Green Bay-based Associated Bank plans to launch Apple Pay services for its debit card customers in mid-December.
The bank currently offers the mobile payment service on its Associated Bank branded credit cards and is in the certification and testing process for the debit cards.
With Apple Pay, users upload credit or debit cards to their devices, and the device is then used to pay instead of the card. The Apple device and servers do not store the card number, but rather a unique, encrypted device account number. A one-time dynamic security code is generated for each transaction. And if the device is compromised, the information can be remotely erased.
The process, known as tokenization, has been gaining steam among payment providers and financial institutions because of its added security and ease of use. Minneapolis-based U.S. Bank and Pittsburgh-based PNC Bank, which also have several Milwaukee market branches, have implemented the technology as well.
Customer demand for the new technology is high, said Brent Tischler, director of payments and direct channels at Associated Bank.
“We have, like many issuers, placed an ‘Apple Pay coming soon’ banner on our public website,” Tischler said. “We’ve gotten thousands of hits on that coming soon banner. Our call center, as well as our branches, were getting a lot of customer inquiries if Associated Bank was going to participate.”
Associated Bank is shaping a culture of innovation and has jumped into the Apple Pay space sooner than it might have adopted new technologies in the past, he said.
“It’s really going to be kind of the blueprint for e-commerce going forward from a security standpoint,” Tischler said. “All of the tokenization, digitization, encryption, it creates among the most secure payments possible for our customers and that’s certainly something that’s important for us, as well as privacy.”
It’s too soon to tell what adoption rates are like among Associated customers, but the bank expects it will be a compelling solution for them, he said.
Bank customers must an iPhone 6 to use Apple Pay, which can be implemented through an iTunes account or through the Passbook app.
The merchant must also offer near field communication or contactless payment. So far, about 2 to 3 percent of retailers have done so at the point of sale, but Tischler said the trajectory of acceptance continues to accelerate.
“We expect I would say a growing and accelerating shift to mobile payments, but it’s still not going to be the primary channel for some time,” he said. “We are taking a very broad and holistic view to the digital payment network and environment. We believe while Apple Pay will likely emerge as one of the winners in this space, we believe it’s not going to be the only winner.”
