1. AUGUST 4 - 8, 2014 visit paymentweek.com
Beat The
Banks With
Robocoin 2.0 -
Bitcoin ATM
Mobile Payments Becoming
Massively Popular in China
ALSO INSIDE:
Hackers Steal
Billions of
Usernames
& Passwords
From
Internet

2. 2
F E A T U R E D A R T I C L E S
Felix Shipkevich
FOUNDER
Jason Mongiello
DIRECTOR OF MARKETING
GRAPHIC DESIGNER
Kevin Xu
EDITOR
CONTENT STRATEGIST
Andrew Barnes
MANAGING DIRECTOR,
EMERGING PAYMENTS
Brad Rickerby
CONTRIBUTING WRITER
Eric Wagner
CONTRIBUTING WRITER
Monique Zamir
CONTRIBUTING WRITER
Jane Genova
CONTRIBUTING WRITER
Atifa Imran
CONTRIBUTING WRITER
Melanie Macinas
CONTRIBUTING WRITER
David Cross
CONTRIBUTING WRITER
Corporate Office
65 Broadway
Suite 508
New York, NY 10006
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Week should be directed towards our
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M A R K E T P L A C E
T E C H
E M E R G I N G P A Y M E N T S
Exclusive Q&A with Gemalto’s Amol
Deshmukh, VP of Mobile Financial Services
We speak with Amol Deshmukh, VP of Gemalto’s
Mobile Financial Services division, on leading
security in the realm of mobile payments,
innovating in wearable tech, and the tricky issue
of consumer adoption.
S P O T L I G H T A R T I C L E
4 - Apple’s Mobile Payments Play Takes Shape
3 -Scan it And Scoot: Instant Shopping Coming Soon from JumpQ
I N D U S T R Y V O I C E S
5 - Hackers Steal Billions of Usernames and Passwords From Internet
A U G U S T 4 - 8 , 2 0 1 4
6 - P.F. Chang’s Releases Information on Extent of Security Breach
7 - Money20/20 Introduces Payments Hackathon
8 - Beat The Banks With Robocoin 2.0
9 - Global Payments Teams Up with BitPay
11 - Newegg Offers Visa Checkout for Seamless Checkout Experience
10 - New App Locks Debit Cards for Added Security
R E G U L A T I O N
14 - European Court of Justice to Rule If VAT Applies to Bitcoin
16 - Exclusive Q&A with Gemalto’s Amol Deshmukh, VP of Mobile
Financial Services
12 - Square Acquires Caviar, Begins Offering Food Delivery Services
13 - Mobile Payments Becoming Massively Popular in China

3. T E C H
3
Scan it And Scoot: Instant Shopping
Coming Soon from JumpQ
By: Eric Wagner
M
obile point-of-sale pioneer, JumpQ is
getting a jump on the digitization of the
supermarket with a hot new app launching
mid August.
Claiming that it will revolutionize the way people
shop and interact at the neighborhood store, “Our
aim is to allow customers to spend less time
waiting in lines and let them get back to the things
they’d rather be doing,” said Jason Musyj, Founder
of JumpQ. “The level of convenience that users
have grown accustomed to from their e­-commerce
experiences has not translated over into offline
shopping, and our goal is to completely redefine
the traditional shopping experience.”
The app works by letting customers “Pay Ahead”
using their smart-device. Customers take a photo
of the items they want and then they can pay for
those items through their mobile device as well; all
of which adds up to much less time waiting in lines
allowing for a much better experience overall.
The JumpQ app will launch August 15th, 2014 and
will be available on both Apple and Android App
Stores.JumpQ makes the entire shopping experience
better for both shopper and merchant. Barcode
scanning is built into the mobile app and allows for
instant item identification through mobile cameras.
The App’s coordination of incredibly fast, dynamic
and vast product catalogues allow merchants to
price their goods in the most effective ways ever.
JumpQ has incorporated the popular Square card
reader APIs which automatically connect with
merchants’ Square accounts, in order to cast a wider
net attracting smaller local merchants wishing to
be part of the growing trend towards integrating
the online experience into the offline store.
Considering that there has been a lack of any real
exciting upgrades to the whole shopping experience
for a few decades, any change would come along
invitingly. JumpQ however, has brought in a wave
of exciting new shopping possibilities, and is likely
to take the boredom out of waiting in the meat and
dairy isles for good.
MOBILE

