FinTech and Mobile payments are now common place. Adoption was initially slow due to the nature of the mobile technology supporting the concept. However significant advances on the technology front have made this area one of burgeoning growth in the financial services sector.
Services based and text-based payment and proximity device communications a Re-appearing worldwide. Widespread use of smartphones and consumer comfort with mobile devices for more than communication are the principal drivers of a resurgent and increased interest in mobile payments. In addition, advances in software and hardware Security techniques have made trusted financial transactions possible from these devices.
Mobile devices are now a central tool consumers use to manage banking relationships. When consumers start embracing mobile wallets and making digital transactions, banking will never be the same again.
A “mobile wallet” — defined at least for financial purposes — allows consumers to store and manage their credit, debit, prepaid and gift cards on their smartphone using a singular payment application. Instead of carrying around a stack of physical plastic cards, consumers can use the virtual “cards” on their phone to make point-of-sale purchases. They can swipe of their phone or tap the screen a few times, and voilà — a payment can be easily made. (Note: the definition of “digital wallet” is often expanded to include nearly every piece of information consumers carry around with them today — government-issued IDs, driver’s licenses, health insurance cards, etc.)
Mobile devices are the future of payments, and mobile wallets represent much more than just an emerging/alternate option. Soon nearly 100% of all transactions will be 100% digital, and consumers will be able to conduct and manage nearly every one of them through their mobile devices. Mobile wallets will consummate a new era in banking.
Under the guidance of the European Central Bank, the European Forum on the Security of Retail Payments (SecuRe Pay) has developed recommendations to improve the security of internet payments. It outlined 14 recommendations covering three main areas: general control and security environment, specific control and security measures for internet payments, and customer awareness, education, and communication. For example,
standards for internet payments security include measures such as 3-D secure ready cards for strong customer authentication. The recommendations must be implemented by PSPs and governance authorities of payment schemes by February 1, 2015. The report specifies minimum requirements for internet payment services such as cards, credit transfers, e-mandates, and e-money.
The Payment Card Industry Data Security Standard (PCI DSS) is an information security standard used to handle credit cards from major card brands. The standard is administered by the Payment Card Industry Security Standards Council and its use is mandated by the card brands. The standard was created to better control cardholder data and reduce credit card fraud.
Validation of compliance is performed annually or quarterly,[better source needed] by a method suited to the volume of transactions handled:
An ongoing process is a European Union (EU) initiative to which the European Payments Council greatly contributes as one representative of payment service providers (the ECP is not part of the EU institutional framework). While migration to the SEPA Credit Transfer and Direct Debit schemes created by the EU is now complete, SEPA is still an ongoing process; other payment sectors such as mobile and online payments require further harmonisation.
NFC (Near Field Communication) is the technology behind “tap to pay” contactless payment.
Its design conforms to an international standard that features very close proximity (>2cm or one inch) and in most cases does not require a battery “harvesting” it’s power from the connecting device. The NFC Forum is the governing body of the standard and a compliance program that ensures the reliability and interoperability of connections.