manage and trade a range of financial instruments more efficiently over an encrypted peer-to-peer network. These instruments, also known as Smart Securites™, are self-enforcing, self-executing contracts that offer cost and time efficiencies compared with traditionally brokered transactions. Symbiont’s will integrate Gemalto’s SafeNet HSMs to ensures a high level of regulatory compliance and trust for cryptographic identities authorizing these transactions.

In fact, the use of blockchain technology is starting to be used in a variety of payment-based offerings. Last week, Fin-tech startup ToneTag, which offers contactless payment solutions through sound waves, brought a new layer of security to its contactless payments by introducing blockchain technology in the contactless payments for its global customers. ToneTag enables sound wave based contactless payments that are, according to the company, traceable, transparent, and secure. Every party involved in the transaction is protected by the blockchain since it maintains a record of every transaction that ever took place in the system and blockchain in ToneTag system will ensure safety against fraudulent transactions for both merchants and customers; record and validate each and every transaction, protecting them from the threat of hacking; and will eradicate anonymity and pave the way for traceable transparent transactions, claims the company.

While paying through ToneTag, customers can identify whether the merchant outlet they are dealing with is exposed to risks or if it has witnessed fraudulent transactions in the past. Similarly, merchants  can detect if the transaction is unusual or if the customer was involved in fraudulent transactions earlier. “ToneTag has always been at the forefront of disruptive technology in the Fintech space. Blockchain technology has the potential to completely redefine the way transactions take place as it brings unprecedented advancements in fraud prevention,” said Kumar Abhishek CEO, ToneTag.

Expectations that blockchain technology will have such a disruptive effect on payment system security is one of the reasons that Contactless Intelligence has invited London-based blockchain company Epiphyte (provider of a block-chain-based software as a solution (SaaS) for immediate financial transactions), to speak at our Spring Conference on the topic of ‘The Blockchain - what is it and why should you care?”. The company recently worked on a proof of concept with Visa Europe Collab to utilise the blockchain to facilitate international money transfers and have developed software that enables payments to be sent from a fiat currency in one country (e.g. a legal tender like GBP) and to be received in another. For those of you who want to know more about this technology and what it could mean for your company or solutions, we highly recommend that you take in this session.

Because they way things are going - the blockchain could end up being THE technology of 2016!

Until next week.

Steve Atkins
Contactless Intelligence

Using contactless to beat cancer

Last week saw the arrival of World Cancer Day (4th February) and was marked by Cancer Research UK (CRUK)holding face-to-face fundraising collections using contactless donation terminals in 16 locations across the UK. Supporters of the worthy cause were encouraged to donate £2 by tapping their contactless bank cards on specially designed readers held by the fundraisers. Most of the selected locations were at train stations and shopping centres in London, Glasgow, York, Liverpool and Leeds.

Ed Aspel, executive director of fundraising and marketing at Cancer Research UK pointed out that, with the increasing use of contactless payments, “this seems a natural next step”. He added, “We’ve been at the forefront of contactless giving in the third sector, having launched a small scale pilot in four of our shop windows last year.  But this activity takes it to a new level, will ensure we stay relevant, and make it as easy as possible for people to donate in a way that suits them.  It really is as simple as popping some spare change in a collection tin and all money raised will go towards our life-saving research to beat cancer sooner.”

Creditcall, the omnichannel payment gateway and EMV Kernel provider, together with Elavon and Payter, provided their contactless payment technologies in support of Cancer Research UK’s World Cancer Day  fundraising campaign,  “It is crucial to offer consumers a secure and hassle free method to make donations” said Lars Pedersen, CEO of Creditcall. “Having used our payment gateway and EMV software in a previous contactless payments pilot with Save The Children, we were able to apply our learnings to help Cancer Research UK pioneer the to date biggest contactless donations service. Donors can now support Cancer Research UK with a simple tap of their card. We are very proud to be a part of this initiative.”

This year, as part of World Cancer Day, CRUK is working with Breast Cancer Care, Anthony Nolan and the Movember Foundation to unite the nation and transform the lives of millions who are affected by cancer. 

