This podcast episode delves into the world of contactless payments, comparing and contrasting two primary methods: X-Pay (like Apple Pay or Google Pay) and Issuer Wallets. While X-Pay solutions are widely popular and often mandated, the speakers highlight the advantages of NFC Issuer Wallets, such as increased flexibility, enhanced security for user data, and lower transaction costs. The discussion emphasizes the strategic importance of considering a parallel implementation of Issuer Wallet SDKs alongside mandatory X-Pay solutions to gain greater control over the payment process.
SPEAKER 1: Hey, everyone. Welcome back for another deep dive. Today, we're tackling a topic that's at the forefront of everyone's minds in the financial world.
SPEAKER 2: Absolutely.
SPEAKER 1: Contactless payments.
SPEAKER 2: It's the future.
SPEAKER 1: Really, it's the present and future.
SPEAKER 2: Yeah, yeah, you're right. It's here.
SPEAKER 1: I mean, think about it.
SPEAKER 1: When was the last time you actually swiped a card?
SPEAKER 2: It's been a while.
SPEAKER 1: It's all about the tap now.
SPEAKER 2: Tap and go.
SPEAKER 1: Exactly.
SPEAKER 2: Super convenient.
SPEAKER 1: But for banks and fintechs, offering contactless payments isn't as simple as just flipping a switch.
SPEAKER 2: Right. There are some big choices to make.
SPEAKER 1: Yeah, some real dilemmas.
SPEAKER 2: It's about how to do it.
SPEAKER 1: Exactly, because you've got these big players, the giants in the field.
SPEAKER 2: The 800-pound gorillas.
SPEAKER 1: Apple Pay and Google Pay.
SPEAKER 2: The X-Pays, as they're called.
SPEAKER 1: Catchy, right. But is hitching your wagon to these giants the only way to stay in the game?
SPEAKER 2: Or is there a smarter path?
SPEAKER 1: That's what we're digging into today, the x-Pays versus the alternative.
SPEAKER 2: Issuer wallets.
SPEAKER 1: And we're going to break it all down so you can make the best decisions for your business. So let's start with the obvious, the allure of the x-pays.
SPEAKER 2: They're everywhere.
SPEAKER 1: I mean, they're ubiquitous. Everyone knows them. Everyone uses them.
SPEAKER 2: And they're easy to use. So easy. From a user perspective, it's a no-brainer.
SPEAKER 1: So as a bank, wouldn't you want to jump on that bandwagon?
SPEAKER 2: I mean, it seems like a no-brainer from a business perspective too, right?
SPEAKER 2: You want to offer your customers what they want.
SPEAKER 1: And stay competitive?
SPEAKER 2: Exactly.
SPEAKER 1: But hold on a sec. There's a but. There's always a but. Okay, I'm listening.
SPEAKER 1: What's the cost of all this convenience?
SPEAKER 2: Ah, the catch.
SPEAKER 1: Because there is one.
SPEAKER 2: Several, actually.
SPEAKER 1: Let's break it down.
SPEAKER 2: So first, there are the fees.
SPEAKER 1: Fees, always with the fees.
SPEAKER 2: Apple, for example, they take a cut for every transaction through Apple Pay.
SPEAKER 1: And it might seem small.
SPEAKER 2: Per transaction.
SPEAKER 1: But those microtransactions add up.
SPEAKER 2: Especially if you have a large customer base.
SPEAKER 1: It starts to eat into your margins.
SPEAKER 2: And then there's the data issue. Ooh, data. That's a big one.
SPEAKER 1: That's the goldmine these days.
SPEAKER 2: Google, in particular, they're known for collecting user data.
SPEAKER 1: Everything. Pretty much. Including transaction information.
SPEAKER 2: Right. So they know what your customers are buying, where they're buying it.
SPEAKER 1: How much they're spending.
SPEAKER 2: And they use this data for targeted advertising.
SPEAKER 1: And to improve their own services, of course.
SPEAKER 2: Sure. But it raises some privacy concerns. Big time. Do you, as a bank, really want to hand over that much customer data to a third party?
SPEAKER 1: It's a tough call.
SPEAKER 1: It is! You want to offer convenience, but... at what cost?
SPEAKER 2: Right. And that brings us to the alternative.
SPEAKER 1: The roadless travel.
SPEAKER 2: Issuer wallets.
SPEAKER 1: What are they all about?
SPEAKER 2: So, issuer wallets are digital wallets that banks and fintechs create and manage themselves.
SPEAKER 1: It's like having your own in-house contactless payment solution.
SPEAKER 2: Precisely.
SPEAKER 1: You're not relying on Apple or Google.
