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Asian Outlook: Payment Innovation for Banks, Retail and Government

Experts from four leading Asian institutions share their take on the key technologies that will impact mobile payments in the year ahead. We bring you their views, courtesy Terrapinn, who are organizing the Cards & Payments Asia 2013 next April in Singapore.
Anil Kishora, CEO of the State Bank of India (SBI) in Singapore. 1. What do you think are the top 3 trends in Cards & Payments market? Basically, there are 3 things happening now. It is observed that people do not carry many cards in their wallets all the time and they selectively use only one or two cards at most. Such people are geared to use a particular card and at the same time, I find that people tend to opt for cards which are accepted at a number of merchant outlets which gets them the credit discounts. Of course there are segments, premium segments where the concentrations are different. Technology is also moving at a fast pace so going forward technologies such as NFC, RFID, etc are going to play key roles in giving us a new card altogether.
2. What do you think are the opportunities and challenges that you are going to face in the Cards & Payments market next year?
The challenges include regulatory constraints on the side of pricing because regulators are getting concerned with the high pricing. The second being the migration towards chipless cards and that could be a logistic issue. This is because some regulators are not comfortable with the barcodes. As for opportunities, I find that because of the migration and organisation taking place on a larger scale globally, there will be new consumers coming up. Hence, there are ample opportunities in the types of offerings we will see in the future.
Aijaz Shaikh, Joint Director, Payment Systems – Policy and Regulation Divisor, State Bank of Pakistan (The Central Bank). 1. What you think, as a regulatory, are the opportunities and challenges in this industry in 2013? We can see that in most of the countries, including Pakistan, most of the consumers prefer to do transactions online and electronically. They do not like to go to the bank branches to do the transaction manually. They opt for the products that allow them to access their accounts and do the financial transaction remotely at their convenience. With this rise in consumer preference, I can see a lot of problems coming up like breaches in consumer data. Therefore, the next measure initiative of all commercial banks and regulators will be in the protection of consumer data. Saving the consumer data, the confidential data, is also something that needs to be looked after properly from the regulatory aspect as well. For example, if you go with the PCI DSS implementation, would it ensure consumer data can get protected if you implement this standard? Since as a regulator, I cannot mandate the implementation of this standard. To resolve this problem, I will have to involve the industry, they should take the initiative and they should implement the standard to protect the consumer information so that we can increase our digital ID transactions and digital transactions. This is one of the things that I can see that if we go with the standards, like EMV and PCI DSS, it will be able to ensure and safeguard our e-transactions.

Koichi Tagawa, Chairman of the NFC Forum and General Manager of Global Standards and Industry Relations Department at Sony: 1. What are your thoughts behind the commercialisation of NFC mobile payments in Asia? One way of defining NFC: your contactless card is now in your device that you are carrying such as your smart phone and it works with the existing infrastructure, be it a train’s turn still gate or payment terminal. The advantage is that the card is now a network distributed virtual card instead of being a physically distributed plastic card. There are many benefits to the end consumers by becoming virtual and connected to the network. Ultimately, the important thing is that the consumers - the people who will be using it every day and in their everyday life must be used to the usage of those cards and understand the convenience of those cards. Contactless is already an established consumer acceptance as a standard for everyday life in many of the Asian cities including Singapore and Japan, the country where I come from. The added advantage of having that capability in NFC is probably that you do not have to train your consumers so much to tap your phones at the turn-stills. That is one advantage the Asian countries have compared to places where do not have contactless at all and you have to train or educate the consumers from the very beginning that you have to tap to do a transaction.
2. What are the key obstacles that may hinder or drive a successful roll out in the near future? Well, for the service to be a successful roll-out, fortunately or unfortunately in reality since NFC leverages on existing infrastructure and is going to be something new to that infrastructure, there has to be an agreement and development of probably new pieces to make that infrastructure work the same way as it does with plastic cards. The operators in the ecosystem will have to work together to resolve some of the issues that will now newly surface because you are dealing with a virtual card instead of a physical plastic card. At Cards & Payments Asia 2012, I have been in a session where the euro ecosystem players are already sitting down together as a consortium and trying to resolve these issues. That is a very encouraging sign and therefore I would categorise that not as obstacles but probably challenges for new opportunities to better satisfy consumers in the end.
Rick Whaite, Founding Partner and Director of M2CASH: 1. What do you think are the top 3 trends that will change / alter the payments landscape in terms of mobile payments in Asia? I think the Asian market is prepared to embrace opportunity more so than any other markets. That’s why you’re a leader in this space. As far as the landscape itself, there have been a lot of people who talk about it but there has not been any action taken. People think that Near Field Communication is the next thing but smart technology has been in the market now for many years and we are not really getting the attraction. From our perspective, cash is still going to be very important but it is using technology to make it easy for people to access cash. Near Field Communication will become very important and we will be participating in that space as well. But right now, it is still a case of convenience for customers, security and access to cash.
2. When people think of mobile payments, the number one thought will be security. How does M2CASH mitigate the issue of security surrounding mobile payments? Well, M2CASH is based around security. First and foremost, we are here and we are entering the global money transfer market to address the inherent security issues that there are because people are not accurately identified. The M2CASH system makes sure that both the sender and receiver are identified. That’s what we need to do to close the loop. Once that is done, that’s what creates integrity in the system and security. Over and above that, we have global partners who provide us with electronic verification of ID within 7 seconds. Instantaneously, almost as quickly as we can send cash, we can establish exactly who the sender and receiver are. The opportunities there are in future is that we can use technology to improve the quality of our interactions and what that changes in term of customer service is that people can send money and receive money much quicker.

Anil Kishora, Chief Executive Officer – Singapore, State Bank of India, Puneet Verma, Head of Distribution - Consumer Banking, U.A.E: Barclaycard, Assets & Barclays At Work, Barclays Bank, A.P. Hota, MD & CEO, National Payments Corporation of India and Parag Rao, Senior Executive Vice President, HDFC Bank are slated to speak at the Cards & Payments Asia 2013 next April ( 24-25) in Singapore.  

See our Tech video, courtesy Sapient,  for a few days, on what NFC is doing to mobile payments