There has been a lot of discussion about using Host Card Emulation (HCE) to support EMV payments over Near-Field Communication (NFC) interfaces. But HCE can be used to support EMV payments over, essentially, any interface. As part of Consult Hyperion’s prototyping programme, we developed a working (ie, using EMV data) proof-of-concept demonstrator (running on Android and iPhone) for paying with HCE over Bluetooth Low Energy (BLE) and showed it at the UK Cards Association last week. The demonstrator is so cool it superconducts.

Most of you know Consult Hyperion as the consultancy of choice for organisations who want to exploit new technology for mass-market electronic transactions. But you may not know that for many years we have had our own full-time, in-house development team. We call this the Hyperlab, and it’s a resource used by many of our clients to build prototypes and proof-of-concept demonstrators, to play around with new ideas and to try out new technologies to see if they might be useful in market-market deployment. As you might imagine, one group of technologies heavily used in Hyperlab at the moment are NFC, SE and HCE. But in recent months, there’s been some experimentation going on with BLE. It’s not relevant to say why or for which clients, but we have good reason for thinking that BLE will be taken up by many of clients to support new customer experiences.

The question naturally arises, then, as to the relationship between the technologies in this group. Our clients are at the larger end of the scale, so when they invest in new technology (even if it is only for prototyping) they need to have a view of the roadmap with a path (or more typically, paths) to connect the technology push with the business pull in a sensible manner. To be specific, the question facing many of our clients is the choice of path connecting all of these technologies in the retail environment. Largely because of the dominant position of Apple in the mindspace, if not the marketspace, a lot of recent discussion has been around the pros and cons of NFC and BLE, which I think is in many ways an unproductive place to begin the conversation. And I am not alone.

NFC and Bluetooth Low Energy (BLE) will likely complement each other and coexist in the mobile ecosystem because their best use cases differ, John Ekers, the CIO at ABnote said in his keynote presentation.

[From American NFC Mobile Technology Adoption to be Spurred by the ‘Big 3′: HCE, BLE and EMV | RFID Technology News (Radio Frequency ID)]

I think John’s right about this and we have been advising our clients the same for a good while. In fact, as I wrote last year, there is no need to see any either/or in the combination. Some people like to tap. Some don’t. Some people want to use a mobile wallet. Some people want to use a retailer app. Some people like to be recognised automatically. Some prefer to have control. So let them have their choices.

An HCE/NFC/BLE world seems rather attractive from a consumer experience perspective.

[From Why all the fuss about HCE? - Tomorrow's Transactions]

Now, since the nature of our business concerns transactions, we are particularly interested in the technologies around retail transactions. And since most of our clients have in recent memory spent an enormous amount of money migrating to EMV, it is naturally of interest to see how this transaction technology works with NFC and BLE. With this in mind, and in the context of a couple of projects we are working on, we thought it would be interesting to see if we could execute EMV transactions over the BLE vicinity interface. Obviously we know how to do this using the NFC proximity interface, and so does everybody else, but there are a couple of good reasons for trying it over BLE.

• First of all, both Android phones and iPhones (and also other phones, and for that matter smart watches and the like) have BLE whereas they do not have NFC. This means the retailer app can deliver a common experience on both platforms. Since retailers want to use BLE to establish communication between location and customer, using it for payment as well is an obvious extension.
• Secondly, a rich BLE interaction between the handsets and the point of sale or service can encompass coupons, loyalty, offers, information and all sorts of other valuable data as well as the payment data.

So we tried. And it worked. Really well. Here’s Stuart Fiske, our CTO, showing you. The laptop in front of him is running the POS software and it has a BLE USB diongle connected. The power on the device has been dialled down to reduce the range (important for POS applications). Stuart is running a mobile wallet app on an Android phone. This app has real EMV credentials stored in it and will use HCE to pretend to be an EMV card to the POS terminal.

(There’s nothing secret about this, by the way. It was demonstrated by our chaps at UK Cards last week.

The POS writes a payment request to the BLE dongle. This request contains the EMV data fields that are needed to effect a transaction with a standard EMV card. The request is broadcast and picked up by the mobile wallet app. The app takes the data fields and feeds them to the HCE app, where the relevant EMV jiggery-pokery goes on and a bunch of data fields are generated. These are fed back to the POS terminal, where the EMV data elements are stripped out and passed on to the acquiring system. Note that the acquiring system has no idea that these data elements came from HCE via BLE: all it sees are the same EMV data fields that it would see in a normal interaction with a standard EMV terminal.

The transaction is approved, and the customer has paid, securely, while standing near a POS terminal or POS person or mPOS or vending machine or… You get the point. It’s cool. And here’s the fun part: here’s the same app running on an iPhone. Yes, that’s right. HCE on an iPhone, but using BLE instead of NFC to pay.

