FINTECH BRIEFING: HSBC goes big on biometrics -- Samsung Pay comes to Europe -- PayPal partners with Vodafone

Welcome to The Fintech Briefing, a morning email providing the latest news, data, and insight into disruptive fintech in the UK and Ireland, the Continent, and beyond, produced by BI Intelligence.

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HSBC GOES BIG ON BIOMETRICS: HSBC has announced it will offer voice recognition and fingerprint authentication account access to all UK customers, including those on its First Direct brand, by summer of this year. This is the largest rollout yet of biometric security to retail banking customers in the UK, affecting 15 million people.

  • HSBC has previously lagged other major UK banks on biometric login options. Barclays offers some customers the opportunity to use voice recognition services, and a “biometric scanner” to corporate clients, while RBS and Natwest launched fingerprint authentication last year. However, at present no other bank offers all retail customers biometric authentication options, given that fingerprint technology can only be used by those with a mobile app.
  • First Direct started out as a telephone-only bank, therefore the introduction of voice recognition makes sense given their client base. Consumers will have to enroll their voiceprint, but once registration is complete they will no longer need to use memorable answers and passwords. Voices and fingerprints are “almost impossible to mimic”, making them much more secure than traditional methods, according to the bank. And yes, the system can handle colds, coughs and speech impediments according to the UK Head of Customer Contact at HSBC in an interview with the BBC.
  • Voice recognition is provided by Nuance Communications.The company, which has headquarters in the US and Ireland, is fast becoming the go-to firm for financial services companies wanting to use voice recognition technology. Nuance is already providing services to ING in the Netherlands and the Royal Bank of Canada among others.
  • UK consumers are ready to try biometrics. 61% of consumers believe biometric identification is either “just as secure, or more secure, than current system passwords” according to an Experian survey conducted last year. Consumers are also more willing to use biometric security in order to access online bank accounts than social media accounts.

SAMSUNG PAY COMES TO EUROPE: On the same day Samsung announced adoption figures for Samsung Pay in the US and South Korea, it also announced its plan to launch the service in the UK and Spain by the end of this year.

  • Transport for London (TfL) included in list of partners. This is important because the network is seen as a leader in adopting payment methods and has seen great success with both contactless cards and smartphone payments. Once consumers are using a payment method on TfL they know it is secure and efficient, and are therefore likely to use it elsewhere. Over 35,000 transactions are already made via smartphone everyday for TfL’s services, according to calculations from The Telegraph. That represents a sevenfold increase in transactions in the last 6 months of 2015 following the launch of Apple Pay.
  • Samsung’s proprietary MST technology won’t be game changer in Europe.MST allows smartphone payments to be made at terminals which have the old-fashioned magnetic stripe readers — relevant in the US due to the slow rollout of EMV and contactless terminals. Europe already has a large number of contactless terminals, and consumers are already “tapping to pay” using their contactless cards, especially in the UK where there were 128 million contactless card transactions in November 2015. That means that MST won’t give Samsung Pay a significant advantage over Apple Pay or Android Pay in Europe.
  • The list of partners includes major payments networks, banks, and retailers: American Express, China UnionPay, MasterCard, and Visa. Many of the countries’ major banks and partners include Abanca, American Express, Banco do Brasil, Banco Sabadell, Bradesco, Brasil Pre-Pagos, Caixa, CaixaBank, China Construction Bank, China Everbright Bank, China Guangfa Bank, China Minsheng Banking Corp, DBS, El Corte Inglés, ImaginBank, Industrial and Commercial Bank of China, Itaú Unibanco, MBNA, Nationwide Building Society, Nu Bank, OCBC Bank, Ping An Bank, Porto Seguro, Santander, Standard Chartered Bank and Transport for London (TfL).

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PAYPAL PARTNERS WITH VODAFONE: PayPal gave more detail on its recent partnership with Vodafone at Mobile World Congress this week. Consumers who have PayPal will be able to link it to their Vodafone Wallet, while those who don’t have it will be prompted to open an account in the wallet — enabling consumers to use PayPal in store. It will also make PayPal part of a four-way inter-industry collaboration also including Vodafone, Visa, and Alphabet (Google).

  • The partnership heralds PayPal’s move to NFC. PayPal previously shunned contactless technology, but since its split from Ebay it’s increasingly looking to grow its in-store presence. Doing so means competing with Visa, MasterCard, and Apple Pay, and therefore NFC is a requirement.
  • The service will start in Spain and expand to other markets “later this year”. This makes sense given that Spain is a global leader in contactless payment acceptance. Spain had 1.2 million POS terminals in 2014 of which half were contactless by July 2015.
  • PayPal will make Vodafone Wallet more appealing to consumers.Telco wallets have struggled to take off in Europe due to a lack of trust in their security, and the poor customer experience involved in manually topping them up from other payment sources. Vodafone claimed to solve the latter problem last year with an announcement that consumers in major European markets would be able to link Visa and Mastercard cards to their wallet in order to avoid having to manually top up prepaid accounts. PayPal will add a 3rd direct payment method as well as bringing a trusted brand to the wallet to reassure wary consumers.

VISA CHECKOUT COMES TO EUROPE: Visa has announced that Visa Checkout will be coming to the UK this year — and France, Spain, Ireland, and Poland. Original e- and m-commerce checkout proposition was quietly shut down in Europe in September 2015, and this week’s press release suggests that Visa is hoping to build on the success the Visa Checkout brand has built internationally. In the US, Visa Checkout has overtaken PayPal Express as the payment method most likely to result in conversion on e-commerce sites according to data collated for Visa by comScore. The rebrand also ties in with Visa Inc.’s acquisition of Visa Europe announced late last year.


  • Chinese banks will pay half the amount their US counterparts do to leverage Apple Pay. Discussions over the fees were in part responsible for the delay in introducing Apple Pay to China.
  • Mastercard “Selfie Pay” gets the go head as a means of ID verification for online payments. Following successful testing in the US and the Netherlands, the technology is due to be rolled out across Europe and the US soon.
  • Australian Fintech firm MoneyMe gets a boost. The company which until now has offered small loans, has received $30 million to develop niche Fintech products aimed at millennials. According to Finextra, it marks a shift in confidence towards Fintech by Australian investors.


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