Now that we are into the new year, we would like to offer you some predictions for 2014 from the Bell ID team. With a number of technological innovations and pilots coming to market in 2013, 2014 is shaping up to be an interesting year in the management of tokens.
EMV and Cloud-based Payments
Martin Cox | Global Head of Sales
“2014 is all about EMV and cloud-based payments. Currently the US market is in a state of confusion surrounding EMV and near field communication (NFC), with sections of the marketplace discussing which should be done first. 2014 will bring clarification that NFC is an extension of EMV technology and we will see issuers push forward with the implementation of a contact and contactless EMV infrastructure using markets like the UK, Canada and Australia as case studies.
“Elsewhere, there is a hunger to finally bring NFC transactions to consumer devices. With the contactless infrastructure already in place in a number of key markets, we are now seeing pilots becoming roll outs. I believe we will continue to see MNOs play a central role through the traditional trusted service manager (TSM) model and, where consensus is more difficult, cloud will increasingly be utilized. Host card emulation (HCE) has taken the shackles off the marketplace and now enables more options for both service providers and MNOs to deliver services to consumers.”
David Worthington | Principal Consultant, Payments & Chip Technology
“2014 is the year for mobile payments form factor diversification. We will see new and innovative payment solutions brought to market through the traditional NFC model, through cloud and through new technologies such as Bluetooth Low Energy (BLE). Key players in markets such as Canada will continue to roll out NFC-based platforms, whilst we will see pilots of new technologies and new payment solutions come to several markets. This is not a year for the selection of the winning mobile payment solution, this is instead a year for intensified competition amongst already established and newer disruptive payment methods as the mobile revolution marches on. At the same time, growing mobile payments maturity means more focus on payment being a facilitator and only one aspect of the wider mobile experience – getting the overall mobile experience right will be the longer term decider for the big winners in mobile payments and commerce.
“For EMV, the growing US EMV migration momentum will also tip the scales for other national initiatives to move to the latest level of EMV security – some of the early adopter cheap chip (SDA) and signature territories will start projects to prevent fraud being pushed back. Adopting full DDA/CDA Chip and PIN support will also be an opportunity for some territories to widely introduce contactless acceptance as the basis for their own mobile payments enablement. Growing use of EMV and other token based technologies to deal with growing CNP fraud will be another focus for 2014.”
U.S. EMV Migration
Todd Freyman | Vice President, The Americas
“Everyone expected more movement on US EMV migration in 2013. While some issuers, particularly on the credit side of the marketplace, kicked off migration projects, the Durbin Amendment – a last-minute addition to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 – slowed activity for debit issuers.
“In 2014, debit issuers will recognize that the Durbin Amendment will simply require a minor configuration change rather than a major design update which, in the context of a 7-9 month migration project is a negligible disruption. Secondly, as the changes following Durbin will be largely centered on the acceptance infrastructure, the legislation changes should not affect issuing banks in their activities to meet the 2015 deadlines. In fact, delaying activity at this stage could cause unnecessary pressures later in the project as timescales become shorter.
“Once the nerves around Durbin are resolved, issuers will look to take full control and deploy and manage EMV issuance projects. The larger issuers will find benefits through in-sourcing the required software platforms giving them cost savings advantages, more control of their EMV solution and faster-time to market for enhancements. Once EMV migration is underway, issuers seeking to differentiate themselves as early adopters in the marketplace will initiate NFC pilots. We are already seeing significant interest in cloud payments as issuers seek to take control and offer added value to their customers.”
Mobile Payments in Canada & Scandinavia
Gini Lindsay | VP, Canada Customer & Business Development
“Keep your eyes on the Canadian mobile payments market to see at least one commercial launch of our Secure Element in the Cloud platform. Additionally, due to the contactless acceptance infrastructure that is already in place in Canada and consumers’ tech savvy attitudes, we will see significant uptake on mobile wallets as consumers look to the speed, convenience, security and added value that mobile can bring.
“Mobile wallets will also get fatter! 2014 may also see gift cards and loyalty cards migrate to mobile which can then be automatically redeemed and applied at the POS via NFC transaction. This expansion beyond traditional debit and credit cards will offer a complete transaction cycle with one tap and will revolutionize the customer interaction with retailers at the POS.”
René van Rosmalen | Regional Sales Manager
“The Nordics is a particular area of interest for us in 2014. 2013 saw trusted service managers (TSM) become a reality in the region as near field communication (NFC) projects began to kick off and Swedish banks supported the launch of the MasterPass m-commerce platform. With these foundations laid, 2014 presents an excellent opportunity for Bell ID and its partner MeaWallet. Utilizing the cloud for mobile payments will also be key for the Nordics as issuers seek to offer better options to consumers through card-present transactions.
“Looking to The Netherlands, many of the pilots and trials that were seen in the last couple of years will become commercial roll outs, as we have seen with Rabobank, ING and ABN Amro. This is an exciting time for Bell ID to be close to mobile payment and commerce evolution and we are well placed to help drive this market forward with our TSM and cloud platforms.”