Contactless Intelligence Weekly News Review - Calendar Week 33

iWallet, NFC, Beacons, HCE & predictions for the next 6 months…

August. The time of year when the industry - and all the hard-working people in it - resembles one of those marathon runners after reaching the finishing line after a long race. You know what I mean... The out-of-breath, wide-eyed stare into the distance. The unwillingness to move again after what they have just been through. We see it every year about this mid point. Time spent away from work is more important than anything else; consequently, the industry dies a very quick death for about three to four weeks before it is urged back into life.

We too are about to shut down for a couple of weeks on a brief summer hiatus. But before we do so, here are some of my predictions of what will have an impact upon the industry and the dissemination and interaction with its technology. To aid me, I have asked a couple of well known players in the industry to give me their opinions on the matter and so help dilute the MY-editorial/MY-view vibe I may be giving out. So here goes…

1. Apple will indeed launch its own iWallet (perhaps even NFC-enabled but it won’t really matter) and together will work with Visa on the Apple iWallet in one form or another. After all, with the internet ablaze with Apple/NFC rumours (again) perhaps Apple has come to realise that they may be a little late to the payment party. Bur as I said - an iWallet being dependent on NFC is not the real thing here – it’s that Apple could make a lot of waves in the mobile payment market. 

This is what Neil Garner, CEO and Founder of Proxama had this to say on the subject, “As rumours intensify about whether Apple will adopt NFC, the future looks exciting for the technology. Personally, I'd be surprised if Apple didn't take advantage of the payment capabilities of iTunes, as it has millions of users' card details stored in its accounts. Even if it doesn’t include NFC in its iPhone 6, recent figures from Visa Europe that state consumers made 19.7 million contactless transactions in May 2014, demonstrate the growing confidence in the technology. But NFC shouldn’t just be limited to payments. It can be used to deliver in-store customer loyalty programmes, vouchers and competitions and this market”.

Rupert Englander, Founder & Managing Director of Wooshping agrees; ”The big trigger over the next 6 months is if Apple decide to opt for NFC. If they do, we could see a sea change in attitude towards the capability. If not, NFC will continue to labour along, beset by lack of consistency in approach from those who support it. Apple may not resolve that particular issue, but to be able to say that Apple supports NFC will see that shift change in acceptance, regardless of other factors, simply because Apple holds that much weight still.”

2. Mobile payments will find their core acceptance in unattended POS elements including parking, ticketing purchasing and the more recognisable of all, vending machines. I believe that what WILL spur on mobile payment adoption is usage. Or rather HOW and WHERE one uses their mobile for any form of payment. The human interaction with someone behind a checkout is no longer required as long as the process is simple and intuitive; any complications at all will mean non-interaction from the user. Simply usage and interaction works well in a transportation/ticketing environment. Fundamentally, any form of purchase activity that does not involve human interaction, case in point; paying when you get on a bus. 

It’s working well so far, for Transport for London in the case on contactless payments. Rupert Englander agrees with me (i think…) “The next 6 months will see the continued roll-out and adoption of contactless payments. Moves by the likes of TfL to do away with oyster and move to a transparent contactless payment system will move adoption on another significant step.However, the current status quo in mobile (i.e. no participation by Apple) could see the continued stagnation of payment by mobile which is still beset by complexity and consumer scepticism that will dictate that small scale roll-outs and trials will continue to evolve.”

Englander goes on to say, “I still don’t see any evidence that the “mobile industry” has nailed it from an ease of activation and seamless experience. For example I recently tried to sign up for EE Cash on Tap service. I downloaded the app and clicked to activate but I was informed there was a problem, that I couldn’t be activated and to call customer services. Could I be bothered? No. And I have an indirect vested interest to see this succeed – but seriously, this just has to work, without needing me to go out of my way to get it fixed. How many other examples of these poor experiences will continue to be rolled out whilst someone just comes along, nails it, and delivers on the promise of mobile payments in 1 swoop. It might happen in the next 6 months – but I believe (despite my commentary on Apple being in the last chance saloon) that they are the only ones who can realistically pull it off. Whether the consumer cares is another matter.”

