Focus on Mobile Banking
December 2011 | e-newletter
M-banking:
from ‘nice-to-have’ to ‘must-have’ channel
10 Keys
to Mobile Banking Success
Most Trusted Brands
in Mobile Payments
M-Banking in Europe Latest Mobile Partnerships Visa Newsletters
Trends | Mobile Banking
M-banking: from ‘nice-to-have’ to ‘must-have’ channel Upcoming EVENTS: 17-18 Oct 2011/ Berlin:
Cards & Payments Innovation Europe
29-30 Nov 2011/ London:
Technology Innovation for Banks in Growth Economies
7 Feb 2012/ London: FinovateEurope
19-22 March 2011/ Singapore:
5thMobile Commerce Summit Asia 2012
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December 2011
Javelin Strategy & Research’s third annual Mobile Banking Vendor Scorecard survey concludes that the mobile channel has moved from a ‘nice-to-have’ to a ‘musthave’ channel. Javelin scored the offerings of 15 major vendors, using data from surveys conducted with more than 10,000 consumers and interviews with 6 financial institutions (FI). Fiserv, FIS and Sybase received the highest scores. Fiserv won best in class, while mFoundry won “Path to Mobility”. It is the second consecutive year that Fiserv achieved top place. The triple play - mobile banking via SMS text, mobile browser, and downloadable apps - is emerging as the new norm, with four out of five vendors now offering it. However, security remains a top
concern, as almost half of consumers cite fear of security as the main reason they do not use mobile banking. Vendors seeking market leadership will also need a thorough understanding of how to incorporate
Mobile Banking | Trends these trends into the development of their solutions. For example, the mobile banking industry is consolidating, with players bringing mobile technologies in-house. Tablet adoption by consumers is growing at a tremendous rate, and FIs and vendors will need to provide access to mobile banking specifically designed for tablet users. The 15 vendors compared were, in alphabetical order: Clairmail, FIS,
Fiserv, Harland, Intuit, Jack Henry, Kony, mFoundry, Monitise, ORCC, Q2ebanking, S1, Sybase 365, Tyfone, and Yodlee. Infosys was included as a new entrant this year but not scored. One in 10 using mobile banking Around 9% of mobile phone users are using their devices to access bank accounts, according to research presented by the Future Foundation at MasterCard Europe’s Prepaid Conference in Barcelona. The research, conducted in Europe’s five biggest economies, showed that just over 5% of mobile users used their phones for payments. More than 60% of the mobile banking users were men, said Future Foundation director Barry Clark who presented the comScore survey results. He added that the most popular platform was Apple with more than 30% of those surveyed, followed by Symbian (the operating system for Nokia) coming second, and Google [Android] coming third with almost 20%. The original research was conducted between January and March 2011.
Brief: • The number of mobile banking users doubled in the past 12 months in China, Brazil and Kenya.
• In the UK, 20.4% people now use mobile banking - compared with 9.7% a year ago. • In the US, mobile banking adoption grew from 11.4% in 2010 to 21.9%. • Sweden recorded a bigger leap still: mobile banking adoption rose from 8.1% to 20%. • 63% of mobile phone users in sub-Saharan Africa said they would like mobile banking services.
December 2011
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Trends | Mobile Banking
10 Keys to Mobile Banking Success *as considered by mobile pioneers, i.e. SunTrust, IBC Bank, Fiserv
1. Go for the triple play - downloadable apps, mobile browsers and SMS-based services 2. Invest in versatility - ensure that your vendor can adapt quickly 3. Develop with agility - iterative development can itself be trailblazing. 4. Test, test and re-test - “Mobile”, by definition, is dynamic, always moving and adjusting 5. Secure it right & educate your end-users 6. Consider mobile remote deposit capture (RDC) - set deposit limits, establish fixed daily limits or require a certain balance for a certain length of time 7. Tablets – the latest play (3 months after the iPad first came out, 58 percent of banks were already servicing them) 8. Get ready for HTML5 which significantly advances rich web content capabilities 9. Leverage device awareness - by pushing out offers, fraud alerts etc. – sharing information with the customer 10. Keep an eye on social networking - updatedall the time and “show off” on Facebook, Twitter, blogs etc.
