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WILL EMV BOOST MOBILE PAY?
Longer transaction times could be a factor By Melanie Scarborough, contributing editor
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mergency responders are taught that “seconds matter,” and that may soon apply to banking as well. The new EMV debit and credit cards rolling out are more secure, but slower. Instead of being swiped, they remain in the point-of-sale terminal until the transaction is complete, launching concerns that the cards could lose favor to faster mobile payment methods. Lee Wetherington, director of strategic insight for Jack Henry & Associates, noticed the lag while using his EMV card in Europe. “I can tell you it’s a discernible difference,” he says. “You’re looking at two to three seconds, sometimes longer, until the transaction is complete and the card comes out.” Two t o t hree second s may sound insignificant until that time is placed in context. A spokesman for Visa says their current processing time for swipe cards is 200 to 300 milliseconds. “People compare and contrast,” points out Wetherington. “Right now, they think, ‘Why would I use Apple Pay when swiping my
card is just as fast?’ That comparison will materially change once they’re using their EMV card. It will be discernible to the average cardholder that that is a slower way to pay.” So far, mobile payment applications, such as Apple Pay and Google Wallet, which are available in the newest smartphones, haven’t gained w ide appeal among consumers—in par t because there are so few compatible POS devices. That may change this month with the
introduction of Samsung Pay, which will work with all existing terminals. “Does this mean there will be a mass migration to mobile payments? I’m not making that forecast,” says Wetherington. “But convenience can be a top driver in deciding what payment [method] to use.” So can information, according to Cary Whaley, vice-president, payments and technology policy, at the Independent Community Bankers of America, who says EMV cards will be an adjustment, and customer education is essential. Before going to work for ICBA, Whaley was a banker, and says that “with this type of change, we trained everyone short of the janitor—even folks not in customer contact—because you never knew when they were going to be asked a question at church or in the supermarket.” To keep c ust omer s loya l t o t heir EMV cards, banks w ill have to keep pace with progress. “The key to all this is being forward-thinking and f lexible enough to anticipate market and technology changes,” says Whaley. Does the
Video tellers: Handful of “ITMs” scores By John Ginovsky, contributing editor
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ove over ATMs, here come interactive teller machines. These machines—essentially souped-up ATMs with cameras and microphones that link walk-up or driveup customers with a live person located in a central office—have proven to be well worth the effort, albeit for the very few banks that have embraced them. Advocates point to their ability to extend full-service banking hours, make staffing more efficient, and make things more convenient for customers. Doubters ask why a customer would choose a virtual teller after coming to the branch. Research by Celent published late last year indicates that barely 2% of banks have them in operation or have definite plans for them, while about 37% are considering adopting them. “The whole idea of video in the branch remains a polarizing topic for banks,”
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BANKING EXCHANGE
September 2015
says Bob Meara, analyst for Celent. He notes, however, that for financial institutions using video tellers, “it’s pretty mu ch a no - b r ainer to d e li ver sub stantially the same functionality as an in-person teller via video, at a substantially reduced staffing cost, if you have a decent number of branches and can realize the efficiency of centrally managing and deploying those resources.” This resonates with two institutions that have had experience with ITMs: PCSB (formerly known as Paige County State Bank), Clarinda, Iowa, and Salin Bank, Indianapolis, Ind. PCSB installed its first ITMs in 2013, and now has 14 in service at six branches. “We were looking to improve our facilities and help the customers in our market footprint have a better banking experience,” says James Johnson, CEO and president.