For 43 years, the leading publication covering payment systems worldwide. NOVEMBER 2013 Issue 1,029

U.S. GENERAL PURPOSE CARDs Through 3Q ‘13 There were 51.58 billion purchase transactions initiated by general purpose credit and debit (including prepaid) cards in the U.S. from Payment Cards Worldwide January 1 through September 30, 2013, an increase of 7.8% or 3.75 2012 vs. 2017 ... turn to page 8 51% Top Acquirers Worldwide Growth in Global Brands The 150 largest acquirers of merchant card transactions based on the number of general purpose card purchase transactions at 36% merchants during calendar year 2012 are listed on page 11. 29% 28% turn to page 11 26% 23% First Data Tablet Platform The move to replace countertop terminals, cash registers, and PC- based systems with tablet-based systems is accelerating faster than 9% even early adopters had predicted. First Data, the world’s largest 5% ... turn to page 5 Deloitte Payments IndusTry Consulting In the aftermath of the Great Recession, the amount of money financial institutions and industry vendors have available for consulting services has shrunk. As a result, several payment Total Cards (Mil.) Type 2012 2017 2017 Private Label* 5,677.1 7,764.4 ... turn to page 12 UnionPay 3,534.0 5,341.7 EVO Payments Expands in Europe Visa 2,499.2 3,197.9 Domestic GP 600.0 1,606.8 Privately held EVO Payments, which ranks 18th among U.S. 2012 MasterCard 1,157.4 1,576.4 merchant acquirers, has formed majority-owned joint ventures in 725.0 762.8 Spain and Poland. These deals follow last December’s acquisition Amex 102.2 128.5 ... turn to page 6 JCB 78.3 96.2 Discover 61.5 79.6 FICO Fights False Positive Fraud *Private Label includes prepaid. Diners 5.8 6.3 Issuers face back-office costs as well as disgruntled cardholders ©2013 The Nilson Report 14,440.5 20,560.5 when their fraud protection systems decline valid authorization requests from transactions originating in a foreign country. Payment Cards Projected Worldwide turn to page 5 Payment cards in circulation worldwide reached M&A and Corporate Financing — SEPTEMBER 2013 14.44 billion in 2012, up 8.2% over 2011. These included cards with global general purpose Turn to page 9 for a list of 34 mergers, acquisitions, joint ventures, brands (Visa, MasterCard, , and corporate financing deals that occurred in September. There Maestro, JCB, Diners Club, and UnionPay), were 325 transactions from January 1 through September 30. ... turn to page 10 turn to page 9

Fast Facts P 2-4 | Miura Chip & PIN Device P 6 | U.S. Bank’s New Prepaid Card P 7 | Supports Visa/Orange NFC Partnership P 7 INSIDE: Cardlinx Association formed P 9 | WEX Card Joint Venture in Europe P 10

CHARTS: U.S. General Purpose cards ytd 3Q P 8 | Payment Industry M&A September 2013 P 9 | Top 150 Acquirers Worldwide 2012 P 11

© HSN Consultants Inc. 2013 THE NILSON REPORT Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for any purpose is a copyright violation subject to substantial fines. Yearly Subscription for 23 print and electronic issues is $1,495. ISSN 1087-8718 THE NILSON REPORT: 1110 Eugenia Place, Suite 100, Carpinteria, CA 93013 USA • PHONE (805) 684-8800 • FAX (805) 684-8825 • [email protected] Fast Facts >>>>>>>>> CONSUMER FINANCIAL PROTECTION BUREAU has FUNDING LOANS: Current and Future Consid- eliminated a feature of the Credit Card Accountability, Respon- erations is a discussion paper available from The Federal Reserve sibility and Disclosure Act passed in 2009, which effectively Bank of Philadelphia's Payment Cards Center. The 21-page report is available from http://www.philadelphiafed.org/consumer-credit- denied credit cards to stay-at-home spouses or domestic partners and-payments/payment-cards-center/publications/discussion- because the employed spouse or partner's income could not papers/2013/D-2013-November-Funding-Credit-Card-Loans.pdf. be considered in the application. Credit card issuers must now consider household income, rather than individual income, for PROPAY, a wholly owned subsidiary of TSYS, will offer its persons applying for a credit card under their own name. e-commerce merchant customers Planet Payment’s Shop in Your Currency multicurrency pricing service. Greg Pesci is President at CHASE CARD SERVICES will add EMV-compliant chips to Sap- ProPay, (801) 341-5560, [email protected], www.propay.com. phire Preferred Visa cards it issues in the U.S. The largest U.S. credit Philip Beck is CEO at Planet Payment, (516) 670-3200, pbeck@ card issuer will add EMV chips to its upscale JPMorgan Palladium planetpayment.com, www.planetpayment.com. Visa and JPMorgan Select cards and British Airways and Marriott co- ONYX PAYMENTS is the new name of the former Pegasus branded cards. Jennifer Roberts is President at Chase Card Services, . The company provides more than $500 million (302) 282-4000, [email protected], www.chase.com. annually in payment disbursement and reconciliation services to HEARTLAND PAYMENT SYSTEMS will offer its small business more than 40,000 hotels and 60,000 travel distributors worldwide. customers American Express Merchant Financing based on their Mark Dubrow is CEO, (214) 234-4120, [email protected], annual card processing volume. Loans are paid back over a www.onyxpayments.com. 12-month period. Merchants can borrow up to $75,000. HPS is the FISERV has licensed iovation's ReputationManager360 Internet 6th largest U.S. acquirer. Pierric Beckert is EVP, Pricing & Bus. Devel. authentication and fraud control service. John Horn is Security at American Express, (212) 640-5757, [email protected], Strategist, Enterprise Risk & Resilience at Fiserv, (330) 874-0529, www.americanexpress.com. Bob Carr is CEO at Heartland, [email protected], www.fiserv.com. Jon Karl is VP, Corporate (609) 683-3831 x2203, [email protected], Devel. at iovation, (503) 224-6010, [email protected], www.heartlandpaymentsystems.com. www.iovation.com. SQUARE, provider of processing services to merchants TRANSFIRST, the 14th largest U.S. acquirer, will offer its nearly using smartphones and tablets, will discontinue its monthly service 200,000 active merchants PayPal card acceptance at the point of fee as of February 1, 2014. By that time all processing will be han- sale. Craig Tieken is Director of Product at TransFirst, (303) 625-4614, dled on a per-transaction basis. Square has also eliminated holds [email protected], www.transfirst.com. Don Kingsborough is and deposit limits on manually entered transactions in the U.S. VP, Enterprise & Retail Solutions at PayPal, (408) 967-3794, dkingsborough@.com, www.paypal.com. FEATURED CONFERENCE INCOMM, a top provider of prepaid cards, now offers merchants a 20% shopping cart optimized for buyers using mobile devices. David Nelsen is General Manager, Digital Solutions, (503) 443-8264 PAYTECH SUMMIT 2013 Subscribers to x706, [email protected], www.incomm.com. Two-Day Conference The Nilson Report will receive a 20% EON PAYMENT SOLUTIONS has released the latest version of November 27-28, 2013 EonPay, its Enterprise-Class Hosted Recurring Billing Platform for The Hotel Estanplaza International discount. (Use code TNR_13K_PT.) corporations, software companies, and payment service providers. São Paulo, Brazil The platform is PCI compliant. EON is a division of ABC Financial Topics include: how technology and innovation could bring Services. Doug Elkins is Managing Executive at EON, (501) 515-5062, a larger convergence and interoperability, regulation of [email protected], www.eonpayments.com. m-pay, business models for m-pay in Brazil, technology for HIGHER ONE has reached a preliminary agreement in federal court secure transactions, Brazilian consumer behavior, and more. to settle class-action lawsuits in five states. The company will pay Speakers represent: Chile, Agência Nacional De $15 million if the settlement is approved. The litigation was tied to Telecomunicações, Mg Systems Consutoria, TVZ, Banrisul fees charged to accounts held by college students. Compras, Clearsale, Redecard, Banco Santander, Caixa Econômica Federal, Paypal Brasil, COTS Advocacia, Buscapé JUMIO has reduced to an instant the time it takes for its new Company, Nokia Solutions and Networks, Vivo do Brasil, Netswipe Version 2.0 SDK to scan a payment card using a camera MasterCard, ACG, Camara E-Net, Polishop, Claro do Brasil, in a smartphone or tablet and initiate payment in a merchant's app Ericsson, Associação Paulista de Supermercados – APAS, on a checkout page. Netswipe 2.0 scans and extracts the customer's EMTU, M.Sense, Ewave do Brasil, Cielo, Morpho do Brasil,

