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Royal Bank of Canada's chief executive, Dave McKay, says the company could roll out a loyalty system kept on a blockchain next year as it experiments with distributed ledgers and looks to enhance its mobile wallet.
November 11 -
JPMorgan Chase entered the digital wallet wars in announcing Chase Pay, a product that will launch next year. Although mobile payments have been more bark than bite so far, the company says that its product plans to use loyalty programs to lure reluctant consumers.
October 27 -
Most mobile wallets clearly favor one industry over another, with banks and retailers often pitted against each other in a battle over payment card fees. JPMorgan Chase just made a stunning move by conceding some of this ground to the benefit of the Merchant Customer Exchange.
October 26
After years of supporting payments research and building a reputation of being friendly toward technology startups, American Express is bringing its key technologies under the Amex Enabled Digital Solutions umbrella.
By hopping on board quickly with Apple Pay, Android Pay and Samsung Pay, it has become clear to American Express that mobile payments are positioned to take off with consumer and merchant adoption, said Mike Matan, vice president of network capabilities at American Express.
"If someone had asked my thoughts on mobile pay a year and a half ago, I would have said it is pretty unclear," Matan said. In the last year, however, mobile and digital payment initiatives have proven they are here to stay, Matan added.
In an unrelated move that illustrates American Express' confidence in mobile payments, the card brand is the only issuer involved with Apple Pay in its launch in Canada, expected soon.
"There are numerous innovative companies operating in this space, and we have to make sure we are well-positioned to partner with many of these companies to make it easier to come to market and provide customers with digital payments," Matan said.
Amex Enabled Digital Solutions will offer technology for accepting the leading digital wallet platforms, and incorporating Near Field Communication (NFC) for contactless payments and Host Card Emulation (HCE) to bypass the secure element in handsets.
American Express Token Service, which provides tokenization of payment card data during transactions, and American Express Checkout for online payments are included in the solutions package.
"It's a package for our issuers to take advantage of the current mobile wallets, but also specifications to create their own wallets," Matan said.
American Express is presenting its new solutions package in Paris this week at Cartes 2015, an annual payments conference that was taking place under heightened security in the aftermath of the terrorist attacks in the city last weekend.
By offering digital solutions under one umbrella, American Express joins the other card brands in assuring it is positioned for a digital payment future.
Earlier this year, Visa offered its Visa Digital Enablement Program in what it refers to as a "no cost" commercial framework in providing issuers access to the Visa token service and a connection to wallet platforms, eliminating the need to contact those providers separately.
The structure also does not allow companies using
MasterCard did much the same, also this past summer, in offering tokenization for app, e-commerce and recurring payment programs through its
But MasterCard launched the digital enablement service in 2013 as a way to tokenize accounts for digital wallet services and had pondered establishing fees in 2016, but decided not to do so. Though not part of the digital enablement services, MasterCard has recently sought a minimal charge for use of the 3-D Secure technology for e-commerce security.
It all points to the card brands becoming more prolific in data security through tokenization and other methods as they begin to view such services as a future revenue channel.
But American Express is not looking at the digital solutions package as a way to monetize tokenization services, Matan said. "What's driving this is making sure we give our customers what they are looking for," he added. "We want to enable the devices that our customers want to use."
In creating Amex Enabled Digital Solutions, the company is being pro-active in "positioning itself as a payments provider that is future-proofed in the eventuality that proximity payments becomes a significant form of payment," said Daniel Van Dyke, mobile payments analyst with Javelin Strategy & Research.
Javelin projects 54 billion mobile proximity transactions will occur by 2019 in the U.S., which is a small percentage of total retail transactions, Van Dyke said.
"But it's important to recognize the growth rate powering that, which is outpacing any other form of payment on the market," Van Dyke added.
American Express' move to package digital solutions confirms that the card brands are positioning themselves for the next big payment platforms and not just for plastic cards, Van Dyke said.
But the rush to get in the forefront of digital and mobile transaction services is not without its pitfalls.
"It is great to take the industry into the future, but the card brands are not addressing where the industry is today," said Steve Mott, principal of BetterBuyDesign, a Stamford, Conn.-based consulting firm.
Most of the tokenization emphasis has been on mobile, rather than for EMV transactions or e-commerce, where all of the fraud is, Mott said.
"As the card brands strike deals with Apple, Google, Stripe and Facebook in order to get digital players on their side, the result may be a more reasonable tokenization solution for the industry," Mott added.
It would also be beneficial if banks and merchants were working together on digital payment and security initiatives because of their understanding of business and risk management, Mott said.
To that end, American Express wants to provide its issuers and merchants with technology needed to accept future payments.
"People speculate about which innovative companies will win the mobile payments war, but I have always firmly believed that the winners in the payments war will be global networks like American Express partnering with innovative companies that bring new technology into the market," Matan said. "That is a powerful combination."
