The Merchant’s Guide to Transactions, Cards & eCommerce
Security, fraud & privacy ❱ Setting a new
standard for secure digital payments in Canada
❱ Fraud detection
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TableKey of Contents theme COLUMNS & DEPARTMENTS July/August 2016 Volume 7 Number 4 Editor-in-Chief Steve Lloyd email@example.com Managing Editor Sarah O’Connor firstname.lastname@example.org Publisher Mark Henry email@example.com
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Contributors Frank Attaie; Phil Campbell; Kevin Deveau; Tomas Likar; Peter Lim; Brian Spencer; Scott Zoldi Creative Direction Jennifer O’Neill firstname.lastname@example.org
MasterCard unveils new MasterPass global digital payment service
Security, fraud & privacy:
Photographer Gary Tannyan
President Steve Lloyd email@example.com
Setting a new standard for secure digital payments in Canada
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20 Events 22 Resolutions
Starting Points Patterns Payments News
Fraud detection learns in real time to stay ahead of the curve
Online retail: 16
The perfect combination: Mobile payments, ordering and loyalty
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From dated to digital: Seven questions to ensure quality digital experiences Next issue…
Made possible with the support of the Ontario Media Development Corporation
Sept/oct Mobile technology: Apps, wallets and wearables are already revolutionizing the way people pay. We take a look at Canadian companies leading the way with all things mobile. may/June 2016
Four ways Brexit might impact the payments industry Tomas Likar is VP of strategy and business development at Hyperwallet.
n the immediate aftermath of the United Kingdom’s vote to leave the European Union, global stock markets tumbled, losing about $2 trillion in value the day after the vote. Much of this stock market drop can be attributed to investors’ uncertainty about the UK’s financial future in the event of the UK actually leaving the EU. In the midst of the vote and continued discussions surrounding Brexit, investors, banks, FinTech companies and other stakeholders are left questioning just how much Brexit could impact the UK payments industry. London has spent the past several decades as the gatekeeper to the EU from a financial and trade perspective. By setting up shop in London, financial institutions, banks and FinTech companies have been able to easily access the EU’s common market of more than half a billion people. This all has the potential to change following the Brexit vote. While Brexit isn’t entirely imminent— the UK would have to take several timeconsuming steps to make the exit official— most assumed the initial vote wouldn’t
even pass and are not prepared for the new reality that it now threatens to bring. From a UK payments and FinTech industry perspective, what will be Brexit’s impact? Outlined below are some of the key aspects of the payments and FinTech industries that might take a hit as the UK moves closer to exiting the EU.
Regulatory complications Brexit has the potential to make EU licensing much more complicated. In recent history, the majority of global financial technology companies have had the option to establish a European headquarters in London and apply for an eMoney license through the Financial Conduct Authority (FCA). Applying through the FCA has allowed payments and FinTech companies to “passport” this license to all other European countries. If the UK does exit the EU, any company with an FCA eMoney licence will have to apply for a new one with a different regulator, such as German BaFin or Swedish FI. This will not only make the licensing process more complex, but it will also leave companies questioning whether to operate multiple European offices or close their London office. Brexit has the potential to complicate major processors and cross-border acquirers that have turned to London as a key hub. This is because European privacy and data security laws require these processing
centers to be based in the EU. It is still unclear what the UK’s position will be in the event of Brexit, but if it ends up being treated as an offshore country—seemingly the most logical outcome—payments processing operations of hundreds of companies could be forced to relocate to the continent.
Restricted market access Brexit will likely lead to UK-based financial institutions facing a variety of obstacles when accessing the European financial services market. As a somewhat similar example, Switzerland isn’t an official member of the EU and its banking sector does not have full access to the EU’s internal banking market despite a close working relationship with the EU. Ironically, Swiss banks have long used “passporting” from the UK to operate in other EU countries—a practice they will have to quickly reconsider, as do UK-based banks and FinTech startups. This could also cause some large UK banks who have been the “go to bank partners” for most FinTech startups throughout the EU to take a hit. Chances are, their competitor banks in France, Germany, and other EU countries are already getting ready to prove themselves as the banking partner of choice.
Venture capital uncertainty Just as stocks plummeted the day after the Brexit vote, should the UK exit it will July/August 2016
Starting Points likely lead to market uncertainty that will possibly last for several years. Venture capital investors in particular are wary of investing in companies in such an uncertain market. While most venture capitalists in the market have expressed commitment to any existing portfolio companies, the market uncertainty could spell disaster for new London-based FinTech companies looking to raise seed rounds. Political and regulatory risk surrounding Brexit means newer London-based FinTech startups will be left having to rationalize their valuations or consider moving to another country within the EU. Other European cities certainly aren’t shy to express their interest in taking over London’s role as the EU financial services capital. Berlin is already the most important entrepreneurship hub in Europe, although it only has a small footprint in FinTech. According to Ernst & Young, Berlin attracted
the most VC capital of all cities in Europe in 2015 (EUR $2.2B vs. London’s $1.8B). Other than Berlin, other serious contenders to be the new leader in EU payments and FinTech include Frankfurt, Dublin and possibly Barcelona.
Reduced talent pool A multitude of financial technology companies have established a global or European headquarters in London largely due to its diverse talent pool, which has deep knowledge of cross-border payments. There is reason for concern about access to this talent pool in the long run. CityUK conducted a survey before the referendum, which found that an estimated 37 per cent of financial services companies are “very likely or fairly likely to relocate staff if the UK left the EU.” Additionally, CEOs of London-based FinTech companies admitted that they were considering a variety of
relocation scenarios. Other factors, such as the UK’s stricter work visa policies, reduced attractiveness of British schools for European students and a weakened pound valuation will potentially lead to a gradual exit of some of the UK’s prime payments and FinTech talent.
Looking ahead As outlined earlier, Brexit isn’t imminent— yet—so it’s still up in air how much of a hit UK payments and FinTech businesses will take if the UK does leave the EU. Such a move is unprecedented and it will ultimately be up to EU officials to decide the UK’s fate in the common market. But one thing is certain: payments companies will quickly move from drawing theoretical exit scenarios to making tough business decisions. Unfortunately, I struggle to see anything but downsides for the UK’s financial services economy.
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Welcome to the blockchain revolution
New integrations offer glimpse of the future
Anthony Di Iorio, president and founder of Decentral.
From left to right: Santino Failla, director, chief solutions architect; Michael O’Loughlin, director of consulting; and Cathy Pin, head of global payments solutions for CGI.