Conference links at www.nilsonreport.com name, in addition to the 16-digit card number and the expiration and more. Cost is $1,800. Contact Eduardo Machado at Next date. Customers only need to enter the 3-digit CVV number to Business Media, 55 (11) 3173-4413, eduardo.machado@ complete the transaction. Daniel Mattes is CEO, (650) 424-8545, nextbm.com.br. Register at www.paytechsummit.com.br. [email protected], www.jumio.com.

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 2 NTHEOVE MBNILSONER 2013 REPORT ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of NUMBER 1029 Novemober 2013 - 1 - HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. >>>>>>>>>FastFifth Edition Facts ACCULYNK, provider of PaySecure, a graphical PIN pad that con- sumers can use for online debit payments, as been deployed by Ria, provider of international money transfers. John Beisner is SVP, New for 2013 Client Services at Acculynk, (678) 894-7026, jbeisner@ acculynk.com, www.acculynk.com. Juan Bianchi is CEO at Ria, 85 pages (562) 345-2154, [email protected], www.riafinancial.com. BILLTRUST, a top provider of outsourced billing and payment ser- Figures include vices, now offers EmailPlus, a turnkey service that billers can use to cards in e-mail bill recipients a summary of their invoices along with a PDF circulation and Largest attachment. Recipients can securely view and pay invoices as well as spending for download invoicing data directly into accounting software such as more than QuickBooks. Flint Lane is CEO at Billtrust, (609) 235-0846, Payment Card Issuers [email protected], www.billtrust.com. 880 credit and Merchant Acquirers STRUCTURE & PRACTICES OF THE DEBT BUYING & debit Worldwide INDUSTRY is a 49-page report available from the Federal Trade Commission at www.ftc.gov/os/2013/01/debtbuyingreport.pdf. card issuers a 2013 Nilson Report Publication from 115 countries in - PCI DATA SECURITY STANDARD (PCI DSS) version 3.0 is now all world regions available. Updates include recommendations for making PCI DSS © HSN Consultants Inc. 2013 THE NILSON REPORT, www.nilsonreport.com/largest issuers. Reproduc part of everyday business processes, best practices for maintaining copyright violation subject to substantial fines. Asia/Pacific, ing or allowing reproduction or dissemination of any portion of this document in any manner is a ongoing PC DSS compliance, guidance from the Navigating PCI DSS Guide built in to the standard, and enhanced testing procedures to Canada, Europe, clarify the level of validation expected for each requirement. Latin America, , Visit www.pcisecuritystandards.org. and Middle East/Africa Also lists ROGERS, Canada's largest mobile network operator with more than 9 million subscribers, has signed an agreement with MasterCard to 250 Merchant Acquirers install a prepaid MasterCard account and contactless PayPass tech- from 64 countries in all world regions nology in NFC-enabled smartphones. The Rogers Prepaid Master- Card in the Rogers suretap wallet will allow cardholders to tap their phone to pay at more than 40,000 retailers in Canada. Betty DeVita Order Today is President at MasterCard Canada, (416) 479-3226, betty_devita@ www.nilsonreport.com/largestissuers .com, www.mastercard.ca. David Robinson is VP, Emerging Business at Rogers Communications, (416) 935-5112, [email protected], www.rogers.com. MITEK SYSTEMS has received its second U.S. patent related to using a smartphone or tablet camera for bill payment. The com- pany's Mobile Photo Bill Pay software takes a picture of a bill, reads the text, and auto-populates the fields required to make a pay- MANAGEMENT ment. Keith Gray is VP Sales, (858) 309-1740, kgray@miteksystems. > CHANGES com, www.miteksystems.com.

