Andrius Sutas, CEO and Co-founder of AimBrain looks at the limitations of secrets-based authentication and the three simple steps that banks can take to enhance security and facilitate innovation.
In this digital world, security is more challenging and demands more resources than ever before. Customer centricity – remote onboarding and eKYC, faster payments, greater interconnectivity between FS providers and any other customer-first initiative – offers unprecedented convenience for the consumer, but places immense pressure on banks and FS providers to offer such services quickly, cost-effectively and, most importantly, securely.
Mobile banking, for example, is undoubtedly one of the greatest things to have happened to the sector. Reducing branch spends, rapidly enabling new products and greater segmentation, remote onboarding…it has been a pivotal step for the industry. But never failing to miss an opportunity are the criminals that seek to dupe, coerce and attack. Mobile banking is particularly susceptible to fraud; Trojan attacks doubled in volume last year against 2016 and increased 17-fold compared to 2015. McAfee also said that it had detected 16 million mobile malware infestations in Q3 2017; double the number of the same period in 2016. Supplement these attacks with omnipresent, large-scale data breaches and you’ve got one marathon migraine coming on.
So, it is no wonder that banks now find themselves in a position of having to pool resources just to defend against mobile account fraud; and that is a single channel in the customer engagement journey. On-device biometric authentication is a patch fix for a problem that is only going to grow; the fact is that the only way to be utterly certain of an individual’s authenticity is by verifying the person, not the device.
Passwords don’t work. It’s not rocket science. Anything that can be intercepted, guessed, hacked, teased out – does not work, and the more enterprises continue to rely on passwords and secrets, the more resources they will find themselves throwing at the problem. What’s left? Hardware is antiquated, OTPs via SMS have proven themselves to be dangerously easy to intercept, and push notifications rely on the physical proximity of a device.
So how can banks truly secure customer data, act compliantly and have the freedom and flexibility to innovate? We believe that the strength lies in layering on security, in a simple and easy-to-configure model that is fit for both today’s fraud and the challenges of tomorrow.
Biometrics (how someone behaves, looks or sounds) can fulfil these requirements, and more. Unlike securing the authenticity of a device, biometrics assure the authenticity of the person themselves. And better still – unlike passwords – they are not secrets. They are everywhere! We leave fingerprints wherever we go, our faces are on show, we talk into devices all day long.
This might seem counterintuitive, but it’s not the data, but the way in which biometric data is treated that creates the security. We’re not just talking about templating it using algorithms – pretty standard methodology across the industry – but about how to keep it secure.
If someone has your password, they have your password. It’s black and white. If they have a video of you, or a recording of your voice, this might be enough to beat some authentication gateways. So, the key is to continually add challenges to beat the fraudsters and make it impossible for someone to pretend to be the customer, whilst keeping it simple for the customer.
How? We think it boils down to three steps.
- Passive bot detection: feeding industry or enterprise-specific annotated fraud data into a passive anomaly detection module that provides an early warning for behaviours that could signal fraud, as early as at the onboarding stage, whether manual or synthetic.
- Configuring multiple biometrics: combine and layer biometric challenges; behaviour, bot detection, voice, face and any blend thereof, to create unique combinations of step-up/step-down security rules and weightings on specific outcomes. Use in-session risk-based assessments rather than the binary yes/no of passwords to ascertain a user’s authenticity in an ongoing way.
- Combining simple and smart tests: use the latest stringent anti-spoof and liveliness detection (that it is a user and not a representation of a user) that marry simple user challenges with time-sensitive outcomes underpinned by artificial intelligence, such as combining facial authentication with an in-session audio prompt. Simple and secure, and a strong indicator that even though biometrics are public, technology can render them worthless to fraudsters.
These steps will keep banks ahead of the capabilities of even the most sophisticated presentation attacks. We recently launched AimFace//LipSync, which combines facial authentication with a voice challenge and lip synchronisation analysis. A customer can enrol or access simply by taking a selfie and simultaneously reading a randomised number. Nothing exertive. Pretty simple really. But – we think – impossible to spoof by any method available today. It’s about staying one step ahead of fraud, in a way that minimises inconvenience to the user, and your biometrics partner should have a solid roadmap in place that demonstrates consideration for the fraud we haven’t yet seen.
