2015 finally saw mobile payments go mainstream and, as a consequence, technologies like tokenization and host card emulation come to the fore. As we approach the end of the year, the Bell ID team has taken a moment to consider the key trends and technologies that will support the continued growth of the industry into 2016 and beyond.
MARTIN COX, GLOBAL HEAD OF SALES AT BELL ID
“In 2016, we’re going to see more and more services come to market from issuers, and enhanced services from the OEMs. As more services come to market, the components that make up the mobile payments infrastructure – cloud payments and tokenization services, for example – will start to fragment as players begin to find their natural place, breaking the payment schemes’ monopoly.
“Banks will move to take greater control of certain elements of the technology, such as tokenization. By bringing these elements it in house or hosting them with a third party provider they can avoid ‘on us’ tokenization fees and costs for token creation and detokenization.
“Market competition will also intensify as new players enter the fray and companies that already have longstanding technology relationships with banks expand their services to secure their position in the mobile payments ecosystem.”
TODD FREYMAN, VP THE AMERICAS AT BELL ID
“2015 has been a year of change for the payments industry in the US. The liability shift has now taken place but there is still a great deal of work to be done. Banks that have already deployed EMV will look towards improving the EMV transaction experience, U.S. Common Debit AID and contactless issuance next year, while those in the midst of migration will make decisions on whether to deploy contactless right away. We’ll also start to see more banks implementing more of the technology themselves, having initially set up hosted services with the processors. This will bring greater control, efficiency and autonomy.
“Building on this in the U.S. and across the Americas region, card not present, mobile payments and tokenization will come to the fore in 2016. The OEMs and banks are talking about value added services and, with the importance of couponing and loyalty in the States, this is going to drive significant consumer adoption by enabling new efficiencies and convenience at checkout. For issuers, the banking consortiums and domestic debit schemes are already sourcing solutions for the benefit of their member banks and tokenization will be the big priority as banks seek to control their own security and flexibility to support new product offerings. Finally, on the acquirer side, banks will also start to look seriously at mobile value added services as the industry looks to make them seamless for customers.”
DAVID ORME, CEO AT BELL ID
“It has been a busy and exciting year for Bell ID and we’re seeing a number of regional and technological growth areas for 2016. As with 2015, HCE and tokenization will continue to dominate discussions as the wallet wars really heat up. The industry is waking up to the possibilities of tokenization, which are essentially endless. Think social security numbers, passports, driving licenses, gift cards; the list goes on.
“As Todd mentions, service providers will recognize that payments is not enough of a benefit to drive consumers to use their smartphones to ‘tap & pay’. This is where value added services come in; loyalty, ticketing and gifting can all be catalysts.
“From a regional perspective, EMV contactless and mobile payments in Asia will continue to grow rapidly as migration continues and technology adaption forges ahead. Additionally, we’re going to see some really interesting activity in Latin America as the region further develops its payment and mobile infrastructures in advance of the Olympics.”