We recently checked in with our Payments Leaders to find out what stood out for them in 2015. Here’s what they had to say.
From Trevor Mast, SVP, Financial Services Products
In the area of credit and debit card processing, 2015 could be pretty well described as the year of security. The three main topics that dominated the headlines and conversations from a security perspective in 2015 were EMV, tokenization and card controls.
EMV conversations in the US started well before 2015 but heated up this year as the liability shift in October forced decisions to be made. Most discussions before the shift were around cost vs. benefit for both issuers and merchants; then just before the holidays most big box retailers began to wonder whether they should wait until the new year to implement the technology in order to avoid any increased friction and long lines at the point of sale. For many U.S. card issuers and retailers, 2015 was the starting point for EMV not realizing the long road ahead of them. Some analysts believe that it will be well into the 2020s before we see complete migration to EMV in the U.S..
Tokenization conversations also started before 2015 but really took off last year as more and more mobile wallets entered the payments space. Like EMV, there were many discussions around the cost vs. benefit of tokenization for both issuers and merchants. The first half of 2015 was dominated by the success or failure of Apple Pay (depending on your point of view), as well as the emergence of the other major device wallets (Samsung Pay, Android Pay). The back-half of 2015 was more around financial institutions and retailers taking the lead and using HCE (Host Card Emulation) and QR code technologies to their benefit. There is no doubt that mobile payments through the assistance of tokenization will accelerate in the coming years. The debate is more around how fast and which provider will lead the pack by creating a consistent and rewarding experience for the end consumer.
The last topic that frequented the headlines in 2015 was consumer card controls. These controls allow a cardholder to manage and control their payment cards through a mobile application and could be the answer to the challenges that many financial institutions have experienced over the last couple of years, such as higher fraud costs, lower interchange revenue, higher regulatory pressure and greater user expectations. With more control, financial institutions are betting on higher engagement and lowering fraud costs. This could make card-control programs more profitable, by driving their cards to top of wallet.
The payments ecosystems in 2015 definitely had its share of hot topics, whether it was blockchain, mobile, regulatory, compliance, data & analytics or integration and consolidation. For credit and debit card issuers, however, none was more dominant then security. Next week, I’ll share my thoughts about what’s ahead in 2016.