The password is not fit for purpose. Secrets are dangerous. Biometrics are a simple yet secure way of authenticating the person and keeping their valuable data and assets safe.
AimBrain is a BIDaaS (Biometric Identity as-a-Service) platform for global B2C and B2B2C organisations that need to be sure that their users are who they say they are.
The Biometrics Institute predicts that the development of biometrics over the next five years will shift towards online identity verification, government mobile applications, online payments, e-commerce, and healthcare.
Biometrics has been viewed as a secure method for financial transactions and security in many walks of life, with fingerprints used for clocking in at work or verification for contactless payments, but the institute’s research suggests there are further user cases set to emerge in the coming years.
And, it comes as no surprise for those studying the market closely. The global technology powerhouses, such as Microsoft, Apple and Samsung, are strong proponents of using biometric identification for PC, laptop or mobile access purposes and, as consumers get used to this way of engaging with tech, it naturally paves the way for fingerprints and iris scanning in payments.
The case for businesses and consumers
Various technology companies and card schemes argue it’s a secure way of paying, and with the likes of Apple Pay, Android Pay and Samsung Pay mobile payment solutions already using biometrics as part of their authentication process, there could be calls for more to come.
Companies like Starbucks utilise mobile payment providers like Apple Pay within their apps, meaning with the tap of a thumbprint money can move from bank account to Starbucks account, and subsequently be used at the point of sale. The simplicity of it continues to strike a chord with consumers, as the coffee chain’s latest figures show its Starbucks Mobile Order and Pay service represented 12% of US company-operated transactions in the three months to 1 April 2018.
Then there’s the Amazon Go effect to consider. As the online titan looks set to add more checkout-less physical stores to its inaugural offering in Seattle, enabling frictionless transactions without the need for shoppers to queue or visit a fixed cash desk or till, it will shape consumer expectations.
If this momentum continues and Amazon drives sales through these stores, you can imagine strong arguments from consumers for further installations of this type of technology in convenience retail – and one way of supporting speedy and secure transactions is through use of biometric identity.
Finger, face or eye scanning are all seen by industry analysts as ways to improve the authentication phase of payments for the consumer, while helping tackle growing fraud levels in retail and hospitality, and protecting customer information.
But biometric scanning isn’t fool-proof and can only be part of the identity solution, especially when being used to authenticate higher values purchases, for instance.
This means business considering adopting body-scanning payment methods need to be mindful of the trade-off between security and user-experience – and this requires a fine balance between how many false positives and false negatives are allowed in order to process a payment. Too many false positives pose a security risk but, at the same time, too many false negatives could lead to a legitimate shopper not being able to authenticate a payment, resulting in poor customer experience and possible purchase abandonment.
A balance that provides the right level of convenience but mitigates against the risk of misauthentication will be key to successful biometrics payments solutions.
Choice trumps any individual payment type
At any trade show we attend the clear message is there’s no silver bullet when it comes to retail or payment technology.
Whether it’s mobile payment, buy-now-pay-later schemes, card and cash payment, crypto-currencies – or anything using biometrics in some way – they key for retailers is to know what their customers want and offer the relevant payment options. Businesses need to be sure that having helped navigate a customer to the all-important point of purchase they don’t lose them because they don’t offer the most suitable method of payment.
Therefore, retailers should be investigating biometrics usage as part of their suite of payment options, because the most forward-thinking organisations know they need to provide choice at the checkout.
Mobile support
It is clear mobile is very much at the heart of a lot of the innovation going on in the payment space, playing a fundamental supporting role for many of the new transactional options.
With Deloitte predicting that, by the end of 2023, 90% of adults in developed countries will have a smartphone, it’s obvious why tech companies and innovators in the payments space are targeting that piece of metal that sits in our pockets as a platform for their new solutions.
In the last 18 months the conversation in the financial world may have veered towards crypto-currencies and open banking, but before it becomes clear what impact these or, indeed, biometrics have on the overall landscape, we can be near-on certain that mobile will be central to it all.
As for the evolution of biometrics, fingerprints are already playing a key role in mobile payments processing, but in the future this could be usurped as the most dominant form of biometric payment.