And just in case anyone wants to check the cryptography, here’s the details of the message back from the acquirer!

Just as a further point, you can see how this might work with tokenisation. The iPhone/Android bank/retailer/whoever app would periodically contact the relevant token vault to pre-fetch tokens valid for an hour or a day or a particular merchant. Then, when the customer walks into the branch/shop/wherever, the app opens up and displays coupons, loyalty points, shopping lists and so forth. The customer gets what they want, it gets rung up either at a conventional POS or on a handheld POS. Then the consumer executes an EMV payment either by tapping with an NFC phone or confirming on a BLE phone. Either way, it’s a secure transaction that uses the standard EMV infrastructure to deliver to terrific payment experience in the context of a terrific shopping experience.

Our Hyperlab guys rock.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post HCE BLE EMV is a new way to pay appeared first on Tomorrow's Transactions.

Just because there isn’t any contactless crime does not mean that we should ignore the fears of consumers (or, for that matter, the police). Time for some mass market education on cuddle cards, as I now call them.

Although we don’t focus on it — by and large because it works and has become business as usual — I think that contactless payment technology is fun. I had an enjoyable couple of days trying out my usual panoply of cards, phones, watches and stickers when I was last in Canada and I have to report that the situation was all systems go (except for one of my UK MasterCards that was inexplicably declined) whereas in the US it remains mixed. Meanwhile, it’s going gangbusters down under, as I discovered on my last trip to Australia. I paid with cards everywhere, and almost everywhere I paid I paid with contactless. Like in this taxi, for example.

Unfortunately, the Aussie rousers are less enthusiastic than I am about the amazing technology, the rapidly-evolving Australian retail payment environment, innovation at point of sale and quick and easy transactions for consumers. They claim, in fact, that there is wave, plague and apocalypse of crime that can be directly attributed to the new technology.

“We’re seeing many, many theft of motor cars, handbags and burglaries where people are looking for these cards, are getting hold of them and within hours of getting them, they’re going into stores and using them.

[From Tap-and-go credit cards contributing to increase in crime stats, Victoria Police says - ABC News (Australian Broadcasting Corporation)]

This is, if true, rather interesting. I say “if true”, of course, because I have been unable to uncover any statistics that back up the Victoria police claim. Nor, it seems, have any of their fellow law enforcement agencies.

Police around the country have differing views on the effect the cards are having on burglaries. The NSW Police said it had “not seen a spike in credit card related fraud since the advent of contactless payment technology”.

[From Banks stare down police over tap-and-go]

Still, this tidal wave of contactless crime must surely have shown up in the bank fraud statistics.

One of the major banks said on Thursday it had 30 per cent more ­contactless cards in the market compared with a year ago but card fraud was flat.

[From Banks stare down police over tap-and-go]

Oh well. Let’s just assume for sake of argument that there is a crime wave, plague and apocalypse but only in Victoria and only amongst issuers who do no collect or report card fraud statistics. That still sounds like a bank problem to me, since issuers will bear the losses. If a mugger demands my contactless card then I will give it to him. I couldn’t care less since it’s not my problem: the UK banks have an unequivocal guarantee to refunds unauthorised transitions. Nevertheless, the Melbourne heat seem most upset about contactless in general and especially miffed that they were not one of the stakeholders consulted in the banks’ roll-out.

he said police were not consulted before tap-and-go credit cards were introduced and that he regretted their introduction… “They are chewing up an enormous amount of police resources.

[From Tap-and-go credit cards contributing to increase in crime stats, Victoria Police says - ABC News (Australian Broadcasting Corporation)]

The crime wave, by the way, does not seem to have affected public confidence, since contactless use continues to soar. It is at very high levels in Australia already, with more than two-third of supermarket transactions already tap and go. Use amongst police chiefs, so far as the statistics presented in the article would indicate, seems particularly high.

Mr Lay did admit he used a tap-and-go card all the time.

[From Tap-and-go credit cards contributing to increase in crime stats, Victoria Police says - ABC News (Australian Broadcasting Corporation)]

Aha. I should point out, by the way, that the Victorian peelers objections to contactless go back some time. They’ve always been uncomfortable with contactless.

Police want to ban banks’ tap and go technology after vowing to take on big business over sloppy work practices. The force said it is sick of “mopping up” for “totally slack” initiatives that it states encourage crime.

