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PYMNTS Talks Back: PayPal’s Marcus Jumps to Facebook, The Payments Implications of the Apple Ecosystem and More

Some pretty big stuff got the payments industry talking this week. PayPal’s President moves to Facebook, World Cup revelers can’t get Brazilian currency and a mobile payments innovator claims HCE isn’t all that it’s cracked up to be. That was just Tuesday, Wednesday and Thursday!

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  1. What Apple Didn’t Say That Acquirers Should Have Heard

     

    Karen Webster explains how the big disruptor for payments won’t be Apple directly, but the ecosystem that Apple has created for merchants and consumers. Webster says that the “by-product of that ecosystem has the potential to throw a pretty big wrench into the plans now on the acquiring industry’s drawing boards.”

  2. Philip writes:

    Intriguing, 800 million accounts on file, an operating system, Apple ecosystem and cash in the bank. All one needs to ponder the potential disruption ahead. While it is true Apple has a magnetic attraction for developers; retailers are a bit more pragmatic and want to touch all their loyal customers, not just the Apple iPhone enabled consumer.

    We also need to see payment brand rules change and see card not present fees adjusted down; before cost conscious merchants run to the illusion that Apple will guarantee increased revenue.

     

    Stanley writes:

    A good point about the 800MM iTunes subscribers tied to some form of credit card. Many would have also missed the latest agreement between Apple and China Union Pay. The latter has 4.3 B issued debit cards. China Union Pay also has the back office of their successful Shang Ying Tong prepaid card...some 300 MILLION cards in existence...this card is similar to the very successful Octopus card in Hong Kong. I'm a watcher of both Apple and China Union Pay! And am anxious what is going to happen when they both combine their ecosystems.

     

    Sanul writes:

    Apple has already filed patents for NFC tech for iPhone 6 on May 23rd, so NFC is definitely coming to iOS. With NFC and Bluetooth beacons, Apple aims to support the widest array of acceptance technology in my opinion.

    Gacoogan writes:

    As usual Karen is spot on. The potential for disruption in the payment space is huge and the interest from Apple is there. The payments paradigm has not evolved much in a very long time, and the prospect of it doing so is invigorating.

  3. PayPal’s Marcus Moves to Facebook

    Karen Webster gives her take on the news that came as a big surprise to the payments world:  PayPal’s President David Marcus resigned to join Facebook in order to lead its mobile messaging group and turn it into its latest and greatest hit.

  4. InTheBiz writes:

    I thought that the State of California doesn't allow for non-competition agreements.

     

    Taras writes:

    I will not be surprised, if 12 months from now Marcus' responsibilities will expand into payments at FB.

  5. World Cup Currency Crunch Bypasses U.S. Soccer Fans


    In the not so nice surprise department, consumers traveling to Brazil for the World Cup from around the world faced an unpleasant surprise when currency exchangers all over the world started running out of the Brazilian Real.  This is no minor issue for foreign soccer enthusiasts, since, as the info-graphic above and viewed up close here  demonstrate, carrying local currency is the best, and in some cases only way to pay.

  6. Ed writes:

    I have traveled to Brazil approx 10 times in recent years and use my mag-stripe card at restaurants, hotels, etc w/o issue...and my debit card (no chip) works just fine at ATMs to take out Brasilian Reais -- getting cash locally has never been an issue. Of course, Travelex would like folks to think otherwise...

     

    Tim writes:

    "Brazil is a Chip and Pin country, meaning American cards simply won't work in Brazilian machines.". Are you saying this based on actual evidence on the ground? In general, EMV terminals fallback to magstripe when there is no chip on the card - this is true for any Americans traveling to Europe and able to carry on happily using their cards

  7. The Flaw with HCE


    Host Card Emulation (HCE) has been hailed as the cloud-based fix for what ails secure mobile payments. But while HCE solves one problem, it still lives in the cloud. Shaunt Sarkissian, CEO of Cortex MCP thought that was a flaw too fatal to have it sustainable as a method of payment. 

  8. Philip writes:

    Tokenization. I ponder a few thoughts. If the assumption is that the infrastructure behind the merchant terminal is much like it is today, then we must talk about tokens that preserve the information a merchant now derives from that 15 or 16 digit number called the PAN, printed in the clear on the front of our payment cards. The first 6 digits are what is called the BIN or Bank identification number. It tells the merchant a lot about the card like: is it debit or credit card, was it issued by a Bank the merchant has a special arrangement with or is it one of those corporate cards the merchant must provide line item detail to the Issuer. Finally there is the last digit, the right most character, that is used too. It is a check digit that confirms that the number read is correctly read.


    Tokenization need to preserve all those characteristics if it is going to work without wholesale changes to the merchant and acquirers systems.


    Then of course HCE is predicated upon the assumption that the dialogue between the mobile phone and the merchant device will adhere to the ISO 7816, 14443 and EMV standards.

    Finally when the radio is off and the phone cannot talk to the cloud, all the data needed to process the transaction such as Expiry Date, PAN, Track 1 or 2 equivalent data and cryptogram are all in the phone. Or there is no way to pay with your phone and you have to pull out your trusty card anyway.


    Unless of course you implement more than just HCE and the Secure element in the cloud.

     

    InTheBiz writes:

    So if you lose your internet connection then you won't be able to access the HCE. That is a valid point however you could sue the same argument about the merchant's ability to accept the payment you are trying to make!

     

    Jorge writes:

    All I read about the alternatives (HCE, Tokenization, NFC, ect) is mostly tied to smartphones. And I keep thinking, how are you planning on dealing with the battery life?

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