Delving deeper into the Biometrics Institute research it appears facial recognition dominates as the biometric most likely to rise in popularity for businesses over the next few years. That is closely followed by a multimodal – a combination of two or more biometric forms – and then iris.
It’s certainly worth keeping an eye on how this all impacts retail payments in the not-too-distant future.
John Cooke is Founder and MD of Black Pepper Software, an agile software development company specialising in the financial services sector.
Online research from Equifax, the consumer and business insights expert, shows that using a debit or credit card with a pin number is still the preferred method of payment for 42% of people in the UK. Contactless methods followed at 34%, with the vast majority of these respondents (31%) preferring a contactless card to using their phone or wearable technology (3%).
The survey, conducted with Gorkana, also highlighted that the majority of consumers (66%) are happy with the current £30 contactless payment limit and only 16% think it should be increased. Of the people keen to see a higher limit, 13% would like to see it increased by a maximum of £10, and 39% would like the limit to be set between £40 and £50.
When asked why they would use contactless rather than cash, 34% see the speed of the transaction as the main advantage and 21% said it’s more convenient than making a trip to a cash point. Only 16% of people feel that contactless payments are more secure than carrying cash.
The research found that 45% of consumers withdraw cash just once a month or less, yet 28% of people surveyed said they would never choose contactless payments over cash. Despite the rising popularity of using wearable technology like watches to make payments, 36% of Brits don’t expect this payment method will ever overtake cards.
Sarah Lewis, Head of ID and Fraud UK at Equifax, said: “The rise in popularity of contactless and wearable payment methods is a hot topic right now but our research shows that retailers and service providers are going to have to accept a variety of payment types for some time to come. Many consumers have been early adopters of contactless and wearable payments, and really value the convenience of these options, but others remain wary and prefer the more traditional means.
“Contactless payment is not without its risks and these results show that consumers are well aware of this. There has been talk about increasing the contactless payment limit but this would simply increase the incentive for criminals to steal contactless cards, resulting in higher levels of related fraudulent activity. Contactless and wearable payments will continue to grow in popularity, but the financial services industry has a lot of work to do to make customers completely comfortable with these options.”
(Source: Equifax)
Bangalore-based software company Ezetap has developed a platform that makes it easy to pay anywhere with any device you like. It has created software allowing a merchant with a smartphone to accept any type of payment and see that money moved seamlessly into their own bank account.
When adopting new payment methodologies, banks must strike a challenging balance between ease of use and access and the need to put in place stringent levels of security. With technology evolving at ever-increasing rates, it’s increasingly difficult to keep on top of that challenge. Below Finance Monthly hears from Russell Bennett, chief technology officer at Fraedom, on this challenging balance.
Banks first need to put in place an expert team with the time, resource and capability to stay ahead of the technological curve. This includes reviewing, and, where relevant, leveraging the security used on other systems and devices that support access into banking systems. Such a team will, for example, need to look at the latest apps and smartphone devices, where fingerprint authentication is now the norm and rapidly giving way to the latest facial recognition functionality.
Indeed, it is likely that future authentication techniques used on state-of-the-art mobile devices will drive ease-of-use further, again without compromising security, while individual apps are increasingly able to make seamless use of that main device functionality.
This opens up great potential for banks to start working closely with software companies to develop their own capabilities that leverage these types of security checks. If they focus on a partnership-driven approach, banks will be better able to make active use of biometric and multifactor authentication controls, effectively provided by the leading consumer technology companies that are investing billions in latest, greatest smartphones.
Opportunities for Corporate Cards
This struggle to find a balance between security and convenience is however, not just about how the banks interact directly with their retail customers. We are witnessing it increasingly impacting the wider banking ecosystem, including across the commercial banking sector. The ability for business users to strike a better balance between convenience and security in the way they use bank-provided corporate cards is a case in point.
We have already seen that consumer payment methods using biometric authentication are becoming increasingly mainstream – and that provides an opportunity for banks. Extending this functionality into the corporate card arena has the potential to make the commercial payments process more seamless and secure. Mobile wallets, sometime known as e-wallets, that defer to the individual’s personal attributes to make secure payments on these cards, whether authenticated by phone or by selfie, offer one route forward. There are still challenges ahead before the above becomes a commercial reality though.