4. 4
T E C H
4
A
pple has been engaged in extensive talks
with major players in the forefront of the
mobile payments sector, and has made it
clear they intend to make a big push for a mobile
payments partnership by fall.
Timing is critical as it is widely speculated that
the much vaunted Apple smartwatch which fans
have been patiently waiting for, will be announced
simultaneously with the launch of the iPhone 6.
Apple has recently acquired a patent for a so-called
“iTime,” described as a full-featured smartwatch
with support for hand gesture control.
Apple’s mobile payments play, which is still under
wraps, will allow users to turn their iPhone into a
credit card and pay for goods and services either
online or even in the actual retail store.
Apple has a reputation among consumers for
producing the highest quality hardware in the
design of their devices. Apple’s payment solution
is said to take advantage of a built in secured
element within the iPhone, which is thought to
relate to the secured enclave for data built into
the new A7 mobile processor.
Leaks from the talks point to the new payments
platform being a function of Apple’s Touch ID which
is its new biometrics technology, first launched
with the iPhone 5s, which uses a fingerprint reader
in your handset to allow iOS to unlock certain
functionality when you touch the Home button.
If you’re concerned about your biometric privacy
or about Apple getting its corporate hands on your
fingerprints, you’ll be happy to know that your bio
data is safely secured in your device. The Touch ID
sensor is essentially wired directly into a special
area of your iPhone’s A7 CPU, called the ‘secure
enclave,’ that encrypts data using a key that is
embedded into the chip. The data never leaves the
enclave, and could not be read even if someone
were to physically gain access to your handset and
take it apart.
Some have suggested that Apple might include
near-field communications (NFC) chips in the
iPhone 6, and hardware prototypes continue to leak
out of the factories where parts are being made.
Ultimately, time will tell what the final product will
look like and how it will work. For certain it’s sure
to bring a wave of change amongst the hundreds
of millions of I-users who are devoted heart and
soul to the brand.
Apple’s Mobile Payments Play Takes
Shape
By: Eric Wagner
MOBILE

5. T E C H
5
T
he way companies protect consumers’
information online has once again been
put into question following a series of
internet attacks wherein billions of usernames and
passwords have been stolen by Russian hackers.
According to a recent report by the New York Times,
Russian hackers have stolen 1.2 billion usernames
and passwords and 500 million email addresses
from 420,000 websites. This series of heists was
discovered by Milwaukee-based Hold Security,
which has long been involved in uncovering online
security thefts.
Security experts fear hackers will continue doing
their illegal activities unless companies become
more careful.
“Companies that rely on usernames and passwords
have to develop a sense of urgency about changing
this,” said Avivah Litan, a security analyst with the
research company Gartner.
According to Alex Holden, the founder and chief
information security officer of Hold Security,
majority of the sites attacked by the hackers are
still prone to further thefts.
To date, the information gathered from the wave
of attacks are being used to send spam messages
such as marketing pitches and schemes on social
networks.
The increasing reports of information theft and
security breach are indeed alarming. Now is the
right time for companies to intensify their security
measures in order to protect consumers and their
businesses.
Hackers Steal Billions of Usernames
and Passwords From Internet
By: Melanie Macinas
SECURITY

6. 6
T E C H
6
Image credit: gsloan
P
.F. Chang’s has released a list of the
restaurants affected by a data breach, which
occurred during an eight-month period.
In total, 33 restaurants were compromised, with the
breaches occurring during the period of October
2013, to June 11, 2014.
The United States Secret Service tipped off P.F.
Chang’s of suspicions that credit and debit card
data had been stolen from the Arizona-based
restaurant chain’s customers.
In a statement, the company said that cardholder
data including card numbers, names and expiration
dates were stolen.
The breach was believed to have likely stemmed
from compromised point-of-sale machines, since
P.F. Chang’s quickly switched to manual entry of
cards for payment after they were informed.
The restaurant chain confirmed, “We have
determined that the security of our card processing
systems was compromised” in the release.
While not on the same scale as recent breaches
such as Target’s holiday shopping season disaster,
or eBay’s customers having their login credentials
compromised, it highlights the fact that no business
is truly ever safe from enterprising criminals.
However, P.F. Chang’s is being proactive by offering
its customers a free “fraud alert” service that “alerts
creditors to take additional steps to verify their
identity prior to granting credit in their names.”
P.F. Chang’s Releases Information on
Extent of Security Breach
By: Kevin Xu
SECURITY