By Sarah O'Connor
ecent product launches and integrations are bringing the blockchain and cryptocurrencies into the mainstream payments ecosystem. Payments Business spoke to two companies on the leading edge of the charge— Decentral and CGI—to understand what these innovations mean today and what they may mean tomorrow. “When you think about back in the day what speech was when the printing press came about—people were so used to the government controlling how news was disseminated to the people,” says Anthony Di Iorio, president and founder of Decentral. “And then you had a printing press come out and totally change what people were used to in terms of control over speech. “I think people in the future are going to look back and say, ‘really? You tried to control value between countries? You tried to stop it between borders? It’s just information!’ It will be freedom of value, it will be global. We need to starting thinking outside the box. In my opinion, it will be a big shift.” “I think we’re going to look back in a few years at ourselves and laugh at the way we’re looking at it,” concurs Michael O’Loughlin, 6
CGI’s director of consulting. “We’re looking at it as though it’s the internet and the use case we’re all exploring right now is email when really there’s a large list of things we can really tap into. Payments is really one tip of the spear. Blockchain isn’t the only thing that’s innovative in the market right now; however, it is one that has maybe an unending list of opportunities.”
Decentral’s Jaxx blockchain wallet integrates ShapeShift Decentral has announced the new integration of the ShapeShift API with its Jaxx fleet of blockchain wallets. By working with ShapeShift—an industry leader in blockchain asset conversions— Jaxx's seamless cross-platform experience now offers the option to convert between bitcoin, ether and dao tokens, or any other tokens that Jaxx and Shapeshift integrate in future. This integration is part of Decentral’s long-term vision of Jaxx becoming the go-to wallet for all, including users of alternative blockchains. The ShapeShift API allows users to convert digital currency directly within Jaxx. ShapeShift Founder and CEO Erik Voorhees says “we built ShapeShift’s API for this very reason—to enable other services in this
ecosystem to leverage it for the benefit of their users. Converting blockchain assets should be as easy as clicking a button and Jaxx’s integration of ShapeShift demonstrates this principle.” “The integration enables people to be able to switch, right now, between three different digital currencies,” explains Di Iorio, president and founder of Decentral, the makers of Jaxx. “I don’t like to use the word ‘currency’ because ether, which is one of the ones that we have integrated, isn’t really a currency, it’s a fuel that runs the platform and it’s a requirement for a product to operate. So in the space where we are trying to define what digital currencies are, it gets really tricky to even call some of these things currencies. They are basically digital units of value, is what they are. Basically they are information.” Jaxx offers unprecedented accessibility for the blockchain enthusiast, with interoperable versions currently available on nine major platforms. The unified Jaxx fleet of wallets enables cross-platform pairing, encompassing mobile, desktop and browser extensions. “The Jaxx-ShapeShift integration is one of many partnerships we anticipate with companies around the world,” says Di July/August 2016
Patterns Iorio. “We believe our single code base and the ability to deploy in minutes across all platforms and devices gives us a huge advantage toward becoming the industry’s default blockchain wallet. “I think in the future when we talk about goods crossing borders and value being exchanged across border—all it really is is information. Since we’ve digitalized everything, it’s all turning into information. “You think about cash crossing the border—you can’t take over $10,000 in cash or it has to be claimed. Well, I can have a wallet in my head now that can literally contain millions of dollars in digital value. We need to think outside the box—it‘s not about paper, it‘s about digitizing value. “These things are really about changing one type of value into another type of value. So our integration is converting things from ether to bitcoin to doa, and its being done in our wallet, and its basically just saying, ok you have this token, we use an API that switches it from one token to another, and that’s the service that we are providing— being able to say I have bitcoin, I want to buy ether, and I can now send it, directly in the wallet, so that you send bitcoin into the API, the API converts it to ether and now your wallet has ether. But its really just value, its token, it’s information. This is where we are getting away from currency and really thinking about what we are dealing with in the future and its digitalized value.”
CGI payment solutions are now blockchain enabled CGI has integrated Ripple’s distributed financial technology into the CGI portfolio of payments solutions. CGI’s clients will realize the benefits of instant international settlements such as greater cost efficiency, agility and speed to market. Specifically, financial services companies using CGI’s Ripple-enabled Intelligent Gateway can use their existing payments hub to access new protocols and services, and connect with multiple payment networks and clearing channels, including the Ripple network ecosystem. “It’s fundamentally a gateway,” explains Cathy Pin, head of global payments solutions for CGI, “and one of the functions that this July/August 2016
gateway does is transforming message types. So if you’re sending a message in format A, our gateway will transform it into format B. Our engine can transform it into whatever existing payment types [a client bank has] within their existing payment ecosystem and the payments message can flow to the receiving Ripple bank. The key is that this integration allows banks to embrace this important technology without disrupting what is already working. “Bringing anything new into a bank is really difficult,” notes Pin. “Banks have been in the business and continue to be in the business of protecting people’s money and people’s identity and so our clients were saying, ‘what’s the use case? Show me the use case. What have others done?’ Well, its still so new it became a bit of a circular argument. “Our clients, banks, need to get into this new technology for competitive reasons, their lunch is going to be eaten if they don’t. They will become the Blockbuster to Netflix. There’s a business need to really understand the technology, and do it now. So we sat back and said, how can we help our clients get into this innovation space quickly, and in a way that doesn’t disrupt their payment ecosystem? Because those ecosystems have been built on years of processes.” CGI’s Intelligent Gateway is one of the first payments solutions in the industry to integrate Ripple’s distributed financial technology and provides a solutionagnostic, transformational wrapper around a client’s payment processing systems, allowing participants in the Ripple network to directly transact with each other without the need for a central counterparty or correspondent. This includes real-time payments of any value, in any currency, to anyone, at any time and from anywhere in the world. Benefits also include end-toend visibility and certainty, increased cost effectiveness and real-time insight into liquidity positions. “It was obvious from a product perspective that if we were going to provide value to the financial community and beyond, we need to provide a capability that made integration as seamless as possible,” says Santino Failla, CGI’s director, chief solutions architect.
“Using our Intelligent Gateway, which isn’t a new product but is a new extension when we look at Ripple Connects and blockchain, was an obvious choice for several reasons. “First, in the payment space it’s a payments-engine-agnostic gateway. So it doesn’t really matter which payments engine a customers has, we will connect to it. And we actually manage the gateway, so our Intelligent Gateway is a physical connection to multi networks at one time. We can connect into an existing message flow within a bank.” These benefits are easy to realize when a financial services company implements Intelligent Gateway in front of its existing payment hubs to bridge the transformation gap between disparate systems while still leveraging the existing payment ecosystem and formats. “Cross-border payments is an area where there are heavy costs being pushed back on to corporations and indeed their end users,” explains O’Loughlin. “For payments, it doesn’t necessarily make sense for me to walk into a bank and hand over X amount of cash and then not all that cash arrives in five working days or seven working days. Really it goes into black hole. What blockchain offers is an autonomic transaction, a real time transaction. “Naturally if we have our software embedded in banks throughout the globe, this is going to impact that software and our clients don’t just want us to be vendors, they want us to be partners. They want us to enhance our technology so they don’t have to rip out the beating heart of a bank, which is the payments engine, which is our primary product. Instead they’re asking us, how do you improve it? How do you do so in a methodically, safe, secure way? “We’ve really embraced this,” concludes O’Loughlin. “We’ve researched it, we continue to research it, we will continue to research it. We realize that talking about it and writing whitepapers about it isn’t enough. And that’s why we, in April, announced the launch of this new product, the Intelligent Gateway which, in essence, connects banks to distributed ledgers in a safe, secure, efficient and agile manner.”
