Smart Card Alliance 2013 Payments Summit Concludes: Education is the Key for Successful U.S. Move to Chip-based EMV Payments; Mobile Payments and Ticketing Leap Forward in Transit
Princeton Junction, N.J., February 11, 2013–More than 700 people attended last week’s activities in Salt Lake City centered around the Smart Card Alliance 2013 Payments Summit to learn and collaborate on the most pressing issues in payments today–the U.S. move to chip-based EMV card payments in retail and transit, and the adoption of smart mobile payments.
U.S. Migration to Chip-based EMV Payments
Conference sessions made up of a mix of payments brands, merchants, issuers, acquirers and payment processors discussed plans and processes for moving the U.S. payments infrastructure from magnetic stripe to secure chip-based EMV. The common message they conveyed: anyone who hasn’t started the migration process needs to start now, and education is the best first step to a migration plan.
“EMV changes the way you do business. It takes time and you need to start now,” Discover Financial’s Troy Bernard told attendees. Discover started building its EMV infrastructure five years ago after buying the Diner’s Club brand. Today, Discover is making resources available for acquirers, issuers and merchants including documentation and training programs.
“EMV is a team sport,” said Walmart’s John Drechny, who said that that education and planning needs to start at the ground level of an organization. EMV, according to Drechny, is an opportunity for retail payments executives to be leaders and move their organizations’ technology forward in the right way.
“Education is the key–form a project team now,” said Peter Ho, Wells Fargo. Wells Fargo got started with EMV chip cards as a response to customers having problems with their cards traveling abroad and issued 15,000 EMV cards to select customers last year. Ho said, “As an industry we need to work together as an ecosystem to create educational programs for our customers.”
“We did a lot of education, developing internal resources and educating clients on what EMV is and how it works,” said Guy Tony Laquet of Bank of America, which launched its PIN-enabled EMV chip corporate cards for international travelers last year. They have already delivered 20,000 cards and plan to issue 20,000 more over the next few months to their commercial and purchase card clients. Bank of America has developed an innovative Online PIN Check that allows consumers to access their PIN in a secure online environment, a helpful solution for cardholders who forget their PIN while out and about.
Two hundred and twenty-five payments industry leaders from the EMV Migration Forum gathered at a separate event prior to the start of the Payments Summit in Salt Lake City. The Forum, which began operations in August 2012, has already grown to over 120 member companies. The Forum’s working committees also presented their activities publicly for the first time at the Payments Summit. The Communication & Education Working Committee, U.S. Coordination Working Committee, Testing & Certification Working Committee and Debit Working Committee reported significant progress towards producing deliverables that will address major issues impacting the U.S. move to EMV chip.
NFC Payment Innovations
The mobile payments track discussed the road ahead for NFC payment and mobile offers. With NFC-capable mobile devices and applications now readily available and global NFC retail payments expected to reach $180 billion by 2017, stakeholders discussed the best platforms, technologies and applications with which to move forward.
Presentations on the Isis mobile wallet explained how Isis is using payment and non-payment (coupons, offers) applications to drive adoption of the technology. The Isis wallet is an NFC-based, PIN-protected mobile wallet that allows consumers to carry payment cards, loyalty cards and offers, protected by a secure element smart chip in their mobile device. Isis reported that in Salt Lake City, active wallet users are paying with Isis five or more times per week, and that consumers taking advantage of offers from merchants are shopping twice as often at that merchant.
Many speakers agreed that transit may be the “killer app” for expanding the use of open standards-based contactless NFC mobile payments. The Utah Transit Authority’s (UTA’s) Clair Fiet told attendees about the launch of a UTA transit application for the Isis mobile wallet. Because the NFC-based Isis mobile wallet is based on the same standards as UTA’s contactless open payments system, the integration “was really simple,” according to Fiet. The UTA reported that contactless transactions have increased from 400 to 1,000 per day since the launch, and are still growing. Next, the UTA plans to make available branded, prepaid contactless payments cards to be purchased in area retail outlets.
Transport for London (TfL) started its five-phase rollout of open EMV contactless and NFC payments by equipping 8,500 buses to accept the payments. Steve Brunner of Cubic Transportation Systems told attendees that, despite a soft launch with limited marketing, TfL has seen very positive early results with more than 6,000 transactions per day.
Transit Mobile Ticketing
Both the Massachusetts Bay Transportation Authority (MBTA) and Dallas Area Rapid Transit (DART) are experimenting with mobile ticketing. According to Joshua Robin of the MBTA, mobile ticketing is the answer to bringing the agency’s Charlie Card brand to the area’s commuter rails. The new mobile application enables riders to purchase tickets on their mobile devices–“a vending machine in your pocket”–and provides a virtual ticket to show conductors on the train. Robin reported 50,000 downloads of the application and $1.7 million in sales in three months.
DART’s mobile application, GoPass, allows riders to buy and view tickets, plan their travel and receive offers on their mobile device. Along with the visual “flashing” of virtual passes, the GoPass also incorporates bar codes that can be read to validate tickets. According to DART’s David Leininger, the agency sees mobile as the way to increase “ease of use, ridership and customer satisfaction.”
The Smart Card Alliance plans to return to Salt Lake City next year and continue to track the progress of EMV and mobile payments in retail and transit. For more information on chip-based EMV and smart mobile payments, please visit these Smart Card Alliance resources:
- EMV Connection–An Alliance website dedicated to EMV information
- EMV Ecosystem–An interactive document showing roles and responsibilities of stakeholders
- NFC Resources–Mobile NFC for contactless payment and other applications
- EMV Migration Forum–A cross industry group working to facilitate U.S. EMV migration
- Transit Open Payment Resources–Information from the Alliance’s Transportation Council
About the Smart Card Alliance
The Smart Card Alliance is a not-for-profit, multi-industry association working to stimulate the understanding, adoption, use and widespread application of smart card technology.
Through specific projects such as education programs, market research, advocacy, industry relations and open forums, the Alliance keeps its members connected to industry leaders and innovative thought. The Alliance is the single industry voice for smart cards, leading industry discussion on the impact and value of smart cards in the U.S. and Latin America. For more information please visit http://www.smartcardalliance.org.