Where are the development of bank cards headed? - Part 4

2018.03.01. 08:00 | Hírek

A cikk magyarul itt olvasható.

In the first part of the series, we discussed that several inventions are linked to bank cards, in the second part, we wrote about probably the last physical innovations of bank cards. In the third part we analyzed the most important properties of contactless mobile payment solutions in details, and in the fourth and final part, we present the contactless mobile payment solutions in Hungary along with Bancard experts.

Global contactless payment solutions

A bit strange but contradictory difference is that Apple that developed the user experience bringing us closer to mobile payment is the exact same one that operates the most exclusive mobile payment system. Hungarian users do not have access to Apple’s contactless payment solution, although the devices are physically able to do the job since the release of model 6. Nevertheless, Apple does not allow others to get a slice of the cake of mobile payment on iPhones for business reasons.

So, clients use their iPhones, just not in Hungary. You cannot request it in Hungary, to be more precise, but if you have an Apple Pay compatible bank card, you can use it the same way at Hungarian accepting sites as any other site in the world accepting contactless payment. However, Hungarian client can only use his iPhone for contactless mobile payment, if he signs a bank card contract in a country where Apple Pay mobile payment solution is available. He must consider, though, that clients can send money only by expensive international wire transfer and mobile payment fees may also vary compared to free option in Hungary, additionally, exchange rate losses must be taken into consideration along with international rates at customer service calls available in foreign language.

Google, the company behind Android systems, used a different strategy on the other hand, who opened up its NFC circuits for third party developers, thus for banks as well.

Beside Apple and Google, Samsung and LG also appeared on mobile payment market with their own payment solutions. The second two are also contactless mobile payments like the first two, however, because the two newcomers are also using Google Android that is open to third party developers, so there are no restrictions for being non-contracted with Hungarian banks as Hungarian contactless payment solutions are running on Samsung and LG devices even if the manufacturers did not sign a contract with Hungarian banks, thus the manufacturer’s own payment solution cannot be requested in Hungary yet.

Fingerprint scanner on an iPhone 6 Plus (photo: Kārlis Dambrāns)

The situation of global contactless mobile payment solutions in December 2017:

  Apple Pay Android Pay Samsung Pay LG Pay
Release date October 8th, 2014 June 1st, 2015 August 20th, 2015 June 2nd, 2017
Can be requested at contracted banks in the following countries USA, Australia, Denmark, United Arab Emirates, UK, Finland, France, Hong Kong, Ireland,
Japan, Canada, China, Italy, Russia, San Marino, Spain, Switzerland, Sweden, Singapore,
Taiwan, New Zealand, Vatican City
USA, Australia, Belgium, UK, Hong Kong, Ireland, Japan, Canada, Poland, Russia, Spain, Singapore, Taiwan, New Zealand USA, Australia, Brazil, South Korea, United Arab Emirates, UK, Belarus, Hong Kong, India, Canada, China, Malaysia, Russia, Puerto Rico, Spain, Switzerland, Sweden, Singapore, Taiwan, Thailand, Vietnam South Korea
Compatibility iPhone X, iPhone 8, iPhone 8 Plus, iPhone 7, iPhone 7 Plus, iPhone 6s, iPhone 6s Plus, iPhone 6, iPhone 6 Plus, iPhone SE, iPad Pro, iPad (fifth generation), iPad Air 2, iPad mini 4, iPad mini 3, Apple Watch series 1 smartwatch, Apple Watch series 3 smartwatch, Apple Watch series 3 smartwatch, Apple Watch (first generation) smartwatch, MacBook Pro with fingerprint scanner, or any other model after Mac 2011 featuring Apple Pay with iPhone or Apple Watch devices At least 4.4 NFC Android smartphone or tablet The following Samsung devices and any other smartphones featuring NFC with Android 5.0 or above, or tablet with 1280x720 resolution: Galaxy S6, Galaxy S7, Galaxy S8, Galaxy Note 5, Galaxy Note 7, Galaxy Note FE, Galaxy Note 8, Galaxy A5 (2016), Galaxy A7 (2016), Galaxy A8 (2016) (in South Korea), Galaxy A9 (2016) (in Brazil and China), Galaxy A9 Pro (2016) (Brazil, China, India, Southeast Asia), Galaxy A3 (2017) (worldwide except Europe), Galaxy A5 (2017), Galaxy A7 (2017), Galaxy J5 és J7 (2016) (available only in certain countries), Galaxy J5 (2017)/J5 Pro (cavailable only in certain countries), Galaxy J7 (2017)/J7 Pro (available only in certain countries), Galaxy C5 and C5 Pro (China), Galaxy C7 and C7 Pro (China), Galaxy C9 and C9 Pro (China), Galaxy On5 (2016) (China), Galaxy On7 (2017) (China), W2017 (it’s a non-Galaxy-based smartphone), Samsung Gear S2 smartwatch (only NFC design), Samsung Gear S3 smartwatch LG6, LG G6+, LG G6 Pro
Contracted card companies Visa, Mastercard Visa, Mastercard, Discover, American Express American Express, Visa, Mastercard Mastercard, Visa
Usable Only on contactless POS terminals Only on contactless POS terminals NFC and POS terminals capable of reading any magnetic strips NFC and POS terminals capable of reading any magnetic strips
Authorization by Fingerprint Fingerprint, PIN, password, sample Fingerprint Single-use password, fingerprint scanning, 3D face recognition (later)

As we can see clearly, none of the global mobile payment solutions are headed towards Hungary. Not even in the region or in the neighboring Austria or in Germany, the country with the largest population in the continent.