7. T E C H
7
T
his year’s biggest event in payments,
Money20/20, has announced that it will be
hosting a hackathon.
Aiming to bring together hundreds of “developers,
designers and entrepreneurs” during October 31st
to November 2nd, the Money 20/20 Hackathon will
be a part of the event’s LaunchPad360 initiative.
Launchpad360 itself is an opportunity for budding
companies to display cutting-edge innovations
in payments, in front of investors and leading
busineses in the industry.
The Hackathon’s goal is to provide participants
a chance to cook up something impressive using
the SDKs, APIs, and other tools provided by
ten companies, which include ModoPayments,
Blockchain.info, PayPal, MasterCard, and Mercury
Payment Systems.
Teams of one to five people will have three days
to use whatever they have at their disposable to
create something unique and eye opening.
A $125,000 prize pool will be distributed to ten
teams, with the top five nabbing $20,000 each.
The top team will also have the chance to present
during Money20/20’s LaunchPad360 payments
solutions showcase, which is certainly a huge
opportunity since it will get eyes from industry
leaders as well as investors.
There’s no doubt that along with letting some
talented developers and programmers flex their
muscles, it will also be a stress test for these ten
participating companies to weigh the efficacies of
their payment tools and products.
Money20/20 Introduces Payments
Hackathon
By: Kevin Xu
SECURITY
Image credit: Tim Lucas

8. 8
E M E R G I N G P A Y M E N T S
8
R
obocoin, the upstart coin operator which
brought us the world’s first Bitcoin ATM, has
had some terrific growth this past year. Now
they have announced an upgrade to their platform
in the release of Robocoin 2.0, otherwise named
Robocoin Bank.
The idea behind this new roll-out is to create a
fully functional bank-branch like experience using
their already growing network of Robocoin ATM
machines. The ATMs already work with 12 national
currencies worldwide and the list is expanding. It
can also allow users to send money using only a
phone number or email. Recipients who haven’t
signed up for Robocoin can visit the local branch
to redeem their payment in cash.
“Our goal is to make storing and sending money
faster, friendlier, cheaper and easier than any
other company in the world,” said Jordan Kelley,
Robocoin’s CEO.
The hardware behind the Robocoin 2.0 Bank has
gone through some modification by way of a huge
cut in the price of the machine. The company has
slashed the base price for its Robocoin Classic unit
from $20,000 to $15,000. The company assured
clients that the machines use state of the art bank
safe design for the ultimate in safety and security.
Robocoin bank branches use a biometric
authentication technology, in addition to phone
and PIN authentication. The aim is to completely
protect user accounts and where necessary comply
with anti- money laundering and other modern
banking regulations.
Moving technology closer to our doorstep is a step
in the right direction. Each advancement is making
Bitcoin easier and more functional, whole bringing
it functionally closer to the mainstream. Replicating
our real world desire to interact, Robocoin has
caught our attention as a lead innovator in what
matters most.
Beat The Banks With Robocoin 2.0
By: Eric Wagner
DIGITAL CURRENCIES

9. E M E R G I N G P A Y M E N T S
9
9
P
ayment solutions provider Global Payments
has teamed up with BitPay, a leader in
business solutions for the bitcoin digital
currency.
Under the referral agreement, Global Payments
will integrate the cryptocurrency into its product
line and accept bitcoin payments from customers
all over the world.
Global Payments’ product suite comprises of
solutions and services for debit and credit cards,
gift cards, business-to-business purchasing
cards, electronic check conversion and check
guarantee, verification and recovery, and terminal
management.
“We focus on delivering innovative products and
services to our global customer base, and this
relationship provides us the ability to offer our
merchants an integrated digital currency payment
choice,” said David Mangum, president and chief
operating officer of Global Payments. “We are
pleased to partner with BitPay to provide next-
generation payment solutions to our customers.”
Tony Gallippi, co-founder and executive chairman
of BitPay, said the collaboration with Global
Payments allows retail and ecommerce merchants
to easily accept bitcoin payments.
“The cross-border demands of global merchants
present a great opportunity for bitcoin acceptance
and will allow us to reach more customers in
emerging markets,” he added.
Global Payments becomes the newest company
to embrace digital currencies as a mode of
payment—a testament to the growing popularity of
cryptocurrencies such as bitcoin all over the world.
Global Payments
Teams Up with BitPay
By: Melanie Macinas
DIGITAL CURRENCIES

