 | Issue: | Latin America 2014 |
| Article no.: | 3 | |
| Topic: | Imagine an ecosystem with virtualized policy and charging! | |
| Author: | Pierre Barrial | |
| Title: | President of Latin America | |
| Organisation: | Oberthur Technologies | |
| PDF size: | 218KB |
About author
Pierre Barrial is OT’s President of Latin America and he is based in the company’s regional offices in Sao Paulo (Brazil). In addition to this role, Pierre Barrial is also directly responsible for Oberthur Technologies’ Payment business in the region.
Pierre Barrial brings close to 20 years’ experience gained across multicultural and international environments in the IT industry and in B2B operations.
• He began his career in 1994 in the retail sector before joining Bull Group where he firstly held various sales and management positions in French overseas territories, in Madagascar and in South Africa
• In 2006, he became CEO of the Italian subsidiary leading a redeployment plan before participating in the sale of that entity to an Italian group
• From July 2007 to June 2012, Pierre Barrial was Managing Director of their Central & Eastern Europe business where he successfully repositioned the offering from a commodity business to value-added solutions including acquisitions
• In August 2012, he became Director of Strategy, Development and Corporate Functions of Latin America and was General Manager of Hispanic America since January 2013
Pierre Barrial holds a Bachelor of Business Administration (Ecole Supérieure de Gestion in Paris). He is an advisor for the Foreign Trade organization in France (CCE).
Article abstract
A smartphone is indeed the device of choice to develop ‘multi-channel’ shopping as it can combine in-store and online payment and enables a connection to both worlds: you can receive a mobile coupon or scan it in-store and redeem it in a physical store where you will carry out a ‘physical’ payment on a POS terminal. But if the item you want is not available, then you may switch to an online payment as the merchant proposes to ship it to your home via their ecommerce platform. And the same smartphone can also become an mPOS, enabling a wider base of merchants of all kinds to accept cashless payments easily.
Full Article
Mobility, the heart of today’s payment
Within a few decades, the methods of payment have experienced true revolutions. The introduction of credit cards, the so-called ‘plastic money’, was one of the most notable. In recent years changes occurred at an even-faster pace with the introduction of new electronic payment evolutions, such as contactless technology – near field communication (NFC) or innovative mobile channels.
We are still in the early stages of this mobility revolution, with all players trying to take position and testing a variety of solutions around the world; from contactless payment cards and payment stickers attached to the back of mobile handsets, to mobile wallets relying on NFC secure elements (SE) — SIM cards or embedded SEs- and TSMs, or on cloud-based solutions such as HCE (Host Card Emulation).
These new forms of payment are the result of technological evolution and a yearning for more convenience in payments, on the part of the user, who wants to take care of his or her duties as quickly as possible, as well as the merchants, who want shorter lines at checkouts and more personalized service for their customers.
Driving financial inclusion and digital payment
Mobility has become a way of life and creates an opportunity to develop new solutions to improve payment security and service usability. Consumers want the freedom to carry out transactions anywhere, at the most convenient time, whether through traditional devices, such as cards, or more innovative ones such as dual interface cards (contact and contactless), smartphones or the so-called ‘wearables’. Both cards and smartphones are instrumental in the changing of payment habits.
In Latam countries where cash is dominant, the development of electronic payment in all formats contributes to reducing the risk related to handling cash and allows a more efficient control of transactions. According to ABECS (Brazilian Association of Credit Card and Services Companies), in the first quarter of 2013 the use of cards in the country increased by 15.2% compared to the same period of 2012. Smartphones and tablets are also spreading quickly, creating new “entry points” to digital payments, much faster and in a less expensive way than any bank could develop its network of branches. The use of mobile is indeed driving financial inclusion, through the launch of mobile money services, like account-to-account money transfers, as well as true mobile banking services through mobile agents providing micro loans and savings.