First, these wallets currently relate largely to in-person, point of sale payments. For larger, corporate card use cases such as settling invoices in the thousands, the most common medium remains online or over the phone.
Second, there are issues around tethering the card both to the employee’s phone and the employee. The 2016 Gartner Personal Technologies Study, which polled 9,592 respondents in the US, the UK and Australia revealed that most smartphones used in the workplace were personally owned devices. Only 23 percent of employees surveyed were given corporate-issued smartphones.
Yet the benefits of e-wallet-based cards in terms of convenience and speed and ease of use, and the potential that they give the businesses offering them to establish competitive edge are such that they have great future potential.
One approach is to build a bridge to the fully e-wallet based card: a hybrid solution that serves to meet a current market need and effectively paves the way for these kinds of cards to become ubiquitous. There are grounds for optimism here with innovations continuing to emerge bringing us closer to the elusive convenience/security balance. MasterCard has been trialling a convenient yet secure alternative to the biometric phone option. From 2018, it expects to be able to issue standard-sized credit cards with the thumbprint scanner embedded in the card itself. The card, being thus separated from the user’s personal equipment, can remain in the business domain. There is also the opportunity to scan several fingerprints to the same card so businesses don’t need to issue multiple cards.
Of course, part of value of bringing cards into the wallet environment is ultimately the ability to replace plastic with virtual cards. The e-wallet is both a natural step away from physical plastic and another example of the delicate balancing act between consumerisation of technology and security impacting banking and the commercial payments sector today. There are clearly challenges ahead both for banks and their commercial customers in striking the right balance but with technology continuing to advance, e-wallets being a case in point, and the financial sector showing a growing focus on these areas, we are getting ever closer to equilibrium.
To learn all about Plutus - a mobile application for making contactless Bitcoin payments, this month Finance Monthly reached out to the company’s CEO - Danial Daychopan.
What is Plutus?
Plutus consists of two interconnected applications:
Plutus Tap & Pay is an Android and iOS app for paying with Bitcoin & Ethereum at any contactless-enabled debit card terminal already in use today. Additionally, every deposit you make rewards you in Pluton, a loyalty rebate token which can then be used to make further purchases without fees.
The PlutusDEX is a one-way peer-to-peer exchange (smart contract) that provides liquidity for the Tap & Pay app. The way this works is that PlutusDEX traders can escrow fiat currency such as GBP or EUR to purchase Bitcoin and Ethereum from the users of Tap & Pay mentioned above.
Our favorite aspect, however, is that the Bitcoin and Ethereum can be bought by other users with zero fees through the PlutusDEX. Our person-to-person system it much easier to add new currencies (both fiat and digital) depending on demand, and a 0% fee trading experience encourages exchanges and blockchain enterprises to use our API as well.
Tell us a bit about yourself. How did the idea about Plutus come about? What were some of the challenges that you faced when setting up the company?
My journey in FinTech began in 2013 when I first started one of the first licensed Bitcoin exchanges, followed by a cryptocurrency merchant payments platform called LazyPay.
Earlier that year, I had seen an invoice get filled within seconds across different timezones, all without the need for a centralised party. After this, I was immediately attracted to Bitcoin and fascinated by the features it had to offer.
At the time, there was already a growing niche of Bitcoin supporters and early adopters who wanted to spend the coins they had earned. However, merchant adoption proved far more challenging than anticipated, stalling due to the logistical and volatility issues. Even the largest Bitcoin companies couldn’t move it forward. Unswayed by rising hype, merchants decided that cash and debit cards worked just fine for them. It was and still is an uphill battle.
We were undeterred and still wanted to be able to spend our digital currencies wherever we wanted. And if possible, without having to get merchants involved altogether. After much deliberation, we finally found a way to do it.
In 2015, Plutus first set out to circumvent the issue of merchant adoption by connecting the blockchain to the Visa and MasterCard networks. This gateway makes digital currencies valid for payment at over 40 million debit-enabled points-of-sale worldwide.
