FOR 46 YEARS, THE LEADING PUBLICATION COVERING PAYMENT SYSTEMS WORLDWIDE AUGUST 2017 / ISSUE 1115
Latin America’s Largest Acquirers See page 11 for a ranking of the 46 largest merchant acquirers in Middle East & Africa Latin America and the Caribbean based on transactions handled in 2016. This group processed 19.44 billion Mastercard and > see p. 10 MARKET SHARES InComm to Buy Amex’s Prepaid Platform OF PURCHASE VOLUME Prepaid card payment processor InComm will be the exclusive 2016 distributor in the U.S. of American Express prepaid card products as part of a transaction that involves its acquisition of Amex’s > see p. 5 U.S. General Purpose Card Brands—Midyear 2017 56% 40% 3% 1% Visa, Mastercard, American Express, and Discover credit, debit, Visa Mastercard Amex Diners and prepaid cards generated 46.07 billion purchase transactions –82 bps +70 bps +13 bps –1 bps from January 1 through June 30, 2017—up 2.25 billion or 5.1% > see p. 7 PURCHASE VOLUME ($BIL.) 2015 VS. 2016
QR Code Payment Global Interoperability ‘15 167.34 Visa• ‘16 184.59 EMVCo, the global technical body that manages specifications ‘15 113.03 for contact and contactless EMV card transactions, has released Mastercard• ‘16 130.62 specifications for QR (quick response) code-based mobile ‘15 8.06 > see p. 12 Amex• ‘16 8.72 Alternative Credit for Online Payments ‘15 3.24 Diners• ‘16 3.94 Providing consumers with credit for big-ticket retail purchases © 2017 The Nilson Report from online merchants is the business of U.S.-based Bread, a start–up that recently received $126 million in Series B equity > see p. 8 Middle East–Africa Cards 2016
Tokens for Personally Identifiable Information The total volume of purchases for goods and services combined Visa, Mastercard, American Express, Discover, and other networks with cash transactions at ATMs and over the counter at provide tokens that secure the primary account number of a branches generated by Visa, Mastercard, American Express, and payment card. TokenEx provides a service that both creates Diners Club brand credit, debit, and prepaid cards issued in the > see p. 6 Middle East and Africa reached $886.48 billion in 2016, up 11.1% from 2015. Purchase volume for goods and services from Amex/MineralTree B2B Virtual Card Partners these global brand general purpose cards reached $327.86 American Express and MineralTree have created a platform that billion, up 12.4%. Cash volume was $558.61 billion and lets midsized companies automate the supplier payment process accounted for 63.02% of total volume in 2016, down from from invoice to remittance, an option previously available only to 63.45% in 2015. > see p. 6 > see p. 9
INSIDE 2 – 3 Fast Facts CHARTS 7 U.S. General Purpose Cards MY 2017 vs. MY 2016 4 Investments & Acquisitions—July 2017 9 Middle East and Africa General Purpose Cards 2016 5 Vanstone POS Terminal Including YOY Growth/Decline in Purchase Volume 8 Type–Ahead Address Verification 11 Largest Merchant Acquirers in Latin America 2016
© 2017 HSN Consultants, Inc. THE NILSON REPORT VISIT US ONLINE AT WWW.NILSONREPORT.COM TSYS’S MERCHANT SERVICES segment will provide pay- FACTOR4, a provider of private label prepaid card and ment processing services to Monetary’s network of software loyalty programs to small and midsized merchants, has developers and merchants. Monetary offers a single, integrated its software platform with Click a Waiter, a POS integrated platform with its own payment gateway. system that offers online and Facebook ordering services. Tim Munto is Group Executive at TSYS Merchant Services, Dan Battista is President at Factor4, (484) 614-6813, dan@ (502) 693-1821, [email protected], www.tsys.com. Shelley factor4gift.com, www.factor4gift.com. Osvaldo Rodriguez is Plomske is CEO at Monetary, (970) 828-3223, shelley@ CEO at Click a Waiter, (978) 401-9191, osvaldo@ monetary.co, www.monetary.co. clickawaiter.com, www.clickawaiter.com.
