The swarm of new mobile payment initiatives has left traditional bank issuers with little choice but to shoehorn modern mobile wallets into their aging infrastructure.
In anticipation of the scramble to support large mobile payment initiatives such as Apple Pay, Samsung Pay and Android Pay in Europe, Underwriters Laboratories (UL) sees an opportunity to provide a testing environment for card issuers.
"Everything is moving very fast; you need to be fast to market to enable these services," said Maxim Dyachenko, service line manager for test tools at UL's transaction security division. "It's a chicken-and-egg story."
The testing tool, called the UL Digital Enablement Test, simulates the mobile payment interfaces from MasterCard, Visa and Visa Europe; it also supports use cases beyond the card networks' requirements. It can perform testing for tasks such as transaction history, enquiry, enrollment and notification.
UL provides automated environments to test the interoperability of their payment products against the many acceptance devices used throughout Europe.
"We test whether the host systems of issuers implementing the mobile payments technology 'talk' to each other by using the right 'language,''' Dyachenko said.
Testing can be useful because the technology that powers mobile payments is complex, Dyachenko said.
To enable the enrollment of a card account into a mobile payment app, "everything behind the scenes the system, the integration with Visa and MasterCard has to be digitally enabled," Dyachenko said. "That includes the cardholder number, the expiration date, the cryptographic keys. Everything has to be secure and reliable."
UL hopes to find banks that are interested in deploying mobile payments but are mindful of determining whether their legacy infrastructure is properly configured and interoperable with technology such as including Near Field Communication.
Issuers license UL's Digital Enablement Test Tool and can perform the tests themselves or outsource to UL. Given the complex nature of the tests, more issuers are choosing to outsource digital enablement testing, Dyachenko said.
The Leiden, Netherlands-based UL has timed its product's release to coincide with the rollout of Android Pay, Apple Pay and Samsung Pay in Europe. Apple Pay launched in the U.K. in July, and MasterCard has announced its planned support for Samsung Pay in Europe. Google's Android Pay is expected to debut later this year as part of the next update to the Android mobile operating system.
The rapid-fire launch of these new mobile payment systems means "there will be thousands of issuers that are wondering if they should connect and how, Dyachenko said.
The demand for UL's offering will be based more on UL's experience as a digital testing service than on a lack of expertise at the banks, said Madeline Aufseeser, a senior analyst at Aite Group.
"It's not that the issuer isn't plugged in," Aufseeser said. "It's more that the testers encounter more things because they've done tests over and over again."
Having a third party perform an exam can also improve an issuer's technological profile, Aufseeser said.
"It's more credible than an internal source," she said. "It also gives that organization a leg up if things have come up that have gone haywire that that organization may not have known about otherwise."