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EMV® IN TRANSIT: WHY AND HOW?

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Taoufik Sakhi, Smart Mobility Technical Advisory Director at Fime

 

Today, contactless cards provide a fast and frictionless payment experience, where up to a certain value, the normal cardholder verification method of entering a PIN is not needed. It has revolutionized payments for low value items. This trend has accelerated in the past year, with people concerned about the hygiene risks of handling cash. Recent data from Juniper Research found that digital payments have increased by almost 50% in 2021 compared to 2020.

Over the years, the transit ecosystem has seen ticketing payment options evolve in line with ever-increasing traveler expectations. One method that can live up to these high expectations is contactless payments. They are ideal for transit – where speed and convenience are key to a seamless user experience. This is another trend which is on the rise, with 88% of travelers saying that they expect their public transit systems to offer contactless payments in the future. Therefore, many transport providers are looking to deploy in EMV®* in transit to meet traveler expectations for safe and easy payments.

 

Why EMV?

Organizations around the world use the EMV Specifications to develop and deploy card-based payment products that will work together seamlessly and securely, regardless of where their customers make or accept payments.

Taoufik Sakhi

Combining travel cards and EMV contactless technology into one system reduces the number of cards travelers need to carry. The payment card effectively becomes the ticket to travel. This removes the need for transport providers to offer their own card management systems, reducing card stock overheads.

 

Open vs Closed Loop    

The use of cards produced by others and usable elsewhere has led to the term “Open Loop”, whereas “Closed Loop” cards can only be used for transit payments. Both approaches can co-exist and address complementary use cases. They also both have different benefits for travelers and transport system operators.

EMV Open Loop benefits travelers and transport system operators in the following ways:

  • It enables a single-step process (simply use EMV card on gate).
  • There is no need for cash or different cards for different locations.
  • It provides the same user experience for travelers as they would get in-store.
  • Travelers can track transactions online.
  • Security is built-in, reducing misuse and fraud.
  • There is no need for own card-issuance. 

There are multiple approaches to EMV Closed Loop, each of which has its own benefits:

  • Card as credential – this is a pre-purchase model that allows the traveler to use their chosen payment card or mobile device at a reader. This authorizes entry to the travel system based on the customer’s transit account, but no financial transaction is triggered.
  • EMV White Label – this is a branded EMV transit card issued by the transit authorities or operators themselves. It’s not connected to a payment scheme network, which means there is no need for an industry standard protocol (PCI) when deploying a White Label solution.
  • Limited use prepaid cards – this is a co-branded transit card with an existing payment scheme and is only usable within the transit organization’s defined bounds. This gives spending control to the traveler as it lets them set spending limits themselves.

 

Choosing the best solution

While proven, secure and widely adopted across the payments market, the EMV ecosystem can be complex. And deciding which EMV solution to adopt can be challenging. There is a need for a clear business objective to determine which solution will best fit your transit network. Multiple players, technologies and guidelines must be navigated to make the project a success. For transport players looking to cash in, getting to grips with these complexities first is essential.

Deciding to deploy an EMV project is a huge undertaking and there are a number of key topics to address throughout the project lifecycle. Multiple stakeholders need to be managed, fare strategies determined, risk management policies defined, and appropriate technologies selected. Therefore, operators should consider partnering up with a consultant to guide them on their journey towards EMV deployment.

Fime’s consultants and technical experts can support the whole process. This includes helping you understand the payment ecosystem, assess what solution is best for you and upgrade existing systems to enable best-in-class traveler experiences.

 

Business

OUTSOURCING YOUR IT SOLUTIONS CAN SAVE YOU FROM COSTLY DOWNTIME

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Amir Hashmi, CEO and Founder of leading IT and Cloud services provider Zsah, discusses why you need full-time professionals if you want to avoid the money pits of IT downtime

 

A lot of wealthy business owners will uphold the following infamous statement – time is money. Many CEOs believe that it should be at the heart of your business strategy. They aren’t wrong, and it is no different when it comes to IT. Therefore, it is high-time that businesses consider the real risks and costs associated with IT downtime, and do all they can to avoid it

In the midst of a post-pandemic technological revolution, it’s now more important than ever to carefully consider who manages your technology. It is essentially the motor that drives productivity, efficiency and growth, and if therefore, if there isn’t a thorough and dedicated system in place, businesses risk system failure, which can risk everything.

Something so essential to a company deserves to be taken more seriously than just to deploy the services of an IT help desk when there’s a significant issue. The answer isn’t necessarily to consider ways in which you can fix a problem once it arises, but instead to ponder upon ways of preventing an issue from occurring in the first place. This is what leads us to managed IT support services: your personal, dedicated team of IT experts that not only fix issues when they occur, but that also constantly improve the software and hardware so there is less chance they ever take place.

 

The real cost of downtime

Whenever your IT isn’t functioning at its full capability, you are losing money. Even the shortest of gaps in service can severely impact the customers’ experience, your reputation, and the output and efficiency of your entire staff.

In 2017, ITIC sent out an independent survey to measure downtime costs. It found that 98% of organisations say that a single hour of downtime costs over USD $100,000, with 81% putting the figure at over $300,000. For 33% of businesses, 60 minutes of downtime would cost their firms between $1 million and £5 million.

Figures from Statista.com reveal 24% of organisations worldwide reporting average hourly downtime costs amounting to between USD 301,000 and USD 400,000, with 14% reporting greater than USD 5 million in costs.

Elsewhere, IHS Markit surveyed 400 companies and found downtime was costing them a collective USD 700 billion per year – 78% of which was from lost employee productivity during outages.

 

Managed IT solutions are the key

Though we may never know the full cost of downtime, it is evident that it costs individuals and businesses a large amount of money. Don’t wait until your next emergency to remedy a problem; get the professionals in now to prepare for the future, rather than just fix problems in the present.