3. Beacons will find their place in public places that can facilitate the dissemination of useful information rather than mere marketing ‘noise’ from brands and retailers. Disseminating such ‘noise’ could be detrimental to the technology's acceptance. “The uptake of the (beacon) technology is increasing all the time, but marketers need to make sure they are using it in the right way. Combining beacons with NFC will enable retailers and marketers to; provide incentives, personalise offers, reward loyalty, analyse results, and transform the overall consumer experience. The industry also needs to ensure that it is not spamming people. Contacting consumers with constant and irrelevant offers and news will result in many deleting applications from their mobile devices, or worse still, turning the Bluetooth functionality off altogether, having a detrimental effect on the technology,” says Garner. “Beacons are great for pushing information, but users need the right app on their phone keyed into the beacon network that they are engaging with, so Beacons only really work for repeating interactions with organisation that have been able to work with or deploy a network of beacons in a nearby location”. I thought Neil agreed with me, right up until the very last sentence…

“It wasn’t long ago that businesses and brands utilised Bluetooth marketing techniques to effectively spam phones that dared to come within the proximity of a marketing unit. I recall there wasn’t a day when I couldn’t pass through waterloo station without getting hit. I turned Bluetooth off and in time brands got the message that this approach wasn’t acceptable to the public,” comments Englander. “The use of Beacons in retail could have a similar impact if they are abused by the retailer or brands. Over notification of offers or information about products that are of no interest to you could very quickly become annoying. Shoppers are fairly difficult audiences to get across the line, so the idea that in a multi-branded environment someone is going to take the time and effort to profile themselves to ensure they only get alerted about products or offers that are of interest is highly dubious. Beacons could work in a single brand environment, but even then the challenges of profiling against product interest still exist, unless of course the brand believes that anyone interested in a particular product of their must be interested in everything else that company makes. A dangerous assumption!”

Fundamentally, I believe it’s about making sure that the ‘right’ kind of information is being disseminated by beacon technology and translated into useable information by the accompanying apps. We’ve seen airports being very quick to adopt beacon technology recently and even last week there was a Techcrunch report out that London-based digital design studio ustwo is working on a project with the Royal London Society for Blind People (RLSB) to determine whether iBeacons/Bluetooth Low Energy beacon technology can be used to help visually impaired individuals navigate public transport by mapping their location dynamically and providing audio cues to direct them through stations and onto trains via an app. This, to me, is the immediate future of beacon technology - relevant information for practical implementations. 

Although proximity marketing is far from a tired market when it comes to NFC and QR over BLE. Neil Garner confirmed this. “We are seeing good traction for organisation wanting a combination of proximity technologies: NFC & QR for Pull and Beacon & Geofence for Push. Pull technologies are great to first use or infrequent use with need for an App and can be used to easily trigger download of an app. Once an app is installed and a user has opted in then they can then receive information by push. However push is very dangerous as if it is mis-used and bluetooth or push messaging is turned off than that App will be forever silent! All that said, we've always believed that mobile proximity technologies will play a significant role to drive engagement and to increase footfall and ultimately retail spend for anyone that owns physical world assets… locations such as cultural venues, transport hubs, shopping centres, city centres and retail stores are all places that can be enabled, but in order to gain critical mass we need to focus on specific geographies where consumers know they have the technology on their devices, know how it works and can use it frequently on a daily basis.”

