digital payments kbc - contactless evolves towards...

Christel Marcelis – KBC Bank NV

Digital PaymentsKBC - Contactless evolves towards

standard

Shift in payment methods in Belgium (1)

PROTON : stop december 2014

New solutions

• Promotion of payment terminals

• Lower pricing (Maestro and Bancontact) for <10 eur

• No Pin payments for < 25 eur (focus vending machines)

Expectation that the use of cash will keep declining in the next few years

Comeos - Febelfin |1/9/20163

Shift in payment methods in Belgium (2)Use of cash declines sharply worldwide

People in Belgium also pick up less cash but… (source: Febelfin)

Each Belgian citizen picks up times a year cash at an ATM

On average, we pick up more than a year

More than of the purchases smaller thanwe pay cash

€3.900

80%

29x

€ 20

4



Huge contradiction with Scandinavian countries and the Netherlands

Amount of cash withdrawals at ATM’s

3948

5



Mobile banking is becoming more popular

Amount of mobile subscriptions (in mio)

6



Move towards contactless• Customers want

• Increased convenience

• Faster payments

• Remaining secure

Tap & go

• Merchants want

• Faster check-out leading to higher cashier efficiency

• Reduced costs of cash handling

• Easy access to value added services for their

customers

• Steps towards contactless

• Launch contactless KBC/CBC

debit cards in may 2015

• start contactless credit cards mid 2017

• Move into mobile NFC payments

Move towards contactless

• Number of Contactless KBC/CBC cards in the market: near

1.000.000 cards

• We support new initiatives ex. De Lijn

• Merchant terminal adoption is moving slowly

• Current usage

• Max. €25/tr if NO PIN

• All transactions can be viewed immediately in KBC’s mobile banking

applications

• Card Stop in case of lost card or fraud, transactions are instantly blocked0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

50.0%

% of KBC's Debit Cards Contactless

Near 50% by end 2016

Payments in TransitThe Mastercard Vision

Andrew Slattery, Urban Mobility, Mastercard Europe

Innovation in contactless payments and digital technology made bank cards a good transit ticketing option. Extra rules though were needed.

Contactless CardsMobile NFC Devices

Digital wallets

New transit rules andnew transit payment products

Supported by

10

There is a global standard for chip based bank cards (EMV) and the same global standard governs the terminals used to accept them.

There are data protection and security standards enforced globally.

Multi modal, multi device, multi-country, multi merchant.

so why not in transit?

Transit required special rules to be put in place between 2008-2013 to provide a stable operating framework.

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1. Post-autorization permitted to cope with the speed of boarding transit passengers

2. Aggregation allowed to prevent millions of small value transactions creating peak-time capacity issues and to keep down transaction costs

3. Debt Recovery introduced

Transport for London – a replicable success story!

12

Operation Costs

Annual cost of fare collection was

equivalent to 13p-14p per £ of fares paid

Oyster Card issuance

Customer information

Transaction costs

Revenue protection

Systems & management

Visitor Proposition

• Only 1 in 6 visitors arrived with an

Oyster card on their person

• Severe queues at main entry stations

• Customer Service = demand for

taxis = central London road congestion

Source: TfL conference presentations

Huge numbers and passengers are happy.

13

34%PAYG

Contactless payment is

easier and faster, I do not

have to wait to top up

my Oyster or buy a ticket

this is great especially

when rushing to catch a

train.

Because it is easier to

keep a track of my

transport costs when

only using one method

of payment.

Up to 1.3mcontactless journeys per day

(June 2016)

There are up to 50 active implementations of contactless EMV smart ticketing in transit with many more in development.

Advantages

• More convenient for passengers

• Cheaper for transit operators

• Safe, Reliable Secure Payments

• Catalyst for contactless payments

14

LondonNew YorkSingaporeCape TownMoscowBogotaSt PetersburgChicagoKievBelgradeBudapestBucharestAlmaty

15

Non-UK MasterCard cards from ~70 countries have been used on TfL’s open loop system

12%

88%

Origin country

Non-UK UK

Source: Transport for London

16

Contactless transaction numbers are exploding in the UK thanks in part to Transport for London

• Contactless payments soared by 250 per cent in 2015 in the UK.

• Contactless accounted for one in seven transactions in the UK in 2015, up from just one in 25 in 2014.

• Transport for London is the biggest contactless merchant in the country, with over million transactions being made per day day.

• Apple Pay worked from day 1 without additional investment. Samsung Pay launched Q2 2016.

• 200K individual mobile devices have been seen, rising by 1K every day

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Transit solutions compliment Mastercard’s vision for digital payments in Europe

Every card can be digitized into a mobile device to offer ubiquitous payment experience to transport operators

Digitize cards into mobile devices for payments

Contactless Payments as Ticketing

Roger Kesteloot, VVM De Lijn

The Ticketing Challenge

Traveler

• Easy of use

Driver

• Safety

PTO• Efficiency

Cash ticket sales by PTO vehicle driver

Traveler

• Easy of use

Driver

• Safety

PTO• Efficiency

De Lijn Ticketing Innovation towards digital payments

LaunchedSMS-ticket

MoBIB smartcard

Launching m-ticket

PlanningcEMV*-ticketing

*cEMV: contactless EMV payment card

Traveler

• Easy of use

Driver

• Safety

PTO• Efficiency

Contactless Payment Card Ticketing Benefits

• Frictionless ticketing for ad-hoc traveler• “Tap and Go”• Driving incremental Public Transport use

• Driver safety• No cash on hand

• PTO efficiency• No card issuing• Low transaction costs• Central business rule engine = flexibility

Contactless Payment Card Ticketing and Mobility as a Service (MaaS)

MaaS Framework = ecosystem around central Mobility Operator

• cEMV = potential framework element (autonomous or central)

• PTO Open Data = other framework element (mandatory)

• cEMV with Account Based Ticketing = potential MaaS account base

Contactless Payment Card Ticketing Implementation Challenges

• Bank issuing of contactless cards• Belgium = late follower

• Data security• De Lijn poised to become largest transaction merchant

• Envisioning partnerships with PCI certified 3rd parties

• Enabling cEMV on vehicles• Leverage MoBIB smartcard investment

Demonstration

• De Lijn vehicle validators

• KBC contactless debit cards

• Cloud based business engine• Collecting taps

• Calculating fare due on a daily basis

• Transmitting payment request to issuing bank (disabled)

digital payments kbc - contactless evolves towards...

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