Mobile Minded

Sharing Ideas—Peter Soraparu regualrly participates in the Boston Federal Reserve’s Mobile Payments Industry Work Group discussionsn with his industry colleagues.
Sharing Ideas—Peter Soraparu regualrly participates in the Boston Federal Reserve’s Mobile Payments Industry Work Group discussionsn with his industry colleagues.

Peter Soraparu puts Federal Reserve work group discussions into practice

By Elizabeth Judd

Twice a month Peter Soraparu, senior executive vice president of the relationship banking division at American Trust & Savings Bank, a $1 billion-asset community bank in Dubuque, Iowa, dials into a conference call with other mobile payment enthusiasts across the country. He joins staff at the Federal Reserve Bank of Boston as well as people elsewhere around the industry to discuss where mobile payment might be headed.

Those conversations with the Boston Federal Reserve’s Mobile Payments Industry Work Group are peppered with talk about current technologies such as near-field communication, tokenization and EMV chip cards. Soraparu says the group’s discussions allow him to learn firsthand what other industry members are experiencing.

Six years old, Boston Fed’s payments work group represents 45 different experts across the industry who are involved in either developing mobile payments now or working toward adopting mobile payments, explains Marianne Crowe, vice president of payment strategies at the Boston Fed. Participants include representatives from Visa, NACHA—the Electronic Payments Association, technology provider Fiserv Inc., PayPal Holdings Inc., Walmart Stores Inc., Google Inc., AT&T Inc. and Verizon Wireless Inc.

American Trust & Savings introduced mobile banking in 2010 and enabled Apple Pay transactions in the fall of 2015. Soraparu has participated in the work group since 2013. He tries to attend at least one of the work group’s three in-person meetings held annually. Although the bank didn’t want to spearhead mobile-phone payments, he says, “we wanted to be as quick on the draw as we could.”

Talking Point:

Industry work group is discussing various pressing mobile
banking issues.

Soraparu has a longstanding interest in mobile payment since he began working in the financial services industry. He became intrigued with having American Trust & Savings offer Apple Pay transactions when in late 2014 he noticed that 9 percent of the bank’s customers’ debit-card transactions were conducted through the iTunes app. Today, he estimates that 30 to 35 percent of his bank’s retail base is using mobile banking and perhaps 10 to 15 percent use Apple Pay.

Next on Soraparu’s agenda is increasing the percentage of American Trust & Savings’ merchant base that accepts mobile payments. Although roughly 80 percent of the bank’s merchants are equipped with terminals that accept mobile payments, he wants to do more to acquire them. He credits the work group with helping American Trust & Savings “do the right job for our merchant clients, too.”

To this end, Soraparu has been helping to equip those merchants—starting with those with the highest transaction volumes—with terminals that can accept chip cards and near- field communication for smartphone mobile payments. As soon as American Trust & Savings’ core processor is ready later this year, the bank plans to add Samsung Pay and Android Pay to its list of mobile payment options.

Prominent on the work group’s agenda has been research into tokenization for card-not-present transactions over the Internet. That’s largely because mobile commerce transactions are increasing at a faster clip than card-present transactions, Crowe says. Soraparu notes that, with more secure chip transactions fraud will turn to card-not-present transactions.

Looking ahead, Soraparu hopes the work group will continue to prioritize discussions about card transaction security. Specifically, he would like it to consider tokenization in the card-not-present realm, as well as different methods for authenticating users.

“Security and fraud issues are omnipresent so we have to look at ways to keep abreast of the fraudsters, if not keep a quarter step ahead of them,” he says.

Elizabeth Judd is a financial writer in Maryland.