Tue, May 03, 2016 - Page 13 News List

Government touts Apple Pay, institutions object

COMPLEXITY:Some governing bodies opposed to the introduction of Apple Pay have said that protection of personal information and service standards are a concern

By Ted Chen  /  Staff reporter

The government and the Financial Supervisory Commission (FSC) said they support the idea of bringing Apple Pay to Taiwan, despite objections from certain governmental bodies.

“We support the introduction of Apple Pay in Taiwan and hope that the government would finalize its decision before the new government takes office on May 20,” Commission Vice Chairwoman Jennifer Wang (王儷玲) said on the sidelines of a question-and-answer session at the Legislative Yuan.

The commission last week submitted a report on Apple Pay, pending the Executive Yuan’s approval, Wang said.

Premier Simon Chang (張善政) said that barring tax evasion concerns, the executive branch wishes to grant fast-track approval for the mobile payment service.

However, some governing bodies have voiced their opposition to the decision.

In a meeting with service providers, banks, credit card issuers and government departments, the central bank listed concerns about leaks of personal information, higher operating costs for local banks and added complexity in collecting taxes.

The central bank said that it is most concerned about Apple Pay’s service quality and security, as its token service provider — the authenticating entity for mobile payments — is operated by institutions based outside of Taiwan.

Meanwhile, domestic mobile payment companies said that granting approval to foreign platforms would hamper their development prospects.

Market observers said that a domestic token service provider solution would push back the introduction of Apple Pay until 2018, making Taiwan fall further behind China and Hong Kong.

It would take a domestic token service provider until at least the end of next year to obtain certification by EMVCo, a consortium comprised of the world’s major credit card issuers overseeing technical standards for mobile payments, market observers said.

Apple Pay works with digitally stored credit, debit and loyalty cards, and its token service provider is provided by Visa Inc and Mastercard Inc.

Taiwanese banks said that they would be happy to have the payment system in place, since the popularity of Apple’s mobile devices is expected to help boost adoption, and urged to have the option of choosing between foreign and domestic token service providers.

Meanwhile, the government has been working toward preparing the nation for digitized financial services and to reduce reliance on physical currency, while aiming to double the utilization of electronic payments to 52 percent by 2020.

Last year, electronic payments accounted for 76 percent of transactions in South Korea, while their utilization in Taiwan was gauged at 26 percent, the commission said.

Taiwan’s highly fragmented mobile payment market has added considerable costs to businesses who are compelled to support multiple services, the commission added.

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