Christel Marcelis – KBC Bank NV
Digital PaymentsKBC - Contactless evolves towards
standard
Shift in payment methods in Belgium (1)
PROTON : stop december 2014
New solutions
• Promotion of payment terminals
• Lower pricing (Maestro and Bancontact) for <10 eur
• No Pin payments for < 25 eur (focus vending machines)
Expectation that the use of cash will keep declining in the next few years
Comeos - Febelfin |1/9/20163
Shift in payment methods in Belgium (2)Use of cash declines sharply worldwide
People in Belgium also pick up less cash but… (source: Febelfin)
Each Belgian citizen picks up times a year cash at an ATM
On average, we pick up more than a year
More than of the purchases smaller thanwe pay cash
€3.900
80%
29x
€ 20
4
Shift in payment methods in Belgium (3)
Comeos - Febelfin |1/9/2016
Huge contradiction with Scandinavian countries and the Netherlands
Amount of cash withdrawals at ATM’s
3948
5
Shift in payment methods in Belgium (4)
Comeos - Febelfin |1/9/2016
Mobile banking is becoming more popular
Amount of mobile subscriptions (in mio)
6
Shift in payment methods in Belgium (5)
Comeos - Febelfin |1/9/2016
Move towards contactless• Customers want
• Increased convenience
• Faster payments
• Remaining secure
Tap & go
• Merchants want
• Faster check-out leading to higher cashier efficiency
• Reduced costs of cash handling
• Easy access to value added services for their
customers
• Steps towards contactless
• Launch contactless KBC/CBC
debit cards in may 2015
• start contactless credit cards mid 2017
• Move into mobile NFC payments
Move towards contactless
• Number of Contactless KBC/CBC cards in the market: near
1.000.000 cards
• We support new initiatives ex. De Lijn
• Merchant terminal adoption is moving slowly
• Current usage
• Max. €25/tr if NO PIN
• All transactions can be viewed immediately in KBC’s mobile banking
applications
• Card Stop in case of lost card or fraud, transactions are instantly blocked0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
% of KBC's Debit Cards Contactless
Near 50% by end 2016
Payments in TransitThe Mastercard Vision
Andrew Slattery, Urban Mobility, Mastercard Europe
Innovation in contactless payments and digital technology made bank cards a good transit ticketing option. Extra rules though were needed.
Contactless CardsMobile NFC Devices
Digital wallets
New transit rules andnew transit payment products
Supported by
10
There is a global standard for chip based bank cards (EMV) and the same global standard governs the terminals used to accept them.
There are data protection and security standards enforced globally.
Multi modal, multi device, multi-country, multi merchant.
so why not in transit?
Transit required special rules to be put in place between 2008-2013 to provide a stable operating framework.
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1. Post-autorization permitted to cope with the speed of boarding transit passengers
2. Aggregation allowed to prevent millions of small value transactions creating peak-time capacity issues and to keep down transaction costs
3. Debt Recovery introduced
Transport for London – a replicable success story!
12
Operation Costs
Annual cost of fare collection was
equivalent to 13p-14p per £ of fares paid
Oyster Card issuance
Customer information
Transaction costs
Revenue protection
Systems & management
Visitor Proposition
• Only 1 in 6 visitors arrived with an
Oyster card on their person
• Severe queues at main entry stations
• Customer Service = demand for
taxis = central London road congestion
Source: TfL conference presentations
Huge numbers and passengers are happy.
13
34%PAYG
Contactless payment is
easier and faster, I do not
have to wait to top up
my Oyster or buy a ticket
this is great especially
when rushing to catch a
train.
Because it is easier to
keep a track of my
transport costs when
only using one method
of payment.
Up to 1.3mcontactless journeys per day
(June 2016)
There are up to 50 active implementations of contactless EMV smart ticketing in transit with many more in development.
Advantages
• More convenient for passengers
• Cheaper for transit operators
• Safe, Reliable Secure Payments
• Catalyst for contactless payments
14
LondonNew YorkSingaporeCape TownMoscowBogotaSt PetersburgChicagoKievBelgradeBudapestBucharestAlmaty
15
Non-UK MasterCard cards from ~70 countries have been used on TfL’s open loop system
12%
88%
Origin country
Non-UK UK
Source: Transport for London
16
Contactless transaction numbers are exploding in the UK thanks in part to Transport for London
• Contactless payments soared by 250 per cent in 2015 in the UK.
• Contactless accounted for one in seven transactions in the UK in 2015, up from just one in 25 in 2014.
• Transport for London is the biggest contactless merchant in the country, with over million transactions being made per day day.
• Apple Pay worked from day 1 without additional investment. Samsung Pay launched Q2 2016.
• 200K individual mobile devices have been seen, rising by 1K every day
17
Transit solutions compliment Mastercard’s vision for digital payments in Europe
Every card can be digitized into a mobile device to offer ubiquitous payment experience to transport operators
Digitize cards into mobile devices for payments
Contactless Payments as Ticketing
Roger Kesteloot, VVM De Lijn
The Ticketing Challenge
Traveler
• Easy of use
Driver
• Safety
PTO• Efficiency
Cash ticket sales by PTO vehicle driver
Traveler
• Easy of use
Driver
• Safety
PTO• Efficiency
De Lijn Ticketing Innovation towards digital payments
LaunchedSMS-ticket
MoBIB smartcard
Launching m-ticket
PlanningcEMV*-ticketing
*cEMV: contactless EMV payment card
Traveler
• Easy of use
Driver
• Safety
PTO• Efficiency
Contactless Payment Card Ticketing Benefits
• Frictionless ticketing for ad-hoc traveler• “Tap and Go”• Driving incremental Public Transport use
• Driver safety• No cash on hand
• PTO efficiency• No card issuing• Low transaction costs• Central business rule engine = flexibility
Contactless Payment Card Ticketing and Mobility as a Service (MaaS)
MaaS Framework = ecosystem around central Mobility Operator
• cEMV = potential framework element (autonomous or central)
• PTO Open Data = other framework element (mandatory)
• cEMV with Account Based Ticketing = potential MaaS account base
Contactless Payment Card Ticketing Implementation Challenges
• Bank issuing of contactless cards• Belgium = late follower
• Data security• De Lijn poised to become largest transaction merchant
• Envisioning partnerships with PCI certified 3rd parties
• Enabling cEMV on vehicles• Leverage MoBIB smartcard investment
Demonstration
• De Lijn vehicle validators
• KBC contactless debit cards
• Cloud based business engine• Collecting taps
• Calculating fare due on a daily basis
• Transmitting payment request to issuing bank (disabled)
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