November 26, 2015
LTP recently got a chance to interview the VP of Marketing for Proxama Digital Payments division, Rob Macmillan.
Proxama PLC is an international mobile commerce company operating across two divisions specializing in proximity marketing via mobile and providing end-to-end solutions for card issuers to move customers from magnetic stripe credit and debit cards to contactless mobile payments.
The company provides end-to-end digital solutions to banks and card issuers to securely transition their card portfolio onto mobile for near field communication (NFC) contactless payments as well as solutions for EMV enablement, Electronic PIN Delivery, tokenization and card issuance management.
LTP: Proxama started as a proximity marketing company. How did you get into payments?
Rob Macmillan: Neil Garner is the founder of Proxama and he was already active in the payments industry. He has done a lot of individual work through previous companies around card specification and contactless payments. So he already had that background when he actually founded Proxama. Initially, Proxama was very much focused around proximity marketing. At that stage, payments became a part of our solution very quickly. As an organization, Proxama really works around mobile wallets. So they did projects in the UK and internationally as well, where they developed wallet technology. Proxama has deployed its technology platforms with companies such as Barclaycard, Softcard (formerly ISIS) and many more. So the company has a lot of strength and in-depth areas.
We worked for a company called Aconite and the company became a part of Proxama last year. Aconite delivers software solutions for managing smart cards and mobiles to issuers and processors. The unification of the two companies created a compelling end-to-end solution for card issuers to migrate from magnetic stripe credit cards to both EMV-compliant chip-based cards and contactless payment-enabled mobile devices. Our focus now is to provide end-to-end solutions.
LTP: We have been tracking the proximity marketing space for a while now. In fact, we have done a lot of research in this space. There are more than 60 companies in the US itself which either use beacons, NFC or one of those methods to offer in-store offers/coupons in the mobile devices. I am seeing a sort of downward trend right now. Is Proxama’s move to move into payments a reflection of that?
Rob: No, it is not a reflection of that. First, I would say that Proxama is actually divided into two divisions: proximity marketing and payments. I actually work in the payments division, so I’ll probably be careful how to comment on some of the strategies of proximity marketing, but it’s certainly growing in the UK. Possibly, there have been certain initiatives in the past and there have been more solutions for particular merchant chains and now, adoption is going to pick up because you get to understand what’s behind. What I am doing with proximity marketing is providing a proposition which really is targeted at the card issuer. A lot of proximity marketing could have all sorts of different customers and different strategies for gaining attraction. But my focus is to sell card issuers who are migrating to EMV and who are adopting mobile payments. They really need to look at adding value-added service to that. A mobile phone with payment capabilities is kind of good, but actually, is it really that much better than contactless payment cards? There are certain segments where it’s going to be attractive because it might have been hooked up with a mobile banking app so that when you make a payment, you can check the balances and check the transaction history. But our focus is to bring some extra value here, for example: many of the card issuers have merchant link program where you can get discounts, vouchers to your customers. Typically, the promotion of that tends to be in the form of letters, e-mails and messages. But you can easily put it into contact; so eventually, when I walk through a store, my phone wakes up and says, You have got a voucher/discount. I think we are more likely to do that. And our proposition is focused more on the card issuer. We have got other uses and capabilities of proximity marketing where we can get something specific for the card issuer because there is fairly good adoption. Hence, I am now being pushed towards mobile payments and it is a very good time.
LTP: Can you please tell us something about your API? What is the goal with the API?
Rob: The API has got two sides. In terms of the payments side, we make it so that people can add the mobile payments capability. The SDK which goes into the phone has got a very simple API. Now, the focus is making sure it is something a reasonable content developer working for a bank can actually do. After that, we try to remove the problem.
So literally, from a consumer point of view to provision payments on the app, you just need to press the button that says, Do you want to use this facility? And then, to a certain extent, depending upon the bank’s authentication, everything happens in the background. From a consumer concern, you don’t want a torturous process to be provided to the consumer. In terms of the experience for the proximity marketing side, it is pretty similar because what a bank wants is that they kind of want to control the process.
LTP: I had seen one solution where if you walk into a store and tap into an NFC tag, you can see the information, and then you can press the buy button and finish the transaction as well because the wallet was also integrated into it. Are you doing something of that kind as well: as in the integration of both the things in one product?
Rob: On the proximity marketing side, we have done those things you just described. The rollout has been on the proximity marketing side, which is much more focused on the delivery of content, messages, vouchers, etc. Contact-wise, we can deliver anything really. About the Integration on the payments side, we are probably one step behind. If you actually make NFC payments, you need an NFC-capable reader. We worked with GSMA and contributed, actually saying, Look, what we can do is have a common standard so that any point-of-sale terminal could do both: redeem a voucher and make payments as well. And that requires a little bit of integration from VeriFone and Ingenico to agree on those standards for that, which is not very far away now.
LTP: Can you give us a little bit of statistics around how big the company is now? How is it growing? Can you also tell us about the employees, revenues, funding, etc.
Rob: I can’t really comment on that sort of thing. We have done well in the things you mentioned. We have opened up in the US and we have got two guys based out of here. I am also looking to expand my team; the US is a pretty important market for us. We have got two centers in the UK: one development center in London and another one in Norwich. We support both the US and Europe & Middle East from there.
LTP: Who are your competitors?
Rob: Sequent, SimplyTapp, Gemalto and Oberthur are our competitors. From a payments point of view, we have got two propositions. We have got the core around EMV enablement and PIN management activities. Then we have got cloud-based payments and tokenization. So as a company that has got both those areas, we don’t see any company as our direct competitors. In terms of mobile provisioning, Gemalto, Oberthur, Sequent, Bell ID are definitely quite active. It is difficult to say whether they are kind of similar, but we are definitely operating in the same space.
About Rob Macmillan (VP Marketing):
Rob is responsible for Product Marketing and Product Management for Payments Solutions at the Proxama Group. His knowledge of card payment and NFC mobile management systems is applied to leading the product strategy and roadmap for the group. Prior to being one of the first starters at Aconite, Rob delivered numerous business and technical consulting projects at PwC.