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Everyone wins when you enhance a banking app

People using their phone while waiting for a train
Times have changed. It’s now normal for consumers to buy their groceries, clothes and travel, read news, socialise and research major purchases via their phones. Even essential government services like Centrelink and Medicare are encouraging their customers to use their digital channels rather than face-to-face contact. Financial institutions must also provide opportunities for customers to complete more of their banking via digital channels.

A recent McKinsey and Company report[i] shows that customers across Asia – including Australia – have made a clear shift to digital banking in line with smartphone usage.

Mobile banking is now the preferred option for standard banking transactions such as checking account balances and paying bills. The report highlighted that deep digital engagement with customers can generate considerable value for banks: digitally active customers are stickier – they purchase 1.6 products per year, compared to 0.5 on average for non-digital customers; and active digital customers also own 1.5 times more banking products than their non-digital peers.

Enabling digital engagement at the front-end, where consumers interact with their bank’s services, is a crucial part of developing digitally active customers. Banking apps that are easy to navigate and rich in features provide a myriad of benefits to customers – and ultimately to financial institutions too.

Driving engagement with card and PIN controls

You can improve the richness of your existing digital channels, like banking apps, by introducing new functionality. This can increase your customers’ ability to self-service, encouraging ongoing, regular use of your banking services and improving their loyalty to your brand.

For a customer managing their banking, the ability to manage their card PIN through their banking app – rather than having to make time to visit the branch – is a perfect example of how a banking app which is rich in functionality can better meet customers’ needs. Indeed, for a customer with a crisis out of hours where they need money and have forgotten their PIN, the ability to take control and solve the problem themselves, using their banking app, can be an instant stress reliever.

Implementing enhanced card controls within a banking app is another great way to engage customers by giving them the tangible benefit of real-time management of their cards. Allowing customers to turn certain transaction types on and off with a swipe of their finger, or activate limit-based transaction blocks, creates both financially savvy and digitally engaged customers.

Enabling or disabling contactless payments, switching online or card not present transactions on and off, activating or de-activating ATM transactions (for domestic or overseas transactions) are all examples of everyday interactions banks can create for customers within their banking app. Some customers are asking for further controls, such as setting blocks on merchant categories and being notified when transactions are approved or declined.

Benefits for financial institutions

There is benefit for banks in moving functionality into online or digital channels.

Empowering customers to self-serve helps to lower cost-to-service metrics and enables customer service staff to focus on other priorities and higher value transactions.

Using a banking app as a delivery channel can help solve pain points for both customers and financial institutions. A good example of this is the emergence of virtual card capabilities, to support instant card issuance. This technology allows a financial institution to digitally issue a card to a customer via their banking app or internet banking platform. The customer receives their digital card almost immediately after the order is processed. They can set their PIN, activate the card and use it online straight away. The card can also be provisioned to a digital wallet such as Apple Pay, Google Pay, Samsung Pay or a wearable like Fitbit Pay or Garmin Pay, and be used straight away, anywhere contactless transactions are accepted. No more waiting for several days for the plastic card to arrive before you can start spending.

Instant card issuance is a win for both institutions and customers. The financial institution earns transaction revenue sooner than with the traditional card and PIN ordering process, and saves money because plastic cards and PINs don’t need to be created or sent to customers. Cardholders benefit as they no longer need to worry about their PIN falling into the wrong hands, or wait for their card to arrive before spending in stores or online.

Your best friend when disaster strikes

Digitally issued cards also go a long way to solving the lost card problem – because there isn’t a card to lose! And a virtual card on the phone, even if it is lost, is protected by the phone’s security.

And finally, if a customer loses their physical card – especially if they are travelling – being able to issue a virtual card instantly means that the customer isn’t stranded. It’s conceivable that they could lose their plastic card at breakfast on their last day, login to the app, cancel the old card and set up a new virtual card on their phone in time to check out of their hotel and go to the airport.

Without instant card issuance, the customer could have been stranded for days, or even a week.

At Cuscal, we are collaborating with our clients to help them offer engaging and innovative banking experiences to their customers. Our current suite of products is designed to promote efficiencies in banking operations and create self-service opportunities for cardholders. Our API suite includes enhanced card control APIs, PIN management APIs (including PIN change and PIN set functionality) and a virtual card set to facilitate instant card issuance.

These are dynamic times for financial institutions and we are excited to be assisting our clients to develop solutions that support a more digital way of banking.

