Wirecard launches its Boon services in a growing HCE arena

Monday 30 November 2015 | 09:44 CET | Background

Wirecard, a German provider of electronic payment and risk management services, has introduced its MasterCard-certified HCE payment system for Android smartphone in four new European countries. Boon is now available via the Google Play Store in Germany, the Netherlands, Austria and Belgium, with more countries set to follow. The service is not dependent on a particular type of Android phone or operator. It is however not associated with a particular bank or debit card or bank.

The payment service can be used on any Android smartphone running Android 4.4 or later, in combination with NFC functions. This means that a wide collection of handsets will be available, without the need to swap a SIM card nor the need to certify an embedded Secure Element trustworthy enough to store card credentials.

Announced in March

Wirecard has announced its HCE service in March 2015 at the Mobile World Congress in Barcelona. The e-money company has developed and certified its security and over-the-air delivery in cooperation with MasterCard. At each transaction, a one-time code (token) is used, so no card credentials are shared.

Wirecard has also introduced “boon.protect” with a view to guaranteeing maximum security through modern standards and technologies such as PIN request. The smartphone has its own, user generated PIN code. Orange uses the same platform in France.

At that time, German MVNO Group Drillisch announced that it would adopt the Boon service platform and offer the app. The services will compete with the mobile wallets launched by the mobile operators in Germany: O2, T-Mobile and Vodafone. Base had launched its own service as well, just before it was swallowed up by O2.

Mobile wallets

Those services have in common that they offer an alternative route to contactless payments at point of sale, by means of a prepaid debit card or credit card. All card networks accept these cards, but cooperation with banks is not common. In most cases, a separate contract is required for a card.

Wirecard, which offers its Boon services as a separate brand, works independently from the SIM card and therefore independently from a mobile operator – it still uses a mobile number as one of their identifyers, but it is not tied to a SIM card or a specific phone.

Wirecard says the service is meant for those people who wish to pay by credit card, but do not feel safe handing over the card as that means that the Card Verification Code is handed over as well.

Three service tiers for Boon

The Boon service offers three tiers. In each case, the prepaid wallet must be linked to another credit card or a money transfer. Top up from a bank account is free, but can take up to three business days. Topup by credit card is direct, but carries a 1% transaction fee.

Boon Start can be regarded as a credit card, albeit one with an extremely low spending limit: EUR 5 per year. Boon Basic can be used for a maximum of EUR 500 per day or EUR 2,500 per year. Boon Plus has a EUR 2,500 daily limit and an EUR 30,000 annual limit. All subscriptions are free for the first 12 months.

The Boon mobile wallet and the mobile operator branded mobile wallet compete with existing payment methods, including cash, debit cards and other credit cards. Acceptance may be lower, as not all payment terminals are NFC-ready as yet, while safety should be regarded as being on the same level.

A separate financial contract is required. Consumer surveys done by Telecompaper in the Netherlands have shown a preference for paying with debit card, or, loading the most-used debit card into a smartphone. Once banks offer their own services, a separate card is not the option many consumers would choose.

Wirecard has announced the Boon service will be made available in the Netherlands. ING Bank has made its own HCE service available to the public, after three months of beta testing.

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