More than being just a routine technical discussion about chips on smart cards, the EMVCo user meeting in Singapore last month actually focused on several key opportunities for the future of payments. While a description that the meeting was to “facilitate dialogue between EMV users/implementers and senior EMVCo representatives on all aspects of implementing and advancing the EMV specifications for contact, contactless, and mobile payment” may have sounded routine, and standard topics like security were indeed discussed, two sessions on contactless payments offered especially fascinating insights into just how dynamic new developments in payments actually are. Contactless is an increasingly popular, yet still-evolving, channel for payments, and the discussions touched on both standard plastic contactless payment cards as well as contactless payments using mobile phones.
Contactless mobile payments, which could offer significantly more convenience, were of great interest. EMVCo has extended its role from a single focus on plastic cards to looking at this different type of chip for payments too. As demand increases for multiple banks being able to work with multiple mobile network operators (MNOs) to offer more options to customers, trusted service managers (TSMs) are emerging as an intermediary to specify formats and standards between the banks and MNOs. TSM representatives noted during their panel discussion at the meeting that key issues with downloading and managing applications on the phone include:
- Individuals want payments applications from multiple companies on their phone even though each bank or MNO usually only wants the person to have their own products.
- Phone users expect a similar interface for payments on any device they use, even though they change handsets frequently, so enabling a common interface can help make contactless mobile payments succeed.
- Standard specifications for personalising the application on the SIM card over the air still need to be developed.
- SIM cards are likely to last longer than phones, so specifications may focus more on the SIM card and its applications than on the handset.
- While EMVCo has traditionally developed specifications for payment applications on chips, other groups like Global Platform and the NFC Forum are already involved in specifications for phones, so lines have blurred and cooperation is even more important.
The challenges are obviously immense. Participants said they expect their key focus over the next several years to be on device development, standard user interfaces and experiences, and new form factors. They also highlighted both the challenges ahead as new applications for payments come into play and the cooperative work that is needed – and indeed underway – to resolve issues with this new payments channel.
Another session on contactless cards offered insights into new issues that happen when the technology goes beyond just inserting chip cards into a terminal. Just as the magnetic stripe sometimes failed, contactless cards are periodically failing too. A key difference, though, is that the sources of the troubles are vastly different and some problems can affect more than just the one cardholder. In some cases, electromagnetic disturbances have caused transactions to abort. In others, electrostatic discharges from people or material, especially in cold climates, have caused terminals to stop working. One participant from Scandinavia, for example, said that over 1,500 terminals stopped working due to an electrostatic discharge earlier this year. EMV working groups are looking at how to resolve both issues by defining requirements and enhancing specifications.
The EMVCo working groups have plans stretching over the next several years that will cover the usual issues of security, cards, terminals and interoperability. In addition to these more standard issues, working groups will address contactless cards and mobile payments, and the sessions showed just how far-reaching as well as complex the opportunities for payments players are with these new devices.
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