By Gareth Vaughan
The Trusted Service Manager (TSM) project being worked on by the country's major banks, telcos and payments companies that will enable mobile wallets, is on target to go live early next year, MasterCard's New Zealand country manager Albert Naffah says.
Naffah told interest.co.nz in a Double Shot interview the project was now progressing well after a lot of "good, intense negotiations" between all the stakeholders.
"It is progressing well for a launch early next year from my understanding of discussions with all those partners," Naffah, who is leaving MasterCard for a role at ASB's parent Commonwealth Bank of Australia in New York, said.
The TSM is effectively the common infrastructure to allow the secure provision of payment cards, loyalty cards and coupons to a consumer's NFC (Near Field Communication) enabled smartphone. This then lets the consumer use the phone for "contactless" credit, debit or prepaid payments via MasterCard or Visa. A mobile wallet trial has involved Paymark, which is owned by New Zealand's big four banks and leading telcos.
"For us we see this delivering significantly enhanced convenience to consumers, not just when they're paying for their purchases but across the entire purchase," Naffah said. "It's also delivering greater security to consumers and to merchants as well."
This was because mobile phones provide another layer of security given people can lock their phone.
"They can put a pin or a password on it, they can use various methods that ensure it can only be used by themselves," Naffah said. "So it's going to deliver that significantly enhanced security."
World leading
Naffah estimates that 30% to 50% of all New Zealand payments transactions will be done via a smartphone within two to three years.
"And that will be world leading because the TSM initiative in New Zealand is world leading," he said. "There is no other market in the world that has developed a TSM solution that covers all the banks, all the customers of banks and all the customers of all the mobile network operators."
"In a market like New Zealand with 4.5 million people you needed that 'co-opertition,' that combination of co-operation and competition which is what this TSM solution is and that will then deliver a fantastic service to consumers. I know kiwis are early adopters and they'll take it up and they'll be using it frequently," Naffah added.
"They'll still need that plastic (card) in their wallet for when they travel overseas or for that rare merchant in New Zealand that won't accept, or hasn't yet updated their technology."
MasterPass coming to NZ next year
Meanwhile Naffah said he was "pretty confident" MasterCard's MasterPass digital wallet, which has been launched in the United States, Canada, Australia and most recently Britain, will be introduced in New Zealand next year. There was still work to be done with retailers and banks, who MasterCard needs to distribute it through to their customers.
"If you want a real life example of what it looks like, many people are familiar with PayPal. This (MasterPass) is PayPal but even better because it is an open wallet. It will allow you to store multiple card types in there and self select those card types every time," said Naffah.
"It will allow you to store a whole number of different cards that work online via e-commerce in that wallet. Any card that works online will be able to be stored in the wallet. You'll also put a bunch of other personal information in it like your home address."
Then whenever there's a MasterPass button on an online retailer's payment page users can click the button, confirm who they are with a secure password, and then all the information required to complete a transaction will be "populated" into the payment page.
"You only enter that information into your wallet once. And forever more whenever you see that MasterPass button it will auto-complete the payment page for you in a secure way. (But) you have to authenticate yourself every time you use it online," said Naffah.
In the video Naffah acknowledges "teething problems" with contactless "tap and go" payments through MasterCard's PayPass and Visa's payWave, which have featured in the media over recent months.
Avoiding being the next Nokia
Naffah also says the opportunities created by a digital world for "payments technology companies" like MasterCard outweigh the risks, if you understand what those opportunities are and act to take advantage of them.
"It's now so much easier for a new entrant to come into our space and to displace us and to win the affection of our customers. They'd become our former customers and we'd disappear," Naffah said.
He pointed to the example of Nokia, formerly the world's leading mobile phone maker which has been superseded by rivals after failing to appreciate the opportunity created by smartphones.
"We need to ensure that doesn't happen to us by continually investing in new technologies (and) trying to understand what consumers want," Naffah added.
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9 Comments
1. How many people 'lock' their phones. Around me at least, not many at all.
2. Consulting with all stakeholders. Really. No user consultation going on. My bank told me for example when a dodgy 'tap n go' card turns up in my mail there is no choice. No choice for the bank either - according to the bank - it's all Visa and Mastercards doing.
3. Notice the old EFT-POS cards are not included. ie. Cash cards. It has been explained to me that as credit cards extract a bigger fee from retailer than the eftpos card. (Is that true) It has been the preference of the banks to instead push users to the credit card. Notice them doing this with the 'debit card' ? Which really is no innovation at all.