MERCHANT360 provides POS development, integration, and Paul Burmester has been appointed CEO at ValidSoft, transaction processing to support payments and value-added 44 (203) 170-8125, paul.burmester@validsoft. services. The company now offers bi-directional NFC between com. Jeffry Beene has been appointed Senior Risk enabled mobile phones and point-of-sale terminals from Management Officer at JetPay, (972) 503-8900 and . Steve McRae is CEO at Merchant360, (541) 292-0667, x169, [email protected]. Andrew Mathieson has [email protected], www.merchant360.net. been appointed Group Executive of Relationship Management at TSYS, (770) 663-2954, amathieson@ AURUS, formerly TalentBeat, has been awarded U.S. Patent No. tsys.com. Allison Bennett has been appointed 8543461 for its whizPay payment processing service, which lets Chief Marketing Officer at Elavon, (678) 731-5540, businesses isolate their POS systems from PCI requirements while [email protected]. Robyn Brewington, remaining compliant with Data Security formerly at Source One Direct, has been appointed VP, Standards. WhizPay features can apply to payment processing, Direct Sales at TransCentra, (678) 728-2541, CRM, loyalty, mobile, and social media integration. Rahul Mutha [email protected]. Simon Wilson has is CEO, (508) 982-0334, [email protected], been appointed U.K. Sales Manager at NXGEN, www.aurustech.com. (406) 863-9977, [email protected].

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 3 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. >>>>>>>>Fast Facts FIRST BANK in Nigeria now offers a platinum MasterCard FIRST DATA MERCHANT SOLUTIONS, First Data's direct- debit card exclusively for members of its premier loyalty club. to-market merchant acquiring business, will offer Diners Club and Chuma Ezirim is General Manager & Group Head, eBusiness at acceptance to its merchants in the U.K. Gerry Wagner is VP, Global Acceptance at Discover Network, (224) 405-2955, First Bank Nigeria Limited, 234 (80) 2501-8720, chuma.ezirim@ [email protected], www.dinersclub.com. Raj Sond is firstbanknigeria.com, www.firstbanknigeria.com. Omokehinde General Manager at First Data Merchant Solutions, Ojomuyide is VP & Area Business Head, West Africa at MasterCard 44 (126) 828-5710, [email protected], Worldwide, 234 (1) 460-0902, omokehinde_ojomuyide@ www.firstdatams.co.uk.

mastercard.com, www.mastercard.com. PROSA, the top third-party processor in Mexico, will offer its merchant customers in that country and others in Central America STATE BANK OF INDIA will use the payment processing platform AnywhereCommerce's aCommerce Gateway for accepting payment of Yalamanchili to support its Xpress Money Visa card, which enables cards, payment acceptance software, and mobile POS devices. The cardholders to receive money transfers that originate from the UAE devices will be branded SQCarnet. Bill Nichols is EVP, International directly onto the card. Ramkumar Sekar is President South East Asia Markets at AnywhereCommerce, (954) 993-5093, bill.nichols@ & India Sub Continent at Yalamanchili, (65) 6933-8600, ramkumar. anywherecommerce.com, www.anywherecommerce.com. [email protected], www.yalamanchili.com.sg. Amit Kumar Emmanuel Ari Chamarro is in charge of Carnet, Issuance & Accep- Tripathi is Deputy General Manager at State Bank of India, tance at Prosa, 52 (55) 5268-1212, [email protected], 91 (22) 2274-1210, [email protected], www.sbi.co.in. www.prosa.com.mx. BARCLAYS, Europe's 2nd largest merchant acquirer, will provide full (EMP) has certified card acquiring services for Digital River World Payments. Marc EMERGING MARKETS PAYMENTS Ingenico's Telium 2 range of POS terminals. More than 130 banks Pettican is Director of Sales at Barclaycard, 44 (20) 3555-5569, and 30,000 retailers use EMP as their payment processing company [email protected], www.barclaycard.com. in the Middle East and Africa. Rachid Oulad is Africa Director at Souheil Badran is SVP and GM at Digital River World Payments, Ingenico, 33 (6) 2118-3095, [email protected], (952) 225-3736, [email protected], www.ingenico.com. Paul Edwards is Chairman at EMP, www.digitalriverpayments.com. 27 (83) 709-7007, [email protected], THE NATURAL SECURITY ALLIANCE is a newly formed www.emp-group.com. association dedicated to wireless biometric authentication. , Colombia's top third-party Members include MasterCard, Banque Accord, BNP Paribas, Carre- RBM REDEBAN MULTICOLOR payment processor, now offers an application for smartphones four Banque, Groupe Auchan, Ingenico, Leroy Merlin, Oberthur, and that lets merchants accept card payments. RBMovil can be used Paycer. For more information visit www.naturalsecurityalliance.org. with Android, BlackBerry, and iOS devices. RBM is working with PAYLEVEN, a provider in Europe of payment card processing for MasterCard to promote processing. Juan Carlos tablets and smartphones, now offers its merchant customers the Silva is VP, Sales at RBM, 57 (1) 307-7110 x1217, [email protected]. ability to create loyalty programs based on consumer email co, www.redebanmulticolor.com.co. Marcela Carrasco is President at addresses. Alston Zecha is COO, 44 (786) 736-1792, alston.zecha@ MasterCard Colombia, 57 (1) 607-0520 x70528, marcela_carrasco@ payleven.co.uk, www.payleven.co.uk. mastercard.com, www.mastercard.com.co.

CONFERENCES & SEMINARS

CARTES 2013 PARIS: November 19-21, 2013. The Paris PREPAID CARD COMPLIANCE 2014: January 30-31, Nord Villepinte, Paris, France. Estimated attendance: 1,600. 2014. The Washington Plaza Hotel, Washington, D.C. Estimated Cost for the three-day conference is $1,798 (€1,328). Subscribers attendance: 150. Cost for the two-day conference is $2,295. to The Nilson Report will receive a 20% discount. (Use code PPARIS13.) Subscribers to The Nilson Report will receive a $300 discount. (Use code Contact Alexandra Pinard, 33 (1) 7677-1126, alexandra.pinard@ TNR300.) Contact Nicole O’Neill at ACI, (212) 352-3220 x5257, comexposium.com. Register at www.cartes.com. [email protected]. Register at www.americanconference.com/prepaidcardDC. MOBILE MONEY & DIGITAL PAYMENTS ASIA 2014: January 21-23, 2014. The Gran Melia Jakarta Hotel, SCA 2014 PAYMENTS SUMMIT: February 5-7, 2014. The Jakarta, Indonesia. Estimated attendance: 200. Cost for the Grand America Hotel, Salt Lake City, Utah. Estimated attendance: three-day conference is $1,200. Subscribers to The Nilson Report 600. Cost for the three-day conference for nonmembers is $1,120 will receive a 20% discount. (Use code NILSON.) Contact Charlotte (discounts available with registration before December 20, 2013 Conference links at links at Conference Walkling at Clarion Events, 44 (20) 7384-7919, charlotte.walkling@ and January 15, 2014). Subscribers to The Nilson Report will receive a www.nilsonreport.com clarionevents.com. Register at www.mobile-money-gateway.com/ 20% discount. (Use code 20-DISC.) Contact Kristin Krebs at SCA, event/mobile-money-and-digital-payments-asia-2014. (203) 733-9715, [email protected]. Register at www.scapayments.com.