This digital payment trend comes along with the tendency to move from a world where payment is done ‘in contact’, with money, checks or with a traditional card, to a world where people will pay more and more ‘out of touch’, with a contactless card, with an NFC phone or even online. The continuous launch of innovations associated with a change in people’s habits and with the need to simplify and cut payment processing costs lead to a gradual extinction of operations with cash. In the near future, we will experience a reality in which technology tends to replace paper curriency and other traditional forms of payment and in which dual interface cards should coexist with mobile payments via cell phone. Contactless and mobile methods, via smartphones and other devices, tend to gain the market because they come closest to offering a solution that provides agility, mobility and security. In light with the recent Apple announcement, NFC payment will surely gain even more momentum in the coming months, relying on eSE security.
Transforming the consumer experience with mobile phones
The mobile payment phenomenon is becoming global with commercial launches of secure-element or cloud-based services happening on all continents. Gartner forecasts that the market will be worth US$721 billion with more than 450 million users by 2017. Whatever the technology used, mobile wallets are changing the payment landscape everywhere. The LATAM finance industry cannot ignore and stay out of this worldwide trend. Banking institutions are still on their way to implementing the necessary ecosystems but they know it is a must. Their competitiveness and brand image depends on it and the way they will differentiate themselves tomorrow are with the services and the added value they will bring to their customers through those new channels.
In July 2014, Brazil, for example, finished counting 273.6 million mobile accesses and 135.2 cell phones per 100 inhabitants according to Anatel’s preliminary data. Additionally, 93% of mobile phones are projected to be smartphones in 2017, greatly increasing the possibilities to transform the end-to-end shopping experience from product discovery to loyalty.
A smartphone is indeed the device of choice to develop ‘multi-channel’ shopping as it can combine in-store and online payment and enables a connection to both worlds: you can receive a mobile coupon or scan it in-store and redeem it in a physical store where you will carry out a ‘physical’ payment on a POS terminal. But if the item you want is not available, then you may switch to an online payment as the merchant proposes to ship it to your home via their ecommerce platform. And the same smartphone can also become an mPOS, enabling a wider base of merchants of all kinds to accept cashless payments easily.
Developing such use cases, smartphones would become a real alternative to pay and/or get paid. These devices will allow the final customers to have more freedom and mobility, while the banks will be able to invest in services rather than facilities (such as branches and ATM).
Security, a pre-requisite in all cases
From the user’s perspective, the security of his or her money is as important as comfort and operation agility. A guarantee that the operations will be safe is a determining factor for the success of any innovation in methods of payment. Until today, the major barrier for carrying out financial operations over the Internet or using mobile devices is the fear of data interception, hacker invasions and the consequent financial damage (such as theft or fraud).Therefore, overcoming security challenges is the main task for those who want methods of payment to continue evolving without major obstacles.
The adoption of a chip card is already a big step in terms of security. Five years ago it did not exist in Brazil. Beyond Latam there is a worldwide trend to generalize the use of EMV chip cards that are more secure than traditional magstripe cards. This migration to EMV is already well advanced in most parts of the world. Even the US, who long questioned the validity of such a migration, has realized after several recent huge data breaches, that they can no longer delay it.
These EMV cards are increasingly contactless-able, providing convenience and speed of transaction as well as opportunity for multi-application (for instance combining payment and access control or transport on the same card). Mobile payment will benefit from investments made in more modern POS terminals featuring contactless and user-friendly interfaces (bigger high-resolution screens), that can accept transactions made with NFC handsets (using a secure element or based on Host Card Emulation) or alternative options like QR codes. Today 1.5 million POS are NFC-enabled in Brazil – one of the largest networks in the world.
Similarly mobile financial services in all formats shall benefit from the security infrastructures put in place for these cards. To maintain the best level of security through mobile phones there will be a natural evolution in bank credential management from the physical card, to the secure element in the mobile device and thenS to the secure element in the Cloud with HCE.
Ultimately, with mobility at the heart of today’s payment, there shall be one winner, the end-user, with a wider choice of secure payment solutions, providing more convenience and speed of transaction, with a card or a mobile handset.
