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Archive for the ‘Payments’ Category

Forget passwords. Pay with a selfie!

Wednesday, October 28th, 2015

From passwords to two-factor authentication, bio-authentication, and tokenization, both consumers and cybercriminals have forced the online and mobile banking industry to come up with innovative and convenient security technologies. The latest functionality announced to be available to US e-commerce consumers in the middle of 2016 is MasterCard’s new facial recognition-based identification method. Online retailers will be able to authorize a transaction by taking a snapshot of their face and blinking once (to prevent fraudsters from holding up a picture of the retailer and fooling the system).

Particularly popular with Millennials or the ‘selfie-generation’, using selfies to authorize transactions is a clear advantage to passwords/ PINs as it saves consumers from remembering complicated combinations of numbers or letters.

Just like other biometric authentication functionalities, ‘pay by selfie’ is surely on-trend but it remains uncertain how secure the new technology is. Biometrics that rely on static information like face recognition or fingerprints can be easily faked; the case of the German defense minister Ursula von der Leyen’s fingerprint cloned just from photos is a solid proof in this sense.

The retail banking industry is rushing its way in offering consumers innovative mobile technology functionalities but the next generation of mobile banking apps needs to include stronger security features to make cyberattacks impossible.

 

Part No. 2: Guess who has made the most progress on mobile apps for banking?

Wednesday, September 16th, 2015

Here’s the second hint for our little quiz about which bank showed an outstanding effort in continuously improving its core banking app in our yearly ‘Mobile Apps for Banking’ benchmarking:

2.) THE CORE APP OF THE BANK WE ARE SEARCHING CONTAINS INNOVATIVE PAYMENT OPTIONS FOR CONVENIENT TRANSACTIONS

Watch out for our new report coming soon!

 

Finally the Google (Payment) Empire strikes back

Friday, September 11th, 2015

Google’s payment platform using NFC technology, Android Pay, announced earlier this year, has started to roll out in the U.S. today. Google seems to be back in the game of mobile payments with a promising start: over one million points of acceptance and gradually more announced to be joining. Like Apple Pay, the mobile payment solution loads automatically without having to launch an app, by simply unlocking the device. In-app functionalities are to be implemented later this year.

Google Wallet, the digital wallet forerunner in the U.S., will be automatically converted by app-update to Android Pay. However, the app has not been closed down but given an overhaul to serve as a P2P app (send and receive money).

Google’s Android has an impressive 79% worldwide market share, in the global market for mobile operating systems. Therefore, Google’s alternative to Apple Pay and Samsung Pay, has good chances to see early mainstream adoption among others due to retailers’ fondness of rewards schemes announced to become part of Android Pay’s functionalities soon.

It is surprising that it took Google so long to respond to Apple’s challenge. But there is no doubt that on a global scale Google has the power to become the leading mobile payment provider at the POS.

 

Mobile banking: How a convenient user experience may threaten your clients

Friday, August 7th, 2015

The smartphone business is booming with breakout successes like the iPhone 6 and 6 Plus and the mobile usage is growing at a fast-pace to the detriment of laptops/ internet from home use. It should not be surprising that criminals have also adapted to the new trends and more than 1.3 million unique smartphone attacks have been reported from January to October 2014.

While one of the main causes is the increasing amount of mobile transactions and payments, the multitude of digital communication tools like the real-time apps helping advisers improve communication with their clients also keep clients engaged with their mobile devices. High-net worth clients are attractive targets for mobile security breaches as they mostly manage their wealth while on the way and use unsecured Internet access points (see our report on the mobile behavior of the affluent and HNWI).

But what are the main factors driving security breaches of mobile apps in the banking field? MyPrivateBanking’s recently released report on Mobile Apps for Wealth Management 2015 found that secure client authentication is still being neglected by many wealth managers. Few of the evaluated wealth managers /private banks are using the gold standard to protect clients’ data by making use of a full two-factor authentication procedure plus adding a multi-layered anti-fraud framework. Striving to provide their clients with a convenient, easy-to-access information, some wealth management apps even allow users to log-in with only their 5-digits passcode thus ignoring the fact that these weak security measures make their clients easy prey for hackers who illegally try to access personal data.