4. Expect to see renewed debate over hardware versus software in the mobile wallet wars. Specifically HCE versus the Embedded Secure Element. Where is your data really safe? In the cloud or in your phone? Google would have you believe that software can cure all security ills but there are still many out there who are not so sure. NXP certainly doesn’t see their embedded Secure Element business disappearing anytime soon. Rick Clemmer, CEO of NXP Semiconductor was reported as saying, “We feel very comfortable with the strength of the secure element. We think that the real killer app will have the radio plus the secure element, which provides the security to really be able to protect the individual’s wallet. We think that if somebody is using the radio then there is a weakness; they are trying to use software as the security and clearly that exposes it to additional hacking issues. So we think the secure element plays a very key part of a total mobile transaction solution, providing the security that we all want to have for our individual wallets.”  That said, it’s true that the release of HCE is been beneficial for mobile payments. Proxama’s Neil Garner agrees but, with one eye on Apple, has the following to say, “HCE has given NFC a real shot in the arm for the payments and card/wallet use cases which will now start to fly once the card issuers have got through the current phase of pilot/evaluation before rolling out in volume. The imminent Apple iPhone6 announcement should confirm that Apple has finally decided to join the NFC party, but I’m sure it will be locked into the Apple ecosystem for sometime before all of the useful APIs and capabilities are properly open up for third parties.” Either way, I predict with a potential new mobile wallet out there, the debate will heat up once more. Especially if the new wallet is Secure Element protected.

5. Wearables will become the real ‘interaction’ element for the masses. Less a smartphone on the wrist and more an individuals interaction point. This could cause real change in human behaviour. The phone will remain ‘hidden’ as it were. No need to take out your ‘wallet’, if all you need to do is ‘tap’ your wrist. Imagine moving through the London public transport (or any other city - for that matter) with your ticket on your wrist. Or attending a concert, or anything that requires a ticket for access. After all, various companies and finical institutions have been passing out their own branded ‘wristbands’, look at CaixaBank, or Barclaycard PayBand. Imagine if there was just one and it all went through your wrist - multi-application orientated. There will be lots of apps available for when they become mainstream but Koichi Tagawa, Chairman of the NFC Forum recently said, “Don Norman, a cognitive science professor and designer, suggests that the real usefulness of wearables will depend on how users choose to use them. As with other digital devices, users must decide “whether we use them to focus and augment our activities or to distract. It is up to us, and up to those who create these new wearable wonders, to decide which it is to be.” Perhaps handshakes will be a thing of the past? Instead of the ‘fist bump’ might it not be a simple ‘’tap on the wrist’? (Doesn’t that mean something else?)

6. Expect to see beacons highlighted for their security flaws and their ability to be hacked and information diverted. I don’t want to go into much detail in this one – consider it a end-of-season cliffhanger. However I had a very interesting chat last week with DotOrigins’s Frank Viljoen who had a lot of interesting things to say on the subject. I intend to give Frank a full post on Contactless Intelligence later in September to expand on this issue, but for now, I will let Frank have the last word; “By virtue of the fact that beacons operate using Bluetooth, and nobody 'owns' digital air space, there is very little one can do to prevent competent developers from either cloning a beacon or ambushing a competitors App. For an App to connect with a beacon, the unique beacon ID along with its attributes HAS to be visible. With these details it becomes very simple for a seasoned developer to ambush a competitor brand or in the case of wayfinding, to confuse the consumer with incorrect information”. Interesting assessment, don’t you think…?

Thanks for reading and giving me feedback and thanks to those who agreed to be quoted in this editorial. I always reply, answer questions and respond to request, as many of you know. So don’t be shy about getting in touch. I will be back at the start of September with the second part of the year's editorials as well as some exciting news about the 2015 conference and some new forums within the event. 

So, until then, I wish all of you a restorative summer break and see you all in three weeks time!

Steve Atkins
Contactless Intelligence

Driving cash down the Value Chain

When the term “the death of cash” first started circulating in the payments industry, the future for coin and paper payments was perhaps not quite as bleak as some suggested. But over recent years, as chip and pin has pioneered the move away from cash payments, we’re seeing innovation pushing cash further and further down the value chain.

In the last year we’ve seen a significant increase in the use of contactless payments across Europe. In 2013, UK consumers used their Visa contactless cards to make close to 100 million individual purchases (reaching 94 million), compared to fewer than 25 million contactless purchases in 2012. Growth is accelerating as consumers are becoming increasingly aware of how contactless works, and more and more retailers are installing contactless payment terminals. 

