Where does Wirecard position itself in the mobile financial services ecosystem and what kind of solutions do you offer? Christian von Hammel-Bonten: Wirecard started as an online payment service provider and is now a leading European payment brand. The Wirecard Group has more than 13 years of market experience and enables companies to accept electronic payments from all sales channels: offline, online or mobile. Our multichannel platform bundles international payment acceptances and methods, supplemented by fraud prevention solutions with a global reach.
One fast-growing part of our business is the issuing segment for cards and mobile payment solutions. We combine our technological expertise with various services to form a unique end-to-end infrastructure for the mobile financial services ecosystem: from card and payment processing as well as card management through to the licenses needed to act as an issuer. To sum up: we are successfully positioned as an innovative technology partner in the new mobile payments area.
Please provide a brief overview of Wirecard’s strategy for development and expansion in the mobile payments space. Christian von Hammel-Bonten: We are supporting a huge number of initiatives when introducing innovative payment solutions. In particular, large telecommunications providers in Europe and Asia are starting to issue mobile wallets and card products to consumers.
We are expecting substantial growth from mobile payment products and the associated added value services from 2014 on. Our constant investments will allow us to accelerate the further development of the integrated ecosystem of applications for mobile payment acceptance, mobile money transfers and the technical provision of loyalty and couponing programs that are integrated in the mobile payment process. Another point will be to re-value our mobile wallet with innovative functions.
Given the fact that the world of commerce seems to be fully embracing mobile technologies, does Wirecard expect the mobile phone to replace the wallet in customers’ pockets? Christian von Hammel-Bonten: Yes, one day. We are one of the European suppliers leading the way towards a cashless society. It is our vision that NFC-enabled smartphones, QR codes, web-based solutions and many more can replace the current wallet in our pockets. But we are aware that mobile payment is not a revolution – it’s more like an evolutionary process.
Wirecard’s mobile payment offering now includes all necessary “ingredients” for the provision of co-branded mobile wallet programs. What are these “ingredients” and what challenges have you met in deploying co-branded m-wallets?Christian von Hammel-Bonten: We offer all elements or “ingredients” for co-branded mobile payment card programs, whether they are based on NFC, QR-code or any other technology. We do have the licenses required for financial transactions in order to issue virtual or contact-free cards that are based on eMoney coupon cards, MasterCard or Visa.
Some of the ingredients needed would be as follows: 1. Real-time issuance: digital cards must be provisioned in real-time to the eligible handsets 2. Flexibility in the processes to handle mobile, cards, NFC stickers dual-interface and other form factors 3. Looking beyond payment and leveraging the “always-on, always with” of mobile handsets, thus delivering direct feedback on payment transactions, in-app notifications and building a path to value-added services like couponing and loyalty services.
The challenges of deploying co-branded mobile payment solutions are clearly the complexity of managing those cards on the NFC-SIMs to be deployed by mobile network operators. In the old world cards were produced and shipped but now a close integration into the mobile network operator’s environment is required to ensure the cards can be managed properly.
Last year, Wirecard has rolled out a white-label program which includes a new card-reader concept for smartphones. What has prompted your company to carry out such a significant expansion into the mobile (processing) space? What is Wirecard’s strategy for expansion in the M-POS market? And what’s the partnership with payleven all about? Christian von Hammel-Bonten: Basically Wirecard is constantly developing payment innovations. Our mobile card reader solution on a white label basis simplifies mobile card payments at the POS. Wirecard is like a think tank – we develop software to make payments easier. Our mobile card reader solution simplifies mobile acceptance of card payments for all industries.
Our solution sets itself apart from all competing products because we are following a different approach. Our concept is to offer distribution partners, e.g. orderbird, the possibility to get their own card reader and the corresponding app with their corporate design and logo. We benefit from selling the entire bandwidth of Wirecard Group’s services: from payment processing to banking services, product design to marketing support. Wirecard Bank provides card acceptance for the SEPA region. However other acquiring banks can be integrated around the world.
Our recently published strategic alliance with payleven spans various strategic product issues; independent of the respective marketing strategy. The partnership’s main objective is to define potential for synergies within the mPOS-value chain. Shared projects range from central purchasing of hardware, acquiring services, through to risk management and card issuing. Over and above this strategic alliance, both companies work independently on their key markets: payleven will continue to operate in the SME segment. Wirecard’s white label program for mobile card readers is geared to sales partners who can design the product with their own look and feel.