THE NILSON REPORT If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 4 NUMBERNOVEMB 1029ER 2013 November ISSUE 2013 1,029 THE NILSON REPORT immediately.- 3 - Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. First Data Tablet Platform (from page 1)... processor of card payments at merchants, has now firmly committed to replacing legacy devices with tablets, which it can easily deploy with industry- specific applications. POS terminal as well as sales it makes using POS Clover Station is the terminals manufactured by other vendors. name First Data has The Clover Station uses the Android operating given to a hosted, system. Its 11.6-inch screen is larger than those cloud-based POS available from other vendors selling tablet- commerce platform based POS commerce systems. The tablet fits it plans to into a swivel stand that can be turned to face the offer small cardholder. The Clover Station deploys Wi-Fi, and midsized Bluetooth, and Ethernet protocols. A USB port can businesses to be used to add an NFC card reader. Future systems replace all of the will integrate contactless readers. A barcode reader existing devices is available. they use on their countertops. The hardware and open-system software were developed by First Clover Station’s installed menu of core apps can be Data’s Clover Network subsidiary broken down to subapps to work better — a unit that operates with its own for specific merchants or they can be governance structure. its 11.6-inch completely uninstalled and replaced by screen is a customized app created by an outside Bank of America Merchant Services, larger than developer. a joint venture of BofA and First Data, is the first merchant acquirer to offer other POS Clover Station was designed to be Clover Station. tablets. shipped fully configured for the merchant it is being shipped to and First Data will bring Clover Station is able to be installed in 15 minutes to market directly and in partnership with joint without the need of a professional IT person. venture and other partners in the U.S., Europe, and Leonard Speiser is President at Clover Network other regions by year-end. Clover will replace sales in Mountain View, California, (350) 396-9444, First Data currently makes using its proprietary [email protected], www.clover.com.

FICO Fights False Positive Fraud (from page 1) Balancing the customer identify the location of a mobile experience versus protection phone in proximity to an ATM against fraud has been an or POS terminal where the card is being used. Issuers send the cardholder’s mobile number and into its Falcon Fraud Resolution the location of the transaction Manager product, which is to ValidSoft, which returns a used to protect issuers and score in less than half a second. cardholders from payment Cardholders are not aware that card fraud. Falcon monitors ongoing debate for payment the connection has been made. transactions from more than 2.4 card issuers. In the current Jon Alford is Product Manager billion cards. Fraud Resolution environment, issuers see more at ValidSoft in London, U.K., Manager includes customer to gain by favoring the customer 44 (203) 170-8128, jon.alford@ communications software that experience. validsoft.com, www.validsoft. FICO gained in the $115 million com. Prior issues: 996, 993, 980, acquisition of Adeptra last year. ValidSoft offers issuers a 948 confidence score on cross-border FICO has already tested transactions through its ability to FICO has integrated ValidSoft ... turn to page 6

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 5 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. FICO Fights False Positive Fraud (from page 5)... ValidSoft’s proximity correlation service with two the service, which is now available globally. The U.K. card issuers. Those trials showed that false mobile phone proximity service can be licensed on positives on international transactions can be a volume basis or a per-transaction basis. Thomas reduced by up to 70%. This helps create another Horan is VP, Product Management at FICO in San positive effect — fraud personnel are freed from Diego, California, (858) 369-8118, tjhoran@fico. working many false positive transactions and can com, www.fico.com. Prior issues: 1,027, 1,026, focus on real fraud. FICO expects Falcon users 1,024, 1,020, 1,015, 1,014, 1,011, 1,009, 1,001, 996, based in Europe to be particularly interested in 991, 990

MIura Chip & PIN Device

The M007, Miura’s latest chip triple track mag- reader Miura brought its first mobile and PIN entry device, is rated for 500,000 swipes. device to the U.K. market in measures 150 mm The embedded contactless 2011. It provides the hardware high x 80 mm reader gives ISO 14443 A/B and software kernel. Its wide x 23 and NFC support. M007 is customers, which include mm deep. certified for Level I and Level banks, PSPs, system integrators, It II. Authentication processors and others, add the software are available to integrate with needed by end users. Customers Apple, Android, and BlackBerry include PayPal, , devices. Payleven, WorldPay, Swiff, Stagecoach, The high-resolution its smart International backlit LCD Transaction Systems display measures card reader (ITS), Touchpoint 256 x 128 pixels is rated for Payments, and iZettle. and is capable of 1 mil. inser- Miura products are supporting QR tions. sold directly and code generation. through resellers in The M007, which Europe, the Middle uses the Linux operating East, Africa, Asia, and South system, can be locked into comes with USB, RS232 America. Richard Goodland a cradle and secured by an (serial), and Ethernet physical is Chief Operating Officer at alarm for use in fixed-lane connections and Bluetooth and Miura in Stokenchurch, U.K., environments. It can be Wi-Fi communications. The 44 (790) 997-5773, rgoodland@ unlocked from the cradle for M007’s reader is miurasystems.com, handheld use. rated for 1 million insertions. Its www.miurasystems.com.

EVO Payments expands in europe (from page 1)... of all assets of Germany-based Deutsche Card Services, which operates in 39 countries in Europe.