CRUK said it was the first charity to test contactless technology on this scale, but other charities have experimented with it for their fundraising. In March 2015, Comic Relief encouraged shoppers to donate £1 each by tapping with their contactless payment cards on statues of comedians and comedy characters such as Dawn French and Rowan Atkinson's Mr Bean. 

Contactless payment technology has huge potential to transform fundraising in an age where the use of cash is likely to decline, according to the Charities Aid Foundation and Save the Children. Last June, they completed a groundbreaking 100-day proof of concept, with Visa Europe Collab, to explore consumer readiness for this new way of giving. An innovation team from Visa Europe Collab worked with CAF and Save the Children to design and create mobile contactless collection tins and countertop donation terminals to test whether the technology has the potential to grow giving in the UK. Chris Allwood, Senior Product Development Manager from CAF said, “We are always looking to the future and we are convinced there is a massive future for donations using contactless technology as people switch from using cash to using cards. Contactless cards are still being rolled out but they are clearly seen as they way people will make small payments in the future. It’s vital we are at the forefront of this technology so that charities do not lose out.”

Cancer Research UK has promised to share the results of its nationwide contactless collections trial for World Cancer Day with the wider charity sector. CRUK has experimented with contactless collections in the past. CRUK previously used contactless technology on the windows of four of its shops – in Brighton, Guildford in Surrey, and Kensington and Marylebone in London – during two weeks in January 2015 to mark last year’s World Cancer Day. This is the first time that CRUK or any charity has trialled contactless donations on a national scale. During the campaign period over 70,000 people "engaged" with the contactless windows. CRUK would not disclose how much money was actually donated via the contactless windows as this is "commercially sensitive information".

Cancer Research UK will be speaking on this topic and sharing feedback and results with the audience at this year’s Contactless Intelligence Conference, taking place in London on April 26th. If this topic is of interest to you or your company I wholeheartedly encourage you to attend  and educate yourself on what will no doubt be the future of street charity collection.

Until next week.

Steve Atkins
Contactless Intelligence

Glitches and cooperations

Last week saw a certain amount of gleeful Schadenfreude coming from various members of the tech community aimed at Apple and their iPhone offering - as news reports surfaced of problems and glitches with Apple Pay and something else – known as Error 53 (or as it will probably soon be known as ‘Error53gate’), that has an impact on the use of Apple’s Touch ID solution and in some cases the iPhone in general.

Relatively few people outside the tech world are aware of the so-called “Error 53” problem. The issue appears to affect handsets where the home button, which has Touch ID fingerprint recognition built-in, has been repaired by a “non-official” company or individual. The problem only occurs when the latest version of Apple’s iPhone software, iOS 9, is installed. In fact, the phone may have been working perfectly for weeks or months since a repair or being damaged. However, after installation a growing number of people have reported that their phone simply stops working. In mobile parlance - it just becomes ‘bricked’ - that is, as useful as a brick.

Apple defended this move by saying that Error 53 was there to protect customer security and issued a statement. “We take customer security very seriously and Error 53 is the result of security checks designed to protect our customers. iOS checks that the Touch ID sensor in your iPhone or iPad correctly matches your device’s other components. If iOS finds a mismatch, the check fails and Touch ID, including for Apple Pay use, is disabled. This security measure is necessary to protect your device and prevent a fraudulent Touch ID sensor from being used. If a customer encounters Error 53, we encourage them to contact Apple Support.”

If that wasn’t enough, later in the week 9to5Mac reported a glitch within Apple’s mobile wallet prevented users from setting it up — at least as far as Visa cards were concerned. Other cards, American Express, MasterCard or Discover cards, were not affected. Apple acknowledged that the Visa-linking issue affected “some users” of Apple Pay and a detailed timeline on Apple’s system status page appears to confirm the roughly seven-hour period during which the problem existed.

