Worldline: M-payments: discover what they can do for you - Wolf Kunisch
Developments in payments technology come with new security and technical challenges, as well as new demands from customers, and keeping payments secure in the new digital age poses challenges for card-issuers and banks alike. Worldline's Wolf Kunisch discusses how to make the transition to mobile payments smoother, and where he sees the technology going.
The days of cash payments are coming to an end; replaced by a variety of newfangled payment methods. From contactless payments to mobile apps, customers can increasingly spend money on everyday goods and services with the tap of a debit card or smartphone.
For Worldline, a subsidiary of French IT services giant Atos, connecting, securing and managing these new types of transactions is what they do on a day-to-day basis, processing billions of electronic transactions a year from secure data centres, and through its range of products in merchant services and terminals, as well as financial processing. The company is a rapidly expanding global player and a European leader in business and payments transactional services, with annual revenues of €1.1 billion in 2013 and 7,200 people employed across the world.
So, how has Worldline had such success with its products? Wolf Kunisch, head of financial processing and software licensing global business line, argues that the company's central wallet platform checks all boxes of what customers expect. It enables remote and proximity payments, card and non-card settlements, and value-added services for merchants and consumers, as well as being an efficient experience with more than 20 banks, 100,000 merchants and 400,000 active users connected, and giving customers seamless control over the user experience, security and data.
Trust is key
Kunisch argues that financial institutions are still much more trusted than any other player when they say they will secure customers' data, and that this is a huge asset for banks - helping make the transition to mobile payments smoother.
"Banks already have customers' data so do not need them to hand it over again," he says. "They know a lot about their customers, and have the capabilities and processes to keep their information safe - security is not just a matter of fact, but also a matter of trust.
"It's also useful to have the help of payment services providers like Worldline, of course, to bring them solutions to help make the link between mobile and their IT in a secure way."
Soon these new methods will come with value-added services just like any other form of payment, Kunisch argues, as consumers ultimately choose the solutions that bring them the most convenience and the best benefits, and card-issuers begin to compete in providing the best mobile products.
"There is a need to establish the convenience and universality of mobile payments for consumers, which might not come by integrating all possible value-added services at first. It will come over time," he says.
Worldline is still fresh from its participation in MyBank, a pan-European online banking and e-payments (OBeP) scheme, which was launched in 2012 and aims to provide an online solution to harmonise payments across Europe. Worldline was a key supplier to banks and played a large role in making the solution possible. It sees MyBank as one of a number of participatory schemes improving customer experience.
Kunisch points to the example of the secure interbank mailing service, which provides services such as bill payment, BIC/IBAN verification, and mandates exchange tools, as a solution that is well suited to the payment of a purchase in instalments and, like credit transfers used in online banking, reduces paper and postal costs.
"All of these initiatives are very interesting and create opportunities for new services with greater value for customers," he says. "MyBank SEPA core direct debit customers can create e-mandates in real time and in line with Europe-wide terms and conditions.
"This will effectively unlock digital payment and billing solutions across Europe to drive forward the growth of online commerce and services."
There are several reasons why banks are increasingly motivated to integrate e-SEPA schemes, like MyBank, as quickly as possible, Kunisch says, arguing that his company meets more and more merchants looking for secure, low-cost, cross-border payment means.
"Online merchants with high exports need to provide their customers abroad with easy cross-border payment options," he says. "From a regulatory point of view: new European Union regulations on interchanges are affecting business models for cards, and from a processing point of view: e-SEPA is completely altering the finance supply chain.
"All stakeholders must assess the impact of these changes on the various aspects of their businesses, including customer relationship management, IS evolutions, billing and more. They should be ready for the adoption of schemes such as MyBank on a huge scale."
Tools of the trade
Today, more than 143 banks and payment service providers have activated MyBank services, meaning more than 12 million customers currently use the services across Europe. Worldline is also working on integrating MyBank into online and mobile-payment gateways through its acceptance services and back-office tools.
"At the same time, we are a self-certified provider for e-payment and e-mandate; enabling buyer bank and seller bank to propose Mybank to their customers," Kunisch says. "The investment in MyBank is at the crossroads of our SEPA and online banking e-payment strategies."
The issue will not just be about payment, but about a new 'e-identity' for everyone: allowing technology to exchange securely and seamlessly the exact required amount of information required to perform a transaction.
"This involves coupons, certified address, certified majority, insurance coverage or other rights that need to be checked," he says.
Year on year
While 2014 may be the year that mobile payments were popularised, it was in 2013 that the ball really got rolling, Kunisch argues, and it was in that year that mobile payments, thanks to in-app integration, became the fastest growing segment for online payments.
"It got even more important in late 2013 with the introduction of Host Card Emulation (HCE) by Google in Android," Kunisch says. "Of course, HCE had been around before, but being made for a prominent operating system really gave it a boost.
"When Visa and Mastercard announced their support for mobile face-to-face payments in the spring, it really took off. It's not a question of if these technologies will replace cash and cheques, it's a question of when."
Apple Pay is the last piece of this puzzle, Kunisch argues, and will help raise the customer interest in mobile payments. With a strong start in the US, it is expected to arrive in Europe at some point next year, and will allow the iPhone 6 to be used to pay in stores and within apps in a quick and, hopefully, secure way. Using near-field communication technology, the service meets a significant success on the other side of the Atlantic, and can be used in the majority of major banks and retail chains, from McDonald's to Foot Locker.
Smartphones will play a key role for the next five to ten years, Kunisch believes, as the main device of connection and interaction between the physical and the digital world. He also believes that 'wearable' technologies, such as the Apple Watch, will help to bring a better user experience in proximity use cases, where a customer wants to be able to pay as quickly as possible - possibly even replacing the smartphone at some point down the line.
"Ultimately, it could also be our car on the road, or any personal digital device that we use for a given interaction," he says. "This will rely on a mix of settlement networks (card-based or not) probably significantly different than the one we know today, as we can already see with initatives such as eSEPA and MyBank."
Cash, cheque and, ultimately, physical cards will progressively be displaced by digital payment means, tying our identities more than ever before to our digital devices, Kunisch believes. Although, he adds, some of these might stay with us for a while longer than we'd expect, while users catch up with the new technology.