10. 10
E M E R G I N G P A Y M E N T S
10
C
onsumers will soon be able to lock their
debit cards thanks to a new technology that
provides more security to card users.
Texas-based Malauzai Software is the first to
offer an app that locks debit cards when not in
use—a feature that users find to be interesting and
beneficial.
Last year, the Centier Bank in Northwest Indiana
started offering Malauzai’s on/off security feature
to consumers through its mobile app.
The bank said the number of customers using the
app had increased following Target’s announcement
of a breach on millions of its customers’ debit and
credit cards.
According to Nessa Feddis, who works with the
American Bankers Association, the new service
provides customers with more security and piece
of mind.
“We’re all familiar with the bank systems that
identify suspicious activity, but this is one that
actually stops the fraud before the transaction
occurs,” Feddis said.
The new technology has caught the interest of
Chicago-based BMO Harris Bank and MB Financial,
and they are now planning to offer the service soon.
Ondot also plans to launch similar technology
through banks and credit unions in the US in
September.
“In some of the test markets where the product has
been deployed for over 12 months. They’ve seen
reduction in fraud by as much as 60 percent,” said
Ondot founder Rachna Ahlawat.
This is a step in expanding financial security and
placing it firmly in the hands of the consumers,
a welcome step following increasing reports of
security breaches and card fraud.
New App Locks Debit Cards for
Added Security
By: Melanie Macinas
CREDIT, DEBIT, & PREPAID
Image credit: www.perspecsys.com

11. E M E R G I N G P A Y M E N T S
11
11
N
ewegg, a California-based online retailer of
computer hardware and software, has added
Visa Checkout for desktop and mobile users,
providing more payment options to consumers for
a seamless checkout process.
Visa Checkout is an important component of
Newegg’s mobile wallet solution, joining Google
Wallet on Android and iOS, said Soren Mills, chief
marketing officer at Newegg North America, Los
Angeles.
Aside from a more seamless experience,the addition
of Visa Checkout also seeks to reduce shopping cart
abandonment and increase conversion potential.
“Newegg’s implementation of Visa Checkout
aims to offer more diverse one-click payment
options to customers,” said Nathalie Reinelt, an
industry analyst with the Aite Group, Phoenix. “Not
everyone has a PayPal account, so Visa customers
can now set up their payment credentials through
Visa Checkout to have a better frictionless online
shopping experience.”
Visa Checkout stores credit card information online
allowing e-payments to be made on merchants’
website. Visa’s newest offering also allows users to
store multiple cards from several vendors.
To encourage more users to try the new technology,
Newegg is offering a 10 percent off on all Visa
Checkout purchases until August 25. Shoppers
just need to enter the promo code “VCO” to take
advantage of the discount.
Newegg
Offers Visa
Checkout
for Seamless
Checkout
Experience
By: Melanie Macinas
CREDIT, DEBIT, & PREPAID
VISA CHECKOUT
IS AN IMPORTANT
COMPONENT OF
NEWEGG’S MOBILE
WALLET SOLUTION,
JOINING GOOGLE
WALLET ON ANDROID
AND IOS.
“
“

12. 12
M A R K E T P L A C E
12
S
quare is going from payment platform to
full-on retailer with its acquisition of food
delivery service Caviar. Square has been
in talks to buy the startup that is valued at $90
million for some time, and now the deal is official.
Caviar follows in the footsteps of much larger
delivery services such as GrubHub Seamless, but it
goes one step further by providing its own delivery
drivers and vehicles to restaurants that do not
currently offer deliveries. Caviar also boasts no
minimum order requirements and real-time GPS
tracking so customers know exactly when their
food will arrive.
The acquisition will beef up Square’s foray into the
food delivery and restaurant market, which it first
targeted earlier this year with its Square Order
service, which allows customers to order ahead
food from a dedicated app that offers menus from
local restaurants. The app will alert users when the
food is ready to be collected.
With Caviar, Square can go the last step and actually
deliver food to customers’ houses.
Caviar currently serves a handful of metro areas
in the country, after starting in San Francisco in
2012. The company has offered delivery from
upscale restaurants and more specialty shops in
metro areas, which has helped it grow in popularity
amongst a small but dedicated audience.
The acquisition comes shortly after Google
acquired Seattle-based Appetas, a platform that
helps restaurants build their online presence. Other
startups like Munchery, Postmates, Spoonrocket,
and Sprig have also raised money in recent moves
to become players in the growing mobile commerce
fueled food delivery market.
Square Acquires Caviar, Begins
Offering Food Delivery Services
By: Michael Foster
INDUSTRY LEADERS

