Who Can Benefit from the Banks' Brexit?
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February 2017 Issue 540 www.cardsinternational.com WHO CAN BENEFIT FROM THE BANKS’ BREXIT? • ANALYSIS: Contactless UK • MOBILE: BIM • GUEST COMMENTS: PPRO Group & Aprimo • COUNTRY SURVEYS: Bahrain, Lithuania & Portugal CI 540 new.indd 1 03/02/2017 14:11:46 Simple, secure and effortless digital solutions for fi nancial services organisations To fi nd out more please visit: www.intelligentenvironments.com @IntelEnviro Intelligent Environments is an international provider of innovative mobile and online solutions for fi nancial services providers. Our mission is to enable our clients to deliver a simple, secure and effortless digital experience to their own customers. We do this through Interact®, our single software platform, which enables secure customer acquisition, engagement, transactions and servicing across any mobile and online channel and device. Today these are predominantly focused on smartphones, PCs and tablets. 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IE Adverts - 2017.indd 1 21/12/2016 11:53:12 Cards International EDITOR’S LETTER CONTENTS 6 ANALYSIS: UK CONTACTLESS Contactless technology in payments has taken the UK by storm, EDITOR’S LETTER particularly in London with its usage in public transport. Additionally, this trend doesn’t seem to be hitting Visa and MasterCard kick off 2017 the brakes anytime soon. Patrick Brusnahan reports on positive note 8 FEATURE: BIM Peru’s BIM is providing a reference model for how the stakeholders in a mobile money ecosystem can collaborate to build a nationwide, interoperable infrastructure. Robin s CI goes to press, Visa and MasterCard interchange regulations with greater reductions in Arnfield takes a closer look report a resilient set of results with Visa in credit cards compared to debit cards. 10 REGULATION: BREXIT particular performing strong. Add in factors such as the underbanked and The UK is likely to leave the EU single At Visa, highlights included transaction unbanked in major markets such as India and market, with the UK PM placing A China entering the cards sector for the first time. volume up 41% year over year while the number control of immigration ahead of of issued cards is up 28% year over year. Net rev- The credit card/debit cards imbalance (currently the single market’s benefits. Which countries are in prime positions to enue increased by 25%. around 70% of all cards globally in circulation are take advantage of the UK’s current There remains huge growth opportunities in debit cards) has also been boosted by a fall in the stance? Douglas Blakey writes Europe for further cash displacement and from number of credit cards in use in Russia as banks 14 GUEST COMMENT: APRIMO a parochial point of view, Visa is entitled to be stiffen eligibility criteria. The next few years in the financial upbeat about its soon to open European innova- But not so in Germany. I am obliged to Dr Hugo services sector are going to be tion centre in the UK. Godschalk of the consultants Paysys for flagging transformative from a marketing perspective, says senior financial At MasterCard, while revenue analyst forecasts up that the biggest growth driver in 2015 in Ger- marketer Stephen Ingledew. were missed by a fraction, there were encouraging many was in credit cards (11%) and ELV (10.2%). This may be the start of ‘Digital Darwinism’ signs of reliable growth and successful cost man- Now 24% of card turnover in Germany is made agement initiatives. with via credit card By contrast, the growth rate 13 GUEST COMMENT: PPRO GROUP MasterCard was also able to report progress in of the German debit card scheme fell significantly, Mobile payment methods continue to soar in popularity in the UK, China. Its focus on driving single branded card with a gain of only 1.9%. lessening the country’s dependency issuance is paying off with Bank of China added A quarter of all UK card transactions are now on cash. PPRO Group’s Ralf in the last quarter, bringing the total number of made via contactless, with 325 million purchases Ohlhausen takes a closer look programmes for single branded card issuance made using contactless debit and credit cards in 14 COUNTRY SURVEY: BAHRAIN launched in 2016 to 44, with more than 10 banks. November 2016, the most recent month for which 16 COUNTRY SURVEY: LITHUANIA Both Visa and MasterCard have been expending figures are available. 