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SOFTPOS: EVERYTHING KEY PLAYERS NEED TO KNOW ABOUT DEVICES

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By François Drouard, SLM Terminal & Mobile and Emmanuel Desdoigts, Project Manager at Fime

 

SoftPOS solutions harness untapped potential of smartphones and address a wide range of use cases that could change the retail game for merchants and consumers. But the success of this technology rests on more than the app. Merchants need the right foundation to do this properly, the right device.

This is where device manufacturers come in. OEMs are looking to capitalize on the rise of contactless and optimize their devices for this expanding use case on NFC-capable devices. With the convenience of this functionality on their devices, they can differentiate themselves from competitors and broaden their market value to businesses. So, what considerations do they need to make when creating devices intended to accept payments?

 

The power of NFC

SoftPOS (Software Point of Sale) solutions transform a regular smartphone or tablet– known as a Commercial Off-The-Shelf (COTS) device – into a contactless payment terminal. These solutions utilize the device’s embedded Near Field Communication (NFC) capability. As the name indicates, it enables data transfer between two devices which are placed near to each other. As the technology behind contactless payments, NFC has soared in popularity over the past few years. In 2021, nearly all Android phones on the market have NFC functionality, enabling them to perform payments. NFC devices have the following functionalities:

  • Contactless reader mode – which allows the device to accept SoftPOS payments from wearables, cards and mobiles.
  • Contactless card emulation mode – which allows the device to behave as a contactless smartcard to make a payment.
  • Contactless peer-to-peer – which allows the device to communicate with another NFC device.

Designing a device which can perform all of these functionalities well is difficult because the device needs to meet multiple different requirements. One of the reasons it is difficult is that NFC devices are being developed and certified for card emulation mode, which has different requirements to reader mode. For example, in reader mode, the device has to generate the radio frequency field used to communicate with the payment card or device. It can be very challenging for COTS devices to match the performance of a traditional POS, meaning OEMs are playing catch up to compete with traditional POS vendors.

 

Where to tap? 

As with traditional contactless payments, when making a SoftPOS payment the consumer must hold their card, smartphone or wearable near the antenna within the acceptance device. This enables the communication between the two devices. The antenna can be located either at the top, middle, or bottom of the rear side of the device, since it is ideally positioned for ‘card emulation’ mode to make mobile wallet payments. However, there is currently no standard spot for placements of antennas.

To help consumers find the antenna, some solutions show the contactless symbol on the screen of the device or on a sticker on the device which directs consumers where to place their card or device to make a payment.

 

A matter of centimeters = a big difference

Similarly, read ranges differ between SoftPOS and traditional POS terminals. Four centimeters is the maximum distance range defined by EMVCo to be able to read a card or mobile wallet for a legacy terminal, which is Level 1 certified. This can drop to only two centimeters on a mobile device.

These differences between legacy POS terminals and SoftPOS solutions could create confusion for consumers, who are now familiar with where to tap their card or device to make a payment. This could slow down the payment process and cause frustration during the customer’s purchase experience. It is fundamental that manufacturers design their devices with this in mind to make it simple for merchants to accept payments.

 

The compliance conundrum 

As with all payment products, it is important that device manufacturers ensure their solution meets the relevant requirements to enable safe and secure transactions. For contactless payments, this means achieving Level 1 certification in line with the EMV®* Contactless Communication Protocol Specification. Level 1 tests ensure that the contactless device can meet the analog and digital requirements like lower level electromagnetic field and communication protocols, including operating distance tests.

However, although Level 1 certification is important, the hoops you have to jump through to evaluate your device in line with the latest requirements differ between SoftPOS and traditional POS payments. Traditional POS payment terminals are certified in line with the EMV Proximity Coupling Device (PCD) Level 1 requirements. This certification process does not currently apply to SoftPOS payments. Why? Because of the differences between COTS devices and payment terminals, the compliance process has not caught up yet – but this will soon change.

 

When you know. It is easy.

COTS providers can currently seek approval in line with EMVCo’s Early Adopter Programme instead. The pilot testing program evaluates COTS mobile devices with built-in contactless capability for contactless payment acceptance. The evaluation processes available through the program evaluate the performance of these devices, and their interoperability requirements related to read range and user experience needs. Within the Early Adopter Programme, there could be two possible paths:

  • An approval process which details the product’s performance in a formal Letter of Approval (LoA),
  • An evaluation process without a LoA, but with a scoring report about the Level 1 performance of the device, providing an indication of the expected user experience.