13. M A R K E T P L A C E
13
M
obile payments in China has increased 707
percent year-over-year in 2013, according
to the 2014 China Internet Financial
Development Report published by the Internet
Society of China (ISC) and Xinhua News Agency’s
magazine, Finance World.
The number of Chinese making payments through
mobile phones reached 125 million people last
year, up 126 percent from the previous year, the
report said.
But as mobile payments became more popular
among the Chinese, ISC Deputy Secretary-General
Shi Xiansheng warned of the security threats
associated with online payments.
Xiansheng called for the improvement of technology
and safety standards to prevent problems arising
from online payments such as identity theft.
Chinese consumers made over 1.6 billion financial
transactions through mobile phones last year and
this figure equaled to US $1.6 trillion, the report
added.
However, as the mobile payments industry continues
to enjoy growth, the People’s Bank of China has
planned to impose a cap on the amount of money
that users could spend through their mobile phones,
a move that might impact the industry.
China’s central bank was also mulling over similar
curbs on mobile financial products including Yu’e
Bao.
An online investment fund available for use on
mobile phones, Yu’e Bao is Alibaba’s entrance
into expanding its services past e-commerce and
payments.
China also recently barred the use of virtual
credit cards and QR codes for payments, at least
temporarily.
Regulators said these restrictions were not imposed
to crack down on firms providing mobile payment
products but to safeguard consumers from security
risks.
Mobile Payments Becoming
Massively Popular in China
By: Melanie Macinas
GLOBAL & LOCAL
Image credit: Tom Thai

14. 14
R E G U L A T I O N
14
T
he European Court of Justice will rule if
bitcoin transactions are subject to its value-
added tax rules (VAT).
If that top court decides to impose VAT regulations
on member nations with bitcoin businesses, they
could suffer an economic setback. Others could
miss out on the opportunity to establish business
initiatives associated with bitcoin. VAT is one
way the EU raises tax revenues. It’s essentially
a consumption tax, paid by buyers as part of the
purchase price.
That case before the Court is C-264/14 Skatteverket
v David Hedqvist and it raises the issue: Do
transactions between cryptocurrencies and
traditional currencies fall under VAT regulations?
As with all tax policies, this one could wind
up actually lessening government revenue by
weakening economic momentum. Much of the
recovery in the EU has been sluggish.
Any nation such as Denmark which classifies
bitcoin trading – both gains and losses – as exempt
from taxation can be at a competitive advantage
in attracting investors. That taxation policy might
even motivate investment firms and serious
investors to relocate to that country.
In the US, for example, bitcoin investments are
taxed. The law also requires that foreign accounts
be disclosed.
Currently, nothing in the EU tax rules, which
date back to 1993, applies specifically to digital
currencies. The current case arose primarily
because of a dispute between David Hedqvist and
Sweden’s tax authorities.
Hedqvist’s business objective is to begin to sell
bitcoins on his website. At the time, the Swedish
tax folks were in the process of challenging a court
ruling in Sweden which held that VAT should not
be imposed on bitcoin transactions. Hedqvist didn’t
European Court of Justice to Rule If
VAT Applies to Bitcoin
By: Jane Genova
ELECTRONIC PAYMENTS LAW
Image credit: Yanni Koutsomitis

15. R E G U L A T I O N
15
15
want to proceed amid regulatory uncertainty. As a
result, the Supreme Administrative Court of Sweden
filed a request for clarification on the issue.
In addition to the ruling, the decision from the
EU’s highest court will guide central bankers on
the authority of taxation agencies in relation to
bitcoin. They need that clarification to regulate the
relationship of traditional and digital currencies.
The EU Banking Authority has warned banks not
to engage in any cryptocurrency transactions until
regulators can protect both types of currencies.
One fear is that the trading platforms for digital
currencies could be hacked.
For solid economic reasons, when the EU’s top court
issues its decision, the global currency industries
will be paying close attention.