Canadian shoppers most trusted online retail brands named across 12 categories TORONTO -- Leading market research firm BrandSpark International has announced the 2016 BrandSpark Most Trusted Awards winners for Canadian Online Retail. The results were based on the annual BrandSpark Canadian Shopper Study. "Seven in 10 Canadians identify themselves as online shoppers. They want to find great prices on the brands they trust, discover exciting new products and demand an intuitive shopping experience and lightning fast service. Now shoppers can find out which online retailers were voted most trusted by other shoppers in a national survey," said Robert Levy, president and CEO of BrandSpark International. "The annual BrandSpark Most Trusted Awards honours the retail and product brands that Canadians trust most, those they would recommend to friends and neighbours." Survey participants named the online retailers that they consider their Most Trusted in 12 household and personal shopping categories. Listed below are the national winners.
Online retail category - Most trusted online retailers • Baby / Children's Clothing - The Children's Place / Old Navy (tie) • Beauty & Cosmetics - Sephora • Books - Amazon • Electronics - Amazon / Best Buy (tie) • Flights - Expedia / Westjet (tie) • Grocery / Food & Beverage - Walmart • Health & Personal Care - Amazon / Well.ca (tie) • Housewares / Kitchenware - Amazon • Men's Clothing / Fashion - Amazon / Mark's (tie) • Toys & Games - Amazon • Travel Accommodations - Expedia • Women's Clothing / Fashion - Old Navy / Sears (tie)
Online retail category -Top three most trusted - Brand (rank) • Baby / Children's Clothing - The Children's Place (1) Old Navy (1) Carter's (3) • Beauty & Cosmetics - Sephora (1) Amazon (2) Well.ca (3) 8
• Books - Amazon (1) Chapters (2) Kobo (3) • Electronics - Amazon (1) Best Buy (1) eBay (3) • Flights - Expedia (1) Westjet (1) Air Canada (3) • Grocery / Food & Beverage - Walmart (1) Amazon (2) Well.ca (3) • Health & Personal Care - Amazon (1) Well. ca (1) Walmart (3) • Housewares / Kitchenware - Amazon (1) Walmart (2) Hudson Bay (3) • Men's Clothing / Fashion - Amazon (1) Mark's (1) Hudson Bay (3) • Toys & Games - Amazon (1) Toys "R" Us (2) Walmart (3) • Travel Accommodations - Expedia (1) Hotels. com (2) Booking.com (3) • Women's Clothing / Fashion - Old Navy (1) Sears (1) Hudson Bay (3) The BrandSpark Most Trusted Awards previously announced results for 150 consumer packaged goods (CPG) product categories and 16 retail store categories. More details can be found at www.BrandSparkMostTrusted.com.
How brands build and maintain trust Canadian shoppers also revealed what determines their trust in a retailer: consistently strong value (often driven by low prices or highvalue promotions), a strong selection of quality products and a consistent and convenient shopping experience. This is at least as true for online retailers as for brick-and-mortar, though online the price competition can be even fiercer, and out-of-stock issues can be even more damaging. Consumer reviews play a key role online with six in 10 shoppers saying they regularly look to reviews to support their purchasing decisions. Most online shoppers are savvy users of reviews, looking to the breakdown of product scores and reading negative reviews in detail to address or eliminate their own personal concerns and give them the confidence to buy. "When real problems arise with products or the shopping experience, it is important that
retail and other brands react transparently and quickly to take responsibility and address the issue. The best e-commerce retailers have greatly overcome the limitations of a lack of physical stores by providing no-hassle returns and other service," added Levy. The big winner across several categories is Amazon, trusted by the most shoppers for books, toys & games, and housewares/ kitchenware. Amazon also tied with other major national retailers in diverse categories including electronics and personal care. "Amazon has created its own ecosystem for shoppers, who can purchase electronics alongside household items or even food products, receive personalized recommendations backed up by extensive consumer reviews, and receive their products quickly with free shipping," says Levy. "They have set the tone for e-commerce retail, but major retailers like Walmart and Best Buy have also created sophisticated e-commerce platforms, and other online-only retailers like Well.ca are carving out their own spaces." "Canadian retailers will be watching to observe the success this year of Prime Day, Amazon's annual one-day promotional event with deals exclusively for Amazon Prime members. Prime Day, which is also running in the USA, has also influenced other online retailers to offer deals making the impact even larger for consumers," said Levy. "Given our work with e-commerce players in China over the past number of years, we have seen these types of online promotions grow dramatically and we can expect the same in Canada."
How winners are determined BrandSpark researchers analyzed the unaided responses and the reasons for trusting the brand. The results were ranked based on the greatest volume of mentions, and if the difference between brands in online retail were not statistically significant, ties were declared. Respondents represented the profile of household shoppers by region. BrandSpark also captured why Canadians selected the brands they trusted the most.