This means that even though you are using digital currencies, the store owner or merchant will receive a bank transfer as usual and will not see any difference when compared to a regular debit card transaction.
What have been the company’s major achievements thus far?
Plutus has come a long way since our inception. When we began, we first wanted to gauge community demand. We knew that we needed the app we were making, but we didn’t know whether other people knew it too. From this idea forth, we decided to crowdfund the project. In a surprising result, we raised over 1 million USD from over 1000 users, and have grown to thousands of subscribers since.
We’ve also built an incredible team of tremendous people, from management to development, and entered into partnerships with leading service providers. Now we are right in the middle of the BETA programme, testing and tweaking our platform with the help of our community, drawing ever nearer to the first production-ready release of Plutus.
What kind of device is required to use Plutus? Do merchants need anything to accept Plutus payments or Plutons?
Pretty much all (relatively) new smartphone have built-in NFC. In fact, finding a smartphone without it
Is actually quite difficult nowadays.
To support Plutus, all merchants need is the regular contactless payment terminal that they most likely already have. This makes Plutus payments valid at over 40 million compatible points of sale in the world by default.
What can you tell us about your in-app cryptocurrency called Pluton?
Our platform Plutus Tap & Pay has an in app token called “Pluton”, which act as loyalty reward points on the platform. However, it is important to note that this is not intended to be a competitor of Bitcoin or Ether.
Rather, Plutons (or PLU for short) are actually a cashback program similar to frequent flier miles. This means that they can be used to make purchases on our platform just like BTC and ETH, with the added advantage of faster deposits and absolutely zero fees. Every time you make a purchase with BTC or ETH, you get 1-3% of your purchase back in Plutons.
Could you tell us more about where you see blockchain technology in the future?
We believe there is huge potential in blockchain technology to positively disrupt our standard methods of payments, trading, and other aspects of our lives. The industry is rapidly growing with a never-ending drive towards more automation, more decentralisation, and less friction. Over the coming years, we believe the use case will reach mainstream products where consumers could have a better user experience without the need to understand or be aware that the blockchain was utilised.
However, that said, private blockchains do not rely on a peer-to-peer network but if an organisation intends to utilise the technology for improved governance, automation and transparency internally then it can work if done right – for now, we remain skeptical.
Do you look at others in the FinTech industry as competitors or do you take a different view?
I have a different view - they help push the industry forward and help us to learn from their mistakes. In many ways, we are doing something completely different.
When you charge your Plutus account with digital currencies, you are actually transferring them directly to a trader on the DEX who has created an order to purchase them in return. This means that our customers can sell and buy digital currencies directly to and from other customers. As a result, Plutus never stores any digital currencies on the platform.
And with recent security concerns on the rise, the benefits of not holding funds are becoming increasingly clear as the blockchain space develops.
What have been the biggest hurdles faced by the company?
Red tape and creating a winning team - both in development and in management. In the blockchain space everyone is competing for talent, while regulators are still very skeptical. This creates a challenging environment.
What is your vision for the future of Plutus? Where do you see the company in 2-3 years?
The aim is to enable users to pay using crypto currency directly with smartphones at any merchants of their choice. And lower the barrier of entry for anyone wanting to buy Pluton, Bitcoin and Ether. This is why we created Plutus Tap and Pay and the PlutusDEX. We also wanted to create decentralise loyalty reward system called Pluton that awards customers for every deposit, which they can then spend anywhere. In the future, we believe the platform will be one of the largest platforms that enables payments via the debit card network in the peer-to-peer market.
We also aim to enable users to make a direct deposit in their Plutus account, using direct bank transfer instead of crypto, who will also receive a reward in Pluton, introducing new users to the blockchain ecosystem.
Initially, we will be releasing physical debit cards, NFC stickers. Our main product will be an iOS and Android app for making contactless purchases, trading and managing your wallets. We plan to add online payments and other nifty features as well.
What are you currently working on?
We are currently working on Plutus Tap & Pay, and the PlutusDEX. Both parts are interconnected and fulfill important roles in our ecosystem. Currently, our live payment systems are already undergoing internal testing. Once the stress-tests have been completed, the PlutusDEX will be released, followed by shipment of the official Plutus Debit Cards.