In Spain, the new 50%-50% joint venture between in Spain. Last year it ranked 39th among merchant EVO and Banco Popular will operate under the acquirers in Europe by processing 158.9 million name Popular Payments. A 10-year marketing Visa and MasterCard transactions (up 10%). José alliance will direct merchants with accounts at Félix Martínez de Cabo is Merchant Acquiring Banco Popular exclusively to the joint venture. Manager at Banco Popular in Madrigal, Spain, 34 Banco Popular operates more than 2,000 branches

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 6 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. (91) 520-8275, [email protected], transactions processed (up 53%). Marek www.bancopopular.es. Prior issue: 1,019 Paradowski is CEO at eService S.A. in Warsaw, Poland, 48 (22) 533-2210, marek. In Poland, PKO Bank Polski received [email protected], $113.5 million for selling EVO a PKO Bank www.eservice.com.pl. 66% stake in its eService merchant Polski and acquiring business the amount of EVO have When EVO completed acquisition of any operational cash in the company Deutsche Card Services earlier this year, signed a 20- at closing. An earn-out mechanism it became a primary member of Visa allows for additional revenue if year alliance. and MasterCard. The joint marketing performance goals are reached. relationship EVO has with Deutsche Bank’s Global Transaction Banking A 20-year alliance agreement will begin at closing division is a 10-year contract. During that time EVO of the transaction, which is expected by year-end. receives exclusive to the bank’s merchant The partners see eService expanding to other base. James Kelly is CEO at EVO Payments countries in Central and Eastern Europe. Last International in Atlanta, Georgia, (770) 804-8787, year eService ranked 28th among all acquirers in [email protected], www.evopayments.com. Prior Europe with 278.9 million Visa and MasterCard issues: 1,008, 1,003, 990

U.S. Bank’s New Prepaid Card

The new Visa brand prepaid can include a second card linked the account and a $4 recurring Contour Card from U.S. Bank to the primary account for use monthly service fee per card. replaces the issuer’s Convenient by a spouse. It can also support Funds can be loaded at U.S. up to five subaccounts, each Bank branches or by direct with separate prepaid cards that deposit. are linked to the main account. U.S. Bank first used the Contour Users can select different color brand for a prepaid MasterCard schemes for all of the cards in launched in 2012 as their accounts. part of its Campus U.S. Bank provides Users can Card program. That a single online create up card doubles as a dashboard to to five sub- student identification track spending accounts card. It offers mobile and transfer funds account management Cash and Buxx products. U.S. with separate between the linked and person-to-person Bank believes that combining cards. It will also cards. payments. Whitney features tied to those products offer Contour Card Bright is Market gives Contour Card a stronger apps for iOS and Leader for Consumer chance of creating long-term Android devices. Prepaid at U.S. Bank in St. relationships with users of Louis, Missouri, (636) 300-5653, reloadable prepaid accounts. U.S. Bank charges a $4 upfront [email protected], enrollment fee for each card on The new Contour Card account www.usbank.com.

WireCard Supports Visa/Orange NFC Partnership

Orange, a mobile network operator (MNO) with in Botswana in August of this year. Orange Money 233 million subscribers in 32 countries in Europe, was an existing prepaid account offered by the the Middle East, and Africa, signed an agreement MNO to its nearly 1 million customers in the with Visa last year to add prepaid products to country and used to transfer funds to other mobile Orange Money accounts. accounts, buy airtime, and pay recurring bills. Moussa Thiemoko Dao is Orange Money Director Orange Money Visa prepaid cards were launched ... turn to page 8

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 7 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. WireCard Supports Visa/Orange NFC Partnership (from page 7)... at Orange in Gaborone, Botswana, (267) 369-3700, France’s four largest banks also have formed [email protected], www.orange.com. partnerships with Orange. They will add debit products to NFC-enabled phones. Orange also has Orange, with 27 million subscribers, is France’s largest MNO. It has started to preload the Visa mobile payment application into NFC-enabled SIM cards in handsets it sells. Approximately 40% of the handsets it sells are NFC-enabled.

Cardholders can download an Orange from app stores prepaid account partnerships with MasterCard in and top up their Orange Cash Spain and Poland. Thierry Millet is VP, M-Payments account using their bank card. and NFC at Orange in Paris, 33 (1) 5548-7685, Wirecard Card Solutions is the Visa [email protected], www.orange.com. issuer. Wirecard, which will also handle the account Cardholders can use their handsets processing for Orange Cash Visa prepaid at the 120,000 merchant locations transactions, also provides prepaid account in France where NFC card readers processing for Deutsche Telekom, Vodafone, are expected to be installed by year- E-Plus, Telefonica O2, and SFR. For all of those end 2013. They can also generate programs except Deutsche Telekom, it is also the virtual, one-time-use account numbers for spending card issuer. at online merchants. Those mobile network operators also use Wirecard The service will launch in Strasbourg and Caen to provide over-the-air provisioning of card account before rolling out nationwide in midyear 2014. and loyalty/coupon information to NFC-enabled Frederic Maistre is Head of Strategic Alliances at handsets. Markus Braun is CEO at Wirecard AG in Visa Europe in Paris, 33 (1) 5305-3914, maistref@ Aschheim, Germany, 49 (89) 4424-1415, markus. visa.com, www.visaeurope.com. [email protected], www.wirecard.com.

U.S. General Purpose Cards YTD 3Q 2013 vs. YTD 3Q 2012 U.S. GENERAL Dollar Volume (bil.) Purch. Trans. Brand/Type of Card Total Chg. Purchases Chg. Cash Chg. (bil.) Chg. PURPOSE CARDs Visa Credit $827.20 10.1% $791.10 10.1% $36.10 9.9% 9.35 10.6% Through 3Q ‘13 American Express Credit $467.90 7.5% $465.12 7.5% $2.78 9.9% 3.25 6.6% (from page 1)... MasterCard Credit $431.82 3.9% $412.27 4.6% $19.55 –8.1% 4.67 1.4% billion versus the total for the Discover Credit $99.30 4.1% $92.77 4.6% $6.53 –2.5% 1.43 5.6% first nine months of 2012. Credit CREDIT CARD TOTALS $1,826.22 7.6% $1,761.26 7.8% $64.96 2.5% 18.70 7.1% card purchase transactions & Prepaid $1,189.45 6.4% $884.20 7.5% $305.25 3.3% 23.61 7.3% increased by 7.1% or 1.24 billion. Debit card purchase transactions MasterCard Debit & Prepaid $488.85 8.8% $364.55 9.8% $124.30 5.7% 9.27 10.8% increased by 8.3% or 2.52 billion. DEBIT CARD TOTALS $1,678.30 7.1% $1,248.75 8.1% $429.55 4.0% 32.89 8.3% Debit cards generated 63.75% Visa Total $2,016.65 7.9% $1,675.30 8.7% $341.35 4.0% 32.96 8.2% of all purchase transactions, up from 63.49%. MasterCard Total $920.67 6.4% $776.82 7.0% $143.85 3.6% 13.95 7.5% VISA & MC TOTALS $2,937.32 7.4% $2,452.12 8.1% $485.20 3.9% 46.91 8.0% Through the first nine months of 2013, Visa credit cards CREDIT & DEBIT TOTALS $3,504.52 7.3% $3,010.01 7.9% $494.51 3.8% 51.58 7.8% issued in the U.S. accounted for Includes activity on all consumer and commercial credit, debit, and prepaid cards for January 1–September 30, 50.01% of credit card purchase 2013 vs. January 1–September 30, 2012. American Express and Discover include figures for third-party transactions, up 158 basis points issuers. © 2013 The Nilson Report from 48.43% for the first nine