4. I have this thing called cash. It seems to be very fast at the counter. Potential for loss is limited to what is in your pocket. Balance is easy to see. Huge advantages. I see myself as an early adopter.
It seems they are trying to make a new type of medium of exchange to replace cash. Given cash is a major public good provided free by the Reserve Bank and this new system will either cost the end consumers or the intermediate consumers -the retailers, maybe the Reserve Bank should be part of these negotiations to ensure the public interest is best served.
Not sure if you saw this one KH, but it certainly seems that Eftpos NZ and its parent VeriFone want in - http://www.interest.co.nz/business/65584/banks-retailers-and-payments-n…
Thankyou Gareth. I found that a little tricky to unpick, but it seems that Eftpos might join, but maybe leaving the cards behind. And also that the credit cards might come in first, with a gap leaving eftpos out for a while. Such a gap will inevitably migrate more users to permanent use of credit card. Anyway thats what I saw there.
As for the mobile wallet phone . It's been a mildly disturbing experience in the last few days which makes me very wary. I could be described a moderate technophobe in that I like to use the stuff but have very little interest in their internal working. For example I take and publish a lot of photos.
Just the two of us in our house but 4 Samsung tablet including phones such as my S3. A big desktop and a windows laptop and an Apple powerbook. to my alarm they seem to want to talk to each other.
1. Wednesday I stumbled across the existence of Google plus on the destop pc. Which was working away behind. It had my photo on it as ID, passed over without my awareness from a blog I do, usually on the powerbook. I spent a long time reading instructions about how to delete Google Plus without deleting the enormous blog which has been years in the creating. My technophobe side was to afraid to do so in case it all went wrong. I notice names of certain people I on 'My' Google Plus. How did they get there. Nothing to do with me, or them I suspect.
2. Yesterday evening I did a minor Google search on the Apple powerbook. Later when I used the Samsung tab, which I use mostly as an e-reader, there were the same searches. I have no idea of how that happened. And less idea of how to stop it. And frankly have more things to do than spend days trying to work it out.
Simply put this makes me vary wary of any such thing as a wallet in my phone.
And. I have a beautiful new car, which I enjoy very much, except it's smart, and expresses an opinion by beeping at everything I do that it disapproves of. Irritating. I have just realised it is now linked in with my phone. All I have to do is walk up and sit in it and it powers up with the S3 phone functions. aaaaagh. Where will this lead. !!!!
What I don't need from fellow common taters is lots of advice about what to turn on or off. Thats the technophobe side of me. And usually such advice leads to days of frustration and an call to my IT consultant. But also fellow common taters, maybe I do have to do this - but I should not have too.
Seems all this management of issues, anbd risks is something I have to do. When I am ill equipped to do so. But would be doing better things by choice. All forced on me.
I prefer the technique of this enterprising chap.
Man who created own credit card sues bank for not sticking to terms When Dmitry Argarkov was sent a letter offering him a credit card, he found the rates not to his liking.
"They signed the documents without looking. They said what usually their borrowers say in court: 'We have not read it',” said Mr Mikhalevich.
http://www.telegraph.co.uk/finance/personalfinance/borrowing/creditcard…
Cash is King
The old saying rings just as true today:
Quote:"The only secure computer is one that's unplugged, locked in a safe, and buried 20 feet under the ground in a secret location... and I'm not even too sure about that one."
-- Dennis Huges, FBI.
http://arstechnica.com/security/2013/08/philips-hue-lights-malware-hack…
Good to read and see tech stories like this, Gareth, and good to see people being given a chance to explain their point of view in answer to a few well-placed questions.
After all, many of the benefits we take for granted, like being able to post here (electronically and instantaneously, no less!) and pay by EFTPoS are due to incremental innovations over the years which add up to some real benefit.
Not to say everything's perfect, and I must say that I had been concerned about exactly how proximity cards operate in the real world, with the risk of mistaken transactions. However, Mr. Naffah's explanation of the concrete details of distances, blocking of repeat transactions, education programmes, and such like is a good start to getting good information on how these cards will work.
Also interesting from a strategic point of view to see that MasterCard have really reinvented themselves as a transactions company rather than just a card company, and are looking for be a key element in electronic transactions, using the same electronic media that social networking surrounding those transactions uses (i.e. the tablet and smartphone; make the purchase, then share with friends). Seems like a good integrated strategy for them.
Of course, we are right to be skeptical on some points. No doubt there will be some technical issues, and it will be interesting also to see how criminals and fraudsters keep up with security layer improvements over the next couple of years. I think that education and smart security awareness will be key to keeping users out of trouble.
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