- Perhaps the biggest and most talked-about announcement of the show was Chase Pay and its partnership with MCX. Chase is developing a wallet that will be available to all of its 94 million cardholders to use in-store, in-app and online. The wallet is not planning to use NFC at the POS, with QR codes set to be a most likely method, and as a result will be available on any smartphone device, irrespective of its operating system. On the merchant side, Chase is offering a fixed fee processing which will make merchant costs more reliable and predictable with an opportunity to “earn it down” based on volume. Partnership with MCX gives Chase Pay access to the largest merchants in the country. In addition to a stand-alone app, Chase Pay will also be available as a payment option inside CurrentC, the wallet that MCX has been piloting in Columbus OH, the results of which were presented and greeted with a tentative applause during another keynote at Money 20/20.
- Mobile payments market in the US is only getting more complex, with Apple Pay, Android Pay and Samsung Pay already there, more “Pays” on the way (e.g. LG Pay), and now Chase Pay and revived expectations of CurrentC. Make no mistake – while most “pays” look similar, they offer a different customer experience (e.g. how to trigger payment, where it is accepted, etc.) and require issuers to adapt their processes to each of them. At the show, I picked up strong signals from issuers that they want to have more control over digital payments and are looking at various options, including HCE wallets, to achieve that.
- The Tokenisation panel was one of the best sessions I attended with panelists from the networks, issuers, merchants and processors sharing their views how tokenisation is going to evolve. It includes tokenisation for cards-on-file and e-commerce transactions (both Visa and MasterCard announced tokenisation of their Checkout and MasterPass wallets respectively), new approach to 3D Secure, introduction of Payment Account Reference (PAR) – a non transactable ID that ties together all the tokens, and tokenisation for DDAs which The Clearing House is working on. According the panelists, tokenisation is the much-needed “abstraction layer” that will be a “foundation for the next 20 years of innovation.”
- Biometrics are entering mainstream, with FIDO alliance laying the groundwork for how to deploy biometrics for authentication. Sorting through a myriad of biometrics providers and approaches (e.g. fingerprints, hands, voice, eyes, etc.) is a headache and eventually, it will be consumers that will decide which approach works best for them. FIDO alliance delivers a standard irrespective of what the consumers choose. Looking into the future, the panelists envisaged a behavioural approach where the providers use a number of data points to constantly verify that the user behaviour is consistent with a typical pattern and authenticates automatically in the background, a process called “ambient authentication.”
- Conversations about cryptocurrencies have matured enormously over the last 12-18 months. The focus is now very clearly on blockchain technology and how the financial services industry can best deploy it. A number of exciting partnerships are emerging in this space, from TD Bank and RBC working with Ripple on domestic and cross-border P2P payments as well as more efficient transfers between subsidiaries, to Nasdaq’s partnership with Chain, to the R3 consortium. Perhaps the most exciting demo I’ve seen was Visa’s connected car experience, where the driver could review the new leasing document on the screen, sign it, register it on a blockchain and drive off. Time will tell if this is how we will be getting to drive cars in the future, but it only shows the opportunities out there.
But the approach to service differs considerably between the two models. Bank of America deploys ATMs with Teller Assist in its new Express Centers. Tellers still exist in Bank of America’s model, but they are located centrally and engage customers via real-time video. During business hours, tablet equipped staff can also assist. After hours, it’s all video. Wells prefers all customer interactions to be with in-person branch staff in its Neighborhood Stores. There’s no silver bullet when it comes to branch transformation. There will likely be a variety of design within banks and among banks. Both initiatives appear to be “test and learn” approaches, and may evolve as both banks gain experience. That’s exactly how it should be done in my opinion.What do you think?