Or even those solutions that were launched onto the market 2 or 3 years ago.

Therefore we must be satisfied with Hungarian developments of contactless mobile payment solutions that, of course, provide technically the same user experience as their global counterparts.

Hungarian contactless payment solutions

With Google opening up NFC circuits on their Android cell phones for external developers, contactless mobile payment could start in Hungary in November 2014, followed by GRÁNIT Bank in 2016,in 2017 Budapest Bank and MKB Bank joined them and OTP Bank replaced its former solution with the new tokenized one. Of all the five operators, Budapest Bank is currently using the older technology solution not relying on tokens. This needs the contribution of the phone service provider at request and during use. Budapest Bank’s solution is only available at Telenor. User experience at Budapest Bank, however, is the same as with any other solutions.

As we can see, although two years after OTP’s pioneering, other Hungarian banks emerged to the mobile payment market, and the process doesn’t seem to be reversible with the simultaneous and independent market presence of the 5 banks. Each bank provides mobile payment solution only for those who they have signed contract with so there is no crossing over, thus it can’t be used from external bank that doesn’t provide a mobile payment solution either.

OTP Bank came up with a witty solution for the problem and the Hungarian professionals of Mastercard know only 1 or 2 solution like this in the whole world: beside their own card holders, OTP offers this service to any bank client interposing an OTP prepaid card, which can be loaded with any other bank cards of non-OTP clients issued by their own banks, and from that time they can also pay with OTP’s mobile payment solution.

This prepaid card is currently free, but according to OTP Bank’s effective announcement, this special offer is only free until revocation or February 28th, 2018 at latest, after which it will cost the client 300 HUF each month, if he uses Simple prepaid card in Simple app instead of other bank’s NFC payment solution. Loading the prepaid card will also cost money from March 1st, 2018 at latest, with a fee of 1 percent per loading, but minimum 200 HUF. For legal reasons, the maximum balance of the Simple card is sixty-five thousand HUF at any time and cannot be used abroad.

The situation of contactless mobile payment solutions in Hungary in December 2017:

Name of the contactless payment solution GRÁNIT Pay Telenor Wallet MKB Pay Simple K&H mobile wallet
Bank GRÁNIT Bank Budapest Bank MKB Bank OTP Bank K&H Bank
Date of release 2016 2017 2017 2017 2017
Android version minimum requirement 4.4 4.4 4.4 4.4 4.4
Download page link link link link link
PIN required under 5000 HUF? No No Yes No No
NFC payment can be done under 5000 HUF with the screen locked? No Yes No No No
NFC payment can be done under 5000 HUF without entering codes but with the screen unlocked? Yes Yes No No Yes
NFC payment only with the SIM card’s phone number registered at the bank? Yes No No No No
NFC payment can be used parallel with how many devices? 1 1 3 No data No data
Number of stored tokens for offline payment (internet connection is needed at least once between this maximum number of payments) 10 No limit as it does not use token technology 10 10 10 to 15
Above the preset limit (and every time above 5000 HUF) the payment code must be entered on the following device POS terminal POS terminal Cell phone Cell phone Cell phone
To avoid double swipe*, the time window of using the cell phone for payment with the screen unlocked No limit No limit 30 seconds 120 seconds 60 seconds
Authorization can be carried with fingerprint, if the device has a fingerprint scanner No (as the PIN must be entered on the POS terminal) No (as the PIN must be entered on the POS terminal) No Yes No
Card types available for registry Private and business Private Private Private Private and business
Ratings of users in Android app store, where 1 = bad ...  5 = good 3.5 (not exclusively mobile wallet app!) 3.8 (not exclusively mobile wallet app!) 3.2 4.5 (not exclusively mobile wallet app!) 4.2 (not exclusively mobile wallet app!)
Number of raters on December 20th, 2017 399 1965 196 10109 3473

*Double swipe means if the client wants to swipe once, he must authorize himself before paying, as opposed to physical cards. If it’s not the case, after the first swipe the POS terminal sends a message to the client giving instructions on the screen (i.e. enter PIN on the phone or unlock screen etc.) and then the payment is finished with the second swipe.

This is the end of the series of articles made with Bancard Ltd. experts. However, the company’s professionals are awaiting the questions, comments and requests of our dear Readers and professional partners.

Thank you for your attention!

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