16. I N D U S T R Y V O I C E S
16
G
emalto is leading the pack in digital security,
with hardware and software solutions
utilized by some of the biggest names
in tech. We speak with Amol Deshmukh, VP of
Gemalto’s Mobile Financial Services division, on
leading security in the realm of mobile payments,
innovating in wearable tech, and the tricky issue of
consumer adoption.
Kevin Xu: Amol, lets start with a breakdown on
Gemalto, your place in security, and the global
scope.
Amol Deshmukh: Gemalto has been around for a
long long time, so we’re definitely considered by
the industry as the leader in digital security and
M2M technology as well.
We have several lines of business; mostly all of
them have to do with increasing the security in the
digital experience of whatever people do on a day-
to-day basis. So we have customers in the telecom
space who are mostly operators, MNOs that buy our
products and services to enhance the security of
their networks, on the GSM network. So obviously a
large portion of our business is providing the SIM
cards, personalizing them, and getting them issued
into the hands of consumers.
The other area is of course in the financial space
where we sell millions and millions of EMV chip
cards and solutions. So that is a big business for us
coming in the US as well.
Of course all solutions around it whether its
personalizing these cards, getting them in the
hands of consumers. So when you order a credit card
from say Chase bank, and you get it in the mailer
and you get it in your hand, that’s us. Of course the
trends are also changing now where you also get

17. I N D U S T R Y V O I C E S
17
the same cards over your phones. So Isis is another
example of what we’re doing, where Gemalto is the
key component for the Isis ecosystem.
And also work with service providers such as Amex,
who issue these cards together on Isis phones,
which also happen to have the Gemalto SIM cards
inside of them. That’s another area. The third area is
a kind of pure security in the corporate, government,
transportation, and that kind of space, where we
sell millions and millions of corporate ID cards to
folks such as Exxon Mobil or Shell who want to
secure their networks, VPNs, send secure emails
between their companies, so on and so forth.
And of course the e-government initiatives,wherever
there’s national ID initiatives, Gemalto is typically
involved with our products and solutions.And closer
to home here, we have the DOD, the Department
of Defense where we have a huge majority of the
cards that they issue to their personnel and their
agencies for network and network logins, checking
their emails, security and also physical access at
some points.
So the M2M business is a business that was
something that we acquired a few years back.
Looking at the fact that humans interact with each
other but soon its going to be machine interacting
security and then you can do that… so that you
can have a secure interaction whether its talking
to them, talking to humans…. and that’s a huge
portion of our business as well.
So from a footprint, about I would say 12,000
employees from over 100 nationalities, we’re in
44 countries and we have about 190 countries
that have customers globally. 3,000 plus financial
institutions are our customers, 450 plus global
MNOs, the names that you would know, AT&T,
Verizon, T-Mobile, Orange, Vodafone, everybody.
About 80 plus I would say, government programs,
national IDs that we have done, and revenue in
2013 was over $3.25 billion. So a leader in a number
of fields if you look at it from a digital security
standpoint, anything to do with securing the
networks, securing the communications, securing
interactions between devices as I mentioned.
And there is probably a chance that several or
most of the world’s consumers are going to have a
Gemalto product in their pockets or in their phone
and wouldn’t even know about it. That’s one of the
key things that we do, we’re kind of the “Intel Inside”
if you may, for a lot of things, we just don’t have
that advertising campaign, but we have several
customers who have usage in the background and
let them be with their brand.
Lets talk a bit about global NFC adoption for a little
bit. Would you say that the security features in NFC
and contactless payments are inherently more
secure than credit cards? Or is that something that
needs to be focused on, built up?
Right. From a US perspective, you have magnetic
stripe cards which are quite easy to duplicate, you
can just take a swipe of the card and you have all
the data. And you can start using it or create a fake
card out of that. Now the chip cards inherently
have a lot more security built in to it because you
can’t really track the chip in terms of trying to get
the card data out, EMV is the standard for payment.
EMV has also come out with contactless payment.
NFC is the same interface if you may, of contactless
payments. So when we’re doing NFC deployments
whether it’s using the phones or using our EMV
dual-interface cards, then yeah absolutely, we
have a much much higher level of security, and