Postal union: Big banks can lobby all they want but postal banking is still on the table OTTAWA -- While pay equity and pensions have grabbed headlines during the current round of bargaining with Canada Post, postal workers say there are other matters on the table, including bringing back postal banking, an idea which has just been rejected by the big bank lobby. "We're not surprised that the big banks, which raked in a $35 billion profit last year by gouging Canadians with some of the highest fees in the world, would oppose a public banking option," said Mike Palecek, president of the Canadian Union of Postal Workers. Aside from making postal banking a bargaining demand, the CUPW, together with the Canadian Postmasters and Assistants Association (CPAA), has been actively campaigning for the return of the Canadian postal bank as a way to shore up revenues and offer new public services. "Post offices have worked and could work very well as banks. We are already processing other financial transactions such as money orders," said Palecek. "If Loblaws and Canadian Tire are doing it, why shouldn't Canada Post? We are everywhere in the country." Contrary to lobbyists' claims that Canadians are already "well-served" by the big banks, Palecek points to recent research from John Anderson and the Canadian Centre for Policy Alternatives that shows the big banks withdrawing and closing branches in many parts of the country, while millions of Canadians are either underbanked or forced to resort to payday lenders and other fringe financial institutions that charge usurious fees. Many other countries around the world, including Switzerland, New Zealand, the UK and France, have successfully introduced postal banking. Canada Post conducted a four-year study on postal banking, which it refuses to disclose, although a heavily censored version that refers to postal banking as a "win-win strategy" was obtained via an Access to Information request. "In this round of bargaining and in the public postal review, we will keep pushing for better services for all Canadians," said Palecek. July/August 2016
Moneris expands services to bring currency conversion solution to Canadian businesses TORONTO — Moneris Solutions Corporation is rolling out Dynamic Currency Conversion (DCC) to offerings for Canadian businesses. Now when an international customer uses their foreign Visa or MasterCard in a terminal, they’ll immediately see the cost of the purchase in their own currency and have the option to pay for it in that currency or in Canadian dollars. Ideal for businesses processing a high volume of foreign transactions, Moneris DCC is easily added to existing terminals. It offers merchants the ability to process payments in a customer’s preferred currency at an exchange rate displayed on the terminal, providing clear pricing to the customer. This program can help merchants improve their bottom line, while providing greater customer service and flexibility. “Many visitors to Canada, particularly from the U.S., don’t realize how much more affordable things are here due to the favourable exchange rate. When they see the cost of items displayed in their own currency on the terminal, they tend to spend more,” said Rob Cameron, chief product and marketing officer at Moneris. “Foreign spending in Canada has increased more than 17 per cent year over year. Giving businesses the flexibility to offer currency conversion at the store level makes payments easier for them and their customers visiting from abroad.” In 2015, international arrivals to Canada increased 7.5 per cent year over year. U.S. travelers are increasingly coming north of the border as the Canadian dollar has weakened against the U.S. dollar, making 5.2 million overnight trips, and spending $3.4 billion. Southern Ontario’s Niagara-on-the-Lake region, a destination attracting more than two million tourists each year, is home to Cecile’s Home & Gift, a business using Moneris DCC. The store serves many tourists and the owner is always looking for new ways to improve the customer experience. “Currency conversion payment options are something I had seen while travelling in Europe and I really liked the feature,” said Chris Martineau, owner, Cecile’s Home & Gift and Cecile’s House. “When the option was presented to me from Moneris, I immediately took advantage. We’ve already had a number
of tourists come in and it made their experience that much simpler and straightforward when it came time to pay.” With DCC, merchants may benefit from: • Improved payment services, increasing customer satisfaction; • The ability to offer their customers the choice to pay in over 90 currencies including: Euro, U.S. dollar, Japanese yen, Chinese yuan, British pound sterling and more; • No monthly program fees or rate look-up fees; • The potential to reduce chargebacks and avoid confusion due to unrecognized amounts on cardholder statements; and • The opportunity to share in the DCC currency conversion revenue. Foreign Visa and MasterCard credit cardholders also benefit from DCC through: • Increased transparency on transaction amount(s), offering comfort and peace of mind when making a purchase because the price and currency conversion rate is displayed and the sale is processed in their own currency; and • Simplified expense reporting for business travelers as receipts in their own currency will match their cardholder statements.
Canadian tourism data Overseas residents made 2.2 million overnight trips to Canada and spent $3.6 billion. The more favourable U.S. to Canadian dollar exchange rate is expected to contribute a 3.3 per cent growth in overnight travel from the U.S. in 2016. In 2015, the number of U.S. overnight visitors rose 8.3 per cent compared to 2014 to reach nearly 12.5 million. According to Moneris spend data for Q4 2015, the top three foreign cards used were from China (+24.10% YoY), U.S. (+14.68% YoY) and United Kingdom (+13.68% YoY). Available now, DCC is available for merchants using standalone payment terminal solutions with more options available later in 2016. Moneris DCC uses rate look-up functionality provided by Planet Payment’s Pay in Your Currency.
MasterCard unveils new MasterPass global digital payment service Omnichannel, all digital payment service now available in U.S.; coming to Canada early 2017 By Sarah O’Connor
asterCard believes the latest iteration of MasterPass offers a glimpse into the future of commerce. Beginning the end of July 2016, customers are now able to make fast, simple and secure digital payments through their preferred bank or credit union wherever the like—online, in app and now in-store with contactless. “The nature of payments is changing,” explains Craig Vosburg, president of North America, Mastercard. “Payments are increasingly about and integrated into commerce. And commerce today is more connected, more consumer driven and more open than its ever been before. Commerce is constantly evolving and with that evolution comes innovation. So we have a bold vision—to be a transformational leader in enabling new possibilities for commerce around the world. 10
And we are making this vision a reality.” “I think from a card perspective we provide an awesome experience in store and I don’t think consumers are going to necessarily move to mobile until we actually make that experience better on a connected device,” adds Garry Lyons, chief innovation officer for MasterCard. “These advances in technology allow us to go beyond. We can make the experience better, more consistent and more secure across all channels—in store, in a browser, in an app and across all devices.” MasterPass is currently available at hundreds of thousands of U.S. merchants online or in-app and consumers will now be able to use MasterPass at the more than five million merchant locations in 77 countries that accept contactless. Contactless capability will first be available to Android device owners in the U.S. Merchants who will deploy MasterPass in the coming months include JetBlue, Saks.com, July/August 2016
Lord and Taylor.com, Subway app and The Cheesecake Factory app.
Through consumers’ preferred bank or issuer MasterPass uniquely empowers issuing partners to deliver a bankbranded, all-digital payment solution. More than 80 million accounts will be automatically enabled through issuing partners as the service rolls out globally. The enhanced digital payment functionality helps issuers differentiate existing products, including mobile banking apps, by integrating digital payment functionality and new services like purchase alerts and paying with points. By layering services including tokenization with bank identification and verification of cardholders, MasterPass uses the most advanced security methods today to protect consumers from fraud. “The point of all this effort and investment we’re making is to help make our partners more successful,” says Vosburg. “While we obsess over meeting the ever changing needs of consumers, our path to reaching those consumers is through the banks and merchants with whom they enjoy a direct relationship.” The rollout of MasterPass-enabled solutions from issuers in the U.S. begins later this month. Europe and the Middle East/Africa will be the next markets where the converged MasterPass solution will be live by the end of 2016. Additional rollout of the enhanced MasterPass service in North America, Europe, Latin America & the Caribbean, Middle East & Africa and Asia Pacific will continue through 2016 and in to 2017. “Canada as a market for digital payments is probably the best in the world,” says Jason Davies, head of digital payments and Mastercard Canada, when asked why MasterPass is being launched in the U.S. ahead of Canada. “But let’s not forget we are a country of 30 million or so and the U.S. is a huge market and I think the market size there and the penetration of smartphones made for a recipe that could not be ignored. That market saw the launch of digital players like Apple Pay, Samsung Pay and Android Pay—I think that really started the market moving forward and proved that there was a real consumer demand for a digital payment experience that will be easy to engage with and could scale.” “With billions of cardholders across the globe, we are working with our issuers and merchants to ensure that we’re delivering digital payments that support consumer expectations for a familiar and secure payment experience both now and in the future,” said Vosburg. “The expansion of MasterPass represents an important evolution of our business. We’re packaging the intelligence and insights generated by digital payment solutions to power a wide range of merchant and consumer experiences.” “I think you’re going to continue to see quite a few announcements over the next couple of months,” says Davies. “We’re going to continue building our merchant acceptance footprint. MasterPass has now arrived—it’s a global digital payments solution that really has a massive amount of scale behind it and this is only one step in the journey of many where we will continue to grow that platform and add value for consumers. Now the really exciting stuff starts.” The latest version of MasterPass is expected to launch in Canada in six to nine months. July/August 2016
