BBVA Customers Can Pay With Android KitKat Smartphones

Spain's BBVA has become the first major global bank to launch commercially a host card emulation-based (HCE) mobile contactless payments service, using the cloud to process EMV credentials.

This is not another mobile payments trial. Many banks are currently testing several NFC implementations of mobile payments, mostly using SIM cards as the secure element. But BBVA has gone further, launching the first commercial rollout of contactless payments using the HCE feature .... Continue reading the article in SaaS In The Enterprise

IBM Patents Digital Guardian AgainstOnline Fraud

IBM has patented an innovative solution against online fraud: a series of algorithms that analyze the way individual customers interact with e-commerce and financial websites to detect slight changes of pattern and trigger additional security measures in order to authorize transactions.

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Mobile Wallets Offer More Security

I became interested in the possibility of paying with my phone after Sony, Samsung, and BlackBerry started to roll out models with Near Field Communication (NFC). This technology, paired with contactless card payments and mobile wallets, allows you to store credit card and other payment cards securely on the phone, and pay by tapping it on the contactless POS terminal.

So far so good; the technology has been out for a few years. But why don't we see a lot of people tapping their phones at the checkout counter in shops? Because we lack a simple, easy-to-use, open standard.

Mobile wallets such as Google Wallet and PayPal are working in the right direction, offering a PaaS for mobile payments. The problem is the credit card companies, which want access to all the purchasing data, and the operator's greedy desire to control the ecosystem. These are putting major roadblocks in the way of mass adoption.

Another issue is the slow roll out of EMV credit card security in the US. Most financial institutions have not started to supply their customers with secure CHIP+PIN cards yet, and many do not have contactless cards either. Liability Shift will change that in a few years, when the non-EMV compliant party (banks, stores, etc.) will have to cover all the costs of a fraudulent transaction. But, for now, standard magnetic stripe credit cards are the norm.

One of the advantages of using a mobile wallet and NFC is that EMV is embedded on the system, making it almost impossible -- or at least extremely difficult -- to clone a card and use it on a payment terminal. Target recently lost several million of its customers' credit card records, which cyber-criminals are already selling on the black market.

Until now, mobile carriers have been trying to control the mobile wallet market to monetize it and keep their best customers from switching carriers or switching to cheaper MVNO plans. The European Commission has been looking at mobile wallets and wants to define a standard that everyone can use without switching mobile operators and/or credit card companies. The EU also wants a very low transaction fee so businesses will be happy to accept contactless payments for small purchases.

Carriers should stay out of this business. Customers should be able to change their mobile operators anytime -- as required by European rules -- when their contracts are up, without losing their mobile wallets, or any other service. Any carrier solution only means additional cost and less freedom of choice. It would be like paying your ISP a fee every time you shopped online.

Banks and credit card companies must embrace an open solution such as Google Wallet, to allow customers to choose which card they want to use for each transaction.

Like contactless cards, the mobile wallet should be easy to use and work fast for small purchases. Google wallet lets you define a "default" card to pay with without launching the app. This way customers can just tap-and-pay for small purchases without entering a PIN. This could be especially handy when paying for bus tickets (for instance, buses in London accept contactless card payments).

With more NFC smartphone models and EMV being used almost everywhere, there is no reason for this technology to stay out of reach.

Article first published as "Freedom for Mobile Wallets (as-a-Service)" on SaaS in the Enterprise