When signing up for this mobile processing offering, do users also have to open a merchant account? How does Wirecard’s white-label program work - what are the main steps in the payment processing cycle?Christian von Hammel-Bonten: Our white label program is tied to partners, who act as super merchants. These partners use a full white-label approach for the mPOS-ecosystem: From apps to open Software Developer Kits, brandable backend processes and hardware up to different levels of support. As Wirecard is the acquiring bank and the technology partner for these projects here in Europe, the payment processing cycle takes an out-of-the-box approach. We are able to manage the entire mPOS-lifecycle: from hardware setup to terminal management and acquiring processing.
For merchants, our programs are quite easy to access .They decide on the mobile card reader get one adapter, an app and have to sign some compliance documents – that’s it. The payment processing cycle is quite easy: The card reader dongle is connected to the mobile device, e.g. the merchant’s smartphone or tablet PC. When the credit or debit card is put into this reader, payment data transfer is encrypted in line with highest security requirements. The end customer confirms payment via touchscreen signature or PIN entry. A receipt can be sent to the customer by e-mail if required.
In 2012 Wirecard also closed a deal with telecom giant Deutsche Telekom to support the latter with payment processing in view of the planned launch of Deutsche Telekoms Mobile Wallet in 2013. As the go-live for this initiative nears, what is currently the state of affairs for NFC-enabled mobile POS terminals in Germany? Are German merchants willing to deploy NFC-enabled terminals to facilitate mobile-enabled payments at the point of sale? Christian von Hammel-Bonten: The roll-out of NFC-enabled mobile POS terminals is gaining pace. In the near future the likes of value-added or location-based services will play a major role in mobile payments. You need to create and provide incentives for merchants and users alike to convince both of them about the new payment method and its added value.
What measures does Wirecard have in place in order to deal with fraud risks?Christian von Hammel-Bonten: Data security and protection are an important goal for Wirecard as a payment service provider with its own bank. We offer a wide range of risk management technology to minimize fraud scenarios and to prevent fraud. Our solutions are industry-specific and offer customizable, real-time fraud and money-laundry protection. We constantly improve our own fraud prevention models as we want to secure the best and state-of-the-art technology for our customers. What is more we have agreements with European credit scoring and identity agencies and offer credit scoring decision engine and strategy support.
As far as the adoption of m-payments by consumers is concerned, where do you think the main challenges come from? How far are consumers willing to trust their mobile phones for financial transactions/payments?Christian von Hammel-Bonten: The main challenge is the fear for change. In fact the mobile phone can add security to the payment ecosystem. In our mobile payment solutions people will always be informed about any transactions processed on their account as the smartphones are “always on, always with”. The transparency of “what’s going on” that we can give users through the mobile application will give them more trust than a plastic card (for which user see the processed transaction when they receive their statement). Beyond that VISA and MasterCard and all other standardization bodies involved have done their job to define a standardized ecosystem with a high level of security. What is your vision of the emerging European and global mobile payments ecosystem? Where are we now, how is innovation taking place and where are we headed next? Christian von Hammel-Bonten: In the last years we have observed a paradigm shift in the society. Consumers’ lives are more mobile than ever. Smartphones and tablets have become a lifestyle factor.
Also consumers’ increasingly mobile purchasing and payment behaviour plays a key role in the increasing convergence of bricks-and-mortar and online-based retailing. Our understanding is that in 2014 we will see a significant increase in mobile payment transactions.
In Brief: The leading area for mobile payments in Europe is… Turkey with Spain and UK to gain more momentum in near future
If NFC is to prevail, will merchants have to change all their terminals? Many merchants already have NFC-terminals and further terminals will be exchanged in the coming years as part of normal update procedures.
Cash will…not disappear within the next years. But it’s our vision that people will soon regularly use electronic mobile wallets instead of their purse. The mobile wallet has a variety of advantages: In future we won’t have to carry a thick purse with money cards, passport, keys and a mobile – you will have everything combined in your mobile wallet, with even more services linked in.
Since payments are a two-sided market, what will this mean for merchants? Merchants will have to build up the corresponding infrastructure to enable mobile payments. They should combine payment with attractive loyalty and couponing concepts. And they will have satisfied customers because long queues at the till will be obsolete, instead they will benefit from quick transaction processes and save costs for cash handling processes.
Three real cool initiatives in the mobile space are …. e.g. mpass, myTaxi, Starbucks Mobile Card…
Consumers have good reason to trust m-wallets of telecommunication companies because... they have deep mobile expertise which is combined with our payment expertise to bring secure, innovate mobile payment solutions to the market (across Europe and beyond).
For more information about Wirecard, please check out a detailed profile of this company in our dedicated, industry-specific online companies database.
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