SPEAKER 2: Nope. You're in control.
SPEAKER 1: You build it. You brand it. You own the data.
SPEAKER 2: And you own the customer experience.
SPEAKER 1: Sounds pretty appealing.
SPEAKER 2: It is, but it's not without its challenges.
SPEAKER 1: Okay. Lay it on me.
SPEAKER 2: First off, development time.
SPEAKER 1: How long are we talking?
SPEAKER 2: Building an issuer wallet from scratch, it can take 12 to 24 months.
SPEAKER 1: Wow, that's a long time.
SPEAKER 2: It is. And then there's the ongoing maintenance.
SPEAKER 1: Because technology never stands still.
SPEAKER 2: Never. You have to keep up with security standards, new features.
SPEAKER 1: It's a commitment.
SPEAKER 2: A big one.
SPEAKER 1: But the payoff could be huge. Absolutely. Okay, so I'm a bank and I'm intrigued by this issuer wallet idea.Â
SPEAKER 2: Good.Â
SPEAKER 1: Where do I even start?
SPEAKER 2: That's where a partner like Verestro comes in.
SPEAKER 1: Verestro. Tell me more.
SPEAKER 2: They specialize in making this whole process a lot easier.
SPEAKER 1: Okay. I'm all ears.
SPEAKER 2: They have this platform, the token management platform.
SPEAKER 1: Catchy name.
SPEAKER 2: It's designed to get you up and running with x-pay integrations.
SPEAKER 1: So Apple Pay, Google Pay.
SPEAKER 2: All of them in a matter of weeks.
SPEAKER 1: Weeks, not months. Weeks. That's impressive.
SPEAKER 2: It is.
SPEAKER 1: But what about issuer wallets?
SPEAKER 2: They do that too. They have a whole issuer wallet solution.
SPEAKER 1: So they handle everything.
SPEAKER 2: Pretty much. Design, development, security, compliance.Â
SPEAKER 1: So, you can focus on the big picture. Okay, so back to the benefits of issuer wallets.
SPEAKER 2: You get more control. Right.
SPEAKER 1: More control than with an x-pay.
Â
SPEAKER 2: Way more like.
SPEAKER 1: Give me some specifics.Â
SPEAKER 2: Well, for one you can customize the user experience.
SPEAKER 1: Tailor it to your brand.
SPEAKER 2: Exactly.Â
SPEAKER 1: What about the whole data thing?Â
SPEAKER 2: With an issuer wallet, you own the data. All of it stays with you; you're not sharing it with Google or Apple.
SPEAKER 1: That's a big deal.
SPEAKER 2: It is. Especially in today's data-driven world.
SPEAKER 1: And what about the cost?
SPEAKER 2: In the long run, issuer wallets can save you money.
SPEAKER 1: Compared to x-payss?
SPEAKER 2: Yes, because you're not paying those per-transaction fees.
SPEAKER 1: So it's a long-term investment.
SPEAKER 2: It is, but it can pay off big time.
SPEAKER 1: So, should banks and fintechs just ditch the x-pays altogether and go all in on issuer wallets?
SPEAKER 2: That's a good question.
SPEAKER 1: I mean, it's tempting.
SPEAKER 2: It is, but x-pays still have their place.
SPEAKER 1: They do have the market share.
SPEAKER 2: And the consumer recognition.
SPEAKER 1: People are used to them.
SPEAKER 2: So, the ideal strategy is probably a hybrid approach.
SPEAKER 1: Get the best of both worlds.
SPEAKER 2: Exactly. Offer x-pays for that wide reach and familiarity.
SPEAKER 1: But also develop your own issuer wallet.
SPEAKER 2: To give you that control, that flexibility.
SPEAKER 1: And the long-term cost savings.
SPEAKER 2: Right. And that's where Verestro can really help.
SPEAKER 1: They can guide you through the whole process.Â
SPEAKER 2: Absolutely.Â
SPEAKER 1: So, it seems like the future of contactless payments is all about finding the right balance.
SPEAKER 2: A mix of x-pays and issuer wallets.
SPEAKER 1: And Verestro can help you do just that.
SPEAKER 2: Exactly.
SPEAKER 1: Thanks for joining us for this deep dive into the world of contactless payments.
SPEAKER 1: It's a complex landscape. But hopefully we've shed some light on the key considerations.
SPEAKER 1: And hey, who knows? Maybe one day issuer wallets will be the dominant force in the market.Â
SPEAKER 2: It's possible.Â
SPEAKER 1: The future is full of surprises.
SPEAKER 1: Until next time, keep innovating.
SPEAKER 2: See you next time.
