Citadele Bank (Latvia)
Around 80% of Latvian smartphone users will soon have the opportunity to pay via their mobile phones in shops, restaurants, and other establishments that accept cards by simply holding their mobile device near the card reader. Citadele Bank in partnership with Mastercard is the first bank in the Baltics to develop this solution, and it will become publicly available this summer on all Mastercard cards.
Citadele’s mobile payment solution will rely on additional security features to enable payments for amounts exceeding 10 Euro, the current limit for contactless card transactions in Latvia.
Citadele’s mobile payment service is currently operable in a beta testing programme, where it is being used by Citadele employees and select client groups in order to ensure that the mobile payment solution is secure, convenient, and usable at different card terminal models in Latvia and abroad. The beta testing programme is the final step before offering mobile payment solutions to the wider society which is estimated to occur this summer. Citadele is planning on introducing mobile payments in Lithuania and Estonia in the second half of 2017.
“We have entered a new era of payments - from now on, paying in a shop will be as easy as holding your mobile phone near the card terminal. Phones have become central to our lives - we use them for photography, filming, internet browsing and a variety of apps. We will now also be able to use them to pay by simply tapping the screen. Just as we have become used to paying with bank cards, within a few years we will also see mobile phone payments as a natural part of our everyday lives; I expect that they will gradually replace the payments we are used to making with card or cash. Mobile payments are simple and safe, and after trying out contactless mobile phone payments for a few months, I can conclude that it is more convenient and faster than finding my wallet and pulling out my payment card,” said Citadele Bank member of the board Kaspars Cikmačs.
Initially, mobile phone payments will be available on the Android operating system (Samsung, HTC, Huawei, etc.); this comprises roughly 80% of mobile phone users in Latvia. Citadele will soon offer alternative mobile payment solutions for users of other mobile operating systems: bracelets and stickers with near-field communication (NFC) technology. Currently, contactless payments can be used at more than 8,000 establishments in Latvia where contactless payments are accepted; by 2020, all payment terminals in Latvia will have contactless functionality.
“Mobile payments are swiftly gaining popularity thanks to their ease and speed and are already available in most European countries. We are delighted to make contactless mobile payments available in Latvia through our partnership with Citadele and to offer people a modern, secure and fast payment solution.” said Mats Taraldsson, Head of Digital Development at Mastercard Nordics and Baltics.
Up until now in Latvia, non-cash transactions required the insertion or placing of a payment card in or near the terminal. With mobile payments, there is no requirement to carry a physical card. Mobile phone payments will take place in accordance with the tap and go principle popular worldwide.
In order to install the mobile payment service, customers will need an Android OS smartphone (Samsung, HTC, Huawei, Vertu, LG, Sony, etc.) and a Mastercard card. The phone will be linked to the card using the Citadele app. Data transfer between the phone and card terminal will occur using NFC technology, similar in performance to contactless card payments.
Mobile payments solution will feature additional level of security for contactless payments. In addition to transaction limits, additional features such as requirement to lock the phone or confirm the transaction with a four-digit code will protect customers’ money in the event of the loss or theft of a mobile phone.
The mobile payment solution is an original Citadele service which has been developed through the company’s innovation programme; the service was created by Citadele’s card and mobile payment development, e-business, and IT teams, in cooperation with Latvia’s IT company “D8 Corporation”. Citadele has already invested over 30,000 man hours and one million Euro in developing mobile payment services.
Mobile phone payments are the next step in Citadele’s innovation programme, the framework through which modern and convenient bank services are developed and made available. In 2014, an e-talons was integrated into Citadele payment cards for Riga public transport tickets. In 2015, a year and a half earlier than other banks in the Baltics, Citadele developed a virtual code calculator integrated into mobile phones which allows for customer authentication for internet banking and payment confirmation. In 2016 Citadele developed a new mobile app which also supports mobile payments.
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