By completing this evaluation, manufacturers can ensure that their solution meets the relevant EMVCo Level 1 requirements. Unlike the EMVCo Level 1 evaluation for ‘card emulation’ mode, this process is not mandatory for SoftPOS solutions, so merchants should be cautious about which device they select to implement their solutions on. If they are not, they could make themselves vulnerable to loss of revenue and reputational damage. Insecure and malfunctioning payment devices could create extensive problems for big companies that equip their staff with payment acceptance devices, as it could temporarily shut down operations across the world. Merchants should note that as SoftPOS payments utilize a merchant-owned device, they are responsible if payment transactions can’t be made, rather than it being the fault of acquiring banks or terminal suppliers.

 

Putting the pieces together

Multiple factors need to be considered to enable COTS devices to accept payments in a seamless and safe way. From creating your device in line with the technical requirements through to evolving functional evaluation and security considerations. We are seeing an increased interest in SoftPOS solutions, with manufacturers looking for support in solving problems, training teams, tailoring tools and achieving certifications. This interest speaks to the wider momentum behind this technology, and we are excited to enable the industry to develop and deploy SoftPOS solutions swiftly to improve the customer experience.

 

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Insurance providers must be ready to tackle quote manipulation as potential fraud rises

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Sam Marsh, director, product management at LexisNexis Risk Solutions Insurance

As road fuel costs reach a record high[i]  and inflation hits a level not seen in 40 years[ii], it is little wonder that reducing motoring spend, including shopping around for cheaper car insurance, is top of the agenda for many people. Indeed, recent reports indicate that 68% of UK adults plan to decrease the amount they spend on driving[iii]. As finances are squeezed, the fact that one in five motor insurance buyers think it is fine to manipulate details in their insurance application to obtain a favourable quote on their premium[iv], indicates that insurance application fraud looks set to rise.

To some, quote manipulation may seem innocent enough, but deliberately misstating key pieces of information is fraud. This can have the knock-on effect of increasing policy prices for all.  More concerning is that individuals deliberately misstating information in their application could find their policy is made null and void if this is discovered at claim and they may also find it difficult to obtain insurance in the future.  What may seem like a little white lie can have long-lasting ramifications.

What exactly is quote manipulation though? Manipulating a quote is when a person applying for insurance (the proposer) deliberately materially changes information on an application throughout the quote journey, to reduce the premium. It could be the address the vehicle is left at overnight, whether it has any modifications or years licence held. Often this is done across numerous quotes to compare results, cherry-picking the best.

‘Fronting’ is an example of application fraud and often involves quote manipulation.  This is where a person (often a father/mother/older sibling) declare themselves as the main driver/proposer, when really it is their newly qualified family member who would be a higher cost to insure.  They will try numerous quotes, swapping out different main drivers, to see how the costs compare.

So how can the shrewd use of data enrichment at point of quote help the industry move the fight against fraud from detection at point of claim, to prevention at the front door?  It comes down to using quotation data intelligence gathered from across the insurance market.

Fraud comes in many guises, but insurance providers cannot fight it in silo. A market-wide quote history database can help identify potentially fraudulent quote behaviour in real-time by comparing quotes across a specific period of time to identify the probability of data being manipulated.  This insight puts insurance providers in a position to check the facts with the customer before policy inception.

It’s not just fraud prevention this quote history data can help with, understanding the likelihood of quote manipulation can also help support pricing and underwriting practices, when used alongside additional data attributes at the point of quote.

Indeed, insurance providers could combine unique insight into how, when and if an individual has shopped for insurance with further insurance specific data sources such as policy history (cancellations, gaps in cover); vehicle history (MOT, valuation, mileage); the presence and performance of Advanced Driver Assistance Systems; and soon claims history to create a 360-degree view of the risk. This can help insurance providers consider the suitability of a product or price for a particular customer, offering them a significantly better customer experience.

Our research suggests that it is younger people who are more likely to manipulate quotes with nearly three quarters of 18–24-year-olds in our recent study thinking any or some adjustment of information is okay in order to reduce their insurance premium[v].  This may not come as a surprise given a recent report has found that the under-30s are disproportionately being forced to bear the brunt of the costs of social care reform and Covid via a 10% increase National Insurance Contributions and freeze on the student loan repayment threshold[vi]. So, the ‘Packhorse Generation’ as they are being dubbed, may, more than other generations, give in to the temptation of quote manipulation.