We are also looking to grow Plutus with new members in key roles - we are currently hiring.
If you could share one piece of advice with young FinTech entrepreneurs, what would it be?
Don't be scared to fail and be prepared to live “the ramen life”.
Website: https://plutus.it
If helping test the platform and coordinating how the future of Plutus Tap & Pay and PlutusDEX will look, why not join the BETA waiting list? http://beta.plutus.it
For more information about Plutus’ long-term ideas, please take a look at “Slingshot from Orbit: The Future Vision of Plutus.it”: https://medium.com/@PlutusIT/slingshot-from-orbit-the-future-vision-of-plutus-it-cf7b69f827ef#.wajh88j3e
Case Study: An Interview with Plutus.it’s CCO - Filip Martinka
Recently, Plutus has been making rounds in London and Berlin, presenting their technology for instant, peer-to-peer, decentralized payment platform. The company’s CCO - Filip Martinka tells us about how the project is coming along.
Why use Bitcoin over Ethereum?
We believe that there are useful aspects to both. The main reason we are using Bitcoin is for its already widespread usage, and Ethereum - for its ability to automate business logic. We want be able to adapt based on demand. Fortunately there are many other projects on the horizon that aim to be natively compatible with the Ethereum virtual machine, so porting the platform may be possible as well.
Why should more merchants accept Bitcoin as payment? What about Ethereum?
We believe that at such an early stage of Bitcoin’s development, convincing merchants is quite challenging. This is why our app is mainly intended for Bitcoin and Ethereum users who are tired of waiting for merchants to accept digital currencies and want to wield the ability to pay regardless of whether the merchant is involved.
Are you planning to integrate with other Decentralized Exchanges?
Initially, our platform will launch with an open API, meaning that 3rd party applications can interface with some features of our system. At the present moment, our development team is focused on finalizing our product. However, once we have a production-ready release, we will look into available options to expand our cooperation with other exchanges, developers and SaaS providers.
What is the reason, in your opinion, that merchant adoption of Bitcoin and cryptocurrencies has been so slow?
It appears that mass adoption is a slow process, and not necessarily a straight line.
Accepting digital currencies still takes a lot of effort, involves friction and regulation, and is often cost intensive. The main problem is that it is not possible for merchants to accurately predict how many Bitcoin purchases they will get in the early stages of adoption. Many get discouraged when they get none, or remove Bitcoin as a payment option for a combination of reasons including training expenses, fees, or technical difficulties.
What can Status do for Plutus?
We appreciate integration into any 3rd party apps, exchanges, or services. All we want is for our users to have optimum interoperability with platforms, and liquidity for our traders. If you have other suggestions please let us know.
How does Plutus benefit from the use of Ethereum?
Our one-way trading gateway integrates an Ethereum smart contract, which makes our platform more transparent and decentralized. Over time, we want to optimize costs, reduce friction, and make the platform more autonomous.
What is the goal you’re hoping to achieve with Plutus?
We want Ethereum, Bitcoin, and other digital currencies to become regular payment options in daily life.
Which other DApps do you think Plutus can benefit the most from?
Exchanges can plug into our platform as well. It will be interesting to see the result.
What do you see as the biggest hurdle(s) in gaining a critical mass for Plutus?
We have to wait for society to get more familiar with digital currencies - until it becomes a topic one can talk about without getting weird looks from strangers. In the beginning, people who earn their income online will be the first to fully adapt to digital currencies. But we believe that this will take less time than most people think.
How do you see Plutus helping people's lives?
Our main goal has always been to provide a convenient payment method, and an easy and affordable way to buy digital currencies.
Is there a level of technical knowledge required by the end-user in order to use Plutus?
Ideally, there will not be more than few clicks required to use any feature. Our team is always thinking of new ways to make Plutus easier to use and navigate.
What is the most exciting feature of Plutus in your opinion?
How it all comes together. The Tap & Pay users deposit Bitcoin and Ethereum, while traders purchase them on the PlutusDEX, and the merchants receive their usual payment from the traders. This makes it possible to add currencies based on demand, and connect other platforms.
What do you think is the most important factor that differentiates Plutus from the non-blockchain(/Ethereum) applications in your field?