By Lauren McCormack, Head of EFT, Acquiring and Digital

[i] Sonia Barquin, Viniyak, HV, Duhita Shrikhande, Asia’s digital banking race: giving customers what they want, McKinsey & Company, Global Banking Practice, April 2018

Cuscal launch first HCE mobile payment trial

BiscuitCuscal’s mobile contactless payment solution enables quick and seamless provisioning – an Australian first delivering tomorrow’s world today

Sydney, 27 March 2014: End-to-end payments leader Cuscal has today announced the launch of the first trial of a HCE (Host Card Emulation)-based mobile payment capability, for Visa cardholders, in Australia and the Asia-Pacific.

The future-ready solution has been developed by Cuscal in Sydney and when launched commercially, will provide Australian consumers with greater choice when it comes to making secure payments with their mobile phones.

The Cuscal HCE mobile payment solution effectively turns an NFC-enabled phone running the latest version of the Android KitKat mobile operating system into a contactless payment device. With confidential payments data1 stored in a secure cloud, it provides a strong level of security.

When commercially available, the solution will enable Visa cardholders whose cards are issued by one of Cuscal’s financial institution clients to use their mobile phone to make contactless payments via existing Visa payWave contactless point-of-sale terminals that are widely available in Australia. Sensitive payments data is stored in Cuscal’s secure cloud service which the mobile phone connects with via the cellular network.

A pilot team of Cuscal staff cardholders have begun testing the HCE capability over the last week. Following the successful completion of the trial, Cuscal aims to make the solution available to its Australian client base in the middle of this year as part of its broad suite of mobility services; either as a complete client-branded mobile application, or via an application programming interface (API).

This will allow Cuscal clients to offer innovative mobile payment solutions to their customers, while minimising upfront development costs by leveraging this secure and cost-effective solution.

Adrian Lovney, General Manager of Product & Service at Cuscal, said: “Cuscal’s HCE mobile payments solution is a shining example of Australian innovation delivering tomorrow’s world today. Getting payments inside phones has traditionally been difficult because of the need to coordinate multiple parties such as trusted service managers, handset manufacturers and telecommunication providers. The HCE approach simplifies this while maintaining the highest level of payment security for cardholders.

“A level of openness will be built into Cuscal’s foundation mobile application offering, so we can continue to develop the HCE mobile payment solution in line with partner demand and device innovation as well as ensure that it can be integrated with the New Payments Platform (NPP) when it is ready,” he said.

Stephen Karpin, Group Country Manager for Visa in Australia, New Zealand and South Pacific said: “Australia is again leading the charge in payments innovation and we are delighted to work with Cuscal on this trial to help make next generation commerce a reality. With 40% of face to face Visa transactions in Australia already taking place via the Visa payWave contactless technology, it is important to develop the infrastructure to deliver secure mobile payments to the consumer.”

Jason Murray, General Manager Products & Marketing, CUA, said: “It’s exciting that our key payments partner is developing cutting edge mobile payments infrastructure, which we at CUA will be able to leverage for the benefit of our customers in the future.”
Brian Parker, Cuscal’s Chief Information Officer, was the first person to perform a live HCE-based Visa payWave transaction using the new solution with the purchase of two packets of Tim Tams at a 7 Eleven in Sydney’s CBD on 17 March 2014.

Mr. Parker says Google’s Android KitKat operating system, combined with the security of Cuscal’s cloud service and Visa’s network, will provide clients with the highest level of assurance around security whilst being able to access future mobile payments technology and reducing the impact of upfront development costs.

“Increasingly, NFC technology is being developed in the cloud and maintained by trusted technology providers; this is the future of payments,” said Mr. Parker. “Importantly this solution is provisioned securely with multiple layers of protection built-in.”

“Cuscal’s client-branded mobile payments solution, incorporating HCE, will be refreshed and updated on a continual basis to accommodate new functionality in line with device evolution, industry innovation, new payment channels, market demand and innovation within our own ATM, payments and switching environment. We also plan to make HCE payments capability available to our clients via an API.”

Additional points:

  1. The Cuscal-Visa HCE mobile payments capability must first be downloaded by the Visa cardholder to a compatible Google Android device (Nexus 5, Nexus 7, and newer HTC and Samsung smartphones, among others).
  2. Recent research from Telsyte shows that of the 15 million smartphone users in Australia at the end of 2013, Android leads the way, with slightly over 50 percent of the market.
  3. The customer can then wave their mobile phone over secure, contactless point-of-sale terminals in order to make payments and should look out for the contactless symbol at the payment terminal.
    The application and phone pass a series of messages between the phone and Cuscal’s servers, either authorising or declining the transaction.
  4. Like others processed by Cuscal, these transactions are protected by Cuscal’s Vigil fraud bureau service, an industry-leading fraud prevention and protection suite, which has more than two million cards under management.

1 Such as encryption keys, card numbers or PINs.