As digital wallets and alternate payment systems steal the limelight, Tietoevry head of sales Hans Sjölund has delved into the potent partnership between mobile phones and payment cards. He stated that they promise greater speed, convenience, and security, transforming how we make payments.
An increasing focus is on biometric security, featuring unique user elements like fingerprints and iris scans. These provide robust defences against fraud and are now not only accessible on mobile devices but also on payment cards. Mobile phones play a pivotal role in activating and managing these biometric cards, as highlighted in our new white paper. This move towards managing physical cards via an app, such as Tietoevry’s My Cards, is paving the way for future payments.
Meanwhile, in-store payments are being revolutionised by transforming phones into card terminals. An example of this is Tietoevry Banking’s Tap on Phone, launched in May 2023. This innovative solution allows merchants to accept payments from any contactless card or mobile wallet via their standard Android phone, eliminating the need for traditional card payment terminals.
When it comes to online authentication, the EU’s introduction of Strong Customer Authentication (SCA) under its second Payment Services Directive (PSD2) added an extra layer of security to combat fraud. However, this has slowed down transactions. Now, Android users can tap their card on their phone to authenticate their identity at online checkout, offering swift and convenient authentications in line with SCA. This synergy between card and phone could potentially drive e-commerce growth.
Moreover, our new white paper unveils that consumers often favour cards over digital wallets. In a recent JD Power survey, more Americans preferred paying by card than mobile wallets. This sentiment was echoed by 78% of consumers in a Payments Europe survey, highlighting the desire for payment choice. Almost half of the merchants surveyed view cards as their primary source of non-cash revenue until 2026.
Finally, the rise of ‘phygital’ cards, the marriage of physical and virtual cards, is worth mentioning. Virtual cards, valued at $1.9bn in 2021, are predicted to reach approximately $6.8bn by 2026, according to Juniper Research. As a sustainable, convenient, and cost-effective alternative to corporate expense cards, they can be linked to either a digital wallet or a physical payment card. The option to link a virtual card to a physical one adds convenience and choice for users, whether they’re shopping in-store or online.
Read the full report here.
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