18. I N D U S T R Y V O I C E S
18
a challenge response scenario and where the
card authenticates the terminal and the terminal
authenticates the card. Dual authentication sort of
going back and forth, that is way way, way more
secure than a simple magnetic stripe card.
The US has finally made the effort to make that
transition and has that… on the horizon, so starting
to catch up with the rest of the world in terms of
security I would think.
What do you think are some of the main friction
points in holding back NFC adoption?
With NFC or any new technology, you have to
get over the hump of any existing infrastructure.
So that’s one of the challenges that the world or
any industry usually faces, if you have an existing
infrastructure. The infrastructure today in the US is
mostly magnetic stripe based. For them to be able
to support chip or NFC transaction, there’s a certain
change that needs to happen. The good news
however on this, especially at this time with the
mandates for migration to EMV, both on the issuer
and the acquirer and the merchant side, is that
there’s going to be a change in this infrastructure
at some point with a date associated to it, so its
not open-ended. So this kind of a change that’s
going to happen for the infrastructure that’s going
to help tremendously. The other piece is, most of
the US terminal vendors, actually I would say all of
them, because there’s just two big ones left now;
VeriFone and Ingenico.
All of their terminals support contact as well as
the NFC or contactless kind of interfaces on their
terminals. So once the physical change of those
terminals happens, you’re going to be in a position
where there are all these terminals that have the
specific connection to be able to support NFC
transactions. I would say that’s probably one of the
key holdbacks if you may, for any sort of technology
change. We see that with NFC, however we see
the light very close now, so we don’t even say its
now light at the end of the tunnel, because we see
the light already. And our experience has shown
that that’s the way it’s worked with the Canadian
market, the Australian market, UK market, any of
the markets that migrated, once that infrastructure
jump or leap happened, then taking on new and
more secure forms of payment was quite rapid after
that.
What about in terms of consumer habits? What do
you see happening?
It’s just simple, very simple for me, from a user
perspective, if you’re asked to pay, you pull out your
card, you swipe it and off you go.
When actual user behavior has to change with
EMV migration, where you now have to have a chip
card so either you insert it, or you present it as a
contactless interface just because you can now, you
might see a change in the user behavior.
We’ve seen it in several places around the globe,
there is a slight hump that has to be overcome from
a user behavior, for sure, no doubt. I almost put it
close to before there were touch screens, nobody
ever thought of touching the screen. But now, if you
give a regular laptop to my kid, he is four, and he’s
going to try to touch that screen because that’s all
he knows.
It’s a matter of getting used to it, in that sense so
once you see and you start using it, you’re going
to have acceptance and ubiquity of that. But yeah
you’re absolutely right, you don’t see that in the US
today more so because as of now as we speak today,

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the migration hasn’t happened completely. So you’re
still in the moment where what you’ve been doing
or what users have been doing for a long time is
pull their card of the pocket, try to swipe it and be
on their way. It’s not overnight, and that’s why the
mandates for migration actually do help, because it
puts a stake in the sand, a line, where you can say
OK, after this at least the technology has to be able
to support it, and force users to move to a different
user experience.
So what you’re saying is when EMV happens next
year, we’ll see an uptake in mobile payments?
Mobile payments as well as NFC transactions
globally. And you’re right, you try to link the two
together but it’s very difficult to time it perfectly.
You’ve got to have the chicken, and then the egg.
You’ve got to have enough devices in the market,
you’ve got to have enough cards in the market and
then the infrastructure change happens. The good
thing is, people are not going to wait for each other
right now. You see Isis going quite strong, and Isis
with its wallet and I don’t know if you’ve read the
news recently but American Express is provisioning
several thousand, several hundred thousand cards
on the Isis phones. So a month in and month out
going forward for the past few months. So that, in
the hands of the consumers has started to happen.
There are so many phones that can already support
NFC as well. And you see more and more devices
that are coming out with support for that. So I think
that’s a good sign, in general for the contactless
industry.
I want to get your thoughts on what you thought
was the future of payment security. I’ve read a lot
about biometrics and I was wondering if that was
something Gemalto was looking into.
Yeah that’s a great question because we’ve looked
at biometrics for quite a long time. Just what we’ve
seen come back from the markets, is that a system
where the biometric information is stored in a
central location, is not something that has gained
a lot of popularity.