[From Police want ban on tap and go technology, saying sloppy practices can promote crime | Herald Sun]

We have to address real issues, of course, but the fact is that public perception around contactless is not always rational. That Australian story was widely reported in the British press, fuelling public concerns (I have made a fascinating podcast with Karen Williams from Spectrum Insight on this topic). The British press have, it seems to me, always been rather keen on these scare stories. See this hilarious comment on a Daily Mail story about contactless.

It is well known that in America, thieves carry tablets and electronic readers in bags, walk around railway stations and shopping malls and scoop up all data automatically from these cards.

[From Customers charged twice for items because contactless cards were activated from their pockets | Mail Online]

Really? “Well-known”? If anyone can point to me a single reputable report of this ever happening, I would be grateful as I would like to link to it and continue the investigation. Far from being “well-known” I frankly doubt that it has ever happened at all. If you jammed an electronic reader up against my arse on the Tube, and kept it there undetected long enough to scan my card (I only have one in London wallet – haven’t you ever heard of card clash) then you would not get my name or the CVV for the card, so it’s not much of master crime. You can’t use the data to make a clone card and you can’t use it to buy online. Neverthess, as the analysis of contactless sentiment I discussed earlier in the week show, just because something doesn’t happen does not mean can ignore it. If consumer believe it, then we must deal with it.

I think we as an industry should probably be reacting to the “fear” area with some pretty clear messaging around how the technology works, how liabilities are distributed and the consumer protection that the combination provides.

[From Contactless sentiment - Tomorrow's Transactions]

The traditional way of educating the mass market in the UK about anything is to pester the BBC to include it as an EastEnders story line. I shall come back with some ideas soon, but since I haven’t watched EastEnders for at least a decade, it may take some research to get a viable narrative.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Crime and contactless appeared first on Tomorrow's Transactions.

Social media sentiment provides a useful perspective on the evolution of contactless payments in the UK.

If you are interested in the perception of contactless cards in the UK you might find my podcast with Karen Williams from SpectrumInsight interesting. Just out of curiosity we’d asked SpectrumInsight if they could apply their social media analysis techniques to anything as boring as payments and Karen had risen to our challenge by agreeing to monitor the space for a month or so. We chose contactless payments as the specific sub-topic to monitor. Karen was kind enough to pull together what they found into a few slides for us to share on the blog and I’ve picked out four of them to highlight here.

That first chart seems to indicate, as you might expect, some correlation between topics being discussed in the mainstream media and the topics discussed on Twitter so this provides some confirmation that the discussions on Twitter are vaguely anchored in reality.

The second chart concerns the top themes that were covered in tweets about contactless. Unsurprisingly, “bank” and “debit” are at the top. But if you put together Oyster, buses and TfL, then actually transport would come top. I realise that this is a London-centric perspective, but I take these issues to be a reflection of the importance of mass transit in pulling contactless into the mass market.

The third chart concerns the issues that we covered in tweets about contactless. The main one, as you can see, is acceptance and (good news, I think) this reflects a general sentiment that people want contactless to be accepted in more places. I’m convinced that one of the reasons why cash is still more than half of all retail transactions in the UK (compared to 40% in the US where the near-ubiquitous no-signature-swipe provides the functional equivalent of contactless) is that small merchants in particular are not well served. I still see signs saying that cards are not accepted for transactions below (say) £10 when the merchants should really be demanding contactless-only transactions for small amounts (see Julian Niblett’s comments on this last year).

And that last slide looks at emotions, not something I normally consider when looking at the contactless adoption curve and therefore of great interest. See what you think, but I think we as an industry should probably be reacting to the “fear” area with some pretty clear messaging around how the technology works, how liabilities are distributed and the consumer protection that the combination provides.

From looking at these slides and talking to Karen, I think I draw three broad conclusions that I hope will be useful input to our clients strategies around the technology.

1. First, I’m surprised that so many people were complaining that they wanted contactless cards but couldn’t have one (my son is one of them, by the way).
2. Secondly, while it might hard to get people to try contactless it seems that once they try it then they like it and they want to be able to use it in more places. So we probably need to have short term focus on the getting them to use it that one time to get started. Maybe more focus on vending machines?
3. Third, if the Twitter sentiment is anything approaching a reflection of what normal people actually think, I don’t understand the issuers’ baffling strategy of sending contactless cards to people who don’t want them and not sending them to people who do want them.

We’re going to be doing some more work with Karen in the world of payments over the next few months and she has very kindly agreed to come along to the Tomorrow’s Transactions Forum 2015 to talk us through what she finds. Mark the dates in your calendar now:

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Contactless sentiment appeared first on Tomorrow's Transactions.

The US shouldn’t look at Japan as a model for mobile payments, and Europe shouldn’t look at the US.

An interesting discussion about the relationship between age and payment mechanisms in a meeting this week reminded me to look again at Japan to see how the combination of money, technology and an ageing population come together to shape retail payment trends.