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 8 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. months of 2012. MasterCard’s share of debit card Visa increased its share of credit and debit card purchase transactions increased by 64 purchase volume to 55.66% from basis points, from 27.56% to 28.20%. 55.27%. MasterCard’s share declined For credit and debit cards combined, visa’s share to 25.81% from 26.04%. American Visa’s market share increased 23 improved to Express’s share declined to 15.45% from points, from 63.68% to 63.90%. 55.66% from 15.51%. Discover’s share declined to 3.08% from 3.18%. Combined credit and debit card 55.27%. purchase volume was up 7.9% over Credit card cash advances generated the first nine months of 2012. Credit 3.56% of total credit card volume, down card purchase volume increased 7.8% or $127.13 from 3.73%. Debit card cash withdrawals generated billion. Debit card purchase volume increased 8.1% 25.59% of total debit card volume, down from or $94.02 billion. 26.34%.

CardLinx Association Formed

Membership in the digital advertising and linked offers. Members include newly formed CardLinx marketing to the physical world Facebook, First Data, Microsoft, Association is open to in the form of a payment card. MasterCard, Living Social, financial institutions, Card-linked offers bypass the Affinity Solutions, CardSpring, publishers, use of a paper coupons as well Bank of America, Discover, advertisers, merchants as promotion or voucher codes and Linkable Networks. Silvio tied to a mobile phone. Tavares is CEO at The CardLinx Association in , CardLinx Association’s stated California, (202) 549-4397, aim is to create interoperability, [email protected], eliminate friction, and promote and their acquirers, and other www.cardlinx.org. payment growth of the card- entities interested in connecting Payment Industry Acquisitions & Investments September 2013 Amount Amount Company Buyer/Investor (mil.) Country Company Buyer/Investor (mil.) Country September Yoyo seed funding(12) $1.2 U.K. Leaf Heartland Pay. Sys.(1) $20.0 U.S. PayPartners TransCard(6) * U.S. Carta Difference Capital(2) $2.0 Canada Zuora Series E(13) $50.0 U.S. Azimo seed funding(3) $1.0 U.K. Network Merchants Bregal Sagemount(14) * U.S. LevelUp equity funding(4) $7.5 U.S. CIBC TD Bank(15) $158.0 Canada Simplee Series A(5) $10.0 U.S. RS2 Software Barclays Bank(16) $6.9 Malta eScan Data TransUnion(6) * U.S. Check Series C(17) $24.0 U.S. IdenTrust Parallax Cap./StepStone(7) * U.S. RoamEx Trans. Network Serv.(6) * Canada Kreditech debt funding $7.0 Germany BluePay Processing Recapitalization(18) * U.S. Deem Series G(4) $70.0 U.S. Wipit Series A(19) * U.S. Century Payments WorldPay(6) * U.S. Front Desk seed funding(20) $3.2 U.S. Gyft Series A(8) $5.0 U.S. Paydiant growth equity(21) $15.0 U.S. Grapple Montise(6) $63.4 U.K. Zazma Series A(22) $10.0 U.S. Numbrs Centralway(9) $3.8 Switz. *Terms not disclosed. (1) $20 million strategic investment. (2) Acquired 5% Prosper undisclosed funding $25.0 U.S. stake. (3) Led by e.ventures. (4) No investor(s) identified. (5) Led by Social & Capital Partnership. (6) Acquisition. (7) The private equity firms acquired a Clinkle Richard Branson(10) * U.S. majority stake. (8) Led by Karlin Ventures. (9) Additional funding from parent Americant AmeriCommerce(6) * U.S. company. (10) Undisclosed investment. (11) Led by Crunchfund. (12) Several Plaid seed/angel funding(4) $2.8 U.S. individual investors. (13) Led by Next World Capital. (14) Undisclosed growth investment. (15) Acquisition of 550,000 Aeroplan co-branded credit card Branding Brand Series B(11) $9.5 U.S. accounts. (16) Will buy 4.25 million shares from Info. Tech. Mgmt. (17) Led by Official Payments ACI(6) $109.0 U.S. Menlo Ventures. (18) By TA Associates including acquisition of equity held by Goldman Sachs. (19) Led by Core Innovation Capital. (20) Led by Second Advanced ChronoCash MoneyGram(6) * Greece Avenue Partners. (21) Led by North Bridge Venture Partners. (22) Led by PayLife Six(6) * Austria Sequoia Capital. © 2013 The Nilson Report

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 9 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. Payment Cards Projected Worldwide (from page 1)... domestic general purpose brands (such as RuPay, label cards (mostly prepaid), will lead the growth , Discover, , BC, Star, Bancontact, (up 2.09 billion). UnionPay is projected to increase BankAxept, BCA, PostFinance, , by 1.81 billion, with domestic general purpose CuentaRUT, Verve, etc.), and private up 1.01 billion, Visa up 0.70 billion, label credit, debit, and prepaid cards MasterCard up 0.42 billion, and the (such as store cards and fuel cards). ... an increase others (Maestro, Amex, JCB, Discover, Diners) up 0.10 billion. Global general purpose cards of 6.12 billion accounted for 56.11% of all payment cards world- UnionPay will be the only global general cards in circulation at the end of 2012. wide by 2017. purpose brand that will increase its UnionPay brand cards accounted for share. UnionPay cards in circulation 24.47% of the worldwide total of all are projected to gain 151 basis points payment cards, Visa cards accounted for 17.31%, to 25.98%. Domestic general purpose cards MasterCard cards accounted for 8.01%. Maestro, collectively are expected to gain 366 basis points, Amex, JCB, and Diners cards combined accounted led by RuPay in India and Elo in Brazil. for 6.31%. MasterCard cards are projected to decline 35 basis Private label cards accounted for 39.31% of the points in market share to 7.67%, private label cards world total in 2012. Many of these cards are “gift” are projected to decline 155 basis points to 37.76%, cards for use at retailers. Domestic general purpose Visa cards are expected to decline 175 basis points cards (including Discover) accounted for 4.58%. to 15.55%, and the others (Maestro, American Express, JCB, Discover, and Diners Club cards) are By 2017, payment cards are expected to increase expected to decline 152 basis points to 5.22%. by 42.4% over 2012, reaching 20.56 billion. Private

