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Skate to where the puck is going to be...

... not where it has been. Anyone who read some of my blog posts here at Finextra knows that I like that Wayne Gretzky's approach. 

In fact, I use both real-time dynamic "puck" analysis as well as "chess" analysis when playing with my crystal balls.

Let's look at EMV in the US. It is coming. During the past few months, all the discussions that I had with senior execs from top acquiring companies clearly illustrated that the EMV tide is on its way (and it will not lift all the boats...)

Once can argue ad nauseam about that, but (a) top US issuers already have firm plans to issue contactless EMV cards, (b) all major card terminal OEMs have contactless EMV on all current models, and (c) the "word" EMV is familiar to floor-level (!) employees of many US merchants.

Also, the card schemes are investing heavily (!) into NFC-based mobile solutions... In fact, they are even in discussions with Apple... (or is it the other way round?..)

What are the implications of that? Simples

First implication - the renewed "secure element" battle. As contactless bank cards become widespread, both consumers and merchants will finally warm up to mobile payments. To implement mobile EMV payments you need NFC and you need a secure element (SE). As for the latter, there are just three options: SIM-based SE (controlled by mobile operators), embedded SE (controlled by handset OEMs) and an external SE (that could be offered on the "open" basis by a willing party).

Whilst on that subject, I think that one of the reasons why mobile wallets failed to take off was the very notion of a "wallet". The banks are after "mind share" which - correctly or not - they hope to achieve via a standalone app. If ISIS, for example, offered "open" access to its SE, rather than offering the walled garden of its wallet, there could be more takers...

Second implication - as mag stripe gets phased out from the payments ecosystem, fraud will migrate online. Transaction authentication and user authentication will be more critical than ever (user authentication is an important element of mobile payments onboarding too).

Who will benefit from the above? Apple and Samsung (with bio-based solutions). Providers of "federated ID". Providers of open SE. Providers of "card present" (i.e. SE-based) e-commerce infrastructure.

Who will be the losers? Well, I'd rather make friends than enemies, so I will keep my mouth shut... 

Read Tom Noyes' blog post if you want a deeper insight into the subject of authentication.



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This post is from a series of posts in the group:

Innovation in Financial Services

A discussion of trends in innovation management within financial institutions, and the key processes, technology and cultural shifts driving innovation.

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