The fact that Plutus does not hold any digital currencies, and simply acts as a gateway to connect users with each other and match their trades. This makes the platform more secure and adaptable. And in some ways, the peer-to-peer nature of our exchange makes it more like “localbitcoins” for example, rather than a regular centralized exchange.
What can people in the Ethereum community do to help Plutus?
The main thing would obviously be to use our app, or to purchase digital currencies through our gateway. If you are a developer or entrepreneur, note that our decentralized exchange will have an open API and 0% trading fees for buying any digital currencies, making it ideal for integration in 3rd party software.
A recent study from Forex Bonuses finds the countries among the 20 largest economies who are adapting quickest to using cashless systems like phones and contactless cards – revealing that Canada narrowly edges out Sweden for the top position.
The economies adopting the most cashless technology have been revealed in new research from global trading site Forex Bonuses.
Investigating twenty of the world’s most significant markets, the study looks into contactless card saturation, number of debit and credit cards issued per capita, usage of cashless methods, growth of these cashless payments, and the proportion of people who are aware of which mobile payment services are available. From these six metrics an overall ranking was calculated.
Cashless Economies
The top position has gone to Canada, who, while only having contactless functionality in 26% of their cards (compared to 41% in the UK and 56% in China) and the lowest number of debit cards per capita included in the research (0.7), were found to have over two credit cards per person, a figure only exceeded by their neighbours in the US, who had just under three.
Likewise, the majority of their payments were made using cashless means at 57% of transactions, outmatched only by 2% in both Sweden and France. The UK reached 52% on this scale, while China, despite the majority of cards being contactless, used cashless methods in only 10% of transactions. China were also the most educated on mobile payment services, with 77% of survey respondents claiming they were aware of the options available to them in this regard. In comparison, only 47% in the UK claimed the same.
(Source: Forex Bonuses)
September marks the 10th anniversary of the contactless card, and in the last decade we’ve seen its use soar, particularly in recent years. Barclaycard believes its use will push a further 300% in the next four years.
Finance Monthly has heard from Ian Bradbury, CTO for Financial Services at Fujitsu UK and Ireland, who shares his insights on how contactless has developed over the past ten years, and where he expects the payments landscape to go next.
It is hard to believe that contactless cards have now been around for a decade, as we have only in recent years seen them receive significant uptake with consumers. What was once seen as ‘scary’ and ‘unsafe’ to use, is now – thanks to its ease and education – resonating and growing in popularity with today’s consumers and now responsible for a third of all card transactions.
We expect this adoption of contactless payments to only grow, and become an increasingly important feature in the British payments landscape. Ultimately, both consumers and retailers are choosing to adopt solutions that are secure, quick and easy to use, as well as ubiquitous.
Not only are contactless payments quicker and easier to use than Chip and Pin, they are in a variety of ways more practical than small change and notes. The notable corresponding growth in debit card transactions also implies that this is not just growth fuelled by debt and easy credit – much of this increase will be a result of contactless payments being made purely due to ease. Moreover, contactless payments have the added value of fuelling other payment solutions such as Apple and Android pay and other wearable technology, which isn’t so easily done with Chip and Pin.
The success of contactless payments highlights consumers today are quick to adopt new payments solutions that focus on improving their experience. That said, because consumer experience can cover many aspects including convenience, security, speed and ubiquity, it’s essential that providers put in place ways to improve the experience over current solutions. If future payment solutions do not address all of these areas – which are fast-becoming an everyday expectation from consumers – then they are unlikely to be successful.
Transactions made in cash are losing ground to digital payments, and governments around the world are considering the merits of losing paper currency for good. Bloomberg QuickTake Q&A explains the advantages and disadvantages of a world without cash.
Video by Henry Baker
It's war on cash: Credit card giant Visa plans to pay Britain's shops and restaurants to ditch coins and notes.
A credit card giant is planning to declare war on cash by offering to pay shops and restaurants in Britain to reject notes and coins.
Visa claims that preventing customers from paying in cash would make transactions more secure.
Any switch from coins and notes to credit and debit card payments or services such as Apple Pay would also be of huge benefit to Visa, which makes money from transaction fees.