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December 2011
Mobile Banking | Trends
Most Trusted Brands in Mobile Payments
In an online survey performed by Ogilvy & Mather, 500 Americans were asked which brand they would trust most in mobile payments: Visa, MasterCard, American Express etc. carried the most trust, while companies like eBay and Facebook had a much lower score. This means that even in the online world, a brand carries a lot of weight when it comes to payments.
December 2011
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Trends | Mobile Banking
M-Banking in Europe M-Banking – common used services: • Checking your account balance • Bill Payment: Paying the utility invoices to suppliers agreed by your bank (gas, electricity, phone etc.) • Building and/or closing time deposits • Opening/closing current accounts • Money transfer/ Funds transfer to other banks • Cancelling the direct debit option • Request for bank statements • Requests regarding loans advance redemption • Foreign exchange • Notifying the bank regarding address changing • Reporting stolen cards etc.
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More than half of European banks have implemented or will implement the “mobile banking” service. For most banks the target is to improve customers’ experience in the interaction with the bank and to attract younger customers. For ~ 40% of banks in Northern Europe and Scandinavia “mobile banking“ development is treated as priority. This percentage dropped to 20% for banks in Central Europe (!!! a German bank reported an increase of over 1000% for “mobile banking” users; although these are calculated based on the initial small number of customers, it still shows the reality that some banks are performing tests and show some real interest) 16 August 2011 – Germany: Telefónica, Telekom and Vodafone are pushing ahead with their joint activities in mobile payments and intend to register their payment service mpass as a separate company.
Aided by new technologies such as Near Field Communication (NFC), users will soon be able to make simple, secure and wireless payments in high-street shops, too. ...And for banks in South East Europe the figure is only 11%. Social media will most likely be one of the main sources of customer opinions about mobile banking services
Mobile Banking | Trends
Latest Mobile Partnerships 31 August 2011: Monitiseplc today announced that the company has signed a new partnership agreement with RBS Technology Services to broaden mobile banking and payments services across its banking divisions 27 July 2011: BNP Paribas and Orange have formed a partnership and signed a trademark licence agreement to launch innovative mobile banking services in November 2011. Starting in November, BNP Paribas customer advisors will be able to offer mobile banking services – unique in France – in all 2,250 branches (also available through Internet banking). Customers will be able to access the most innovative m-banking and m-payment services to manage their accounts and make payments using their mobile phones. The aim is to equip thousands of BNP Paribas customers with smartphones over a three-year period to combine the very best mobile services and banking services. 17 June 2011: The mobile marketing and mobile payments joint venture between Everything Everywh, Telefonica O2 and Vodafone in the UK will en-
able these mobile operators to secure a position at the heart of the nascent NFC contactless payments ecosystem. The importance of successful mobile operator partnerships is to reduce fragmentation, boost scale, and help position strongly against competitors, such as Google Wallet. June 2011: Visa acquired Fundamo, a South-Africa based leading software maker for mobile banking services in more than 40 countries, with more than 5 million registered subscribers. Meanwhile, Visa announced a long-term trade alliance with a UK mobile software maker Monitiseplc, to enhance the delivery of mobile financial services to Visa account holders through banks. 28 February 2011: Fiserv, Inc., a provider of financial services technology solutions, has acquired Mobile Commerce Ltd. (M-Com), an international mobile banking and payments provider, to enhance Fiserv’s existing mobile channel capabilities. The two companies have been partners since 2008, developing and delivering Mobile Money from Fiserv to hundreds of financial institutions.