One of the main areas of risk, which is often being neglected by banks, is that criminals are targeting not only the secured spaces where transactions are being made by clients but also other apps/features where they are able to identify personal data (for instance address, birthdate or trivial things like shopping coupons). Putting together this information can easily lead to so called identity theft, enabling criminals to break into even better secured systems.

Wealth managers should think hard about an integrated and broad security strategy, even if they have to sacrifice a bit of convenience for their clients to gain gold standard security.

 

How the Apple Watch changes the game for banking apps

Monday, June 29th, 2015

Evaluating the apps of the 30 leading wealth managers for our Mobile Apps for Wealth Management 2015 report (launched two weeks before), we were impressed by the rapid adoption of the smartwatch trend evolving to a major part from the launch of the Apple Watch. During the evaluation phase, several wealth managers were throwing their version of a wealth management smartwatch app into the market.

Given the usually slow progress of the wealth management industry in terms of digitization, this development is particularly noteworthy and it implies that the boom of smartwatch app has only just begun. Therefore, we also expect a dramatic increase of the number of banking apps in the retail sector. Starting our new project on the Mobile Apps for Banking 2015 report (see last year’s edition here), we are curious to see how banks are realizing their version of their banking app’s smartwatch counterpart. It is clear that the smartwatch banking apps’ core functions will mainly include features like notifications and communication. Especially in terms of communication, banks will face major challenges as this article describes.

We will be excited to shed a light on the developments and the industry best practices with regard to smartwatch apps for banking for the first time – so watch out for our 2015 report on Mobile Apps for Banking coming out this fall!

 

How Starbucks is winning the mobile payments war

Wednesday, April 29th, 2015

Technology giants, start-ups and retailers like Google, PayPal, Starbucks, Square, and Stripe have moved on from just threatening and competing against the traditional banks to dominating the mobile payments arena.

Starbucks is the new model of success in mobile payments with an impressive comeback after the unsuccessful partnership with Square in 2014. The Seattle-based coffee giant has made mobile payment strategy a top priority and continued to invest in its own in-house mobile payment systems. The result is remarkable: over 8 million mobile transactions per week, 16 million active users of its mobile app, which translates into nearly 19% of all mobile transactions in US stores.

The brilliant idea behind Starbucks’ “Mobile Order & Pay” system combines the convenience of a simple payment tool, which works on the majority of smartphones, with the benefit of a well-thought loyalty program. The app’s success is not only driven by the ease of payment (“shake to pay” and give a digital tip to the barista) but also by the remarkable set of supplementary features (loyalty program, manage Starbucks card, send Starbucks gifts to friends etc.).

There is yet no confirmation about a possible white-labelling solution of the mobile payment app. However, ‘Mobile order& pay’ will surely trigger a wave of similar solutions either brought up by tech giants or by other consumer companies willing to pay the price for a bespoke solution. Either way, given the rapid acceleration in mobile device purchases and millennials’ hunger for convenient mobile payment solutions like digital wallets, credit card companies and banks are vulnerable to lose a substantial number of mobile customers.

At MyPrivateBanking we believe that customers will choose a non-bank mobile app over a bank’s mobile solution if it offers more convenience and interesting add-on features. It is not enough for banks to launch their own mobile wallets. To gain market share and penetration banks need to think hard about the smart add-ons for their payment solutions: Loyalty programs, preferential treatment when ordering or buying things in high-profile store chains, and many other innovative features will require banks to think like FMCGs (fast moving consumer good companies) rather than old fashioned retail banks. This will be the hardest challenge.

 

Why a simple P2P payment feature will be a must for any banking app

Wednesday, April 1st, 2015

We’ve seen it before: sooner or later, cross-industry trends like customer service via video chat have strong potential to conquer the banking space, as well. While video chat features are slowly becoming standard among the more elaborate mobile apps, mobile and desktop websites, new add-ons are already on their way.