The number of prepaid electronic money cards in circulation hit 182.17 million in June, or triple what it was five years ago, a recent Bank of Japan survey said… growing at an annual pace of 15 percent to 20 percent in recent years… The BOJ credited the surge to people in their 30s who were the first to use the technology when it debuted and have since shed their privacy concerns to adopt it.

[From Use of prepaid e-money cards soars | The Japan Times Online]

Edy is by far the most commonly-used e-money service, predominantly on cards although an increasing number of consumers are using it on their phones as well. It remains a fact though — as Dean Bubley observed in a Twitter conversation on such — that most consumers with contactless phones still use their cards rather than the phones. That’s not to say that the use of contactless phones isn’t growing for other purposes. I guess it just means that payments are not as much fun as rice cooking…

Appliance makers in Japan are jumping on the smartphone bandwagon with new appliances that can communicate with smartphones. Panasonic will launch a steam microwave oven and two induction heating rice cookers on 1 June that can communicate with Android-based smartphones. The appliances also use the FeliCa contactless technology.

[From Japan sees rise in smartphone-connected appliances - Telecompaper]

Another little window into the future is the use of NFC to provide a convenient and simple interface between healthcare devices, a crucial segment of the internet of everyone else’s things in an environment evolving to support the elderly.

…healthcare equipment maker Omron has launched the Wellness Link service which allows users with Android and FeliCa-equipped handsets to track their health online with data obtained from the equipment, which includes scales, thermometers and blood pressure gauges…

[From Japan sees rise in smartphone-connected appliances - Telecompaper]

All very interesting. But back to payments. I thought that the most interesting quote in that Japan Times article came at the end.

Yasuhide Yajima, chief economist of NLI Research Institute, said the use of e-money cards will continue to spread because elderly people feel safe using them and they can be handled like cash.

[From Use of prepaid e-money cards soars | The Japan Times Online]

In the UK, we seem to think that the elderly must be supported using cash and cheques because they are incapable of adapting to modern technologies. I suppose that’s just one of the ways that Japanese payments are evolving differently from ours. Another is the central role of the mobile operators in driving interoperability and new services.

Japan’s leading mobile operator and provider of integrated services centered on mobility, and KT Corporation, South Korea’s leading telecom operator, have agreed to develop a cross-border e-money service that would enable DOCOMO customers with compatible smartphones purchased in Japan to use a prepaid e-money service called “Cashbee” in South Korea… Cashbee is available at some 52,000 locations in LOTTE Group department stores, convenience stores and mass transportation facilities such as subways and buses. The service currently has 5 million users.

[From New DoCoMo Fact Book - NFC Deal with KT | Wireless Watch Japan]

DoCoMo are also building interoperability in other directions to make it easy for Japanese consumers to use their phones to pay elsewhere. Telcos in the Europe and the US have not gone down this route because they have adopted the EMV standard that provides interoperability for them, but the DoCoMo route does show how you could use NFC terminals to run non-EMV payment systems.

The collaboration will connect DOCOMO’s domestic payment network to the world, enabling customers using iD mobile credit payments with compatible DOCOMO smartphones to make contactless payments outside of Japan, anywhere MasterCard® PayPass™ is accepted.

[From MasterCard Connects NTT DOCOMO’s Domestic Payment Network to the World | MasterCard Social Media Newsroom]

Now, no-one should imagine that US or European markets are going to evolve mobile contactless like, say, Japanese or Korean markets have done. These are markets with entirely different structures and entirely different market dynamics. As Consult Hyperion has long advised clients, we should look to these markets for inspiration and ideas but not for templates.

So, I think it’s a mistake for anyone really in the U.S. or developed countries to be looking at Japan as a model for mobile payments.

[From The Future of Mobile Payments]

David is right about this. But I’d go even further. Not only is Japan not a model for the US, the US isn’t a model for anywhere else either. Both the US and Japan are special cases. I’m not saying this in hindsight: it’s been part of the Consult Hyperion mobile world view from the earliest days. That’s why the trick in Europe is to look and learn from those markets but not to try and copy them.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

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I’m a big believer in wearables (not watches). But then I have been for a while.

It seems to me that one of the most interesting of contactless attributes, which is freeing payments from the tyranny of form factor, has yet to properly exploited. But in one area – wearables – we are seeing some developments. Such as this one from down under:

Menswear label M.J. Bale, Heritage Bank and Visa have teamed up to create a suit with a contactless payment chip and antenna woven into the sleeve.

