Canada has been considered one of the “first movers” of mobile payments – partly because the nation is often quick to adopt new technologies. And the key to making that a more widespread trend, says RBC, is about delivering a solution that meets the needs of consumers, merchants and the B2B space – and speeds up provisioning. In a recent interview, Linda Mantia, EVP of Digital, Payments and Cards at RBC, sat down with PYMNTS to discuss how its cloud solution sets out to give mobile payments a huge leg up, and to do so safely and flexibly – and in a way that doesn’t compete with HCE technology.
Canadians are generally early adopters of technology and it is no different with mobile payments. In fact, Canada has been considered the “first mover” in mobile payments. In your opinion, what is driving mobile payments adoption in Canada, and what makes the country a unique market?
LM: New technologies are changing the way consumers go about their day-to-day activities — from the way they bank to the way they shop and now the way they pay. Whether it's in person, online or through a user’s mobile device, RBC is committed to providing our consumer and merchant clients with the most innovative, convenient and secure solutions to pay how they want, when they want.
While adoption is low right now, mobile commerce is the future. Smartphones are always on us. We check we have them before we check what have in our wallets. Our clients are no longer turning to their devices just for text, email, and voice – they’re turning to it for everything. We believe the key element to winning the market and igniting mobile payments is choice.
True innovation is about making sure we have the very best solution to meet the needs of the complete ecosystem – that includes consumers, merchants, and business to business. Many early mobile wallet solutions have been challenging experiences to get up and running. We first started experimenting in 2009 writing payment credentials to embedded secure elements and then to carrier SIM cards. It took us, in a lab, up to five minutes to provision a single payment card, while some of our competitors’ solutions take up 60 minutes to provision, if they work at all. If clients changed card products or received a new card because of expiry or fraud, they would have to provision all over again.
We created RBC Secure Cloud so our clients could provision very quickly, instantly have access to all of their payment cards, and never have to provision anything again. Our SIM-based solution provisions 98 percent of the time in fewer than two minutes, most in and around one minute. Our host card emulation solution provisions almost instantly.
As Canada leads in the evolution of the mobile payments ecosystem, it falls behind in the security aspect of it. What security challenges are you facing today and how are these being addressed?
LM:Consumers take security very seriously, especially when it comes to trusting a financial institution with their finances. We take the privacy and security of clients very seriously and we think it’s one of the reasons people turn to a bank for their payment solution. We have always been committed to providing our customers with choice – the ability to choose how, when and where they want to bank with us without compromising the value of services and advice we provide or security. This is not a new concept to us.
To that end, it’s only natural to worry whether mobile payments are secure. And one should never take security claims at face value. So take the time to read up on what the security features are and how they work before you commit to any kind of digital wallet app. Most importantly, make sure it’s from a reputable company that stands behind its services.
Recent developments with open-source software have given NFC new life, essentially allowing financial institutions to bypass the secure element on smartphones. That "toll gate" spurred innovation that led to HCE; it removes one of the biggest challenges, which was the stranglehold in the U.S.
What role does HCE play in a cloud environment? Will HCE replace the RBC Secure Cloud?
LM: No. The RBC Wallet is powered by RBC Secure Cloud, meaning all sensitive customer data is stored securely with RBC in the cloud, not on the phone. That makes for a safer, faster, more flexible solution. Payments made with the RBC Wallet are protected by the RBC Online Banking Security Guarantee.
HCE allows mobile payments to be less reliant on a specific type of mobile phone, and eliminates the need to ask carriers for permission to access the handset. It also allows clients to use any near field communication (NFC) enabled Android phone to pay at the point of sale with the RBC Mobile app with every mobile carrier anywhere in the world. The user waves to pay with their smartphone, permitting their financial institution (RBC) to host payment accounts in a secure, virtual cloud.
What is fueling mobile payment innovation in Canada and what role does RBC play?
LM: Canada is a global leader in payments and within Canada, RBC is the No. 1 payments company. We have paved the way to what will most likely be the standard in mobile payments in Canada and have long been at the forefront of emerging payments and mobile-based technologies.