As Facebook recently jumped on the train of P2P payment with their Messenger app, it is more than likely that the use of such features will skyrocket given the masses of Facebook users worldwide. P2P payments are defined as an online technology that allows customers to transfer funds from their bank account or credit card to another individual’s account via the Internet or a mobile phone using a simple and quick process.

Hence, it is just a matter of time that financial institutions – be that retail banking or wealth management – face the need of implementing P2P payment features for their mobile touchpoints. Starting the research on mobile apps for wealth management for our new report (see last year’s edition here), we already see some frontrunners among the 30 top players in this respect; one example is the great DBS PayLah! app, which allows customers to split bills, send money to or request money from friends, and even donate money to selected charities in an easy way.

Considering these and other ground-breaking technological developments, we are particularly curious to see, how the top wealth managers worldwide perform this year.

 

Latest trend in authentication works with a heartbeat

Wednesday, March 18th, 2015

Well publicized, recent security breaches at giant retailers (Home Depot) and financial institutions (JP Morgan Chase and the European Central Bank (ECB)), have caused waves of panic about the security and privacy of sensitive (financial) data. As this threat seems to be ever expanding and detection of security attacks gets more and more problematic, the Canadian startup Bionym has developed a biometric alternative to passwords, PINs, or other time-consuming security details. The Nymi wristband leaves other biometric authentication methods like Apple Pay’s touch ID fingerprint technology for contactless payment behind. It could be used for numerous applications like unlocking devices, remembering passwords, authorizing transactions, or controlling connected devices. The bracelet has an integrated electrocardiogram (ECG) sensor that enables measuring a user’s heartbeats (the electrical activity one’s heart generates), which is unique to every person. Nymi uses the heartbeat signature to authenticate and confirm the user’s identity. There are three levels of security involved: the heart ID, the armband itself and an authorized authentication device like a smartphone (via Bluetooth and a matching app for Windows, Mac, iOS and Android). The user must wear the bracelet on the wrist and touch its top sensor with the opposite hand for it to work.

UK’s Halifax bank’s decision to test Bionym’s technology to allow its clients to make online banking operations in an easy and secure manner is an exemplary initiative. It shows that biometric identification is the future for online banking security. Over the next three years, we expect many innovations in this space – just like Nymi.

 

S-Money, A New (French) Revolution in Payments

Tuesday, December 9th, 2014

(by Francis Groves, Senior Analyst)

In our most recent report on Social Media in Banking & Wealth Management, MyPrivateBanking highlighted the arrival of payment processes that use social media channels, specifically the introduction by BPCE and its S-Money subsidiary of a payment service for Twitter users. This service was launched in October and is initially focused on facilitating payments in a social context such as crowd-funding, friends clubbing together to buy a gift or charity fundraising. Go to the @SmoneyFR Twitter stream at the moment and you will find them promoting the AFM Telethon campaign to raise money for families affected by rare neuromuscular diseases (especially in children) - “@SmoneyFR #envoyer X€ @Telethon_France.”

The new service is reported to rely on standard security within the payment/credit card industry. Payments to another individual are limited to €250 and are not (yet) confidential. In the future payments by direct messaging may be available. Although some reports indicate that the service is a collaboration with Twitter, we understand that it is in fact an initiative of BPCE/S-Money on their own, using publicly available Twitter documentation.

But Twitter payments are only one part of the range of recent initiatives by S-Money. At the beginning of the year they signed up with the Visa subsidiary V.me, which will allow customers to store their card details - securely - in a single place.

Then in February, ‘Dilizi’ a new system that turns merchants’ smartphones or tablets into card payment systems, was announced. This new system is particularly attractive to traders who work away from their own premises a lot, such as plumbers. It could also be used in raising money for good causes.

One particular segment of French society that has come into S-Money’s orbit this year is the country’s student population. In July, Crous, the state-owned provider of university services (such as canteen meals) chose S-Money as its e-payment manager. So, potentially, 1.6 million young people are likely to become familiar with S-Money.

At a time when there has been talk of payment processing slipping out of the hands of traditional banks, it is interesting to see that BPCE seems to have the expertise, the financial resources and corporate courage to put the understanding that it has of its home market to work to buck that trend.

 
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