FAST PAYROC, a merchant services provider with more than AMERICAN EXPRESS CHECKOUT, available at participat- 10,000 customers in the U.S. and Canada, offers iTransact ing online merchants, permits U.S.-based cardholders to Mobile Merchant, a mobile point-of-sale card acceptance check out using their Amex account login credentials instead FACTS service from iOS and Android devices. An EMV chip and of manually adding their personal information. Participating magnetic stripe card reader with Bluetooth connectivity is merchants include Delta Air Lines, Avis and Budget car rental AUGUST 2017 also available. Payroc is an ISO for Fifth Third Bank and uses firms, Hulu, Neiman Marcus, Preferred Hotels & Resorts, ISSUE 1115 Vantiv for processing support. Ryan Hallett is CRO at Payroc, Staples, 1-800-Flowers.com, Airbnb, Braintree, Stripe, (708) 675-4580, [email protected], www.payroc.com. Ticketmaster, and others. Luke Gebb is SVP, Enterprise Digital No paid at American Express, (212) 640-2000, [email protected], RISK IDENT, a provider of fraud prevention software advertising. www.americanexpress.com. supported by machine learning, has opened an office in the No sponsored U.S. The company specializes in helping large enterprises COMMERCE BANK offers its small and midsized merchant content of identify and prevent online fraud, including payment fraud, customers “CashFlow Complete,” digital tools that create an account takeover, and identity theft. Dustin Clinard is automated service for accounts payable and accounts any kind. Ever. Managing Director for U.S. Operations, (617) 935-0007, receivable. Bill.com provides the tools and payment platform. It is never [email protected], www.riskident.com/en/. Users can send and receive electronic payments, eliminate paper, manage approvals digitally, and integrate with permissible for CONSUMER FINANCIAL PROTECTION BUREAU accounting software. Bill.com’s payment network links subscribers to (CFPB) says that over at least 10 years, more than 200,000 2 million U.S. businesses that collectively process more than forward or print consumers in Puerto Rico, the U.S. Virgin Islands, and other $36 billion annually. Rene Lacerte is CEO at Bill.com, this issue. Doing so U.S. territories were harmed by discriminatory practices by (650) 353-3301, [email protected], www.bill.com. American Express, which included higher interest rates, violates copyright Matt White is Director of Commercial and Small Business stricter credit cutoffs, and less debt forgiveness. American laws. Strategy at Commerce Bank, (816) 234-8993, matt.white@ Express has paid $95 million in redress and will pay at least commercebank.com, www.commercebank.com. another $1 million to fully compensate consumers.
Conferences & Seminars
Finovate Fall 2017: September PayThink 2017: September 18-20, PayExpo Europe 2017: October Seamless Payments Indonesia 11-14, 2017. The New York Hilton 2017. The Arizona Biltmore, 4-5, 2017. The ExCeL London, 2017: October 10-11, 2017. The Midtown, New York. Estimated Phoenix, Arizona. Estimated London, U.K. Estimated attendance: Pullman Central Park Hotel, Jakarta, attendance: 1,500. Cost for the attendance: 450. Cost for the 2,200+. Cost for the two-day confer- Indonesia. Estimated attendance: four-day conference is $2,195. three-day conference is $1,495. ence is $1,600. Subscribers to 1,500. Cost for the two-day confer- Subscribers to The Nilson Report Subscribers to The Nilson Report The Nilson Report will receive a ence is $750. Subscribers to will receive a 20% discount. (Use will receive a 20% discount. (Use 20% discount. (Use code TNR20.) The Nilson Report will receive a code F17FALLNLT.) Contact code NILSON.) Contact Brent Free passes are available for retail 15% discount. (Use code JYWQ.) Tyler Ferst at The Finovate Group, Hendrix at SourceMedia, banks, retailers, gaming operators, Contact Kalyani Lakshmanan at (646) 895-7329, tyler.ferst@ (212) 803-8369, brent.hendrix@ government authorities, CEOs, and Terrapinn, (65) 6322-2330, knect365.com. Register at sourcemedia.com. Register at start-ups. Contact Andrew Earle at [email protected]. https://finance.knect365.com/ https://www.paymentssource.com/ Clarion Events, 44 (20) 7384-7893, Register at finovatefall/purchase/ conference/paythink. [email protected]. www.terrapinn.com/exhibition/ select-package. Register at seamless-indonesia. www.payexpo.com/europe.
