Page 96 - Pay Magazine s2014

finance & strategy
Special Section: Cards Still Present
Fis: With Complements
rather than viewing mobile as an alternative or replacement to plastic cards, Bob Legters,
senior vice president of product, FIS, sees much potential in the two form factors working together as complements. “Mobile and plastic can co-exist as cooperative tools in some very useful ways,” he says. For instance, FIS is developing a virtual reissuance program, where cardholders who lose their cards can get a replacement virtual card issued via mobile, which can then be used until a new plastic card
is delivered.
“One of the most inconvenient things about losing a card is having to wait several days for a replace- ment. If we can provision a virtual card to a mobile device, the cus- tomer can make purchases and access cash at ATMs in the mean- time,” he explains.
Another potential feature is geolo- cation-based authorization during travel, where mobile GPS informa- tion can be used to authorize card purchases taking place in that geographic area, Legters notes. Meanwhile, merchants will continue to drive deals and offers through the mobile channel—which offers the advantage of branding and analytics—but payments will continue to be dominated by plastic cards for the foreseeable future, he predicts.
“Mobile devices now account for about 1 percent of all transactions. Next year it might be 2 to 3 percent, and in a decade it might
by the numbers
$17 billion
global card manufacturing industry
$6.9 billion
personalization and fulfillment services market
30.4 billion cards were personalized and fulfilled in 2014.
Asia-Pacific ranks as the largest regional market for personalization and fulfillment with more than
11 billion cards.
North America is the second-
largest regional market with 7.5 billion cards.
source: ICMA
One of the most inconvenient things about losing a card is having to wait several days for
a replacement.
If we can provision
a virtual card to a mobile device, the customer can make purchases and access cash at ATMs in the meantime.
—Bob Legters, FIS
be 25 to 30 percent. Mobile adoption rates are great year-over- year, but compared with plastic, it’s still insignificant.” Legters says.
Before mobile payments can reach the mainstream, existing compat- ibility and acceptance issues still need to be ironed out, he adds. While Apple Pay has served to raise awareness about mobile within the general public, the “wallet wars” are by no means settled, with Samsung Pay and Android Pay entering the market. Until the landscape is more established, mobile payments will remain more of a niche. And even then, plastic cards will still play a major role.
“No payment option has ever been fully sunsetted. People have been saying for years that checks are go- ing away, but checks are still widely used—and everyone still accepts cash,” Legters observes. “And just the same way, we won’t be throwing away plastic cards any time soon.”
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