Nets, a payment service company established in 1968, is innovating in the emerging technology space. The company disclosed June 30, 2016, that its new digital wallet, built on Nets' host card emulation (HCE) and tokenization platform, will be widely deployed by BOKIS, a Danish banking collective. BOKIS, comprising 62 member banks, chose the mobile wallet for security and ease of use, representatives stated.
BOKIS members include small to midsize local banks and five regional banks: Jyske Bank, Sydbank, Spar Nord Bank, Arbejdernes Landsbank and Nykredit Bank. All members plan to roll out the mobile wallet solution to their customers in the near term, according to the association.
"We are excited to be the first in Denmark to announce our plans to deliver bank-issued mobile wallets from our members, providing a mobile payment solution that delivers real payment convenience to our customers," stated Søren Nicolaisen, Managing Director, Danish Regional Bankers Association. "End users will be able to pay just by 'tapping' their phone at the contactless point of sale."
Nets, headquartered in Ballerup, Denmark, noted that it has been delivering end-to-end payment and banking solutions to a range of vertical industries for four decades, playing an integral role in forming the Nordic region's modern payments infrastructure. It additionally introduced an array of payment products to the region, including Dankort, Betalingsservice, NemID, BankID, Avtalegiro and BankAxept.
"Historically, Nets has developed and operated the financial infrastructure supporting and driving the Nordic banks' payment solutions," said Hans Henrik Hoffmeyer, Senior Vice President of Mobile Services at Nets. "We have made significant investments on behalf of our customers in becoming a token service provider (TSP), which enables Nets to provide the security services that our banking customers need to power their future mobile solutions and new mobile services."
Nets' three business divisions focus on subscription services, financial network processing systems and merchant acceptance solutions. Over the years, solution sets have evolved to serve a diversified clientele of banks, corporations and merchants. Today the Nets' international network facilitates digital payments across the Nordic region, providing an array of card services, account services and payment solutions.
BOKIS representatives said the open format and easy-to-integrate security capabilities make Nets' mobile wallets appealing. The platform, designed to accommodate enterprise-scale deployments, leverages best-in-class security practices, enabling member banks to incorporate HCE and tokenization into their mobile payment solutions while reducing time-to-market, they added.
When Danish consumers use the digital wallet, payment credentials stored in the mobile device will be replaced at the point of transmission with a unique, randomly generated identifier to further protect sensitive cardholder data exchanged between phone and terminal.
This payment method is similar to current tap-and-go payment schemes used by mobile wallets and contactless cards. Tokenization is gaining in popularity worldwide, largely due to the implementation of embedded wallets in smartphones. Samsung Pay and Android Pay also use HCE to securely store cardholder data. BOKIS will deploy HCE combined with tokenization within the Nets' mobile wallet, which is currently in pilot tests and set to launch in Denmark during the fourth quarter of 2016.
Nets participated in the Copenhagen Fintech Innovation and Research Get F'IT event in June 2016, joining presenters from CashlessWay and Consult Hyperion, who advocated replacing notes and coins with electronic forms of payments. In his keynote presentation, CashlessWay founder Geronimo Emili noted that Scandinavian countries, unlike his native Italy, have been leading the global movement away from cash.
"Even if you copy the Danish system directly to an Italian context, you will still have the Italian people, and the cultural differences, and you would probably still have a lot of work to do," Emili said. "When it becomes clear to the end-user that paying by card or mobile is easier, safer and perhaps even a better deal than by cash, then you'll be able to convince even the most conservative target groups."
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