Mobile payments have long offered great promise, but until recently, a lack of technological standards, a lack of a clear business case and vague value propositions has limited major pilot projects. RBC was in a position to establish early leadership in an area that would be of vital importance to the current generation of consumers and fundamental to the next generation.
For example, in Canada, RBC has been leading the charge in mobile with several firsts over the past year and a half:
- Participated in the country’s first mobile debit transaction with Interac and McDonalds.
- Chose to go our own way with RBC Secure Cloud, patent-pending technology that powers our mobile solution, rather than accept the existing market solution.
- Partnered with Facebook to launch the first social person-to-person (P2P) money transfer capability in North America.
- Introduced RBC Wallet, the first financial institution in Canada to introduce a mobile wallet that provides the customer with the choice of paying with either debit or credit.
As the telecommunications, computing and consumer handset markets revolutionized with the emergence of LTE, cloud computing and the modern smartphone, we saw the opportunity for a mobile payments revolution. We created the patent-pending RBC Secure Cloud to make mobile payments easy to use, give our clients choice in how they pay, and improve the overall security of commerce. RBC Secure Cloud solves facilitating the adoption of mobile/emerging payment. It solves the client mobile experience issues and secures privacy in a way that is not intrusive and is very user friendly.
The RBC Wallet is the consumer-facing portion of our solution and is integrated within the RBC mobile banking app. The RBC Wallet is built upon the success of RBC Secure Cloud by leveraging the latest technology standards (NFC) and the fourth generation (4G) network from the country’s largest telecommunications provider (Bell Canada) to introduce the first mobile payment experience in Canada that allowed the consumer choice of either debit or credit transactions.
Finally, what are you hearing from both your consumers and merchant clients?
LM: The benefits of HCE for merchants vary between countries. But specifically, in Canada and where all merchants have EMV-enabled point-of-sale systems, accepting HCE-based transactions requires no changes to the existing acceptance infrastructure.
On the acceptance side, HCE is a standard EMV chip transaction. Any terminal that currently accepts contactless cards can accept this functionality. Nothing changes for retailers apart from potentially reducing the cost of cash handling.
During this phase of change, there are both opportunities and threats for merchants. We understand they are already faced with many issues such as ensuring privacy, reducing fraud, and now faced with assessing the mobile commerce impact to their business. It’s a complex world right now. There are so many moving parts and we understand that there is a lot of uncertainty. That’s why it is important to us during this time of flux, to take a balanced approach to the needs of all stakeholders in the system. We are in this together.
Executive Vice President, Digital, Payments and Cards, RBC
Linda is the Executive Vice President of Digital, Payments and Cards for RBC. She has global responsibility for the strategic direction of RBC’s Personal and Business Credit Cards, Rewards and Partnership Programs, Merchant Strategies/ Moneris, online and mobile banking, as well as the enterprise Retail Payments Strategy and Innovation.
Linda joined RBC in 2003, as the SVP of the Innovation & Process Design teams. She then moved to London, England, as Chief Operating Officer of Global Private Banking. Most recently, Linda was Head of Enterprise Services and Chief Procurement Officer, accountable globally for Acquisition Integration, Procurement, Corporate Real Estate, Lean Six Sigma, Global Consulting, Business Process Outsourcing and Enterprise Program Management Office.
Linda is a member of the Personal and Commercial Banking Operating Committee and a member of the board of directors for Moneris Solutions, a leading North American payment processor. For two consecutive years, Linda was named one of Canada’s Top 100 Most Powerful Women by the Women’s Network; in 2013 she was recognized in the Corporate Executives category and in 2014, she was recognized in the Trailblazers & Trendsetters category. She was also named one of the Most Influential Women in Payments for 2014 by PaymentsSource and awarded the 2014 Women in Payments Award for Leadership by Women in Payments.
Prior to joining RBC, Linda was an Associate Principal for McKinsey & Company based in Canada, the U.S. and Australia and prior to that Linda was a partner at Davies, Ward & Beck specializing in corporate and securities law.
In the community, Linda is co-chairwoman of Greening Greater Toronto and is actively involved in leading various aspects related to Women Against Multiple Sclerosis (WAMS).