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Opinion | 19 Jan 2015
The most disruptive newcomer is yet to start its operations
Maciej
ss

The Polish mobile payments market is very dynamic and innovative. Although some most established players have been present for over 10 years, they are now facing powerful and highly disruptive competition from the newly launched BLIK system.

Despite the fact that the established players have had a significant impact on the mobile payment market, the most disruptive newcomer is yet to start its operations. In July 2013, six leading Polish banks, namely Alior Bank, Bank Millennium, Bank Zachodni WBK, BRE Bank, ING Bank, and PKO Bank Polski announced that they would jointly build a common standard for mobile payments including shared infrastructure for authorization and settlement.

In November 2014, the joint-venture of the six banks, Polski Standard Platnosci (PSP), has received all required regulatory consents to operate BLIK payment system. The new system is expected to reach 70% of banking customers in Poland, according to estimates provided by Bank Zachodni WBK, while mBank alone declares that it will bring 4 million customers to mobile payments.

BLIK is based on one-time codes and has been built on IKO foundations. BLIK uses existing card infrastructure (POS terminals, ATMs) thus from the start benefiting from significant network acceptance. The system will be open to all market participants, including other banks and retailers, and will support all transaction types: purchase of goods and services, ATM withdrawal, e-commerce, and P2P money transfers. (source: polskistandardplatnosci.pl)

On one hand, the mobile payment initiatives developed by banks and retailers have a significant customer base and relatively broad acceptance network and are embodied in the following:

IKO –started in 2013 by PKO BP, the largest Polish bank. IKO is based on one-time codes and uses existing card infrastructure (POS terminals, ATMs). It allows payments for goods and services, ATM withdrawals, e-commerce transactions, and P2P money transfers. The application is available for all platforms and does not require a smartphone, therefore giving it reach of 90% installed handset base. (source: pkobp.pl)

PeoPay –offered by Pekao SA, the second largest Polish bank, member of UniCredit group. PeoPay is based on one-time and QR codes. PeoPay enables money transfers between the application users, purchase of goods and services, e-commerce, ATM withdrawals via Bank Pekao’s network. Next to iKASA, it is the second mobile payment method available in the Biedronka retail chain. Additionally, the PeoPay system also offers a mobile payment acquiring service dubbed PeoPay mPOS for retailers, where payments may be accepted on a mobile phone (no POS terminal is required). (source: peopay.pl)

iKASA – is a new mobile payment system introduced in October 2013 in Biedronka retail chain implemented in cooperation with Alior and Getin bank. iKASA mobile application is limited to purchases of goods at Biedronka retail outlets. Pekao SA Bank customers can also make mobile payments at Biedronka using the PeoPay application. The transactions are initiated when a cashier scans a barcode displayed on the application screen. (source: ikasa.pl)

On the other hand, non-bank backed providers failed to gain widespread acceptance as they struggle to provide convenient access to current accounts offering prepaid wallet or MasterCard Mobile integration instead. They concentrate on value-added services such as public transportation and parking tickets, mobile top-ups, P2P transfers.

SkyCash – Founded in 2009, offers a mobile application that has traditionally offered payments for goods and services offered by selected partners. Its offering expanded to other services: MSISDN based P2P money transfers, prepaid cell phone top-ups, e-commerce transactions, and bill payments. (source: skycash.pl, research)

moBiLET – Mobile application enabling the purchase of railway, public transportation and parking meter tickets in selected cities. moBiLET is based on a prepaid account. (source: mobilet.pl)

mPay – founded in 2003, was the first mobile payments service in Poland offering payments for purchases in shops and vending machines. Currently, mPay supports POS and e-commerce purchases, P2P transfers, public transportation, and parking tickets purchases. mPay system is also NFC-ready. (source: mpay.pl).

MASSPAY – Founded in 2010, MASSPAY can operate on a simple mobile device capable of making a GSM phone call, thus does not require a smartphone. The customer has only to dial the retailers’ MASSPAY number in order to execute the payment. Afterwards, the payment-related information is displayed on the screen of the mobile phone and the customer authenticates with a PIN to complete the transaction. (source: masspay.eu)

Furthermore, a number of initiatives offering support for e-commerce and m-commerce through a mobile application made their presence in Poland. Apart from globally available MasterCard MasterPass and Visa V.me there are also local players –PayU, for example, who fall into this category. Turning the attention to the involvement of the mobile network operators, banks and payment schemes into the overall mobile payments landscape, a couple of initiatives hit the spotlight that aim at enabling NFC PayPass or PayWave payments in mobile phones.

MyWallet –Alior, Eurobank, Getin, Noble Bank, Raiffeisen Polbank and mBank in cooperation with T-Mobile offer mobile wallet for SIM-based NFC payments. MyWallet leverages existing MasterCard PayPass acceptance network and can be used at 140,000 contactless POS terminals in Poland. (source: t-mobile.pl)

Orange NFC Pass – In May 2014, Orange Poland launched NFC Pass, a service that builds on its existing Orange Cash platform. It enables the customers to make debit and credit card payments using their NFC enabled phone. Currently, the system is available only for customers of the participating issuing banks for selected types of handhelds and operating systems. (source: orange.pl)

Looking back, in 2012 and 2013 a number of companies tried to implement mPOS solutions based on the combination of a hardware card reader and a mobile application. Most of these initiatives have not yet managed to receive Visa and MasterCard certification, with a notable exception of mPeP – a joint project of Polskie ePlatności and Ingenico (mPOS Ingenico iCMP) which introduced first fully certified contactless mobile POS in Poland in July 2014. The solution accepts all payment methods including EMV Chip-and-PIN, magstripe and NFC/Contactless. (source: Ingenico)

Looking ahead, banks are trying to keep up with the technological shifts and have shown interest in the HCE (Host Card Emulation) technology. For example, BZ WBK in cooperation with VISA is planning deployment in early 2015. Contrary to current NFC wallets offered in cooperation with MNOs, HCE is application based and does not require hardware secure element based on SIM.

The Polish payment market has always been very innovative with banks and customers quickly adapting to new technologies. The mobile payments landscape is no exception - it dynamically develops in multiple directions. 2015 will likely bring revolutionary changes that will determine its future for the years to come.

The article was originally published in The Paypers.

Estimated reading time: 6 minutes