Contactless chip card a potential m-payment niche - Gemalto

- Friday, November 4, 2011

Contactless chip card a potential m-payment niche - Gemalto

The contactless chip card is a potential m-payment niche to be developed in Latin America markets, in particular in Brazil, Dutch digital security firm Gemalto's Latin America marketing and communication director, Ernesto Haikewitsch, told BNamericas.

While still being developed and in a pilot phase in the country, this tap and go payment mode as an electronic purse will be relatively widespread in Brazil in 1.5 years, Haikewitsch said.

"The migration from the magnetic strip cards to the EMV chip ones in Latin America was driven mainly by the need to prevent and avoid fraud," Haikewitsch said. "Now, the scenario is different. The motivation here relies on bringing more quickness, efficiency and convenience to the customer - tied in, of course, with a new revenue channel for the segment as a whole."

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The Gemalto executive foresees small purchases - such as buying a cup of coffee or a movie ticket, where passwords are unnecessary - as the greatest commercial potential for using such cards.

But, Haikewitsch acknowledged, the security framework will have to be improved. In the case of theft, the customer could simply call his bank and get the card blocked, as is done currently with EMV cards.

And the idea, as the executive underlined, is that the card does not need to be topped up with large amounts of money.

According to Haikewitsch, Gemalto is advancing quickly with major companies in Brazil to provide this technology. The projects are expected to be announced shortly.

REGIONAL ASYMMETRY

In Latin America, the two biggest countries - Brazil and Mexico - have switched from magnetic strip cards to EMV chip ones, beginning in 2004. "As such, these countries are 'safe' nowadays, I'd say," Haikewitsch said.

In other relevant regional countries, such as Chile and Argentina, the technological switch started later and has been slower, and they are seeing a greater incidence of electronic fraud.

Due to that asymmetry, Haikewitsch believes that Chile and Argentina will end up leapfrogging technologically and start using the contactless and the EMV chip cards concurrently.

"In any case, without a doubt Latin America has been spectacular for Gemalto's business and revenues," he said.