Contactless technology is capturing the imagination of the payments industry. Wendy Atkins reports from the Cartes card show.
Although bank card security remained a key element of the annual Cartes card show in Paris, this year’s event also highlighted how new products and solutions can help banks penetrate fresh markets and promote consumer spending.
Contactless technology took centre stage at a number of card and terminal manufacturers’ stands. Although there is nothing new about the technology – it has been in use in the public transport segment for some time – it seems to be capturing the imagination of the payments industry and is opening up fresh markets to banks, such as low-cost, quick-service environments like restaurants.
“There are benefits for all actors: banks can capture more transactions, merchants more revenue and purchases tend typically to be higher than for cash. And customers get to enjoy the convenience of contactless,” says Bertrand Knopf, senior vice-president, payment and transport card product line, Gemalto.
During the show, terminal manufacturer Ingenico launched its first Pin pad with fully integrated contactless technology. The Ingenico 3070 contactless can accept payments via a contactless card as well as a mobile phone or other near-field communication (NFC) enabled device. Hypercom used the event to announce the availability of the new P4100 PIN Pad, a PIN-entry device that includes a choice of contactless, EMV (Europay, MasterCard, Visa) or magnetic stripe payments.
VeriFone unveiled the QX100 external contactless card acceptance device. “We believe that acquirers, ISOs and merchants will view VeriFone’s introduction of the QX100 as evidence that contactless has entered the mainstream,” says Paul Rasori, VeriFone vice-president of global product marketing.
“With Visa, MasterCard and American Express each aggressively promoting contactless payment cards and fobs to consumers, we believe merchants are ready to adopt the technology if they can obtain systems from trusted leaders that have demonstrated the ability to meet the most stringent security requirements.”
Representatives of Giesecke & Devrient (G&D) and MasterCard explained the US trial of personalised NFC-enabled mobile phones for payment. In partnership with Nokia and 7-Eleven, MasterCard is conducting a consumer trial in Dallas of NFC-enabled mobile phones with MasterCard PayPass capability. According to MasterCard, up to 500 participants from the 7-Eleven Speak Out wireless programme are getting NFC-enabled Nokia 3220 mobile phones and instructions on how to wirelessly enhance them with MasterCard PayPass payment functionality using G&D’s new secure chip management system.
Participants will then be able to use the phones to make purchases at any of the 32,000 merchant locations worldwide that accept MasterCard PayPass. The trial will run for six months.
“Dallas is the testing ground for a technology that has the potential to transform the way consumers pay for everyday items,” says Richard Fletcher, group head, Mobile/Wireless, MasterCard Worldwide. “As far back as the late 1990s, MasterCard recognised the global opportunity presented by mobile commerce. Until now, though, mobile payment trials have been limited by their lack of scalability. Now, with a few simple steps, consumers can turn a cell phone into a PayPass payment device.”
Gemalto launched a microprocessor payment card at the show that contains contact EMV, EMV-based contactless and magnetic stripe data contactless. It says that this is the first contactless product to meet Visa’s global contactless specification for interoperability and that it will be available in large volumes to major financial institutions from January 2007.
The card can also host additional applications, such as transport, access control and loyalty, so Visa issuers can deliver co-branded applications in cooperation with public transport operators and add new services such as loyalty schemes.
“This product will assist banks in addressing the cash market, which is by far the largest in terms of the number of transactions. Furthermore, the combination of EMV-based contactless and multi-application will enhance consumers’ purchasing experiences,” says Philippe Cambriel, executive vice-president, banking and security, Gemalto.
Encouraging usage
Moving beyond contactless payments, some of the card manufacturers highlighted ways in which banks could encourage customers to use their cards. Gemalto’s newly launched CardLikeMe is designed to provide users with an interface to upload a picture of their choice on the bank website to create a unique personal card. As part of the offering, Gemalto provides banks with the software required to process photographs on their website and ensures complete card personalisation and fulfilment. Once the picture is loaded on a bank’s website, users can view the appearance of their cards in real time and adjust the photographs as they wish. The image is approved by the bank before the order is placed.
“There is a big market opportunity for banks to offer their customers personalised cards,” says Thierry Koeberle, marketing director, advanced services, Gemalto. “We’ve already seen a strong trend from consumers for personalising goods. The importance of this development is that it encourages the consumer to keep a bank’s credit card at the top of their wallet, which means it is the one they are most likely to use for payments.”
Mr Koeberle also believes the service is a good way to increase the activation rate of credit cards. “Many consumers take new credit cards for the introductory offers and never actually activate them. By encouraging them to personalise and activate them, they are more likely to spend with them.”