WEX Joint Venture in Europe

ExxonMobil’s Esso European the Esso brand in Europe, will WEX estimates that the joint commercial fleet fuel card enter into a 10-year agreement venture, which is its first fuel program will be acquired by with the joint venture. WEX card business in Europe, will owns the receivables and contribute approximately $35 operates the ExxonMobil fleet million in annual revenue once credit card programs in the U.S. investments are completed. and Canada. WEX also sells WEX will purchase single-use virtual ExxonMobil’s Approximate- credit cards in commercial card ly 1 million Europe to online program in nine cards in 9 travel company countries in Europe. countries are clients. It entered Approximately 1 involved. the prepaid card million cards are program manager a newly formed joint venture involved. The cards business through its between WEX and Radius. are used mostly for 2012 acquisition of WEX will own 75% with fuel purchases by small business CorporatePay. Two U.K. banks Radius owning 25%. Radius is owners and their fleets of cars, issue the virtual MasterCard a company formed in 1990 to trucks, and vans. product. David Maxsimic is provide sales and marketing President, International at WEX programs aimed at small WEX will convert Esso’s in South Portland, Maine, businesses on behalf of retailers card management system to (207) 523-7379, david_ of petroleum products and other the multicurrency platform [email protected], companies. it uses in Australia, New www.wexinc.com. Prior issues: Zealand, and North America. ExxonMobil, which sells under 1,018, 995

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 10 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. Top 150 Acquirers Worldwide 2012 Transactions Transactions Transactions Rank Acquirer, Country (mil.) Rank Acquirer, Country (mil.) Rank Acquirer, Country (mil.) 1 Bank of America (BAMS) U.S. 13,544.5 51 Desjardins Canada 555.4 101 ChinaTrust Comm. Taiwan 207.2 2 Vantiv U.S. 11,209.4 52 Yapi Kredi Bankasi Turkey 538.9 102 First American Pymt. Sys. U.S. 193.5 3 First Data U.S. 9,683.0 53 Credit Saison Japan 538.7 103 BB&T U.S. 189.6 4 Sol. U.S. 9,044.9 54 SunTrust Merchant Serv. U.S. 536.8 104 Total Merchant Services U.S. 185.9 5 Citi Merchant Services U.S. 6,166.4 55 Aeon Financial Serv. Japan 532.1 105 Raiffeisen Bank Austria* 176.6 6 WorldPay U.K.* 5,744.0 56 Santander Brazil 498.4 106 NCCC Taiwan 174.4 7 Cielo Brazil 4,301.6 57 Parsian Bank Iran 479.6 107 Harbortouch U.S. 168.2 8 Heartland Payment Sys. U.S. 3,295.8 58 Transbank Chile 464.2 108 CardConnect U.S. 163.9 9 Redecard Brazil 3,127.3 59 SIX Payment Serv. Switzerland 450.0 109 Nedbank South Africa 160.2 10 Solutions Canada 3,084.7 60 Absa South Africa 443.7 110 PostFinance Switzerland 158.3 11 Barclays U.K. 3,024.0 61 First Data Polska Poland 432.8 111 Banc Sabadell Spain 157.8 12 WorldPay U.S. 2,704.9 62 Nordea Sweden 432.3 112 PayPros U.S. 156.0 13 Teller A/S Norway* 2,625.6 63 Merrick Bank U.S. 431.2 113 MSI Merchant Services U.S. 144.2 14 BC Card South Korea 2,603.7 64 CartaSi Italy 424.0 114 Orient Corporation Japan 138.7 15 Elavon U.S. 2,593.1 65 T. Isbank Turkey 423.7 115 Sage Payment Solutions U.S. 138.6 16 Credit Mutuel CIC France 2,578.2 66 TransFirst U.S. 413.3 116 Global Payments Hong Kong* 132.5 17 Credit Agricole France 2,151.1 67 EVO Payments Int’l U.S. 398.5 117 Fidelity Nat’l Info. Serv. U.S. 132.2 18 Global Payments U.S. 2,103.7 68 iPayment U.S. 397.2 118 Banco Merc. del Norte Mexico 126.8 19 Wells Fargo U.S. 2,080.5 69 Akbank Turkey 392.9 119 Banco de Venezuela Venezuela 125.3 20 Swedbank Group Sweden* 1,595.0 70 Unicre Portugal 364.4 120 Finansbank Turkey 123.8 21 China UnionPay China* 1,579.9 71 Melli Bank Iran 362.1 121 Westamerica Bank U.S. 123.8 22 Global Payments Canada 1,480.5 72 Santander Group Spain* 355.1 122 Tejarat Bank Iran 120.9 23 JCB Japan 1,419.9 73 Singapore* 354.7 123 Banco Santander/Elavon Mexico 120.8 24 Sberbank Russia 1,335.9 74 La Banque Postale France 347.7 124 T. Vakiflar Bankasi Turkey 119.0 25 Atos Worldline Belgium 1,271.1 75 Evertec Puerto Rico* 343.0 125 Turk Ekonomi Bankasi Turkey 117.2 26 TSYS U.S. 1,256.5 76 Lloyds Banking Group U.K. 339.8 126 Aduno Switzerland 114.9 27 BPCE France 1,175.2 77 AIBMS Ireland 339.6 127 Element Payment Serv. U.S. 108.8 28 Global Payments U.K. 1,130.1 78 Sovereign/Santander U.S. 332.7 128 Pasargad Bank Iran 107.5 29 UFJ Nicos Japan 1,110.2 79 Banesco Banco Univ. Venezuela 321.8 129 Commerce Bancshares U.S. 103.8 30 Visa Argentina 1,077.0 80 PayLife Bank Austria 307.0 130 United Merchant Services U.S. 101.8 31 Mercury Payment Sys. U.S. 1,056.9 81 Banco Nac’l (Banamex) Mexico 291.1 131 UCS Russia 101.7 32 Nets Finland 1,001.1 82 eService Poland 280.8 132 Services U.S. 100.2 33 TD Merchant Services Canada 952.1 83 Handelsbanken Sweden* 276.5 133 Privredna Banka Croatia 99.2 34 Samsung Card South Korea 936.7 84 North American Bancard U.S. 267.9 134 Merchants’ U.S. 99.1 35 Commonwealth Bank Australia 919.7 85 Concardis Germany 264.7 135 T.C. Ziraat Bankasi Turkey 97.9 36 Elavon Europe Ireland* 919.3 86 Erste Bank Group Austria* 257.7 136 Elavon Canada 96.7 37 BNP Paribas France 907.9 87 First Data Argentina 255.0 137 Network International U.A.E. 96.6 38 ANZ Merchant Serv. Australia 882.0 88 Grupo Banco Popular Spain 248.4 138 Bancolombia Colombia 96.4 39 Societe Generale France 848.2 89 Merchant E-Solutions U.S. 239.6 139 Kasikornbank Thailand 91.7 40 KB Kookmin Card South Korea 774.9 90 Cynergy Data U.S. 238.6 140 CardNET Dominican Republic 90.6 41 BBVA Bancomer Mexico 766.2 91 Mercantil Banco Univ. Venezuela 234.1 141 Electronic Payments U.S. 88.0 42 Nat’l Australia Bank Australia 753.1 92 First Nat’l Bank South Africa 233.7 142 Key Merchant Serv./Elavon U.S. 83.8 43 B+S Card Service Germany 708.8 93 BBVA Spain* 233.3 143 Shared Elec. Bank Serv. Kuwait 81.2 44 Garanti Bank Turkey 683.9 94 Bankia Spain 227.3 144 Hang Seng Bank Hong Kong 80.8 45 PNC Merchant Services U.S. 683.6 95 Moneris Solutions U.S. 224.9 145 PrivatBank Ukraine 80.3 46 Westpac Australia 667.3 96 Bank Pekao Poland 219.8 146 Central Payment U.S. 79.5 47 Comercia Spain 637.1 97 U.S. 218.8 147 HSBC Mexico 79.0 48 SETEFI Italy 584.4 98 Saderat Bank Iran 213.3 148 Al Rajhi Bank Saudi Arabia 77.8 49 Hyundai Card South Korea 559.3 99 Standard Bank South Africa 209.2 149 Deutsche Credit Card Italy 76.1 50 Mellat Bank Iran 555.7 100 BBVA Provincial Venezuela 208.0 150 Saman Bank Iran 75.0 Ranked by all purchase transactions by country (Visa, MasterCard, UnionPay, American Express, Discover, Diners Club, JCB, domestic debit and credit). *Includes other countries. © 2013 The Nilson Report