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Security, Fraud & Privacy
Setting a new standard for secure digital payments in Canada By Frank Attaie
obile technology has completely permeated the lives of Canadians, particularly for those under 55 years of age. In fact, in 2015, there were 24 million mobile device users in Canada. Suffice it to say, smartphones and tablets are a key part of everyday life. They are now being used to do everything from watch a movie to shop. With Apple and Interac’s recent Canadian launch of Apple Pay for consumers with Interac debit cards issued by several Canadian banks, the further permeation of mobile technology is set to exponentially increase. Since May, consumers have been able to add their Interac debit cards to their Apple Wallet and pay with their iPhones at the hundreds of thousands of merchants who accept contactless payments. What’s driving this paradigm shift in the digital payments 12
landscape? What is neutralizing what has, from a security point of view, been viewed as a weak spot, particularly with authentication between a retailer and the customer’s bank? In a word: tokenization. In fact, we believe tokenization will become the new standard in digital payments, due to the security benefits for not just banks and retailers but all parties, including the consumer. Tokenization is the process of substituting a consumer’s financial information, like a credit card number, with an alias or secure token that consists of a unique, randomly generated sequence of numbers. This token, which is meaningless to unauthorized parties, enables secure digital transactions on the consumer’s mobile device or wallet. Even if hacked, there is no sensitive data exposed. Tokens are also account, device and wallet specific—further minimizing fraud. Security and privacy is at the core of Apple Pay, so when used with July/August 2016
Security, Fraud & Privacy Benefits of tokenization include: • It incorporates unique security features that align with global mobile industry standards. Tokenization substitutes consumer’s financial information with a secure token that consists of a unique, randomly generated sequence of numbers. This token, which is meaningless to unauthorized parties, can only be used on the consumer’s mobile device. • It gives consumers the freedom to make purchases whenever and however they want with device-agnostic technology. The Interac TSP represents an ‘open’ mobile debit payment solution with device-agnostic technology that can be implemented on any mobile device that supports it. • It provides seamless integration with payment partners on a scalable platform. Financial institutions, mobile technology providers and merchants can use the Interac TSP to innovate, build and manage secure digital payment experiences. The platform is built to scale and allows for continued innovation. • It offers a trusted payment choice for all stakeholders within the payment chain—and all at a low cost. Transactions through the Interac TSP use the existing functionality and security of Interac Flash contactless debit technology. It offers strong consumer protections such as protective passcode verification and zero customer liability. Merchants benefit from real-time transactions: payment is received immediately and charge backs never occur. It is also one of the lowest-cost payment acceptance options for merchants.
a payment card the actual card numbers are not stored on the device nor on Apple servers. Instead, a unique Device Account Number is assigned, encrypted and securely stored in the Secure Element of the device. Apple Pay replies on Interac’s Token Service Provider (TSP), to validate each transaction with a one-time unique token. The Interac TSP was developed in collaboration with IBM, Bell ID, a global provider of tokenization software for mobile payments, and Everlink, a provider of integrated payment solutions and services. Tokenization is not a new idea, but interest has certainly strengthened as the consumer’s desire for a seamless multi-channel retail experience has grown. As well, recent highly publicized data breaches where millions of credit card numbers have been stolen and the broadening adoption of services like Apple Pay have accelerated the need for a secure tokenization service. July/August 2016
The concept of substituting consumers’ financial information with a “token” has been integral to the security of several Interac products. For example, Interac debit cards feature an identifier (not an account number) on the front of the cards, Interac Online uses a one-time identifier to complete a transaction and the Interac e-Transfer service requires only an email or a mobile phone number to send money— no account information is shared between senders and recipients. The new Interac proprietary token generation and management service—among the first for a domestic debit network globally—is particularly welcome news in Canada, where consumers are already very actively using Interac Debit cards. Canadians use the Interac network more than 16 million times per day to pay and exchange money. And Canadian consumers use Interac more than any other payment brand as acceptance is nearly ubiquitous at merchants from coast to coast. However, in the future, tokenization holds the potential for a number of other applications, beyond digital payments. Essentially any scenario where data sensitivity is critical could adopt tokenization. For example, we see promise in the health care space, where tokenized patient data could be used by physicians, pharmacists or insurers, and in transportation, where tokenized accounts could provide real-time fare payment options. Because Canadians embrace new technologies quickly, demands for the value, security and convenience tokenization offers will undoubtedly accelerate the rate of change happening in the digital landscape. Frank Attaie is director, financial services sector for IBM Canada.
Security, Fraud & Privacy
Payments options are on the rise and fraud detection learns in real time to stay ahead of the curve Advancements in behavioural analytics minimize false positives, improve overall customer experience
By Scott Zoldi & Kevin Deveau
ecent high profile data breaches, such as GoldCorp Inc. in April and the ransomware attack at the University of Calgary in June, have put cyber security and fraud detection at the top of company priority agendas. While such widely reported scenarios make fraud and security seem like new challenges to the general passerby, those in the payments industry have been grappling with these challenges for decadesâ€”analyzing the threats and adopting new technology to block breaches and fraudulent activity, while striving for a safe and seamless customer experience. As the payments industry continues to experience healthy growth both in transaction volumes and options, it hides an unhealthy increase in payments fraud. The scope and scenarios of where fraud 14
can and does happen is growing and changing alongside evolving payments technology and consumer behaviour. The rise of mobile payments among the influential Millennial generation is well documented. According to a 2015 Accenture survey of 4,000 adults in Canada and the U.S., 23 per cent of Millennials make a mobile payment at a merchant location at least weekly, compared to an average across the population of 18 per cent. Meanwhile, a CPA Canada 2015 fraud study found online fraud in Canada jumped from six per cent in 2014 to 16 per cent in 2015. And that increase is significant when considering that money spent online shopping is increasing as well, with the same study finding that of those who shopped online, 49 per cent claimed they spend $500 or more per year in online purchases. Rising consumer expectations, increasing payments options and growing online commerce means financial institutions and July/August 2016
Security, Fraud & Privacy FinTech companies need to expand fraud protection designed for credit cards and debit cards to newer digital payment solutions and channels. The good news is the latest innovations and applications of analytics and fraud detection that have been applied to the credit card and debit card industry in recent years can be extended to newer payment options entering the market. While customer experience remains the primary driver for retaining business, fraud detection is still a significant factor in consumers’ expectations when it comes to the payments options they use. The ability for payments organizations to accurately decipher what is fraudulent activity and shut it down, while eradicating actioned fraud “misdiagnoses” that disrupt the customer’s experience, is a challenging task, but it is central to retaining customers and maximizing transaction revenue. As the quantity and variety of data, whether it is finance records or tweets, being captured continues to expand, one of the most important things analytics can do for financial service providers is help them rapidly understand and anticipate change. The following outlines the analytics that represent a new breed of machine learning that is applicable to a wide range of consumer interactions, including in the evolving payments space.
