Defining a Strategic Path for Banks Regarding EMV, Tokens, Apple Pay, and Mobile Apps

Overview

A research report from Mercator Advisory Group, Defining a Strategic Path for Banks Regarding EMV, Tokens, Apple Pay, and Mobile Apps, presents consumer research evidence for why most banks will adopt Apple Pay, forecasts m-commerce dollar volume out to 2025, and identifies the gaps that Apple Pay adoption creates, including the lack of ATM support and the inability to enable payments in the banks’ existing mobile application. The report evaluates different approaches financial institutions can take to fill these gaps while also establishing a strategic plan that minimizes risk by establishing gap-filling relationships that may also offer a second-source supplier for mobile payments.

While banking institutions and other organizations are anxious to provide mobile payment capabilities to their most profitable customers, it is imperative they find the right strategic path in a difficult and highly complex mobile payment marketplace that is being targeted by multiple industries and large corporations within those industries. In particular, financial institutions must recognize that tokenization will span more than just card networks. The institution must consider a tokenization strategy that will protect the consumer’s account number, not just the PAN, for all external communications, which includes person-to-person (P2P) payments, bill pay, ACH, and all other external interactions.

“The need for the protection implemented by tokenization far exceeds the reach of any single payment implementation, so financial institutions should consider this strategy that incorporates various payment mechanisms and suppliers under a broader tokenization scheme,” comments Tim Sloane, VP, Payments Innovation, and author of report.

This report is 30 pages long and contains 8 exhibits.

Companies mentioned in this report include: American Express, Apple, AT&T, Chase, China UnionPay, Discover, EMVCo, FIS, Google, JCB, MasterCard, NACHA, Paydiant, PayPal, Samsung, Softcard, T-Mobile, Verizon, Visa, and Wells Fargo.

Members of Mercator Advisory Group's Emerging Technologies Advisory Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.

Highlights of the report include:

  • Data documenting U.S. consumer attitudes toward mobile payments and predicting volumes for mobile commerce

  • Documentation for the drawbacks and gaps associated with the current payment solutions offered by Apple and the nationally branded networks

  • Illustrated explanation of how various token-based mobile payments schemes work

  • Questions for financial institutions to ask when evaluating mobile payment solutions

  • Description of a broader tokenization scheme and identification of the payment mechanisms Mercator Advisory Group recommends FIs consider under such a scheme

Interested In This Report

Related content

February 27, 2023
Fintech Investment in a Changing Market: 5 Things to Know for 2023

With investment capital tighter in 2023, there’s less interest in untested, unproven fintech startups and more of an emphasis on coming out of the chute with products that are read...

December 15, 2022
2023: The Year Digital ID Reaches Your Wallet (and Changes How You Pay)

Wallet-based digital ID will create a wedge between universal wallets and payment apps, as embedded finance product offerings converge on feature parity over time.

November 16, 2022
2023 Outlook: Emerging Technologies

For more than a decade, fintech startups and products have captured outsized attention and investment. In many ways, these companies have set the agenda for driving consumer expect...

Make informed decisions in a digital financial world

Let's Connect