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Trends | Mobile Banking
Visa Newsletters Changes to EMV qualifications for contactless and partial authorizations VISA Europe has approved amendments to the EMV Interchange Reimbursement FEE (IRF) qualification rules to permit contactless and partially authorized transactions to qualify for EMV IFRs, where no other specific arrangements are in place for such transactions. • Contactless transactions will continue to qualify for existing contactless IFRs; • Partially authorized EMV transactions will be eligible to qualify for existing EMV chip IFRs. These changes take effect on 1st of October 2011. Members must take note of the specific changes, update their systems and communicate this information within their organizations as appropriate. Expansion of the EMV chip liability to include USA Under the EMV chip liability shift, the party that does not invest in this technology bears the cost of the fraud if that fraudulent transaction could have been prevented by using
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EMV chip technology. The EMV chip liability shift has been in effect within Europe since 2005, extended to include CEMEA region in 2006 and further expanded to other markets with effective dates up to and including 2014. VisaNet Business Enhancements Global technical Letter – version 3 Implemented on the 14th and 15th of October 2011. The date of the next Business Enhancements workshops is November 25th. Implementation of commitments to the European Commission At its meeting on 16 September 2011, the Visa Europe Board agreed Transitional Incentive Fees (TIFs) for certain countries which are subject to Visa Europe’s EU commitments on immediate debit. These TIFs take effect on 1 October 2011. Visa Merchant Alert Service (VMAS) – clarification on usage The Visa Merchant Alert Service (VMAS) has been operational since October 2006 and is mandated for all merchant acquirers in the
Mobile Banking | Trends Visa Europe territory, under the terms specified in Member Letter EU 38/05, which have been incorporated into the Visa Europe Operating Regulations. Research by Visa Europe has shown that not all merchant acquirers are listing terminated merchants as required, and are thus in breach of the VMAS mandate. This Member Letter provides clarification on VMAS usage, including guidelines on terminated merchant listing and penalties for noncompliance
Currency Conversion rates In early 2012 Visa Europe will change the manner in which exchange rates are set. From this time, Visa Europe will no longer be in a position to guarantee that the currency conversion rates applied in the Visa Europe Clearing and Settlement Service (VECSS) and the Visa Inc. service (BASE II) will be the same. This change is not expected to impact Member processes. Members will be reminded of this change early in 2012 via a further Member Letter, when the exact date for the change is known.
Introduction of a Lithuanian National Net Settlement Service With effect from 15 October 2011, Visa Europe is introducing a customized settlement service for the Lithuanian market. The Lithuanian National Net Settlement Service (LTNNSS) will facilitate Processing Date (PD) ‘Day 0‘ settlement in the Lithuanian national currency, Litas, for qualifying transactions.
Introduction of Online Certificate Authority for VSDC Issuer Public Key Certificates The Visa Smart Debit/Credit Certification Authority (VSDC CA) service is being improved to allow issuers to request and receive VSDC Issuer Public Key (IPK) Certificates via Visa Online. The online system will be implemented during 2011 and will replace the current manual process.
Cross-Border Acquiring of ATMs – application of domestic cash disbursement fees From 14 April 2012, the automated application of the domestic cash disbursement fees (CDFs) that apply to cross-border acquired ATM transactions will be available. Prior to this date, Visa Europe will apply manual adjustments of the relevant domestic CDF.
Decommissioning of Visa Intelligent Scoring of Risk (VISOR) Service The Visa Intelligent Scoring of Risk (VISOR) service will be withdrawn as of 31 January 2012, by which time all existing VISOR subscribers will have been transferred to the Visa Europe Real Time Scoring (RTS) service and VISOR will no longer be available.
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Trends | Mobile Banking October 2011 – VisaNet Business Enhancements Global Technical Letter- version 2 The October 2011 VisaNet Business Enhancements will be implemented on 14 and 15 October 2011. The Global Technical Letter, containing the technical specifications and business overviews for each enhancement, is available on Visa Online at: https://www. eu.visaonline.com/eu_VisaBusinessEnhancements/VBEHome.asp?menu=MNU6. The weekly Business Enhancements News accessed via the same link will provide information and updates on the current release between Global Technical Letter version releases. Amended- Effective date for the EMV Chip Liability shift in Australia and New Zeeland The date notified in Member Letter VE 75/10 for the expansion of the EMV chip liability shift for cash transactions undertaken with a counterfeit card at ATMs in Australia and New Zealand has been brought forward from 1 October 2013 to 1 April 2013.
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Cross-Border Acquiring Programme Expansion to include ATMs The Visa Europe Operating Regulations permit approved Members to cross-border acquire merchants throughout the Visa Europe Territory. Visa Europe is expanding these rules to permit the cross-border acquiring (CBA) of ATMs. Visa Europe ATM Cash Disbursement Fees Member Letter VE 67/10 issued on 17 November 2010 advised of staged reductions in ATM Cash Disbursement Fees (CDF) for intra Visa Europe transactions and domestic transactions that default to the Intra Visa Europe ATM. CDF. This letter confirms that with effect from 13 August 2011 manual adjustments will cease and members will automatically receive the new ATM CDF as outlined in the attached Technical Letter.