[From Contactless payment SUIT lets you pay with a wave of a sleeve | Mail Online]

It’s a cute idea and I will of course go and buy one, since I feel it is both my blessing and curse that I find new payment toys unbearably fascinating, but I don’t really want another payment account. I’d rather just take one of my contactless credit cards (naturally I have several) and slip it into a convenient hidden pocket in the sleeve of the suit. And if you’re wondering where I got that idea from, it was my Thomas Pink Commuter shirts that I bought back in 2006.

The Commuter has only recently been launched but Pink says it is already flying out of shops faster than a rush-hour train.

[From A passion for pockets with a difference - FT.com]

The Commuter shirt had two features that I really liked. It had a channel running up the inside to carry earphone cables tucked away out of sight. These connected through a hole in a side pocket so that you could keep your iPod snug and out of the way. And it had that second pocket for a contactless card in the cuff. It was designed really for Oyster cards, but we put Visa cards in the pocket to make purchases using standard POS terminals with contactless interfaces. In memory serves, we also bought of few of them a presents for some of our favourite customers at the time! Anyway, I just went upstairs and got one to model for you:

The point I used to make was that contactless was about more than the interface, it was about form factors and that it would lead to innovation and I used the shirt to show an example of innovation beyond the card itself. Although the shirt was fun and helped to make an interesting demo about contactless payments in conference presentations, I thought it had two design flaws.

First of all, the pocket was behind the cuff on the top of the wrist. This meant you had to lay the back of your forearm across the contactless POS terminal or Oyster card reader. The pocket really should have been on the underneath of the forearm near the wrist to make paying a more natural action.

The second problem was that if you were wearing a suit and coat, it was hard to get the card close enough for the reader. I remember thinking at the time that I wished that the pocket was in my suit rather than in my shirt.

Naturally, being a consultant rather than a business wizard my thoughts went no further. Now only eight years later some entrepreneurial Aussies have gone and put the payment in the suit. I know it’s really just a publicity stunt but good for them – it’s a bonza idea and may stimulate some further innovation in a country where half of all Visa transactions are already contactless. What’s more, it will add some fun to payments, so I hope my consumer feedback from 2006 will prove useful to them.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Contactless innovation in wearables (nothing new!) appeared first on Tomorrow's Transactions.

Will we be wearing payments? I think we probably will, but I’ll be the only one with a watch.

At the Tomorrow’s Transactions Forum 2014, the talented jewellery designer and craftsperson Heidi Hinder told the audience about her “Money No Object” project at the Bristol Watershed and talked about turning wearable objects into transactional devices. She was terrific, so if you weren’t there to see her I urge you to go and check out that video ASAP or listen to a podcast with Heidi that I recorded last year when her work came to our attention. I wanted to find out more from her because I’m very interested in the topic of wearables — I remember working on a project on this about a decade ago for one our financial services clients and being fascinated then with the idea of transactional jewellery — and very uninterested in the technology industry’s primary vision about wearables, the smart watch. More about transaction-enabled timepieces later. I was thinking about Heidi’s presentation today because someone sent me a link on a related topic:

UK-based Kiroco has won the Best Innovation of The Year award at London’s Wearable Technology Conference and Expo for a range of interactive jewellery that allows a recipient to tap an NFC phone to see text, video and photo messages uploaded by the sender.

[From Kiroco launches NFC jewellery, scoops award • NFC World]

This strikes me as being a cute idea, and the idea of turning interactions into transactions will, I suspect, be of interest to a number of our clients. Here’s another idea on the similar vein (pun very much intended) from Japan.

This silver band, worn on the index finger, uses a Bluetooth wireless signal to connect with the user’s smartphone, which then sends the payment electronically.

[From BBC News - Tokyo technology start-ups offer devices and gadgets]

Time travellers from the Tomorrow’s Transactions Forum of 2012 will, of course, remember an even better version of this idea that was presented as part of the annual Future of Money Design Award that we host each year at the event.

Wearing the ring will create a constant link to your online finances and an almost instant awareness of any financial transactions through a bite like experience, produced by tiny spikes inside the ring.

[From Ever Present Awareness – Future of Money]

As you may recall, the artist’s idea was to reintroduce physicality into electronic transactions, a particularly brilliant concept that our delegates found fascinating.

To go back to the general point about wearables, though, I have say that I personally find the spiky ring idea more plausible than the smart watch in the mass market, despite the fact that I already own a smart watch with an EMV contactless chip inside it and have cheerfully been using it for a couple of years! In fact I used it to buy a coffee when I was working on a draft of this post, which I think is rather cool. But then, I am old, and still wear a watch from time to time. Young persons don’t.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post You wear it well appeared first on Tomorrow's Transactions.

Contactless is not only quicker and easier than chip and PIN, it’s quicker and easier than notes and coins. It’s taking us one step closer to cashlessness. Hurrah!