When you work with a managed technology services provider, your network and infrastructure are supervised 24 hours a day, all year round. As with any IT service, this means that issues will be fixed – however the real advantage is more long-term. As technology service providers perform regular proactive upkeep, there will be a reduced chance of suffering from issues in the first instance, and when (or if) they do occur, it will be far simpler to recover data thanks to full cloud integration.

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Banking

HOW TRADITIONAL INSURERS CAN USE TECHNOLOGY TO IMPROVE THEIR RELATIONSHIP WITH CUSTOMERS

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The customer experience with insurance is anomalous, in that one is only required to engage with their insurer if things are going wrong for them. To add value to the relationship, new technology and methods should be adopted, in turn driving loyalty and business growth, writes Oliver Werneyer, CEO and Co-founder of Imburse

Oliver Werneyer

Insurance is one of the oldest industries in the world and it is still, to this day, considered a grudge purchase. Looking back, insurance has a history of having a challenging relationship with its customers. According to an IBM study, in 2008, only 39% of consumers trusted the insurance industry. This percentage has stayed largely similar over the years, having reached only 42% in 2020. For any business with growth ambitions, good customer relationships are crucial.

I believe that now more than ever, the insurance industry not only needs to continue investing in improving relationships with customers, but to really think about new ways of doing so. At a basic level, the moment of truth for an insurance customer is when either they need to pay or are getting paid. Insurers can have the best policy wording, quick claims processes, apps and advisors, but if the experience to pay premiums or to receive a claim is bad, the customer immediately loses trust.

The pandemic has exposed this tenuous relationship between insurers and its customers. The need to move everything online and provide personalised services has exposed significant shortcomings in the service insurers provide. The industry has been too slow to adopt newer technologies and move engagements closer to the customer (self-service and empowered). This is largely due to the legacy systems and processes that insurers failed to modernise over previous years.

This means that the better-positioned incumbents have stronger customer relationships and benefit disproportionately from the pandemic, as they are able to win more new customers and convert customers from other insurers. They also benefit from significantly lower customer acquisition costs and much better growth, as illustrated in this McKinsey report. Even new entrants or InsurTechs are benefitting massively by focusing on improved customer experience and customer relationships.

However, it is never too late for insurers to build better relationships with customers. The main way to build a good relationship with a client is to make life easier, live up to promises and add value through the relationship with them. By working on these key elements, insurers can start building strong relationships with their customers, and, through the right partners, deliver this in a timely and non-disruptive manner.

 

Embedded Services

Insurance products often get a bad reputation because they cost money, but the benefits might only come much later, or never. Customers don’t get to experience a positive relationship with insurance products, either because they never claim and feel like they lost out, or they claim and they’re in a bad situation. By either embedding other services into the insurance experience to deliver a more transactional engagement, or embedding insurance products into general customer experiences such as online shopping or rewards, insurers can enrich customer relationships to generate value.

This way, insurers become a value-adding part of the customers’ everyday activities and not just a product that they have to pay for and may never get anything back from. One example is to embed micro-savings capabilities, often found in banking, into pension savings and insurance products. This can allow customers to save more for pension, attract younger customers and build a portfolio of fiscally disciplined customers.

 

Tailored journeys and personalisation

Customers have come to expect personalised journeys and engagements from product providers. Streaming services, social media, e-commerce or mobility services have shaped the customer expectations. Now, customers are also expecting personalisation for insurers.

Insurers need to invest very heavily in delivering personalisation and customisation to customers as they engage with their products. Failure to deliver this puts renewed strain on the value perceived by the customer and their relationship with the insurer. This applies not only to customer interfaces, but to aspects such as payments. Insurers should make it easy and pleasant for customers to pay and get paid. As the main moment of truth, payment experiences need to work optimally.

 

Perceived customer value metrics and delivery

The value customers derive from insurance products is, generally, monetary. Therefore, insurers must invest in product enhancement to increase its perceived value. Perceived value is not tied to a monetary value. By being able to choose between multiple payment options, such as a $300 pay-out to a bank account or a $320 Amazon voucher, the customer has a higher perceived value of the payment. This can be achieved by leveraging non-insurance products that can be purchased at a discounted price, exclusive access that the customer would otherwise not have or conversion into a form that is more useful to the customer.

Payments, for collection and pay-out, are at the core of delivering this value. An excellent payment experience immediately influences the customer to be positively inclined toward a product (PwC report). In order to offer this, insurers need to leverage multiple technologies and providers, offer any speed of transaction in any market, and deliver faster automation and better risk control. The key is to transform insurance products into transactional value-adds to customers’ lives and use this opportunity to continuously build on relationships with customers.

The main roadblock for insurers is still the operational implications of these activities and the costs that arise. In looking to build a better customer relationship, insurers need to look at partners that are operational enablers to deliver this. Partners that can solve the integration and speed-to-market problem so that insurers are enabled to deliver new capabilities, not bombard them with new ideas and no path to delivery.

Imburse, for instance, enables insurers to access all the global payment providers and technologies available in any market. Through a single connection, insurers can deploy any payment capability into any channel, for collection and pay-outs, without ever again needing to build a direct operational integration to the providers. This gives them full freedom to leverage payments as a key value driver and customer experience enhancer.

Building a better relationship with insurance customers is key for the insurance industry to close the protection gap. Incumbents are in the prime position to look at Insurtech and Fintech partners to rapidly and significantly modernise, digitalise and transform their own capabilities to deliver major enhanced value to their customers.

Imburse is an advanced universal payment connector that enables businesses to gain cost-effective access to complete global payments technology, regardless of the service provider. To learn more, please visit www.imbursepayments.com.

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