Building a comprehensive fraud detection framework At the heart of fraud detection is distinguishing typical from atypical behaviour of payment channel use for each respective consumer. While fraud detection has mainly focused on identifying potential fraud transactions, today, identifying non-fraud activity is equally as important. Identifying non-fraud reduces the rate of “false positives”— the number of incidences when transactions are incorrectly identified as fraudulent. Proximity correlation is one way to do this. Proximity services identify whether a credit or debit card being used in a transaction is July/August 2016
in the same place as the cardholder’s mobile phone. If the transaction is taking place at the same location or recent location as the user’s mobile phone, it is more likely to be genuine, than if the transaction took place in a separate location or even another country.
Real-time learning analytics FICO has also developed an analytic technology we call behaviour sorted lists to reduce false positives. This technology can reveal insights such as preferred retail categories in spending, like sporting goods or electronics, and the amount spent within each respective category. For example, Sally’s consumer activity shows that she is an electronics buff—regularly purchasing the latest models of personal devices from mobile phones, tablets and electronic fitness trackers. While she may purchase this type of item in a different geographical area at some point, her purchasing behaviour would make the activity less likely to be fraudulent. Similarly, a larger than normal financial transaction at an ATM Sally frequently visits is less likely to be fraudulent. This advanced algorithm identifies these favourites in real time as the customer’s transactional patterns emerge and change over a number of transactions. With each transaction, it updates the lists and ranking of entries. The more frequent entries are ranked at the top of the list, while less frequent ones eventually fall off the list and are replaced with newer, more frequent transactions. As consumers are constantly evolving in their purchase behaviour, this algorithm learns in real-time new consumer specific trends—adapting to changing behaviour that becomes the “new norm” for that customer. Collaborative profiles work hand-in-hand with behavioural sorting lists by identifying fraud based on shared behavioural patterns of other cardholders with similar characteristics. Archetypes are an integral component of this process. Archetypes of customers provide a more complete and textured perspective of customer behaviour. They are machine-learned by an algorithm that analyzes historical transactional data, both structured and unstructured. Using this technology, FICO’s fraud analytics can say that although a given transaction may be new for Sally, it is not abnormal for people that are similar to the archetype distribution that describes Sally’s transaction history. In this way, the technology anticipates first-time transaction behavior for Sally. Ultimately, the best way to stay ahead of the changing payments landscape is to improve the customer fraud experience. This can be achieved with an integrated analytical approach to anti-fraud technology. Today, consumers opt for payment solutions that combine security and convenience in stand-out ways. Financial institutions and FinTech companies that understand this imperative and establish ways to both protect and please consumers will remain strong contenders to retain and grow loyal customer bases in this changing industry. Scott Zoldi is chief analytics officer at FICO. He is responsible for the analytic development of FICO's product and technology solutions. Kevin Deveau is vice president and managing director, Canada, at FICO. He is responsible for growing FICO’s Canadian market share and strengthening client relationships. PAYMENTSBUSINESS
The perfect combination:
Mobile payments, ordering and loyalty By Peter Lim
verywhere you go, people have their heads buried in their phones, either checking Facebook, scrolling through Instagram, glancing at email, sending texts or even catching Pokémon. Businesses cannot ignore this phenomenon if they want to keep pace with consumer behavior and expectations. Let’s be clear: It’s not just communication and gaming that are keeping people busy: they are increasingly likely to use their smartphones to access crowd-sourced reviews, research products, browse offers and make online purchases. Sometimes they’re ordering products from Amazon or Zappos with two-day (or even next day) delivery. And, in a growing number of cases, they are also placing mobile orders that they will pick up the same day, sometimes within the hour, whether it’s a cup of coffee or a sandwich. And they’re paying for it on their mobile device as well, via a debit/credit card, e-gift card or a preloaded account. In fact, a recent eMarketer report predicted that mobile payments will triple in the U.S. in 2016 and nearly one in five smartphone users will use mobile payments by next year. That’s a huge opportunity for brick and mortar merchants looking to enrich their interactions with 16
their loyal customers and drive more revenue. Retail banking trends over the past couple of decades are emblematic of the sea-change mindset of consumers as they moved away from interacting primarily with bank tellers to enjoying the convenience of ATMs… and now heavily relying on smartphone deposits and online banking. Smartphones are truly changing the way we live and transact and every business across industries is starting to recognize the importance of mobile customer engagement.
Speed, convenience, frictionless transactions + rewards Today’s tech-savvy consumer appreciates speed, demands convenience and wants frictionless transactions—not to mention entertainment, personalized offers and rewards. They are starting to expect their favourite brands to deliver all of the above in an easy to use and expedient way. If it is a hassle, then today’s consumers will turn elsewhere. To this end, combining mobile ordering, mobile payments and a mobile loyalty program together in one seamless app represents a powerful triple threat for merchants to improve the customer experience, drive more repeat business and increase share of wallet. People want to interact with their preferred brands as easily and quickly and dependably as possible, and there’s no greater way to July/August 2016
Online Retail execute on that promise than bundling mobile ordering, payment and loyalty programs. Let’s look at a few examples to understand the true value and impact of bringing together mobile ordering, payment and loyalty.
Restaurants leading the way Quick Service Restaurants (QSRs) and Fast Casual (FC) restaurants are rapidly embracing mobile ordering and payment. With capabilities such as “order-ahead,” customers can place orders remotely and pick it up in-store while skipping the line or accelerating how fast they get their order when seated. For high repetition purchases like coffee or food, this trend is convenience at its best and keeps consumers loyal. Two years ago, BJ’s Restaurants blazed trails by launching a highly popular app, complete with mobile ordering and payment capabilities, as well as a Preferred Waitlist option to get seated sooner. The app rewards loyal customers not only for mobile orders, but also automatically places them in the Preferred Waitlist. Orders can either be take-out or dine-in. Another important benefit to the restaurant is that diners can pay and leave the table whenever they want versus waiting for their server—increasing table turnover times for more orders per table. Of course the app also pushes new promotions in its “What’s New” section so that diners are always up to speed with the latest promotions. And speed is at the heart of the mobile app’s Curbside Delivery. Can take-out get any easier?
The Starbucks standard… and Walmart As we all know, the gold standard for any mobile loyalty and payment program is Starbucks. A healthy 21 per cent of the coffee chain’s orders in Q1 2016—and $6 million in revenue—were attributed to mobile order and pay. The app has more than 12 million active users in North America as well as better penetration than mobile payment apps like Apple Pay. In fact, here’s a mind boggling statistic: the amount of money pre-loaded onto Starbucks’ mobile apps was $1.2 billion in Q1 2016, which exceeds the deposits of many financial institutions! Customers are giving Starbucks money to put in the Starbucks bank, so to speak, to use for future purchases. This is a very savvy way to increase customer loyalty and encourage repeat purchases quickly and easily via the mobile app. Let us not forget Walmart, who was the first major brick and mortar retailer to launch its own mobile payments solution, a smart move considering the competitive challenges it faces against online retailers like Amazon. The Walmart pay feature simulates an e-commerce transaction at the checkout by linking the consumer’s app to a QR code. It applies promotions, coupons and gift card balances and facilitates the payment.
