March 2015 Issue 517 www.cardsinternational.com REWARD AND REAP Levaraging Big Data while pulling in the punters ● COMMENT: ACQUIRING ● ANALYSIS: LOYALTY ● INTERVIEW: FINTECH ‘NON-BANKS’ ● OPINION: BIOMETRICS CI 517.indd 1 26/03/2015 09:18:10 Delivering innovative mobile & online financial services solutions to organisations that need to provide secure access To find out more about us please visit: www.intelligentenvironments.com We are an international provider of innovative mobile and online solutions for financial service organisations. Our mission is to enable our clients always to stay close to their customers. We do this through Interact®, our single software platform, which enables secure financial applications, engagement, transaction and servicing across all digital channels. Today these are predominantly focused on mobile, PCs & tablets. However Interact® can and will support other form factors, as and when they proliferate (as seen by our work to develop digital banking for the Smartwatch). We provide a ready alternative to internally developed solutions, enabling our clients with a faster route to market, expertise in managing the complexity of multiple devices and operating systems, and a constantly evolving solution. IE-Advert-Dec-2014.indd 1 16/12/2014 12:25:21 Cards International EDITOR’S LETTER CONTENTS EDITOR’S LETTER 2 COMMENT: BETHAN COWPER Bethan Cowper examines the differences between age groups and Prepaid Middle East: their attitudes towards new and established payment services 6 INTERVIEW: FINTECH ‘NON-BANKS’ huge growth but still APS has become the first fintech non-bank to offer banking services through the Post Office’s branch scratching the surface network. Anna Milne talks to the founder of APS, Richard Wagner, about the journey to make this t was a pleasure to chair the sixth annu- such as carrying cash and traditional debit and breakthrough al Prepaid Summit Middle East in Dubai credit cards, provide security and acceptance 8 OPINION: BIOMETRICS last week, premier sponsored by Visa. limitations, and lack currency exchange capa- John Fernandez of the PPRO Group Prepaid truly is playing a key role in the bilities now available in the market. considers the mass potential of I From business travelers, to leisure explorers, global revolution of cash displacement, while biometrics in the financial sector, not only for security, but for the user opening doors to unbanked and under-banked and the under-banked, people are looking to experience people worldwide to access innovative payment access payment products that both deliver value and purpose beyond a place to keep their money 9 COMMENT: ACQUIRING options not available previously to them. A new wave of reforms to boost The sheer scale of the prospective market is and realise a transaction. Mexico’s economic competitiveness summed up in the forecast that the global pre- A common theme among speakers was the are in place, but how does this affect paid market will be worth over $800bn by 2017. recognition of fresh challenges presented by the financial sector? While the overall theme of the conference was slower, more measured economic growth in the 10 REVIEW: APPLE PAY overwhelmingly positive, it is clear that prepaid medium term, coupled with an extended low Apple Pay is examined in depth to continues to do scratch the surface of its full interest rate environment, increased regulation see how it will impact the mobile payment market potential. and changes in customer behaviour. To highlight a few regions at random: 59% As customers become increasingly self directed 12 ANALYSIS: LOYALTY PROGRAMMES of the 876 million adults in East and South East and as service level expectations rise, driven by How to keep your customers happy Asia continue to lack access to financial services; experiences of other industry verticals, the rate and loyal while leveraging Big Data 58% of 612 million adults lack access to finan- of change in the business environment is accel- 14 COUNTRY REPORT: BAHRAIN cial services in South Asia. In Sub-Saharan Afri- erating. As the amount of payment cards ca, the figures are 80% of 326 million adults; in So it was a pleasure to hear the presentation in Bahrain has just exceeded one million, we examine the card market Central Asia and Eastern Europe the figures are ‘Understanding the Evolving Prepaid Customer’ 49% of 193 million while in The Middle East it by Ranjit Mukherjee – ADCB Customer Analyt- 16 COUNTRY REPORT: BULGARIA is 67% and 136 million. ics looking at the objectives of micro-segmenta- The global financial crisis hit Bulgaria hard, but how has the card One vertical that is showing gratifying prepaid tion to build tactical customer insights. market recovered from this blow? growth is the travel sector, boosted by the phe- ADCB’s methodology detects differentiating nomenal expansion of air travel; in 2013 some behaviors per product domain and uses cluster- 18 COUNTRY REPORT: LUXEMBOURG 3 billion air passengers flew on commercial air- ing analysis to define behaviours segments. Luxembourg’s credit cards have a larger market share than before. lines crisscrossing the globe. A full report of the conference will be pub- How are debit cards and mobile Conference highlights included an outstanding lished in the next issue of Cards International. < payments faring as a result? presentation by Osama Al Rahma, CEO of Al 20 GUEST COMMENT: NUISANCE CALLS Fardan Exchange. Douglas Blakey Fico’s Gabriel Hopkins explains the He highlighted alternative payment options, [email protected] damage cold calls can do to mobile payments among millenials Editor: Douglas Blakey Sub-editors: Nick Midgley, Kev Walsh For more information on Timetric, visit our Tel: +44 (0)20 7406 6523 websiteat www.timetric.com. As a subscriber, Director of Events: Ray Giddings Email: [email protected] you are automatically entitled to online Tel: +44 (0)203 096 2585 access to Cards International. 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Is it all about inclusivity or customisation? alks around payments have a tenden- When it comes to banking behaviours mobile phone over the last month, only 2% cy to focus on the new and exciting, things begin to shift. Despite the high street were aged 46 and over, whilst the majority of from mobile applications to genera- coming top for shopping, Internet banking mobile payments had been made by the col- tion Y and the rise of the millennials. was the clear overall winner for banking lective 45 and under age group at 80%. This T (54%), although the branch remained popu- boils down to trust. As customer behaviours change, financial institutions must be prepared to adapt their lar coming in second (26%), with mobile Overall, mobile was the least trusted pay- products and services to reflect these changes. banking beating telephone banking by six ment method (71%) followed by contactless However, not all behavioural changes are cre- percent (15% and 9% respectively). cards (47%). However, this is where use ated equal and as such, different age groups When these results are broken down by and trust differ though the age groups. The have different requirements that need to be age, patterns begin to emerge. Internet bank- older respondents were less likely to use a met to truly drive loyalty in the payments ing was the most popular method of banking payment method they didn’t trust with 67% space. for 45-year-olds and under (73.1%). of the over 46 year olds saying they would A recent survey from Compass Plus, the However, for respondents over 45, the never make a mobile payment and 55% say- global payments software provider, took to branch was still the most popular place to ing they won’t use mobile banking. How- the streets to question over 650 members of carry out their banking activities at 44% for ever, although mobile was cited as the least the public, of all ages, from London, Welling- the 46-59s and 66% for the over 60s. For secure way to pay across all age groups, of borough, Nottingham and Sheffield.