ABN AMRO's road to its mobile wallet offering was long but is now on track

Monday 27 March 2017 | 09:53 CET | Background
In a recent article ABN AMRO’s senior product manager of mobile payments, Jos van de Kerkhof, discusses ABN AMRO’s path to finding a suitable mobile payment solution for its retail banking customers. It has been a long road but now ABN is very satisfied with its HCE based products and sees a good customer take-up. 

In 2009 ABN started to look at various possibilities for mobile payments and in 2010 it became part of Sixpack, a consortium of three banks and three mobile operators which intended to set up a mobile payment scheme together. As has been seen before and since, banks and MNOs struggle to find agreement on how to offer a mobile payment facility together as both sides want to have the visibility and the first contact with the customer. As van de Kerkhof states: “We could not reach an agreement with MNOs for on-screen visibility, business case and distribution reasons. Being visible, helpful and relevant in customers’ lives is one of our most important reasons to offer mobile payments”.  

In 2012 ABN started to distribute contactless bank cards to all its retail banking customers. This paved the way to make mobile contactless payments more acceptable, as it made consumers used to the principle of contactless payments. Continuing its search for the best mobile payment solution for its customers, ABN looked into microSD cards as they would allow both Android and iOS phones to be used. As the iPhone doesn’t have a place for a microSD card, iPhone users would need to use a special case. However, ABN found that the use of microSD cards had one very large disadvantage: they are terrible to make payments with, requiring numerous actions before payment is secured. Sure that their customers would not accepts such a convoluted method, ABN realised that their solution needed to have the following three key elements: 

  • Easy to obtain and use for many customers.
  • Have little dependencies on third parties for the bank.
  • Able to be used for customer-focused innovations in the future. 

HCE best solution for ABN 

They found all this in HCE, or cloud based payments. To reduce the security risk associated with cloud based systems, they have added various layers of solutions and procedures such as Single Use Keys (SUK). According to Kerkhof ABN’s wallet automatically and invisibly send 10 SUKs from its systems to the Wallet of its customers when they enroll. This reduces the risk by limiting the number of payment keys on the phone, but still allows for 10 consecutive payments when not connected to the internet. When a customer makes a payment, he or she uses an SUK and the inventory of SUKs on the phone is automatically replenished when connected to the internet. The Wallet app informs the customer when there are only a few SUKs left and instructs him to connect to the internet again. 

ABN states it has learned seven important lessons from its search to the most suitable mobile payment solution: 

  1. Initial payment success rate was too low, requiring further enhancements and user education
  2. Every phone and terminal behaves differently
  3. Don’t let security hinder convenience too much, it is about finding the right balance between the two
  4. Designing a mobile wallet is different from any other app
  5. The young and men and those in cities are more likely to use mobile payment
  6. Mobile payments are innovative and create positive feedback
  7. Customers want more from their wallet than just payments 

This last point especially drives ABN to continue working on enhancing its mobile wallet. Although using one’s bank card (contactless or not) remains by far the most popular way for Dutch consumers to pay in shops, using one’s smartphone is becoming more and more an accepted method of payment.

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