After 9to5Mac posted its initial report on the Apple Pay issues related to linking Visa cards, the site later updated it to include mention that Apple had made it known that the outage had been resolved. As is irritatingly standard operating procedure for Apple, no further news regarding the number of Apple Pay users who were affected by the glitch, nor as to the technical specifics that might have caused it, were disclosed.

Apple has recently released a security update that includes fixes for more than 100 flaws in the operating system, including a vulnerability in Apple Pay that can allow for hackers to steal the confidential information of their victims.The security issue would have allowed hackers to trace the recent transactions that users made through Apple's mobile payment system. All the information regarding the transactions could be obtained by hackers through the log feature of the platform.

To add further insult to injury, research from First Annapolis Consulting revealed that only a fifth of iPhone 6 owners in the US (20%) have used Apple Pay at least once, down from 22% in spring last year. 15% say they use it regularly — more than once per month — down from 19% in the 2015 survey. “Awareness among iPhone 6 users is down slightly from 88% in our spring 2015 survey,” says Hugh Gallagher, a principal at First Annapolis. “High awareness is a necessary but not sufficient condition for the success of a new payment service such as Apple Pay. At this point in time, the typical financial institution can expect 1 to 2% of cardholders to use Apple Pay two or more times, based on the survey results. While early adoption of Apple Pay may not be as high as expected and appears to have plateaued since the initial launch in October 2014, usage is likely to continue to increase with the proliferation of other mobile payment solutions which should expand the merchant acceptance base and broaden the availability and visibility of mobile payments in general.”

On a more positive note and speaking of other mobile payment solutions, last week saw Vodafone announcing a strategic partnership with PayPal to expand contactless payments across its mobile wallet. The partnership will enable PayPal customers to link their accounts to the Vodafone Wallet, allowing them to use Android smartphones to make contactless payments. According to PayPal’s European CEO, this marks the first time PayPal users will be able to make contactless payments. “Money is going digital, and the smartphone is at the centre of this transformation. Our partnership with Vodafone will enable millions of our customers in Europe to make contactless payments for the first time in their favourite high street stores using their mobile phones,” said Rupert Keeley, CEO of PayPal Europe.

The agreement will enable millions of PayPal customers in Europe to opt to use the Vodafone Wallet to pay for goods and services at the point-of-sale using their phones with a Vodafone NFC SIM, currently supported by more than 70 Android smartphone models. PayPal customers in several European countries will be able to choose to add their accounts to the Vodafone Wallet during 2016. Vodafone customers who do not have a PayPal account will be able to sign up for one from within the Vodafone Wallet app.

Stefano Parisse, Group Director Consumer Services, Vodafone Group said: “We are excited to allow millions of PayPal customers to make payments at the physical point-of-sale using their Vodafone Wallet, which provides highly secure mobile payments. Vodafone customers will now enjoy the ability to use PayPal to fund payments made using the Vodafone Wallet, which is the industry’s most comprehensive solution for offline and online payments.”

Vodafone Wallet launched in November 2013 and is currently available in Germany, Spain, the UK, Italy and the Netherlands. It was announced in March 2015 that customers in five major European markets would be able to use their Visa cards to make NFC mobile payments with a SIM-based service that makes use of tokenization, while support for MasterCard was added in November 2015.

With Mobile Wold Congress just a few weeks away, expect further mobile strategic partnerships to be announced soon. The Contactless Intelligence team will also be in Barcelona, so if you have any exciting news, make sure you let us know. For those of you who want to know more about innovate payment solutions and the trends in the world of standardisation and Mobile ID, we recommend you book your ticket to the upcoming Contactless Intelligence Conference & Forums (April 26-27, London) as soon as possible while prices are low. 

Until next week.

Steve Atkins
Contactless Intelligence

Panic on the underground!

Remember that photo of a dress that caused such a viral sensation last year? The one where some people saw a white and gold dress and the others saw a black and blue one?. Never before had a photo triggered so many people to talk about what they are looking at. You couldn’t get away from the topic, especially with it being picked up by just about every international news agency.