There are currently more than 38 million contactless cards in circulation across the UK, making up a quarter of all the credit, and debit and charge cards out there.

Take up of contactless has been greatest in London with one in five (17%) using contactless cards, closely followed by Manchester and Leeds (12%). However, in Bristol contactless has failed to catch on with only 4% people using it.

[From News & updates from WorldPay, the fast & secure credit card payment system]

I can’t think of any obvious reason why the natives in my old stomping ground of the West Country should be so suspicious of the apparent witchcraft evident in a “tap and go” transactions, but on my next visit I will ask and see what we can do to reach out to them. Meanwhile, while the spread of contactless in the UK has yet to reach Australian levels, the usage levels show steady increase,

Contactless card payments grew more than three-fold during 2013 thanks to accelerated rollout by retailers and growing acceptance on public transport, according to Visa Europe.

[From Visa: UK contactless payments more than triple in last 12 months - ComputerworldUK.com]

My experience,s based our involvement in a wide variety of contactless experiments, pilots, trials and roll-outs going back several years, is that once you can get people to use contactless, then they really like it. And this, I think, has an interesting knock-on effect on how people see the relationship between cash and cards. Contactless is not just better than chip and PIN, it’s better than notes and coins, and I speculate that this is causing a shift in opinion.

Eighteen percent of U.K. Internet users say they would prefer to be able to stop using cash altogether. Support for a cashless society is strongest in London, with 30 percent prepared to stop using cash.

[From UK non-bank payments more trusted than contactless and mobile card payments | MobilePaymentsToday.com]

Now, of course, I pay no attention what the public say they do or do no want, since they haven’t got a clue, but I do think that if you glance around Gibson-style you will begin to see some weak signals for change. Indeed, I saw one at Woking station recently…

Last week I went to the coffee chap and asked for a latte and a raisin danish and sleepily handed over a contactless Visa card. He tapped it on his contactless terminal and gave it back to me.

[From Retailers could exploit contactless payments more effectively]

My colleague Gary Munro relates a similar tale, again using the prosaic benchmark of South West Trains to illustrate the magnitude of the change underway!

I ordered my coffee & shortbread from the trolley service, and sheepishly handed over my £20, apologising profusely. The bloke on the trolley looked at me and asked if I had a contactless card. Brilliant, I handed my card over, he pulled a contactless terminal out of his cash drawer hey presto payment made, and no pocket full of coins to boot. Can’t believe I had a nice experience on South West Trains. Someone out there is bucking the trend and training their staff (no pun intended).

No pun intended? It jolly well should have been, since it was an excellent one.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

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The MNOs first thoughts are HCE might have been negative, but they need to rethink. It’s a great opportunity for them if they decide to take it.

The GSMA were kind enough to ask me to give one of the breakfast briefings at the Mobile World Congress in Barcelona this year, so I gave a briefing on HCE. I thought this rather a brave choice, because the MNO’s first reaction to HCE was one of horror, but I decided that as it’s a really hot topic it would be great to tackle it head on and look for ways for MNOs to find new opportunities.

I was trying to encourage operators to see HCE (and to some extent BLE, which I spoke about in the Digital Commerce conference session in the afternoon) as opportunities and not threat. So I used my time to explore three points building on our framework for the five key wallet technologies for 2014 that went into in more detail in that afternoon session..

First, the mobile wallet is being energised by a set of new technologies including proximity and vicinity Interfaces, identification and authentication and APIs. These interfaces enhance the user experience when using the mobile wallet, by providing new ways to link to the local environment. For example, a consumer can walk in to a store, the wallet will recognise the store using its vicinity (e.g., BLE) interfaces and up will pop in store information. The wallet will help the user navigate round the store, allowing them to tap on offers and initiate transactions using proximity (e.g., NFC) interfaces.

Secondly, when it comes to proximity interfaces, HCE is a wallet accelerator that supports business flows that are complementary to the MNO Secure Element (SE). It will accelerate the development of NFC services which will expand the number of services available to the consumer (eg, Small Data) and service providers (eg, Tokenisation), educate the consumer as to NFC’s potential and eventually bring innovative applications to customer’s handsets.

Finally, the core elements in the MNO SE proposition for payment, ticketing and other applications in wallets (including HCE) are the secure services that MNOs are perfectly positioned to provide through common APIs using industry-standard frameworks, supporting not only payment services but also identity. The MNO UICC provides an SE managed on the customers’ behalf, ideally suited to provide secure services to these applications. Service Provides and MNOs can also use the UICC for storage or supplementary services such as Customer Recognition, thereby enhancing the user experience.

