Transcript maks ja turv

EPFSF & EIF
Joint Dinner
Electronic and mobile payments –
moving towards a cashless society?
1 April 2008
Governor Erkki Liikanen
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Use of cashless payment instruments within
EU15, number of transactions
30 000
millions
25 000
Card payments
Credit transfers
20 000
Direct debits
15 000
10 000
Cheques
5 000
0
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Source: ECB, Blue Book publications.
Card payments are growing rapidly
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Number of card payments per inhabitant,
1994–2006
180
Number
1994
1996
1998
2000
2002
2004
2006
160
140
120
100
80
60
40
20
0
BE
DK
DE
GR
ES
FR
IE
IT
LU
NL
AT
PT
FI
SE
UK
Source: ECB, Blue Book publications.
Good growth but big variations,
the Nordic countries are leaders in card usage
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Number of ATM cash withdrawals per capita,
2002–2006
Use of cash and ATMs decreases
when card payments increase
50
45
IE
FI
UK
40
SE
35
PT
NL
30
DE
25
BE
ES
FR
20
15
GR
AT
DK
LU
10
IT
5
0
0
10
20
30
40
50
60
70 80 90 100 110 120 130 140 150 160 170
Number of card payments per capita, 2002–2006
Sources: ECB, Blue Book publications and author's estimate of ATM withdrawals in Denmark.
After about 70 card transactions/inhabitant/year, ATM usage decreases
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Number of electronic transactions per capita and
automation level (e-trans./total trans.), 2002-2006
Number of electronic payments per inhabitant,
2002–2006
300
FI
250
LU
200
AT
NL
DK
UK
150
DE
BE
SE
100
PT
ES
IE
50
IT
GR
0
0
10
20
30
40
50
60
70
80
90
100
Level of automation %, 2002–2006
Sources: ECB, Blue Book publications and Bank of Finland.
Strong growth but large variations in national e-payment levels
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Mobile phones contain everything
needed for paying
 Versatile communication capabilities
–
–
–
–
Long-distance communication
Complete internet access
Near-field-communication (RFID, Blue Tooth, Infrared)
Camera scans & photos
 Easy to use and familiar user interface
– Quality colour screen
– Secure PIN pad
– Proper keyboards
 Advanced processing capabilities
–
–
–
–
Processing power
Large data storage
Security module
Encryption processors
Everyone has a miniature PC in their pocket
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Will cards be digitalised and
stored in mobile phone?
Select
- VISA
- MC (Firm)
- Credit
 A mobile phone could
store many cards and
select the correct card
based on parameters and
learning
 Easier to provide and
update cards completely
remotely over the air
 Back-ups safely in the
network and downloadable in case of
hardware failures
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Push & Go / Tap-to-pay
 Check and accept payment just by
tapping
 Make person-to-person payments
 Phone can also contain ticket info
– Bus, train, flight, parking…
– Theater, sport event, concert…
 Automated payment data exchange
between point-of-sale and mobile
phone using RFID (Radio Frequency
Identification)
Real-time card or bank account debit for
presented payment proposals with just
one click or click+PIN
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Well-known risks of Internet
 Distribution of viruses and
spyware
 Trojan horses (‘Man in the middle’)
can seize control of the PC and
e-identity
–
–
–
–
read and change keyboard input
change screen output
change file content
change sent transactions and
information
Customers will need hardware-protected keyboards, screens,
storage and security processors.
Mobile phones can be the security solution
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
The trunk network of identification
service providers
Customers need to identify themselves to several e-service providers.
There will be several e-ID providers in the open global e-world.
Service
providers’ ID
provider
The open internet
Customer
Registration
office
Customer’s
secure ID
provider
The network of
connected ID
providers
Bank
Taxation
authority
Service
providers’ ID
provider
Insurance
company
Social
security
office
A common secure ID service could be based
0n functions within the SIM card of mobile phones
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Mobile phones could become
general authentication devices
Authenticate
 Mobile phones can use the SIMs
(Subscriber Identity Module) for
general authentication (access
control, e-signatures,
identification etc)
Deal 2665
Enter PIN
*****
 Which will be the preferred
technical solution?
TELCO-, bank- or handset
provider-based development?
 Could it be based on joint
cooperation among all
stakeholders incl. authorities?
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
12
Validation domain
eGovernment
service1
Online
Bank1
Online
Bank2
eGovern
ment
Corporate
service2
service1
Government selected CA
Turkcell:
business mgr
+ invoicing
E-Güven: the Trust
Center, CA, issuer
of quality
certificates, legal
validity
Registration domain
Source © Copyright Valimo Wireless
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Flexible business model: mobile signature as a
cost or a revenue source for the service provider
Turkish state:
The catalyst for creating digital signature
infrastructure
Case: Mobile Signature Ecosystem in Turkey
Development incentives and disincentives
Forces pushing for change
• Strive for higher productivity
• Sufficient competition
• Examples in other industries
• Customer demand
• Authority actions
Old dominant
payment
technology
New dominant
payment
technology
Forces maintaining ’status quo’
• Legacy investments
• Monopolistic structures
• Non-transparent pricing
• Coordination problems
• Regulatory requirements
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Based on Finnish experiences,
payment developments are relatively slow and
follow a s-shaped diffusion curve
Cards and
ATMs
EFTPOS
Account
Private e-invoicing
and corp. statement as customer
terminals accounting e-banking
basis
Latecomers
Late majority
Early majority
Mobile
payments?
Early starters
Innovators
1980
1985
1990
1995
2000
2005
2010
The technology is available for a cashless society, but
the diffusion process will still require a lot of efforts
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Paradox: But cash issuance has increased
rapidly in the euro area and also in Finland!
Banknotes put into circulation in euro area and Finland
Banknotes put into circulation in Finland (right scale)
Banknotes put into circulation in the Euroarea (left scale)
Million € (euro area)
Million € (Finland)
800000
8000
700000
7000
600000
6000
Euro area
500000
5000
400000
4000
Finland
300000
3000
200000
2000
100000
1000
0
1998
0
2000
2002
2004
2006
2008
Source: ECB and Bank of Finland.
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Migration of euro banknotes has increased
heavily due to common cash area and large
part of the banknotes issued from Finland are
used outside Finland
Banknotes put into circulation and cash in domestic holdings in Finland
Euro banknotes put into circulation in Finland
Total cash holdings by residents in Finland, million euro
8000
Million euro
7000
6000
5000
4000
3000
2000
1000
0
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
Sources: BoF and ECB.
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
Only within a couple of years ATM withdrawals
of euro banknotes have been slowing down
Cash withdrawals from ATMs and card payments in euro area and EU15
Total value of card payment (billion euro), EU15
Cash withdrawals at ATMs located in the country (billion euro), EU15
Total value of card payment (billion euro), Euro area
Cash withdrawals at ATMs located in the country (billion euro), Euro area
1600
Billion euro
Card payment in EU15
1400
ATM cash withdrawals in EU15
1200
1000
ATM withdrawals in euro area
800
Card payment in euro area
600
400
200
0
1999
2000
2001
2002
2003
2004
2005
2006
Source: ECB Blue Book.
SUOMEN PANKKI | FINLANDS BANK | BANK OF FINLAND
2007