A similar thing happened last week only it wasn’t about a dress. It was about a card scanner on the London underground. And as all things start these days, our story begins on Facebook…

A man called Paul Jarvis posted a picture of a man on public transport with a card terminal and wrote, “So this guy was spotted wandering round with a Point of Sale (POS) device. All he has to do is key in a price less than £30 and then touch the device on the pocket that contains your wallet. Ching! You've just been charged automatically on your touch pay enabled credit/debit card.... We just tried this in my local pub with their POS device and it worked... (I've actually shown people this using the NFC function on my mobile to read their card data through their wallet to freak them out but this is the first time I've seen someone doing it for real). Time to invest in a screened wallet I guess…”

Quickly picked up and whipped into a frenzied hysteria by the British press and that bastion of mob lunacy - otherwise known as Twitter - this was taken as evidence of the arrival of the  'digital pickpocket'. Time to Panic!

While an unscrupulous individual, in theory, could key an amount into the terminal and hold it against the pockets of unsuspecting targets, meaning they could steal money out of their victims accounts via their contactless cards, in practise it doesn’t actually work like that. Most banks require their customers to have a business bank account if they want to take card payments - starting one of these accounts naturally involves handing over personal information to the bank, making the criminal traceable if a victim noticed the transaction on their statement.

Customers could get a refund from the bank if they spotted the fraudulent activity, and if the bank traced the theft to the criminal's account, they could get shut down. But by that point, it might be too late.

Using this method to steal from people is harder than it seems, and out of the millions of people in the UK who own contactless cards, there have only been a few reported cases of these kinds of thefts taking place. And even then it was based on card information and online ordering rather than being based on the £30 contactless cash limit.

Giles Mason, Media Relations Manager for the UK Cards Association, confirmed this premise and told Techradar, "We have not received any reports of this type of incident ever occurring in the UK. Cardholders are fully protected against fraud and would receive a full refund from their bank. In order to be able receive any money from a card payment, a retailer account must be set up with an acquiring bank. All acquirers carry out thorough security checks before setting up an account, and monitor new accounts for any suspicious activity. Every card payment is fully traceable, right through to the recipient account, meaning if any fraud is reported the recipient is easily identifiable."

Mason also commented that, as well as the card being placed correctly near the reader, it would have to be a few centimetres away and "not near any metallic objects, including keys, mobile phones or other cards, which would interfere with the signal."

In fact, contactless card fraud is actually quite low. In the first half of 2015, only £516,500 of a £2.58 billion contactless spend was fraudulent. That represents less than 0.2% of all cases of card fraud in the UK in the first six months of 2015. More importantly though, was the discovery that this photograph was not even taken by Paul Jarvis on the London underground but had in fact originated in Russia. Funnily enough, Jarvis has now deleted his Facebook post.

With Mobile World Congress now about to get underway, do remember to wrap your contactless payment cards in tin foil and avoid any large crowds if at all possible. Just in case :-)

The Contactless Intelligence team will also be in Barcelona, so if you have any exciting news, make sure you let us know. For those of you who want to know more about innovate payment solutions and the trends in the world of standardisation and Mobile ID, we recommend you book your ticket to the upcoming Contactless Intelligence Conference & Forums (April 26-27, London) as soon as possible while prices are low. 

Until next week.

Steve Atkins
Contactless Intelligence

Is Selfie Pay coming to Europe this summer?

MasterCard’s facial recognition payment option, known as Selfie Pay, is expanding beyond tests in the U.S. and Netherlands, with MasterCard announcing its plans to roll out the option in the U.K., according to a Financial Times report. This technology enables consumers to use their fingerprints or a photo of themselves to validate their identity and was created for online purchases and as an alternative to passwords.

The confirmed launch of the service (mid 2016) follows a successful pilot in the Netherlands that resulted in nine out of ten participants deciding that they would definitely like to replace their password with biometric identification. After the completion of the pilot, which was launched in August 2015 by the payment network in partnership with International Card Services and Dutch bank ABN Amro, 77% of the 750 participating cardholders indicated that they want to continue using a fingerprint or facial recognition to complete payments and 75% of users are convinced that biometric payments will decrease fraud. Of those surveyed, 95% of the fingerprint users and 80% of the facial recognition users indicated that shopping became more convenient using biometric authentication.

