November | December 2016 | paymentscardsandmobile.com in this issue CARD NOTES Banking on biometrics REGULATION Strong customer authentication FINANCIAL INCLUSION Addressing the unbanked CYBER INSURANCE Mitigating cyber risk www.paymentscm.com payments cards and mobile | November | December 2016 1 Desktop retransfer printing. Now with embossing. Discover the desktop retransfer printer that’s Designed for Possibilities. Vibrant colors. Fine-line detail. Embossing. All on demand from an instant issuance printer? Introducing the Entrust Datacard™ Desktop Retransfer Series. You not only get the colors, detail, resolution and over-the-edge printing to enhance your branding and image, but also the durability and on-demand convenience to help reduce your costs. All from an instant issuance printer that sits comfortably on a desktop. It’s the next generation of on-demand card printing. The Entrust Datacard™ CE875 Instant Issuance System 2 payments cards and mobile | November | December 2016 www.paymentscm.com N36016-TrustechPrintAd_02.indd 1 11/11/16 10:56 AM Money, Money, Money ‘Money, money, money’ go the lyrics to an Abba hit from the www.paymentscm.com 1970s. Back then, the idea that a war on cash might be waged November | December 2016 was as incomprehensible as Blockchain as an everyday consumer Volume 8, Number 6 payment mechanism is today. Editor-in-chief and publisher It is testament to the payments industry’s enormous success in enabling Alexander Rolfe Tel +44 1263 711 800 digital money that we are actually able to have a sensible conversation about [email protected] what a cashless world might look like — and believe that it may be achievable. Staff Writer Cash is very simply loved or hated. But as PCM research shows, the idea of a Joyrene Thomas cashless world is not likely in the near future. Cash in circulation continues to Tel +44 1263 711 800 rise, despite the explosive growth in digital transactions. [email protected] Financial inclusion in both the developed and the developing world may Contributors Joyrene Thomas help us achieve the aim of a cashless planet, but what is the current status of inclusivity for the financially under-served? In this issue, we look at the Head of Business Development Wendy Sanders structure, business case and feasibility of banking the unbanked. Tel +44 1263 711 801 Cybercrime...we cannot go a single issue without mentioning it, such is the Fax +44 1263 456 100 [email protected] interest in the burgeoning and increasingly well-structured business of the criminal underworld. In this issue we take a slightly different view of the General Manager Gemma Haywood problem and research the peripheral market growing up around cybercrime: Tel +44 1263 711 800 cyber insurance. How do the policies work, who is responsible for managing Fax +44 1263 456 100 them and what is actually covered? [email protected] Subscriptions and General Alexander Rolfe, Gemma Rolfe Editor-in-chief and publisher, Tel +44 1263 711 800 Payments Cards & Mobile Fax +44 1263 456 100 [email protected] Address Payments Cards and Mobile Editorial Advisory Board The Stable, Hall Yard Kelling, Holt John Berns June Felix NR25 7EW Managing Partner, Accourt President – Europe, Verifone United Kingdom Sylvie Boucheron-Saunier Denise Gee Cover, Design and Origination General Manager, Continental Europe, ACI Director, Magna Carta Adam Unsworth Robert Courtneidge Simon Hardie Printing Global Head of Cards and Payments, Director, Magna Carta Micropress Printers Locke Lord All rights reserved. No part of the publication may be reproduced or transmitted in any form without the publisher’s prior consent. While every care is taken to provide accurate information, the publisher cannot accept liability for errors or omissions, no matter how caused. Payment Cards and Mobile™ is owned and published by PaymentsCM LLP ISSN 1759-829X © PaymentsCM LLP 2016 contents ISSUING AND ACQUIRING COVER FEATURE 26. HALF OF GLOBAL BANKING 14-17. CUSTOMERS NOW USING FINTECH – LOSING THE WAR WORLD FINTECH REPORT ON CASH? Half of banking customers across the globe are using the products or services NEWS IN BRIEF Despite all the marketing money spent on promoting electronic of at least one FinTech firm according to 6-7. THE PAYMENTS WORLD payments over many decades, cash the first World FinTech Report (WFTR) from still accounts for around 80 percent Capgemini and LinkedIn, in collaboration IN 60 DAYS of consumer payments worldwide. with Efma. So, is a cashless society a realistic CARD NOTES aspiration, or is less cash the best we can hope for? 27. GROWTH IN GLOBAL PAYMENT 8. GLOBAL NON-CASH VOLUMES CARDS DRIVEN BY EXPANSION OF GROW BY TEN PERCENT IN 2015 18-21. BANKED POPULATION Global Payment Cards Data and Forecasts The growth in payments is fuelled by the ADDRESSING THE shows that the Middle East and Africa use of increased security measures, such UNBANKED IN (MEA) and Asia Pacific were the fastest as EMV and biometrics, new government DEVELOPING COUNTRIES growing regions for payment cards in 2015, initiatives and strong economic expansion Around two billion people worldwide with card numbers up by 13 percent and 10 in key countries. do not use formal financial services percent respectively. and around half the adults in the 10. BANKING ON BIOMETRICS poorest households are unbanked, With the rise of biometrics within financial according to the World Bank. When 27. 