2 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive 1 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive ALIPAY, the QR code-based mobile payment system operated by Ant Financial Services, is moving into South Africa through Peach Payments, a payment Figures service provider. Peach Payments is integrated with ACI Worldwide’s global include network of more than 350 acquirers and alternative payment methods. ACI cards has a global partnership with Alipay. Markus Rinderer is SVP at ACI Worldwide, in 49 (89) 452-300, [email protected], www.payon.com. Rita Liu is Head of EMEA at Alipay, 44 (20) 7395-8310, [email protected], circulation www.antfin.com. Rahul Jain is COO at Peach Payments, 27 (21) 200-5877, and [email protected], www.peachpayments.com.
spending ALPHA PAYMENTS CLOUD has formed a joint venture with Australia Post for 1,073 Card Issuers called AlphaCommerceHub (ACH). The ACH platform provides merchants with credit from 114 countries in all world regions a single user interface to connect to all venders they need to support ecommerce including payment processing, identity verification, fraud & debit protection, loyalty programs, and more. Ronan McDonnell is Marketing Coordinator at Alpha Payments Cloud, 353 (8) 6376-2313, ronan.mcdonnell@ 282 Merchant Acquirers alphapaymentscloud.com, www.alphapaymentscloud.com. from 78 countries in all world regions MERCADOTECNIA IDEAS Y TECHNOLOGIA (MIT), a payment processor in Mexico serving 17,000 merchants with more than 80,000 outlets, will use adaptive behavioral analytics risk management technology from Featurespace in for real-time monitoring and protection against fraud as well as for reduction Asia-Pacific, of chargebacks and false alerts. Juan Carlos Viramontes is CEO at MIT, 52 (55) 1500-9002, [email protected], www.mitec.com.mx. United States, Europe, Latin America, Martina King is CEO at Featurespace, 44 (12) 2334-5940, martina.king@ Middle East-Africa, and Canada featurespace.co.uk, www.featurespace.co.uk. Featured Conference
Order Today IOT PAYMENTS 2017 www.nilsonreport.com/specialreport Two-Day Conference UNITED BANK FOR AFRICA MOZAMBIQUE (UBA) offers the first October 10-11, 2017 Mastercard debit card in Mozambique. Helder Chambisse is Managing Director Hyatt Regency Austin at UBA Mozambique, 258 (84) 300-8641, [email protected], Austin, Texas www.ubagroup.com. Charlton Goredema is VP and Area Business Head, Emerging Markets & Indian Ocean Islands, Southern Africa at Mastercard, Topics include: digital currency as a cybersecurity weapon, how 27 (11) 780-3900, charlton.goredema@mastercard.com, www.mastercard.com. artificial intelligence, IoT, and connectivity are remaking retail pay- ments, the connected home: the key to top of wallet status, smart BARCLAYCARD has started a pilot test with eight retail stores in the U.K. for payments and wearables, risk-based payments security and IoT, in-store acceptance of QR code-based Alipay mobile wallet payments. Rita Liu making the case for IoT device hardware security, securing IoT pay- is Head EMEA at Alipay, 44 (20) 7395-8310, [email protected], www.antfin. ments, IoT risks without hardware-based device security, risk-based com. Paulette Rowe is Managing Director, Payment Solutions at Barclaycard, payments security and IoT. Speakers represent: Samsung Pay, 44 (78) 8018-4298, [email protected], www.barclaycard.co.uk. Mastercard, Bitmint, G+D Mobility, Gemalto, Glenbrook Partners, and more. Cost is $1,095. (Use discount code NILS20OFF.) Contact CHINA GUANGFA BANK CREDIT CARD CENTER uses FICO Customer Bryan Ichikawa at Secure Technology Alliance, (703) 582-7862, Communication Services to help reduce its cost of collections and improve [email protected]. customer service. The average daily rate of repayment has improved by 2% Register at www.iot-payments.com. over the last year. The number of complaints the bank receives has dropped to one-tenth of what they were when it used manual collections. Lin Deming SAVE is General Manager at CGB Credit Card, 86 (020) 3873-8891, lindeming@ Subscribers to The Nilson Report will receive a 20% discount. cgbchina.com, www.cgbchina.com.cn/Site/Home/EN. John Chen is Managing 20% Director. China at FICO, 86 (10) 5839-7127, [email protected], www.fico.com.