“We are now examining the possibilities to integrate our technology in the banking and tech giants’ apps to make payment using a selfie or fingerprint even easier. The Dutch consumer is very progressive in embracing new technologies.,” said Arjan Bol, country manager of MasterCard Netherlands. “The UK is one of the most sophisticated markets for payments technology in the world. British consumers are incredibly tech savvy and love their mobiles and using contactless. Couple that with the infrastructure and the UK offers the perfect environment. If you look at Apple Pay for instance, it’s no coincidence that it came to the UK first after its native market launch,” said another MasterCard spokesperson at last weeks MWC.

The release comes amid an increased interest in biometric security, with HSBC and First Direct announcing the roll-out of their voice biometric security tech in the UK just last week. Startups such as Atom Bank are also introducing biometric technology. Others, such as B-Secur are seeking to license ECG technology for biometric authentication.

PayPal have also been making a series of announcements over the last few weeks in how they intend to further their mobile money strategy through a series of third-party partnerships. First it was reported that PayPal had teamed up with Vodafone in Europe to enable Vodafone Wallet users to use those wallets in-store at places that accept NFC payments: retail locations, stores and restaurants. The partnership makes it possible for PayPal users to use contactless payments for goods and services at the point of sale, too.

The rollout began in Spain (during MWC - of course), giving every Spanish Vodafone subscriber the ability to integrate PayPal into their mobile wallet to pay in-store via NFC. PayPal also announced that it would be adding NFC payments capabilities to its app, starting with customers in the U.S. and Australia this spring. The digital payments company also announced that PayPal and M-Pesa are teaming up to enable the automatic deposit of remittances into Kenyans’ M-Pesa accounts via Xoom. And finally, PayPal announced it is now working with telecom providers in Mexico (Telcel) and Brazil (Claro) on their digital wallets to help their more than 140 million active users manage and make purchases via mobile devices.

These announcements are quite a change of tack for PayPal. Who can remember that back in 2012, John Donahoe, then the CEO of PayPal’s then-parent company, eBay, was reported as saying that NFC stood for “not for commerce.” And PayPal’s then-president, David Marcus, wrote in a blog post that “The NFC payments debate will slowly die in 2013.” Now it would appear that PayPal is looking to become more of an agnostic service for companies and customers and doing so by supporting contactless payments in the PayPal app for Android makes sense - if consumers want to tap their phone and pay, now they can do so through PayPal. 

Samsung also reported last week that in its first six months of operation, Samsung Pay has reached five million users and has processed more than 500 million in transactions since its launch in South Korea and the US. The company says it now supports eligible credit and debit cards from more than 70 major and regional banks in South Korea and the US.

Global rollout will begin next month, as the company introduces Samsung Pay in China. This will bring the firm head-to-head with Apple, which made its debut in China last week, alongside local tech giants Alibaba and TenCent. “Other markets set for roll out include Australia, Brazil, Singapore, Spain and the UK “later in the year. Canada has also been added to the launch roadmap,” says InJong Rhee, EVP and head of R&D, software and services of Mobile Communications Business at Samsung Electronics. Samsung Pay is due to come to the UK in 2016 alongside the new Galaxy S7 and S7 Edge.

Finally, we come full circle back to biometric authentication on the mobile. At this years Contactless Intelligence Conference we are looking forward to hearing from a company called YOTI who are about to unveil their mobile ID solution. A solution that involves - yes - a selfie and verification and authentication via biometric matching software to your passport photograph. If we are really about to enter an age where biometric, mobile-driven authentication is going to be THE way to verify who you are then I really want to hear what they ahem to say - and so should you. For those of you who want to know more about innovate payment solutions and the trends in the world of standardisation and Mobile ID, we recommend you book your ticket to the upcoming Contactless Intelligence Conference & Forums (April 26-27, London) as soon as possible while prices are low.

Until next week.

Steve Atkins
Contactless Intelligence