18 COUNTRY SURVEY: PORTUGAL time and money in China in the hope of breaking A record £2.9bn was spent using the technology the domestic monopoly and if they can just grab in November. This is an increase of 184% per cent 20 RESEARCH: VERDICT FINANCIAL a small share of the market, the impact on their from a year ago when contactless spending passed While the Dutch contactless card market is rising, many remain wary Asian business units can be material. £1 billion in a month for the first time. of contactless due to security issues. As for digital, CEO Ajay Banga was spot on in There are now 101.8 million contactless debit Caution is also present in Spain, with consumers reluctant to take on debt summarising strategy as ‘a marathon not a sprint’. and credit cards in circulation in the UK with 88% products. In the UK, all eyes will be on MasterCard’s execu- of contactless transactions made using a debit tion of the VocaLink deal. card, a higher proportion than for card payments Looking ahead, the consensus is that there overall (78%). remains greater scope for growth in the debit cards Douglas Blakey sector over credit cards. Many reasons, not least Douglas.Blakey@cardsinternational.com Editor: Douglas Blakey Director of Events: Ray Giddings For more information on Timetric, visit our Tel: +44 (0)20 7406 6523 Tel: +44 (0)20 3096 2585 website at www.timetric.com. Email: douglas.blakey@verdict.co.uk Email: ray.giddings@uk.timetric.com As a subscriber, you are automatically entitled to online access to Cards Financial News Publishing, 2012 Deputy Editor: Anna Milne Head of Subscriptions: Sharon Howley International. For more information, please Registered in the UK No 6931627 Tel: +44 (0)20 7406 6701 Tel: +44 (0)20 3096 2636 telephone +44 (0)20 7406 6536 or email Email: anna.milne@verdict.co.uk ISSN 0956-5558 Email: sharon.howley@uk.timetric.com customer.services@uk.timetric.com Unauthorised photocopying is illegal. The Senior Reporter: Patrick Brusnahan Sales Executive: Harry Hooker London Office contents of this publication, either in whole or Tel: +44 (0)20 7406 6526 Tel: +44 (0)20 3096 2586 71-73 Carter Lane part, may not be reproduced, stored in a data Email: patrick.brusnahan@verdict.co.uk London Email: harry.hooker@uk.timetric.com retrieval system or transmitted by any form or EC4V 5EQ means, electronic, mechanical, photocopying, Group Publisher: Ameet Phadnis recording or otherwise, without the prior Tel: +44 (0)20 7406 6561 Customer Services: Asia Office permission of the publishers Email: ameet.phadnis@uk.timetric.com Tel: +44 (0) 20 3096 2636 1 Finlayson Green, #09-01 or +44 (0)20 3096 2622 Singapore 049246 Sub-editors: Patrick Fogarty, Nick Midgley Email: customer.services@uk.timetric.com Tel: +65 6383 4688 Fax: +65 6383 5433 Email: asiapacific@timetric.com.sg www.cardsinternational.com February 2017 y 1 CI 540 new.indd 1 03/02/2017 14:11:59 NEWS: DIGEST Cards International M&A SIA concludes acquisition of UniCredit's card-processing activities in Italy, Germany and Austria SIA has completed the acquisition of Uni- tions executed using debit, credit and pre- Credit’s card-processing business in Italy, paid cards, and for the management of POS Germany and Austria for €500m ($525m) in and ATM terminals. UniCredit said the deal cash. The card processing unit is part of Uni- would provide a consolidated net capital credit Business Integrated Solutions (UBIS), gain of around €440m for the group in 2016, an affiliate of UniCredit. and would boost its CET1 ratio by around The deal, announced in August 2016, 12 basis points. offers SIA ownership of the processing activ- The latest sale forms part of UniCred - ities of nearly 13.5 million payment cards, it’s strategic approach to boost capital, 206,000 POS terminals as well as 12,000 announced in July 2016. ATMs in Italy, Germany and Austria. The bank sold minority stakes in Bank UniCredit also agreed a 10-year Pekao and its online bank FinecoBank in outsourcing contract with SIA for the sup- July 2016, and a 32.8% stake in Bank Pekao ply of processing services related to transac- earlier this month as part of the plan.< SECURITY Oman Arab Bank and Visa collaborate to adopt EMV chip-and-PIN technology for debit cards Oman Arab Bank (OAB) has partnered with “The EMV-enabled cards will be perfectly Visa to migrate the bank’s current Electron compatible with our newly introduced ATM cards to secure EMV chip-and-PIN debit software, making our digital offering strong- cards.