Mobey Forum: Big European Banks Can’t Ignore Prepaid Anymore (June 24, 2014)
The combination of prepaid card infrastructure and mobile wallets will disrupt the current account model in Europe, according to a new white paper, “The Prepaid Mobile Wallet: Taking Prepaid into Account,” from Mobey Forum. The international bank-led trade association, which is devoted to advancing mobile payments, presented the research in a Webinar today.
“The sooner banks start taking prepaid seriously the better,” said Amir Tabakovic, Mobey Forum board member, chair of the Mobile Wallet Workgroup and head of marketing development at PostFinance, the financial services arm of Swiss Post. “There is serious disruption coming from prepaid and mobile,” he said.
While Tabakovic doesn’t expect European consumers to ditch their current accounts in favor of prepaid mobile wallets just yet, he said the potential is there because of the innovation in the space. Mobey Forum laid out four options for banks to get involved with mobile prepaid, including: using prepaid as the infrastructure behind a service, such as P2P payments for current account customers; enabling customers to top up digital prepaid accounts, such as airtime or iTunes; offering a mobile prepaid wallet actively and openly; or providing issuing or backend processing support for mobile-focused financial services providers, such as Moven and Simple. One potential problem with the fourth option, according to Tabakovic, is it takes the bank out of the customer-facing position.
Mobey Forum suggests the mobile/prepaid combination could be a boon to merchants as well, specifically combining host card emulation (HCE) with closed-loop prepaid. “[HCE] will enable merchants and other players to issue secure closed-loop mobile prepaid solutions via an NFC payments model that is much simpler than that offered by the current hardware-based secure element ecosystem, while still benefitting from the merchant’s contactless acceptance infrastructure,” Tabakovic explained. In addition to helping merchants drive closed-loop spend via mobile, HCE would enable merchants to accept other NFC mobile wallet payments without having to make deals with third-party wallet providers, banks or MNOs.
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