However, as stated previously, if an insurance provider knows up front the risk of a quote being manipulated, that is their opportunity to query the validity of the data and educate consumers who may be genuinely unaware of the risks of deliberate mis-statements, before policy inception.  This approach can help protect both themselves and the customer from the outcome of fraud.

As economic pressure spirals, insurance professionals have an immediate opportunity to leverage consumer quote information to educate, protect and price customers based on their shopping behaviour.

[i] https://www.rac.co.uk/drive/news/fuel-prices/diesel-fuel-prices-hit-new-record-high-as-uk-moves-away-from-importing-russ/

[ii] https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/april2022

[iii] https://www.themotorombudsman.org/press-releases/tmo-urges-motorists-to-keep-vehicle-servicing-front-of-mind-in-the-face-of-cost-of-living-hike

[iv] LexisNexis Risk Solutions was not identified as the sponsor of this research, which was based on a survey of 1,546 consumers who had bought motor insurance online within the last 12 months and was conducted during April 2022

[v] LexisNexis Risk Solutions was not identified as the sponsor of this research, which was based on a survey of 1,546 consumers who had bought motor insurance online within the last 12 months and was conducted during April 2022

[vi] https://www.if.org.uk/wp-content/uploads/2022/02/packhorse_inflation_press_release_FINAL.pdf

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Urban Company rolls out health insurance for service professionals in partnership with ACKO Insurance

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  • Health insurance plan to benefit 40,000+ service partners in India
  • Service partners can avail up to 12 free-of-cost online doctor consultations in a year
  • Urban Company already provides Group Life and Accidental Insurance cover to all the service partners associated with the platform   

Urban Company, Asia’s largest tech-enabled home services marketplace, today announced that it is introducing a comprehensive health insurance plan for its service partners in India. The company has tied up with ACKO Insurance to craft this insurance cover.

Under the newly launched health insurance policy, all UC Plus service partners will get an insurance cover of INR 2 lac. The policy will also provide family medical insurance for spouse and two children and up to 12 free medical consultations per year. This is in addition to the existing Group Life and Accidental Insurance cover. Service partners without UC Plus subscription will benefit from a health insurance cover of INR 1 lac, with up to 12 free medical consultations per year for self, along with the existing benefits of the Group Life and Accidental Insurance cover.

Commenting on the initiative, Varun Khaitan, COO & Co-founder Urban Company, said, “Health insurance provides a shield against unexpected medical expenses that can throw individuals and families in dire financial situation. To protect our service partners from such a scenario, we are introducing a specially designed health insurance plan. At Urban Company, our priority has always been the well-being of our partners and we constantly strive towards that through our continued focus on safety net and wealth creation for them.”

Brijesh Unithan, Senior Vice President of Partnerships, ACKO Insurance said “Health Insurance has become a critical aspect in financial planning, and kudos to Urban Company for planning this on behalf of their service professionals. We are excited about the partnership and will keep refining the benefits with more experience to make it a one-stop shop for Urban Company’s service professionals to access all their health insurance needs. 

ACKO Group Medical Cover (GMC) empowers partners to choose from a wide range of benefits offering flexibility to change benefits as per the changing needs of the family and reduces the burden of expensive medical care and the soaring medical inflation. In addition, ACKO GMC eliminates the tedious paperwork by making the entire insurance journey accessible on the app.

Urban Company has a structured approach towards partner development and well-being centered around 4 key pillars: improved earnings, safety net, training and wealth creation. This announcement is part of the Urban Company’s efforts to further strengthen the safety net it offers to its partners. All active partners on the UC platform in India are covered under the Group Life and Accidental Insurance cover. Some of the key aspects covered under the policy are life insurance (INR 6 lakhs), disability cover (INR 6 lakhs), accidental hospitalization (INR 70,000), accidental OPD treatment (INR 10,000), among others.

Recently, Urban Company also announced an industry-first ‘Partner Stock Ownership Plan (PSOP)’ initiative for its service partners. Under this initiative, the Company plans to award stocks worth INR 150 Cr. to thousands of service partners over the next 5-7 years. This will enable Urban Company service partners, including plumbers, electricians, cleaners, beauticians, and massage therapists etc., to become equal stakeholders in the company’s growth.

 

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