But consumer groups warned last night that it would put millions of elderly people and others who rely on cash and cheques at a huge disadvantage.
Tory MP Jacob Rees-Mogg said the firm should be referred to the competition authorities if it tried the move. 'It is essentially the behaviour of a monopolist and I do not think it should happen,' he said.
'People should be entitled to settle their bills using legal tender. The most deprived in society who do not have bank accounts and the elderly will be most affected by this.'
Visa has already begun a trial in the US which offers $10,000 (£8,800) to retailers who are prepared to update their payment terminals.
However, they can only get the deal if they agree to stop accepting cash transactions. A similar trial is expected to be launched in the UK. Jack Forestell, Visa's head of global merchant solutions, told The Daily Telegraph the company had its sights on Britain. 'We very much hope to bring a similar initiative to the UK in the near future,' he said.
'The UK is a bit further ahead than the US in terms of contactless use and cashlessness, so the initiative may look different but watch this space.' But James Daley, director of consumer group Fairer Finance, accused Visa of 'bribing companies to stop using cash more quickly' to make more money.
Consumer champion Which? said cash was still 'widely used' by shoppers. It added: 'Businesses should be led by how their customers want to pay, and not by the incentives offered by card firms.'
And the Federation for Small Businesses said the proposal could make businesses unattractive to tourists who wanted to use cash and was 'impractical' for rural areas with slow broadband speeds.
Its chairman, Mike Cherry, said: 'The vast majority of our members recognise the importance of offering cashless payment options. However, many have high volumes of customers that still want to pay in cash.'
In 2015 the amount of payments made electronically in Britain surpassed the number using coins and notes for the first time. However, cash was still by far the most popular way of paying in pubs, clubs and newsagents. A Treasury spokesman last night stressed that the Government remained committed to cash.
He added: 'The UK leads the way in financial technology such as contactless and digital payments. It's important that consumers have choice in how to pay for goods and services, and paying cash remains a legitimate and useful way to pay.'
(Source: News Capital)
You’ll have noticed over the past year, that every time you go to pay for something, contactless methods are saving you time. Kevin McAdam, Head of prepaid at Allpay Limited, tells us more about this evolving theme in the payments sector.
Society has developed a thirst for speed and ease of payment, originating with online payments and direct debits, followed by the birth of contactless. The use of contactless payment is on the increase, with recent research highlighting the technology’s prevalence over cheque payments. Equally, at allpay Limited we’ve seen an increased demand for contactless, with upwards of 90% of new orders requiring contactless functionality. Moreover, while not a mandatory requirement, many local authorities are seeking contactless in their tenders, most notable in the last 4-6 months. This proves that the market is shifting towards faster payments which require minimal input.
For tenants living in social housing who are elderly or infirm, minimising the room for error is key - especially if they lack access to, or an understanding of, certain technologies. Contactless eliminates the need to remember a PIN number, resulting in small payments being processed with minimal intervention and stress. Transactions are processed quickly, easily and with peace of mind.
As a result, prepaid card payments are evolving to facilitate contactless. Both prepaid and contactless cards enable easy, swift and secure transactions, but are not in competition. Rather, moving forwards, the two payment methods are integrating to optimise ease for the payee and the speed of transactions. Our future goal at allpay Limited is to issue debit free, re-loadable prepaid cards with all the security benefits, as well as contactless capabilities.
The next step towards further facilitating payments is providing access to universal credit via prepaid cards from the government. Universal credit is less restrictive as, instead of paying for one specific outlet, payees would have autonomy over how the money was spent. Of course the pre-set limit of £30 maximum would remain. Yet, this versatility is an appealing prospect for those reliant on prepaid cards, with contactless capability an additional bonus.
Access to universal credit via prepaid has already been tested by the Kent Council, with a largely positive response. The trial demonstrated that prepaid cards have the potential to promote financial inclusion and independence, helping people manage their money and debts and widening options for financial management. On this basis, the evaluation concluded that it would be feasible for the Department of Work and Pensions to carry out a more extensive trial of using prepaid cards to support vulnerable claimants. We pride ourselves on the convenience we offer our customers by providing a wide range of payment solutions. With this in mind, we aim to be at the forefront of all new developments in the prepaid sp