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Contactless usage continues to grow in the UK

The use of contactless cards to make payments has continued to gain monthly momentum in the UK, according to figures released this month by Visa Europe.

To recap; consumers made almost 20 million (19.7 million) contactless transactions across the UK in May 2014, an 18% increase on April 2014 alone. More than 37.8 million contactless cards have now been issued by UK banks, a 35% increase on the same period last year. May 2014 also set a new record for the total value of transactions made by contactless cards in the UK in a single month, reaching £126.7 million, a 14% increase on April 2014. This also indicates a growth of 189% since May 2013.

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G&D supplies secure SIM card platform for Swiss Tapit digital wallet

The Swiss mobile network provider Swisscom is counting on highly secure NFC-enabled SIM cards from Giesecke & Devrient (G&D) to allow its customers to make payments with “Tapit”. Tapit is the digital wallet for smartphones in Switzerland. The platform is used by every mobile network provider in the country. The smartphone app uses NFC technology to allow users to make payments, collect loyalty points and open doors. G&D’s SIM card is the central security element in this system, safely storing sensitive information such as digital payment cards or employee ID for building access.

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MasterCard offers Priceless platform for SFX dance music fans

MasterCard and SFX Entertainment are to develop a multi-year global partnership that will bring technology solutions to the SFX platform and demonstrate MasterCard’s commitment to music and entertainment. Acting as a technology partner, MasterCard are to simplify the way hundreds of millions of electronic dance music (EDM) fans worldwide can access SFX events, engage with content and connect with their community – through the MasterCard Priceless platform. As part of the partnership, SFX will leverage MasterCard’s innovative technologies for its digital and physical platforms including ticketing, retail, live events and social networking...

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Coverage on C-ITV

GUEST POST: Driving Cash down the Value Chain by Mark Austin, Visa Europe 
G&D supplies secure SIM card platform for Swiss Tapit digital wallet 
Contactless usage continues to grow in the UK 
MasterCard offers single Priceless platform for SFX dance music fans 
EDITORIAL WK32: Apple and NFC? The world holds its breath... 
SIMalliance publishes UICC Configuration for Mobile NFC Payments v1.0.

Payments & m-Commerce

US merchant groups call for creation of open tokenisation standards 
Blackhawk Network, Amazon team up on m-wallet functionalities 
Facebook closes gifts business 
How to get consumers hooked on mobile payments 
Westpac NZ unveils augmented reality banking app 
Mobile Payments Becoming Massively Popular in China 
Apple Inc.'s iPhone 6 Will Win the Mobile Payments War 
Airtel partners with BGFIBank for mobile money services 
Shifting Tide Towards Mobile Wallet Technology 
Ease Of Use Is Key For M-Payments Adoption 
Is Apple Preparing to Scoop Up Mobile Payments? 
Mobile wallet meets social media identity theft

NFC & Mobile

NFC Forum: Wearables: Build Them and They Will Come? 
BLE guides the blind at SFO 
Two hundred US shopping malls to use BLE beacons for shopper marketing 
Apple’s iWatch Expected in Fall 
Can iBeacons Be Used To Help The Visually Impaired Navigate Public Transport?
Merchants to test BLE payments at Vilnius street fair

Transportation, Ticketing, Access, Security & Loyalty

Londoners! Ditch Oyster Card & Save Money: Contactless Payments Explained 
Wave and Bell ID Partner to Combat Online Payment Fraud 
LevelUp intros physical and digital gift cards 
Barclays to offer gift cards over Pingit 
Bracknell Forest teams up with allpay to launch prepaid citizen card 
One Stop gives mobile vouchers 
Players optimistic about digital signage payment systems 
Big leap forward for public transport users

Other News & Opinion Articles

Could mobile money become ‘bigger than bank accounts?’ 
China and Adoption of Contactless Boosts Smart/EMV Payment Card Shipments to 1.67 Billion, Up 27% in 2013

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