2016-2019: BREAKTHROUGH financial inclusion is a key enabler YEARS FOR ALTERNATIVE PAYMENT services, could you become your own to reducing poverty and boosting METHODS (APMS) AND MERCHANT password? prosperity, we investigate what the payments industry is doing around ACQUIRERS? financial inclusion. 12. 2016: THE YEAR OF THE MOBILE Last year Worldpay predicted that the BANKING APP digital payments market was overcoming 22-23. its growing pains and heralded 2016 as What has changed in mobile banking apps “the third age of digital payments”. and m-payments in the UK since last year? CYBER INSURANCE AND We examine consumers’ understanding MITIGATING CYBER RISK and attitude towards m-payment options, MOBILE PAYMENTS Cyber attacks are increasing and the implications. in number and sophistication. ‘Transfer’ is one of the four ‘Ts’ of risk 28. MOBILE PAYMENTS SOAR AS 13. THE RELENTLESS GROWTH OF management, alongside terminate, EUROPEANS EMBRACE NEW WAYS tolerate and treat. We examine the TO PAY CYBERCRIME growing market for cyber insurance, According to Visa’s 2016 Digital Payments The volume, scope and material cost of and the extent to which companies Study, the number of consumers regularly cybercrime are growing finds Europol’s can effectively transfer their cyber risks. 2016 Internet Organised Crime Threat using a mobile device – smartphone, tablet Assessment report. or wearable – to make mobile payments has tripled in the past year. REGULATION 29. AI BOTS TO DRIVE MOBILE 24. EUROPEAN REGULATOR PLANS REMOTE PURCHASES TO $2.1 AUTHENTICATION SHAKE-UP TRILLION New findings claim that merchant Following the European Banking integration of technologies such as AI bots Authority’s consultation paper on strong and natural language interfaces will lead customer authentication, the future for to remote goods purchases by mobile operators in Europe looks uncertain. totalling $2.1 trillion by 2021. 4 payments cards and mobile | November | December 2016 www.paymentscm.com contents 29. SMARTPHONES GENERATE 70 33. CONSUMERS WANT 37. 42 BANKS JOIN JAPANESE CENTS OF EVERY $1 IN MOBILE ADDITIONAL SECURITY TO PREVENT BLOCKCHAIN FOR PAYMENTS E-COMMERCE E-COMMERCE FRAUD CONSORTIUM Mobile e-commerce, through both apps As e-commerce and e-commerce fraud SBI Ripple Asia, a joint venture between and browsers, is surging to new heights, continues to expand, online payment distributed ledger tech provider Ripple and having grown 60 percent in 2015 to security is a top concern for merchants SBI Holdings, announced in August that a reach $120 billion, says Javelin Strategy & and consumers. Japanese consortium of 15 banks in a new Research. network will use Ripple’s Blockchain for 33. INDIA TO OVERTAKE US AS THE payments and settlement. 29. MICROSOFT WALLET, ANDROID NEXT E-COMMERCE SUPERPOWER PAY AND SAMSUNG PAY ENABLED India is en route to overtake the US to 37. MISYS FORCED TO CALL OFF VIA MASTERPASS become the world’s second largest CURRENT IPO PLANS Mastercard says it has reached e-commerce market, according to new UK financial software provider Misys has agreements with Microsoft, Google research by Worldpay. been forced to cancel its planned IPO, and Samsung to bring online payments citing “market conditions”, the latest in a capabilities to US-based users of their PRODUCTS series of pulled or troubled deals in the UK digital wallets via Masterpass. and Europe in recent weeks. 35. US BANKS ROLL OUT ZELLE P2P CONTACTLESS MONEY TRANSFER APP 37. ANT FINANCIAL ANNOUNCES A consortium of US banks, including Wells GLOBAL EXPANSION PARTNERS - 30. THE EVOLUTION OF DIGITAL Fargo, JPMorgan Chase and Bank of FIRST DATA AND VERIFONE WALLETS AND MOBILE PAYMENTS America, are rolling out a new P2P money Ant Financial Services is expanding its Aite Group, has released a whitepaper transfer app to take on Venmo and other global reach to make sure its millions tracing the growth and uptake of digital mobile payment upstarts. of clients can buy whatever they want, wallet services across the mobile and wherever they want, and however e-commerce sector. 35. EMVCO LAUNCHES EMV 3D they want. SECURE 2.0 SPECIFICATION 31. EUROPOL WARNS OF ANDROID EMVCo has published EMV 3-D Secure 37. NORDEA SACKS NETS AND PAY NFC TAP-AND-GO THEFT Protocol and Core Functions Specification TEAMS WITH DANSKE ON MOBILE Europol has warned that they believe v2.0.0 (EMV 3-DS 2.0). PAYMENT APP criminals are using Android phones to Nets shares took a bashing as Nordea trigger fraudulent NFC payments. 35. KOHL’S SEES MAJOR ADOPTION Bank dropped the electronic payment OF KOHL PAY system it was developing with Danish E-COMMERCE Kohl’s, a US department store chain, banks and instead teamed up with its main has witnessed a 70 percent increase in rival in Scandinavia, Danske Bank, to use its 32.