The recent shifts in the payments industry – Apple Pay, an independent PayPal, a publicly traded Alibaba – has forced everyone to think well beyond secure payment transacting to secure identity enablement. Marek Juda, Managing Director at Oberthur Technologies told MPD CEO Karen Webster what’s behind this shift and the role that tokenization plays in delivering that vision.
KW: It’s impossible to have any conversation these days, post the Apple Pay announcement, without getting a reaction to that announcement. With Oberthur’s role in providing the embedded secure element and NFC and those technologies, I’m curious to get your reaction. How do you think Apple Pay will change the landscape for mobile payments?
MJ: We’re very happy to see Apple Pay launching. At OT we’ve been in the mobile payment space for some time now, working for example with Samsung on the secure element. Also there’s been a huge discussion in the industry on SIM NFC way or embedded secure element . OT believes in both. Right now, we’re happy to see Apple moving into this space, giving it traction with mobile payments in general as well as with the embedded secure element, of which we’ve been one of the pioneers in the industry.
KW: I’m curious to get your perspective on the fact that it’s taken Apple to really galvanize the direction around that particular technology. It’s not as if this is something that is new and hasn’t been tried before – to your point, you’ve been working with other handset manufacturers to try to get NFC and embedded secure element technologies ignited. What’s different about Apple?
MJ: It’s not so much a question of what’s different about Apple, because they come with their own position and power in the market. But the industry itself, and the mobile payments space, was very fragmented. There have been a lot of players testing very different things, from pure mobile money in the cloud for developing markets to something more complicated with SIMs and embedded secure elements. But all of the players were introducing their own user experience, trying something a bit different to solve a specific problem. The overall mobile payments space was in its early stages. We knew that at some point in time it would converge toward fewer, clearer use cases. It all boils down to a clear and compelling user experience.
KW: Let’s switch gears and talk about what you’re doing with respect to the mobile space. I know that OT has made a point of articulating its position as being at the heart of mobility. With so many other players claiming mobility as their area of expertise, where are you directing your efforts and what’s your advantage?
MJ: I think mobility is really at the core of our strategy in anything we do. In our industry, OT is the only one positioned on the Mobility space. We’re in the mobile financial services, telecommunications and identity markets. In all of those industries, mobility is having an increasingly important role, and it’s in our core DNA. We’re bringing to the market various solutions around smart transactions, digital identity and access, and more. Now, we’re seeing that mobility is accelerating in the market – especially as we deal with mobile financial services and the machine-to-machine/ Internet-of-Things ecosystems. Those are the two leading areas in innovation around mobility today.
KW: As we evolve in the space, I think digital identity will become even more important than it is today. How does OT’s recent acquisition and initiatives play into your interest and expertise in capturing the digital identity space and moving it forward?
MJ: There are a few different elements here. OT is an active player in the digital identity space, having signed some strategic alliances with Canadian partners. We’ve also recently announced the acquisition of NagraID Security, a company who invented and patented this display card technology. We truly believe this allows us to go forward in the industry, making a significant move in addressing several pressing issues on the market like the problems of online fraud, reducing fraud for card-not-present transactions, and more. This acquisition is very important to OT, and allows us to offer a one-time password solution, and most importantly the dynamic CVV solution to the market and to our banking customers. It is not only the next generation payment product but also an end-to-end authentication solution. This is what customers are asking today.
KW: How does what NagraID Security provide complement to some of the other initiatives that we’re seeing networks and issuers coalesce around, which is the tokenization of that data? Are these complementary?
MJ: They absolutely are complimentary. We don’t believe payment cards will go away, and this is a way to make them more secure and allow people to use them more frequently in the commerce space. The huge tokenization wave is a parallel stream, equally as important. OT is also participating in this.
KW: Let’s talk about ignition. That’s one of the things that we focus on as we think about mobile and innovation around it. There really haven’t been a lot of initiatives that have truly gotten off the ground. What do you think is needed to fix that, and what’s the role that OT plays in helping make that happen?
MJ: I think, as we’ve said, the industry was fairly fragmented. It’s true that we haven’t seen so many successful initiatives. The truth is that they were all very different, trying to solve different problems depending on the market maturity. It all boils down to the user experience that emerges, and in that respect, Apple may have an important add-on to the snowball that will create a tipping or inflection point.
Overall, we’re seeing a lot of next-generation or second-generation mobile money initiatives around the world, which we are participating in. People are trying to address the pain points of the first implementations, like interoperability and larger scales. So I think we’re approaching this inflection point, and OT is one of the few players that can address the variety of solutions that we see here. As you know, we are a natural player in the EMV and NFC SIM space. We also see HCE as a bridge between the two.
OT is one of the few players that understand all of these solutions, partnering with banks to address the complexity of those solutions. Depending on the region, those solutions will be different, and while there won’t be one global, ubiquitous solution for all, we’ll narrow it down to two or three.
KW: What I take from that is that there is a great importance in having a platform that isn’t just dependent on one particular method of payment or technology that enable it, especially in a space as dynamic as payments where there are so many different things available to the innovate the experience. There needs to be those core capabilities there to allow players to move with the market, and in front of the market.
Managing Director of the Solutions Business Unit at OT
Marek Juda is Managing Director of the Solutions Business Unit at Oberthur Technologies since November 2013. This unit covers all aspects of Design, Build and Run of Oberthur Technologies’ solutions offering to mobile operators, OEM, banks, retail groups and transport operators – in particular in the field of NFC, Cloud-based Mobile Financial Services, Machine-to-Machine and the Internet of Things. Prior to that, Mr. Juda has served as General Manager for Bull Group activities in Poland. That included holding between 2004 and 2013 the position of CEO of AMG. net, an IT services company operating in the Finance and Telecom segments. Mr. Juda started his career at Anderson Consulting.