The payments landscape in Europe is evolving at an unprecedented rate. From the Payments Services Directive 2 (PSD2), to SWIFTâ€™s global payments innovation (gpi) initiative, change is the name of the game. Mobile payments are also on the rise, driven by growing smartphone penetration and contactless innovations such as Apple Pay. TMI caught up with Carlo Bovero, Global Head of Cards and Innovative Payments at BNP Paribas, to find out why treasurers should pay attention to the rise of Apple Pay and other mobile channels.
Carlo Bovero (CB): Apple Pay is rapidly becoming a preferred payment method for consumers. With a high level of acceptance, Apple Pay should be on every treasurerâ€™s radar, especially those in the retail sector.
From the perspective of the retailer, an Apple Pay transaction is the same as a card transaction. In fact, it simplifies the transaction, as retailers do not need a specific system to accept digital payments such as Apple Pay. A simple contactless terminal is all that is needed, so they can easily â€˜catchâ€™ payments from the Apple Pay device.
On the side of the consumer, security and privacy is at the core of Apple Pay. When you use a credit or debit card with Apple Pay, the actual card numbers are not stored on the device, or on Apple servers. Instead, a unique Device Account Number assigned, encrypted and securely stored in a Secure Element of the consumers device. Each transaction is authorised with a one-time unique dynamic security code.
CB: Having made Apple Pay available to our clients in the USA in 2016, followed by Poland in June 2018, customers of BNP Paribas Fortis and Hello bank! in Belgium can now take advantage of Apple Pay. In France, BNP Paribas and Hello bank! customers will be able to access Apple Pay in early 2019 and we will also support Apple Pay in other countries including Ukraine via our UkrSibbank subsidiary.
This international roll-out of Apple Pay reflects our determination to offer all of our customers, wherever they may be, innovative and secure services that simplify their online and in-store purchases.
CB: Our ambition is to become the reference point for all forms of digital banking in Europe. We are currently investing â‚¬3 billion until 2020 with a huge digitalisation transformation roadmap to allow us to develop a new customer experience. This transformation into a more â€˜digital-firstâ€™ banking experience will also help us improve efficiency levels.
Regarding the digitisation of payment solutions, our strategy is to give our customers choice by providing them with access to different payment platforms such as Apple Pay. Customers are king and they are increasingly keen to use Apple Pay services. Our aim also to bring value added services in order to innovate and stay attractive.
CB: A good example of how we are supporting payments innovation is our partnership with Alipay, allowing retailers to accept Alipay payments in Europe. We also launched â€˜WeChat Payâ€™ from Tencent in two Galleries Lafayette flagship stores last year.
While, like Apple Pay, these new capabilities are primarily aimed at consumers, corporate treasurers should keep a close eye on these developments so that they are not left behind by the rapid changes that come with digital/mobile payments.
BNP Paribas is also working to support corporate treasurers with innovative payments such as virtual cards which are dedicated to online purchases with a unique card number for each purchase. Again, this is highly secure. For each card stored, the limit, starting date and expiration date can be customised. Additional fields can be set up for accounting reconciliation. This is already very common in the travel industry and this specific feature is what other corporate customers are now using for their B2B payments with the growth of e-commerce. The potential for such solutions to deliver treasury efficiencies is high.