In the discussion that followed there were some comments about the extent to which these building blocks are already in place. I tended to the optimistic: I think the operators have many of these blocks already, the GSMA are co-ordinating them through their digital commerce initiatives and there seem to be commercial imperatives for moving forward. This week has in fact already seen a key announcement in just this space.

The Mobile Connect service will simplify consumers’ lives, offering a single, trusted, mobile phone number-based authentication solution that fully respects their online privacy.

[From LEADING MOBILE OPERATORS UNVEIL MOBILE CONNECT INITIATIVE TO PROVIDE CONSISTENT AND INTEROPERABLE APPROACH TO MANAGING DIGITAL IDENTITY | Newsroom]

Look, we all understand that HCE bypasses the SE. But that’s a good thing: it simplifies and enables to deployment of transactional applications through mobile phones. That does not mean that the operators are totally bypassed if they get their acts together. The operators had, in retrospect unwisely, decided to found their NFC framework on the SE. HCE doesn’t mean the SE is toast: it means that operators should use the SE for something that banks and other services providers want to use, and identity may well be it.

The afternoon session that I spoke at was in the Digital Commerce stream. I presented on the five technologies that will change the wallet in 2014 and then took part in an interesting panel discussion with my fellow presenters from Weve, Telecom Italia, BCC Card (Korea), Etisalat and SITA to discuss different aspects of the mobile’s role in digital commerce.

At the end of the day, I feel that overall my prejudices were reinforced. I’m not sure if MNOs should be providing wallets, but there seems to be an opportunity for them to provide wallet infrastructure for other people to use to build wallets. The sky hasn’t fallen in – there is a role for the SE if the telcos decide to make strategic choices around infrastructure and focus on interoperable identification and authentication.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post HCE for MNOs appeared first on Tomorrow's Transactions.

There are some things that Woking station can do better than anyone else in the world. It’s a shame they are nothing to do with trains but, hey, you can’t have everything.

The latest figures show a steady rise in the use of contactless payments in the UK. Slowly and surely, consumers are starting to tap. Contactless is becoming mainstream. As a benchmark, note that now you can use your contactless bank card to ride the bus in London, TfL have decided to give up on cash altogether.

Transport for London (TfL) has today announced that it is to stop accepting cash fares on London buses from summer this year.

[From London buses to go cashless from mid 2014 | Transport for London]

But as yet we are nowhere near, say, Australia. Down under, they have 175,000+ contactless POS terminals and the contactless limit is already $100 (it’s still £20 back in Blighty). The biggest mobile operator (Telstra) already has more than a million NFC handsets on its network and the numbers are still going up. So we’re not at Oz levels yet, or possibly even Canadian levels, where the contactless “no PIN” limit has also been raised to $100 without apparent ill effect and there are contactless terminals in all of the main retailers.

In Australia, six in ten Visa and MasterCard supermarket transactions is contactless. Some retailers there want to install contactless-only terminals (this is currently against scheme rules AFAIK). We are nowhere near that in the UK. Visa’s top contactless market in Europe is Poland. I’m convinced that one of the reasons that our contactless take up has been slower is that retailers don’t really seem to know what to do with it. It baffles me that some retailers ban you from paying with cards for transactions below £10 when it would be more logical for them to say that transactions below £10 must be contactless.

At least Subway have a sign which allows you to pay by contactless for any value but has a minimum spend for [chip and PIN] credit and debit.

[From You searched for greggs - Tomorrow's Transactions]

This came up again when I went to Brighton recently. I went to a very trendy coffee shop with a guest and ordered a couple of coffees and a cake. It came to a fiver or so. Naturally, I didn’t have any cash so I opened my no.2 wallet (the domestic travel wallet) and took out a contactless payment card. The lady behind the counter took the card from me, told me it was an extra 60p for card payments (if it had said that on the door I would have gone somewhere else) and put it in the slot, but I could see that the terminal she was using had a contactless interface. So I explained to her that the coincidence of my having one of the 36+ million contactless cards in the UK and her having one of the 164,000+ contactless terminals meant that it would save her money by using contactless. So I got her to cancel the transaction and then rekey it so that I could tap. Which I did. And having made my contactless payment with a theatrical flourish and tap, I told her that one of the additional advantages of contactless was that it saves time. She fixed me with a steely glare and said “it hasn’t so far”. I am stranger in a strange land.

Ian Cranna, VP Marketing and Category at Starbucks UK… “The introduction of contactless has had a real benefit for all our customers, whether they pay with contactless or not, as it cuts waiting time in the line.