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Purely because if that is once compromised then
there is a big problem. Biometrics are a good
entry point if you want to replace PINs, and if you
want to be able to unlock the credentials that you
have, whether it’s payment credentials, security
credentials, and instead of trying to remember my
PIN, in a more distributed system, if I can use the
biometrics to unlock those and then go on with
whatever I want to do, that’s going to be probably a
more easy to digest.
We have solutions around that as well, whether
it’s storing the biometric fingerprint on the card,
or in secure elements, so on and so forth, that can
be done, not a problem. From a mobile security
standpoint I think what is going to be key is the fact
that folks actually know that when they’re paying:
One it’s more secure than using your magstripe, for
sure. Two, its going to be more convenient as well.
Security is the tough sell, and I think contactless is
going to be seen as a convenient method.
Especially when you start using phones, it’s much
easier to tap your phone and walk away. And people
are starting to get used to tapping cards, tapping
card readers, cards to open doors, to use their
cards for payments or for other things, access for
corporations, things of that nature.
So the tap is starting to get a mindshare if you
may, people are used to using the tap as opposed
to doing something else. So I think that’s going
to be a key for mobile payments in general, and
of course the underlying fact that the consumers,
obviously, almost make an assumption that it has
to be secure, they put that on the service providers.
So they expect that the service providers have put
in solutions that don’t compromise their privacy
and security. And that’s exactly where we help
our customers from our solutions and product
standpoint.
Last question, and that comes back to contactless
payments. Have you been looking towards wearable
technologies and incorporating payments in
wearable form-factors?
We’ve seen quite a strong interest from the market,
we have solutions actually in the market right
now for wearable technology. We’re starting to see
a little bit more interest of saying, okay, can I do
this as a brand, because there is a branding thing
that wearable brings along with it as well. There’s
a convenience and there’s a cool factor, associated
with it, but yeah absolutely we have actual solutions
in the field and technology that allows folks to use
payment cards inside of these wearable bands that
for us looks like a regular card that you just insert,
similar to a SIM card that goes into a phone.
So you stamp it out, put it into the wearable
and off you go for payment. So we take care of
everything that needs to be done from our product
and personalization standpoint. We’re starting
to see that as a strong interest from the market
for sure. It’s amazing, I was in the business of the
financial space about, I would say… six years back,
we started pushing this into the market, and there
were some stadiums around the world who tried to
do that, like football stadiums or soccer stadiums
who wanted to do commemorative kind of bands,
for their users and then the user can interact
with the payment system. We are starting to see
that interest peak now and more and more of our
customers are coming back to us and saying “Hey,
I’d like to issue a companion wearable along with
my dual interface card for payment,” for example.
So it’s really all about being right there and I think
the financial institutions are starting to be in that
space again.
Any last comments?

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We’ve really seen contactless as being the key for
payments going forward, where there’s migration to
new infrastructure happening, the EMV migration
happening, start seeing a strong uptake of
contactless payments. And once that happens that
also bodes well from a mobile payment standpoint,
which is… it’s not very difficult to swipe your card,
it’s very difficult to swipe your phone but its very
easy to tap your phone to achieve the same result.
So those link together, and you see the increase of
contactless really bodes well for increase of mobile
payments as well. And inherently, your phone is a
multi-application phone and can support many
many things, so with payments then, you can have
other things that we also look at. Geolocation, you
know how to make sure that your users can get
relevant offers, things of that nature. So it starts
becoming a much more lucrative and enhanced
experience from a consumer standpoint. And that’s
what starts getting them to use it.
Because lets be clear, folks don’t wake up in the
morning and say – how do I pay in a different way
today? You’ve got to get them to move and to do
certain things because they want to do it, and the
power of that choice, giving that in the hands of the
consumers, making it something that they choose
versus something that’s pushed on to them…. is
much easier on a mobile phone than anything else,
so you see a start where these mobile payments
are on the rise once you have the infrastructure
ready and are able to support it. That’s where we
are definitely quite excited and we see a very very
bright future for mobile usage and payments in
general.
Amol Deshmukh, Director of Mobile Financial
Services North America, Gemalto
Amol joined Gemalto in 1996, where he has served a
variety of roles in the domains of corporate security and
financial services. His experience includes engaging
Fortune 500 companies, financial institutions and payment
associations to champion next-generation authentication
and payment technologies. In his current role as director
of mobile financial services (MFS), Amol’s broad security
and payments expertise has been instrumental in shaping
Gemalto’s strategy to address the converging mobile and
payment landscape.

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