Flexibility, distribution and security – three things that Ted Fifelski, President and Co-Founder of SimplyTapp, says will drive the next generation of payments. A generation that he thinks also needs an “easy button” for both consumers who need to embrace it and developers who want to build it. Fifelski has a perspective on what’s missing and the role of HCE and tokenization in fulfilling it.
Why is mobile payments so hard to get ignited – and what are you doing to make it easier?
TF: It’s all about access – giving the developers and innovators who want to create useful consumer mobile payments applications the tools to make that happen, easily and cost effectively. Back in 2011, when we started the company – (wow, that seems like a long time ago now…!) that was really not possible. Access was mostly for the big conglomerates with MNO relationships or deep pockets. So, our goal was to make mobile payments accessible to every developer and business in the world.
The way we did that was through Host Card Emulation (HCE) to unlock the mobile device, enabling secure, cloud-based payment and access control solutions to card issuing merchants and financial institutions.
But we didn’t stop there.
It was not enough to just open the pathway or channel. We needed to build robust card virtualization, storage and distribution systems to handle payment cards. We built these from the ground up using flexible and modern technologies. This results in a solution that is light, secure, flexible and easy to integrate.
So, why HCE?
TF: Security is an important aspect of any solution in the financial or access control space. And, security is an evolving landscape. Yesterday’s security models do not work against today’s criminals. Technology is developing so quickly that with it come new threat vectors and the need for improved solutions.
We understood this reality from the beginning, and our platform reflects such, allowing the card issuer to tightly couple the card to a device, user, environment, circumstance and more. We think we are doing some really great and exciting stuff in this area.
When we created HCE, it was to unlock the potential of mobile payments for the entire industry. We could have easily kept it to ourselves, but we believed that it had to be open to everyone. As a result, HCE technology will come in a variety of security models, from the lowest security levels where data could be viewed in clear text to the highest levels of security that leverage end-to-end encryption and multiple-form authentication.
Our platform employs some of the most advanced security in the industry, which supersedes PCI DSS standards, fully supports tokenization and the use of alternative PANs. Ultimately, we feel that the card issuer is the best party to choose how they maintain trust with their customers and they should choose solutions which provide that level of flexibility.
There is a lot of confusion in the market concerning tokenization. What is the relationship between tokenization and HCE?
TF: I have heard individuals from even some of the world’s largest banks misunderstand tokenization and how it works. The issue is that there are three distinct perspectives on tokenization: issuer-based, network-based and retailer/merchant-based.
Considering this, tokenization from the issuers’ perspective means that a token is a representation of the original payment card product. This is important because it means that to an issuer it is still a payment product in and of itself. The main difference here is that with tokenization by the issuer, you can now separate the payment product – the card – from the ownership of that payment product. This layer between the two pieces allows context to be embedded into the payment experience.
We were designed to allow dynamic management of payment products, which is unique IP related to our solution. I can tell you that card issuers love this functionality because it matches so well with tokenization and gives them the opportunity to have an ongoing dialogue with their cardholders in a very personal way that plastic did not cater well to.
What factors do you think are driving the next generation in payments technology?
TF: No doubt about it. Flexibility, distribution and security. You could throw contextual understanding – aka personalization – in there as well, but that will come at a later stage.
So, given that, what’s next for SimplyTapp?
TF: We are currently working on some really exciting functionality – functionality that we expect to power the mobile commerce economy for years to come for both financial product issuers and merchants.
For now, mum is the word, but we call it the “Easy Button” for all things payments-related. The purpose of this new “Easy Button” is to help merchants and banks quickly and effectively activate mobile consumers with payment functionality without investing in proprietary terminals or payment collection systems. We believe in an open and active mobile commerce ecosystem where the customer gets to decide how they engage the marketplace around them without causing additional work for the merchant or bank. We are super excited about this because the value proposition of this solution is extremely high.
President and Co-founder, SimplyTapp
Ted Fifelski is the President and Co-Founder of SimplyTapp, Inc., the only SaaS HCE mobile transaction platform that supports card issuers of any size across any industry. Prior to founding SimplyTapp, Inc. Ted served as a business and technology analyst at Arthur Financial Services where he specialized intellectual property and technology analysis for Fortune 1000 companies with global operations.