We’re just getting started There are so many future applications of mobile payments that are just now emerging—which applied effectively will only increase customer loyalty to their preferred brand. In Italy, for example, several July/August 2016
supermarkets such as Esselunga now offer mobile self-scanners that are literally attached to your shopping cart. You can scan products as you go and make a mobile payment to exit the store (with spot checks every so often by humans to reconcile payment, along with reward points added to your account for the slight inconvenience).
What should you be doing? So what should your company be thinking about when it comes to launching a mobile ordering, payment and loyalty app? • Create one mobile app, not several. Mobile ordering, payment and loyalty (i.e. offers, rewards and promotions) must be one app. No one wants to download several apps and navigate between them. And if you want to up-sell and cross-sell your consumers, you have to do it in context and in the moment they are browsing and ready to order. • Make it incredibly easy and convenient. Offer one-tap or swipe ordering and/or emulate the “rotate feature” for reordering, for example. • Ensure your app is powered by modern technology so you can capture and leverage real-time interactions to target offers. This is how you demonstrate to your customers that you are listening to them and tailoring content and promotions specifically for them. • Offer a variety of payment options, including debit, credit and PayPal, as well as pre-loading money (as in the Starbucks case) and even consider personalizing digital gift cards. • Take a page from Amazon and personalize and upsell offers (e.g. “other people who ordered this product also bought this”) • Take advantage of geolocation. For example, target customers when they are near, or in your store and offer in-the-moment deals. • Test, test and test again. In today’s transparent world, there is no better app killer than a series of bad reviews that claim “it didn’t work” or worse. • Consider when and how to incorporate engaging experiences that are fun for your consumers—perhaps using augmented reality within the context of a promotion or sweepstakes. Overall, your goal with mobile ordering, payment and loyalty is to drive higher value interactions with your customers in order to deepen their loyalty and promote their repeat business. Frictionless transactions, coupled with personalized content, offers and entertainment, deliver truly delightful customer experiences. We are witnessing the reinvention of loyalty programs powered by big data and enabling an entirely new mobile experience that blurs the lines between online and in-store. Motivate your customers, reward their loyalty and empower them to browse, order, re-order, pay and pickup wherever, whenever and however they want. Peter Lim is co-founder and CTO of Stellar Loyalty. With 25 years in enterprise applications, Lim is a visionary and highly respected veteran who has delivered highly configurable, scalable and reliable mission-critical CRM, Finance, and Loyalty applications. Peter thrives on using breakthrough technology to deliver enterprise solutions and is the author of 30 granted U.S. patents in the areas of CRM, mobility, and data synchronization.
From dated to digital
Seven questions to ensure quality digital customer experiences
By Brian Spencer
ustomers expect quality experiences from every company with which they interact. When reaching out for customer care in particular, easy and personalized communications are key to positive interactions and earning continued business. Unfortunately, in today’s interconnected world, many companies’ systems are outdated and simply incapable of delivering great experiences across all mediums. With an individual customer’s data scattered across different systems, as well as the myriad of choices consumers expect in contacting companies— everything from voice to text to instant message—providing personalized communications isn’t as easy as it sounds. In aiming to deliver exceptional digital customer care, ask yourself these seven questions beforehand. 18
1. Who exactly are your customers? How can you address their individual needs with digital services? It is important to gain as much knowledge as possible about your customers and consolidate that knowledge into one place. Understanding their preferred methods of communicating, expectations of access and what technologies are important to them—and then acting on that information—will improve the customer experience. Enabling this requires involving your IT team at the inception of the digital transformation strategy. Assess whether changes to your fundamental infrastructure are required and examine the impacts of architecture and applications integration. Determine how available your care services need to be for your specific customers and whether cloud services or internal infrastructure best support this. Consider whether other digital initiatives such as mobile apps July/August 2016
Online Retail should seamlessly link into the customer care infrastructure. Think holistically from the vantage of your customer.
2. Who is in charge of customer engagement? The answer to this question must be established before embarking on any successful journey to a fully digital customer experience. The more senior this person, the better the chance of success. Not only does it signal the importance of the project but more importantly it allows the project to bridge all customer touch points. This person must be able to envision customer journeys that cut across operations and ensure customer experiences are prioritized every step of the way. Consider customer onboarding for a utility—this involves online research, signing up, scheduling installation, receiving and paying the first bill. Is customer care one tap away at each stage through the various digital tools used to undertake the journey? Who can see the entire process?
3. How can you expand the customer experience beyond voice interactions? Voice interactions remain important as one of many equally valuable elements of customer engagement. If starting your transformation from a voice-only status quo, how do you expand into digital channels? First, assess which digital channels are already used but not managed by your contact centres. A likely target is email. Another may be online chat, which may have been separately deployed and managed by the marketing team. Second, consider if and for what processes self-service make sense. Many customers today prefer self-service if engineered for rapid, easy, always-on access. This can please customers with access through their preferred channels and also increase the speed of care without adding staff. But take caution: do not engineer for cost reductions, engineer for great customer experiences.
4. Can you use a full scope of digital channels to engage with customers? If not, which channels are the most important to your business based on the nature of your customer relationships? Understanding your customer demographics and the most frequent care services consumed can smooth the path to digitizing your contact centre. Start with the digital channel most desired by your customers that is effective for the most frequent care provided. If quick and easy answers are needed, say scheduling for a spa or ordering a pizza, SMS may be the right place to start. If more elaborate care is required, such as technical product support, web chat or even video may be appropriate. Once you have deployed your first digital channel and collected customer feedback validating the approach, then move on to others. Make sure to nail each one before moving on or you will lose customer attention and not achieve full return on investment.
5. Are your management and reporting metrics as effective as they could be? Customers inherently look at their experiences with services as a comprehensive lifecycle, as opposed to analyzing the various July/August 2016
individual touch points. Thus, it’s necessary to start building cohesive customer experiences from the management level through real-time reporting on performance, schedules and other metrics. This way, your company will be able to provide consistent visibility and provide customers with an interconnected lifecycle. Even if your contact centre achieves its service goal 90 per cent of the time, if a service experience requires four interactions there is a 40 per cent likelihood a customer will be dissatisfied along the way. This may profoundly change the importance of any single interaction step and thus the service levels you set.
6. Are you worried about increased costs associated with new or improved communications channels? You almost certainly are concerned about costs, even if there is hard data to support the return on investment. Consider these questions in your cost modeling. First, will additional channels increase communications demand or simply redirect what is already occurring? Most likely it is the latter and you can find cost reductions in the anticipated decrease of existing channel usage. Second, will selfservice tools focused on fast and easy customer care be deployed? If so, model a conservative and progressive transition away from costlier live assistance. Third, are there deployment models such as private cloud, public cloud or a hybrid model available that both meet your operational requirements and mitigate up-front costs for the supporting technology? The answer to this is almost certainly “yes.” The options today for digitizing customer care provide many options for managing costs effectively. And the revenue impact of staking a claim as a customer experience leader in your market almost certainly justify the investment.
