10 Sep 2020

Apple Pay set to become king of the hill in Serbia (also)?

Everyday life in the 21st century is awash with change, change mostly dictated by modern technologies and their constant evolution. Mobile payment apps are the latest (and most innovative) addition to the stable of convenience services, allowing users to pay quickly and securely.  The COVID-19 pandemic has pressed home the advantages of paying through mobile phone apps, considering that this method of payment minimizes physical contact between merchants and customers, Apple Pay, a mobile payment application, was launched in Serbia at the end of June 2020. We spoke with Nikola Mehandžić, Business Development Director for the Western Balkans at MasterCard, about how the Apple Pay service works in Serbia, and the benefits this system brings. 

  • Why was the launch of the Apple Pay service in Serbia important for MasterCard?

MasterCard users in Serbia asked, and we listened. The rollout of Apple Pay service comes on the back of huge customer interest over the past number of years in using this modern, secure and popular payment method. By launching the Apple Pay service, Serbia joins a worldwide family of almost 60 countries where it is possible to pay with a MasterCard card via any Apple device and we are delighted that banks have recognized this service as one of the key ones to meet customer expectations for secure and easy payments with the impeccable user experience to which they are already accustomed.

  • Is Apple Pay a safer form of payment compared to other wallet solutions and/or standard payment card use at POS terminals?

Mastercard’s security standards are clear and identical across all payment services, devices and channels, which means that each payment is protected by our network’s multiple protection mechanisms. Customer needs and safety are at the heart of every product we develop. Innovation is the key to our business success and safeguards are in place to ensure that it is never detrimental for users and their rights.

In the current COVID-19 climate, Apple Pay, along with other contactless payment methods, provides another line of protection to users who are looking to spend as little time as possible at physical points of sale and with as little contact as possible, as there is no need to enter a PIN code no matter what the amount since biometrics are used to authenticate the transaction.

  • What sets this type of payment apart, i.e. does this service employ any specific technology?

In general, mobile contactless payments are the next generation of contactless card payments, which are widely used not only in Serbia, but all over the world. A mobile phone becomes a card for paying for coffee on the go, public transport tickets or online orders, in any currency. These payment possibilities give it a massive competitive advantage and is the reason why users around the world are turning to mobile payments. A central feature of the Apple Pay service is its use of tokenization technology, which means that whenever you use your MasterCard debit or credit card within the Apple Pay mobile wallet, your card is not stored either on the device or on the Apple servers. Each device is assigned a unique number that is encrypted and securely stored in a secure element on the device on a certified chip that is designed to securely store information on the device. In addition, the user no longer has to remember the PIN because biometrics are used to authenticate the payment, by means of face recognition, fingerprint or you can type a code to unlock the phone. This combination of MasterCard security technologies, coupled with the performance capabilities of the latest iPhones, makes for an intuitive, secure and reliable payment solution tailored to the modern consumer.

  • How will MasterCard payment card users who own Apple devices (iPhone, iPad, Apple Watch or Mac) be able to activate the service? What are the steps for service activation?

The Apple Pay service is very easy to set up. When the bank enables this service, the user simply opens the Wallet application on their Apple device, selects the + option and just follows the further steps to add a MasterCard payment card. Once users add their card to their iPhone, Apple Watch, iPad or Mac, they can instantly start using Apple Pay on the device to make contactless payments that are just as secure and easy as paying with a physical MasterCard card. The users will continue to have access to all the promotions and benefits provided to them by MasterCard or the issuing bank.

  • What information will MasterCard payment card users need to share with the application to use the Apple Pay service?

To register a card for the Apple Pay service, the data that is already visible on the physical card itself is used, i.e. the user’s name, card number and validity date. Sensitive data such as the PIN code or CVC2 code on the back of the card is never used to register the service and will not be requested by any financial institution from its users.

  • Are there any restrictions in terms of card type, i.e. can users of both credit and debit MasterCard cards use Apple Pay?

The Apple Pay service is available to all customers of banks that have rolled out this service so far and who have an Apple device, an active account in one of these banks and a MasterCard debit or credit card.

  • Will users be prompted to enter their PIN code for purchases over a certain limit?

Contactless purchases over RSD 4,000 made using a standard card require PIN code entry. The situation with mobile contactless payments is different. Namely, with the Apple Pay service, thanks to biometrics, payment authentication is done in the safest possible way, i.e. by scanning the user’s fingerprint or face, taking the PIN code completely out of the equation irrespective of the transaction amount.

  • Will cardholders be able to use the Apple Pay service when paying abroad?

Payment with a MasterCard via Apple Pay service is possible wherever contactless payment is enabled at the POS terminal, which is 97% of the market for card payment terminals in Serbia and millions of locations around the world.

  • To what extent does Serbian legislation in this area differ from that in EU Member States?

Payments via the Apple Pay service are subject to the same regulations governing payments made using physical payment cards (the Law on Payment Services and the Law on Interbank Fees and Special Business Rules for Card-Based Payment Transactions), and in this respect, there is no difference in relation to European Union regulations. Apple Pay payments use a strong authentication method when it comes to two-factor authentication, which involves a combination of device ownership and use of biometric features, which is fully compliant with the PSD2 European Union Directive on Strong User Authentication, which is currently not mandatory in Serbia, but is a standard which MasterCard applies to make digital payments more secure and the number of approved transactions higher while providing impeccable user experience.

  • In case of theft or loss of the phone on which the application is installed, how can users protect themselves from fraudulent payments through their device? 

Where a phone or wallet is lost or stolen, users should contact their bank as soon as possible in order to block their cards. It’s in cases like this that biometrics come into their own – the fact is that most smartphone users already use fingerprint, face or pupil recognition to unlock the phone, which is an important degree of protection against unauthorized use of the device, so the use of the same method for payment authentication, along with all other technological measures, significantly reduces the chances of fraud. Certainly, there is no magic solution to prevent fraud, and we always advise our card users to take reasonable precautions and take care of their cards and mobile devices.