If you are being forwarded a copy of this report, you are not an authorized user and must delete the report 11 NOVEMBER 2013 ISSUE 1,029 THE NILSON REPORT immediately. Your obtaining an unauthorized copy may violate the intellectual property rights of HSN Consultants, Inc. d/b/a The Nilson Report. The right to possess digital versions of this report is granted solely to the individual subscriber. Deloitte Payments Industry Consulting (from page 1)... industry consulting practices expand into Asia, Africa, and products and services. Deloitte have contracted and others Latin America. U.S. companies, says that only 10% of its projects have closed or been acquired. including early stage technology start out as a contract for mobile Deloitte is an exception. Over companies, processors, and ISOs, services but that more than 50% the last five years it has grown as well as issuers and acquirers, of its projects touch on mobile. want to enter China, while Social media’s impact on companies in China are looking payments is an area of focus for to expand to the U.S. Deloitte. It advises established Merger and acquisition companies on the potential for consulting has returned to nonbanks to disintermediate from 610 advisors to more than prerecession levels. Of particular legacy systems and their 1,000, adding many former interest is the acquisition of fraud operators. card industry executives and and risk management vendors. government regulators. Deloitte customers include most In some cases, Deloitte advises of the world’s 10 largest retail Over the last six months Deloitte companies to make at banks, most of the has seen business pick up even least an investment if largest payment further, in particular among not taking controlling ... has grown processors, 8 of the payment card issuers who have interest in order to from 610 advi- 10 largest credit seen revenue growth in recent preserve options. sors to more card issuers in the years from improvements in It advises financial than 1,000 U.S., and 2 of the credit quality, lower charge-offs, services clients on the 3 largest U.S. debit and cost-cutting, but want to role of private equity over the last card issuers. Brian look beyond these short-term firms in payment 5 years. Shniderman is benefits. Issuers have a pent-up systems. Principal at Deloitte desire to deploy innovations. Recognizing that new Consulting in New York, (602) They also show significant innovations usually don’t launch 738-7600, bshniderman@deloitte. interest in new uses of predictive at scale, Deloitte is helping com, www.deloitte.com/us/ analytics. These technologies clients form consortiums of consulting. Prior issues: 1,006, can now identify a cardholder’s companies who can contribute 980, 971, 968, 959, 951, 923, 915, predisposition toward a pieces to a project cumulatively 908, 878, 830, 820, 801, 777, 768, certain type of reward which and generate scale benefits for 746, 724 increases the value of loyalty all parties by leveraging the programs. Other analytics use cloud. This approach has worked structured and/or unstructured in health industry payments, data to anticipate cardholder loyalty, mobile, and social complaints. Higher levels of networking projects. customer service are seen as a must to support long-term In all markets Deloitte sees growth. In countries including interest in new products and the U.S., reducing complaints services for consumers who are is also a response to potential outside the financial services regulatory action. Banks want to industry. The availability of answer complaints before they smartphones by this group, as are reported to the Consumer well as by small merchants, leads Financial Protection Bureau. Deloitte to combine analytics with mobile delivery to combat More than 50% of Deloitte’s the risks associated with the projects are cross-border. mobile channel for a variety of Companies are looking to

David Robertson, Publisher NOVEMBER 18, 2013

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