7. Are you fully taking advantage of all the tools at your disposal to empower your customer care workers? As you expand the customer touch points available to reach the contact centre, be sure to give every tool possible to those workers staffing the centre. There are many tools available to expand the pool of talent available to you, from intelligent workforce scheduling software to meet various work-life balance requirements to secure, high-quality remote worker tools like softphones. Thinking more broadly, make sure to consider the tools that link the contact centre into the enterprise at large for one-touch access to those that can help address customer needs. Unified communications tools make it easy to bring in subject matter experts on demand via internal text messaging, ad-hoc conferences and even desktop sharing sessions. Research indicates the top factor in great customer experience is speedy resolution so making everyone available for rapid response can make a meaningful difference. Brian Spencer is general manager, contact centre at Mitel. With nearly 20 years of sales and executive leadership experience in the contact centre industry, Brian joined Mitel in 2014 as part of the company’s acquisition of OAISYS, where he was president and a board member for six years. He held prior posts in sales and sales engineering and additionally led sales, marketing and customer service at OAISYS and Inter-Tel during periods of rapid growth and transformation.
2016 Industry Events
April April 5-7 Smart Card Alliance 9th Annual Payments Summit Orlando, FL www.smartcardalliance.org April 6-7 9th Annual Prepaid & Payments Retreat Toronto, ON www.paymentseXchange.ca April 6-7 Payments Awards 2016 Toronto, ON www.paymentseXchange.ca April 11-14 NAPCP Commercial Card and Payment Conference Orlando, FL www.napcp.org April 17-19 NACHA, The Electronic Payments Association, Payments 2016 Columbus, OH www.nacha.org April 19-21 Electronic Transactions Association 2016 ETA Annual Meeting & Expo Las Vegas, NV www.electran.org April 27-29 NBPCA Annual Congress-The Power of Prepaid 2016 Washington, DC www.nbpca.com April 28-30 Central 1 Credit Union Central Conference Toronto, ON www.central1.com
May 12-13 FC Business Intelligence Analytics for Insurance Canada Summit Toronto, ON www.analytics-for-insurance. com/canada/ May 16-17 WB Research eTail Canada 2016 Toronto, ON www.wbresearch.com May 17-20 IFO Fusion 2016 Forum & Expo Reno, NV www.financialops.org May 31 - June 2 Credit Scoring & Risk Strategy Association 22nd Annual Conference Muskoka, ON (TBD) www.csrsa.org
June June 7-10 Internet Retailer IRC&Exhibition 2016 Chicago, IL www.internetretailer.com June 8-10 FEI Canada Annual Conference Montreal, QC www.feicanada.org June 14-15 ACT Canada Cardware 2016 Niagara Falls, ON www.actcda.com June 15-17 Canadian Payments Association Payments Panorama Calgary, AB www.paymentspanorama.com
May 5-7 Cartes North America 2016 Washington, DC www.cartes-america.com
June 17-18 ATMIA Canada Annual Canadian Conference 2016 Toronto, ON www.atmiaconferences.com
May 10-11 Finovate Spring Conference San Jose, CA www.finovate.com
June (TBD) NBPCA Annual Congress-The Power of Prepaid 2016
National Harbor, MD (TBD) www.nbpca.com June (TBD) EMV User Meeting 2016 EMVCo Kuala Lumpur, ML (TBD) www.emvco.com
July July 31 - August 3 Retail Solutions Providers Association RetailNOW 2016 Orlando, FL www.gorspa.org
August August 9-10 The Prepaid Press Expo Las Vegas, NV www.prepaidpressexpo.com August 29-31 Mobile Payments Conference Chicago, IL mobilepaymentconference.com
October 4-6 Smart Card Alliance Members Meeting Phoenix, AZ www.smartcardalliance.org October 13 Smart Card Alliance NFC Solutions Summit 2016 Phoenix, AZ www.smartcardalliance.org October 15-17 Canadian Automatic Merchandising Association CAMA Expo 2016 Victoria, B.C. www.vending-cama.com October 13-15 BAI BAI Retail Delivery Conference 2016 Las Vegas, NV www.BAI.org October 17 NAC Conference & Expo Orlando, FL www.natmc.org
September 14-15 WSAA Annual Conference Scottsdale, AZ www.westernstatesacquirers.com
October 19-21 ETA Strategic Leadership Forum Palm Beach, FL www.natmc.org
September 20 Women in Payments™ Symposium & Women in Payments™ Awards Toronto, ON www.womeninpayments.ca
October 23-26 Association of Financial Professionals AFP Annual Conference 2016 Orlando, FL www.afponline.org
September 25-27 American Bankers Association Marketing & Retail Conference Nashville, TN www.aba.com/HiX
October 23-26 Money20/20 Las Vegas, NV www.money2020.com
September 26-29 Sibos Annual Conference 2016 Geneva, Switzerland www.sibos.com September 29 Tomorrow‘s Transactions Unconference Toronto, ON www.chyp.com/thought-leaders/ unconferences
Visit us online www.paymentsbusiness.ca 20
November November 29 - December 1 Trustech CARTES & Identification Exhibition 2016 Cannes, FR www.cartes.com
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Wearables are now in the mainstream And there is plenty more potential growth to fulfil Phil Campbell is creator of the Kerv contactless payment ring.
earables have made a major breakthrough in the last two years. I believe that in several sectors including payments they are now mainstream technology rather than a minor tributary. Not long ago, the term ‘wearables’ would draw blank looks from nearly everyone. But now it is associated with brands such as Apple, Barclays Bpay, the Fitbit, the Jawbone and many others. These have taken wearable devices into the everyday lives of many of us and made millions of others aware of the trend so that they can now engage in discussions about them. This is no longer only the niche world of
techies and geeks. The Apple Watch and Bpay have certainly taken wearables forward in the payments sector, with highly practical, high potential products backed by major brands and marketing investment. Payments technology is, I believe, still a market with vast unfulfilled potential for both innovation and growth. As I explained in more detail in my presentation at PayExpo Europe on Wednesday, June 8th, it was because I felt that general prepaid, specialist travel cards and even the first contactless payment devices weren’t delivering to their potential that I was motivated to develop my own product. The underlying philosophy always has to be to put the user first and think about what they really want to achieve, and the best way of doing so. In short, we didn’t set out to produce a wearable product—but the concept of the ring evolved from considering that process.
The reality is wearables not only have to serve a desired purpose but also be highly practical for users to wear and keep on them for a prolonged period. The essence of the KERV ring is convenience and longevity. The motion to make a transaction with the ring is much easier than a wrist-based device and it doesn’t require charging. I’m sure that more devices will be developed as innovators identify further ways to meet consumers’ needs and demand is likely to increase as the trend for “frictionless payment” continues. There has been much work on optimizing the shopping basket but far less on the payments side. Any new payment innovation that allows a quicker, easier payment for the user will be an enhancement. Wearables certainly facilitate this in physical locations—though it’s imperative that the experience is joined up—across hardware, software and the payments programme itself. July/August 2016
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