BBVA Uses 'Android Strategy' to Manage Apple Pay Adoption

PHOENIX – BBVA has had success in several markets with mobile wallets that blend Near Field Communication (NFC), loyalty and other technologies. But this week's launch of Apple Pay is challenging the bank to ensure its card app remains relevant.

 "Apple Pay looks like it's going to be very successful, and we need to be there," said Jon Groch, executive vice president and global payment system director at BBVA Compass, in a presentation at SourceMedia's PayThink conference, taking place this week.

The challenge with Apple Pay is that Apple controls much of the design and the experience. By default, Apple Pay makes purchases using the first card the user scanned, regardless of whether that card offers the best rewards, customer service or other perks.

BBVA aims to set itself apart with a strategy it developed in Spain on Android phones using Host Card Emulation, which generates an NFC signal without requiring access to the phone's secure element. Its Android card app is designed to regularly remind users of the value of using the BBVA card, such as by providing real-time notifications and account management features.

In its first eight months, BBVA's card app has been downloaded about 300,000 times, Groch said. By carrying these features over to Android and Apple phones in the U.S., BBVA aims to demonstrate that "there's a value to putting the BBVA card top-of-wallet [or] top-of-Apple Pay," he said.

If successful, this strategy will give consumers a reason to favor their BBVA card when making mobile payments, he said.

"This mobile wallet was interesting before, but now [that Apple Pay has launched] I view it as a requirement," Groch said. "If we didn't have this mobile wallet … customers wouldn't even know what wallet they're using when they use Apple Pay."

Part of the value Apple provides to banks is its determination to work with existing technology and financial companies, according to Neff Hudson, who also spoke at PayThink. "Preserving the current system was extremely important and a factor that was far different from the others," he said.

Apple Pay launched Oct. 20, the same day Apple reported earnings for its fiscal third quarter. During its earnings conference call, Apple CEO Tim Cook emphasized the Apple wallet's privacy and security, saying it plans to "keep data private" to appease consumers.