[From Saving time with contactless | /review - Gemalto]

Contrast this experience with the Platform 2 coffee chap at Woking station. Most days, I have a coffee at home before I amble off to catch the 7.59 Flying Glacier to Waterloo via all points beyond mobile coverage between West Byfleet and Vauxhall. But maybe once a week I’ll be doing stuff or be running late and I’ll grab a coffee at the station. When I do, I prefer to go to the Platform 2 coffee chap as I think his coffee is slightly nicer than the Starbucks on Platform 1 or the store on Platform 2. But I also love the raisin danish that he does. But I never have any money. So in the old days, that meant no sale because I would go to Starbucks and use my mobile app instead (and not get the raisin danish that I want). Then they got a POS terminal so you could pay with chip and PIN, which works fine, but obviously there can be a bit of a line at peak times. Last week I went to the coffee chap and asked for a latte and a raisin danish and sleepily handed over a contactless Visa card. He tapped it on his contactless terminal and gave it back to me.

Wow. Better for him, better for me and better for everyone else in the queue behind me. The only thing that would make it even better would be to take the contactless antenna off of his POS terminal and put it on the counter so that I don’t have to hand him my card or my phone or my watch in order to pay. Nevertheless, I thought this excellent payment experience could not go unremarked.

I was so shocked I didn’t recover until the trackside fire at Wandsworth.

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Retailers could take more advantage of contactless appeared first on Tomorrow's Transactions.

The disgruntled commuter, the perpetual pessimist, the misanthrope, the ironist [which covers a large percentage of the people we know!]: Whether you find in your daily commute something soul-sucking or rather darkly comedic, Bad Oyster knows that public transit ain’t all a pleasure cruise. Its Sardines, Roulette and Mind the Gap (‘between your expectations and the service provided’) wallets (£2.99) are like a miniature dose of defensive humour for your harried journey.

[From Londonist: Santa's Lap: Designer Oyster Card Holders]

Not bad. But these are about accessorising (is that the word? My spell check is unconvinced) the payment instrument rather than the payment instrument itself. Meanwhile, over in Hong Kong, they’re showing what can be done with a bit of imagination.

This premium and stylish Octopus series offers four adorable animal designs for customers to choose from, each gorgeously adorned with colourful crystals. Each Octopus Ornament also comes with a beautiful charm and chain which can be easily attached to a handbag, mobile phone or MP3 player, or worn on the wrist as an accessory, adding a touch of dazzling glamour! Each Octopus Ornament design is beautifully packed in an exquisite gift box, making it a perfect treat for family and loved ones.

Combining sparkling glamour and payment convenience, Octopus Ornaments are for sale at only HK$328 each (not including any deposit or initial stored value) at 7-Eleven outlets in Central, Admiralty, Wan Chai, Causeway Bay, Tsim Sha Tsui, Mong Kok and Sha Tin starting tomorrow (4 December 2008). Only a limited quantity is available.

Like all Octopus products, Octopus Ornaments can be used on public transport and at more than 5,000 retail outlets across Hong Kong.

[From Octopus Holdings Limited - Press Releases]

I still have the same boring old Oyster card I bought years ago, although I rarely use it anymore because of my splendid Barclays OnePulse card. It sits at the bottom of my rucksack, only used to help friends or family members who have forgotten theirs. But if I could get a Hello Kitty Oyster tag for my bag, I would. In fact, I’d probably get several, so that I could pay in the most appropriately fashionable way.

Once freed from the tyranny of form factor, the imagination should open up. There’s no real reason, obviously, for contactless cards to be cards at all, apart from the convenient card-shaped slots that people have in their wallets. If the marketing guys understood what contactless was and was it can do (and it’s our fault that they don’t) I’m sure they could soon add some amazing new stuff to the payments world. Such as stickers, for example, but I’m trying not to keep going on about them.

Talking of amazing new contactless stuff makes me put forwardmMy contactless tip for 2009? I spotted this item in Contactless News earlier in the year and I think it gives a little window into the next big thing: convergence of multiple applications on standard contactless interfaces.

At a press conference during the September ASIS International Conference in Atlanta Denis Hébert, HID Global’s president and CEO, announced that new Dell Latitude E-Family laptops have a contactless smart card reader built into the palm rest that supports iCLASS cards.

[From ContactlessNews | HID takes the next big 'logical' step]

The bringing together of logical and physical access control will mean a proliferation of contactless interfaces. Look at Japan, where Sony has already sold some five million USB contactless interfaces for PCs and Playstations. Once your PC has got a contactless interface for access control, then we can begin to exploit that same interface for payments, ticketing and other transactional applications. The smart card interfaces that we all hoped would appear in PCs are finally looking viable for the mass market

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]

These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

The post Contactless Christmas appeared first on Tomorrow's Transactions.