- Thierry Spanjaard
From contactless to invisibility
The Covid health crisis has made us go contactless to an extent never envisioned before. The various lockdowns have transformed social beings into isolated bodies, communicating only through the means of screens, internet connections, etc…
This move has had a huge positive impact on our industry. In payment, markets that were on a slow evolutionary trend from contact cards to dual-interface cards have suddenly accelerated and turned into a super-fast evolution path to contactless payments. Also, in other fields such as ID, digital ID wallets are developing a lot faster since the Covid crisis.
The experience of various trade shows last week: Money20/20 in Amsterdam, Identity Week in London and SIdO in Lyon, demonstrated two things at once: we are all happy to be back to physical contacts, but at the same time, everyone has adopted new behaviors, such as not shaking hands, etc. Contactless payment is one of such habits that had made it to the population at large. Already making payments contactless and without paper ticket are making payment uneventful for many users.
Since its inception, our industry has had as its goal to make payments easier, quicker, and more secure.
At the same time, to answer the demand for always more security, technologies that allow to combine contactless payments with additional security features are finally reaching maturity. BNP Paribas, in France has introduced last week, with a mass communication campaign, its dual interface banking card that includes a fingerprint sensor aboard the card allowing to combine chip security features with biometrics.
Why not go a bit further in the contactless trend and go for invisible payments, those where the consumer does not have to do anything on the spot to have paid for goods or services? The best example is Uber rides, where the simple fact of getting out of the car is enough to trigger the payment, as the conditions had been accepted in advance by the passenger. Amazon Go, dubbed a "Just Walk Out" store by Amazon, is another example, where a combination of cameras, computer vision, sensors, tracking devices and deep learning are used to ensure a fluid shopping experience for users. Amazon say they already have over 25 Amazon Go stores in the US and are in the process of expanding to the UK.
However, the most commonly used identifier of payment means in many systems still remains the PAN, or credit card number. With the growth of tokenization, the PAN space is filling up way faster than before. Also, PANs, especially the BINs (Bank Identification Number), the first digits of the PAN are not only becoming a scarce resource, but also still belong to financial institutions. Many FinTech, which consider as one of their goals to substitute traditional financial institutions, are considering using other identifiers. As instant payments are growing IBANs may seem a good candidate, but they also belong to the established financial institutions. New identifiers may be built, but we all know standardization and interoperability are long and tedious processes.