© 2017 HSN Consultants, Inc. THE NILSON REPORT AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT 3 © HSN Consultants, Inc. 2017 THE NILSON REPORT AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT 2 Investments & Acquisitions—July 2017
The chart below lists 50 acquisitions and investments In the first seven months of 2017, The Nilson that occurred in 18 countries in July 2017. Merchant Report identified 337 acquisitions and investments in acquiring deals dominated, led by acquisitions 41 countries. Of those 337 transactions, 78 or 23.1% including Worldpay by Vantiv, Paysafe by Blackstone, were investments in, or acquisitions of, merchant Bambora by Ingenico, Digital River World Payments acquiring companies. Of those 78 merchant acquiring by Worldline, Buckaroo by BlackFin Capital, and companies, 25 were headquartered in Europe. Chip & PIN Solutions by Valitor. All six takeover targets were headquartered in Europe. Prior issues: 1113, 1111, 1109, 1107, 1105, 1103
Investments & Acquisitions July 2017
Amount Amount Company Buyer/Investor (mil.) Country Company Buyer/Investor (mil.) Country ARTIFICIAL INTELLIGENCE Paysbuy Omise 1 * Thailand Brighterion Mastercard 1 * U.S. Wallezz Jukir 1 * Indonesia B2B PAYMENTS Worldpay Vantiv 1 $9,860.0 U.K. InstaReM Series B 2 $13.0 Singapore MOBILE PAYMENTS Karmic Series B 3 $17.2 U.S. CIMB’s Touch ‘n Go Ant Financial 16 * Malaysia Payable Stripe 1 * U.S. Curve Series A 17 $10.0 U.K. PayStand venture round 4 * U.S. Docdata Payments CM Telecom 1 * Netherlands CASH LOGISTICS FreeCharge Axis Bank 1 $59.6 India Temis Brink’s Company 1 $71.0 France Microtronic Crane 1 $17.9 Latvia CORPORATE GOVERNANCE NETWORK TECHNOLOGY Odava MassRoots 1 * U.S. Girocard Six Payment Services 1 * Germany DATA ANALYTICS PERSONAL FINANCE Upserve undisclosed round 5 * U.S. Cleo seed funding 18 $2.6 U.K. FOREIGN EXCHANGE PREPAID CARD Sunrate Series A 6 * China Transact Payments Neptune Int’l 1 * Gilbraltar IDENTITY PROCESSING Juvo Series B 7 $40.0 U.S. CardWorks new shareholders 19 * U.S. LENDING ConnexPay undisclosed round 20 * U.S. BW Pay AU Card 1 * U.K. First Data Baltics Worldline 1 $85.0 Latvia Innoviti Series B 8 $18.0 India Form3 Series A 21 $5.0 U.K. Revolut Series B 9 $66.0 U.K. Marqeta Series D 22 $25.0 U.S. LOYALTY SECURITY Chatter Commerce Rakuten Viber 1 * U.S. EFTsure Series A 23 $2.0 Australia Ibotta undisclosed round 10 * U.S. G2 Web Services Verisk Analytics 1 $112.0 U.S. Meliuz Series B 11 * Brazil Nok Nok Labs Series D 24 $8.0 U.S. Perkbox equity stake 12 $8.6 U.K. SafePak BranchServ 1 * U.S. POSpulse Series B 13 $3.5 Germany Skycure Symantec 1 * Israel MERCHANT ACQUIRING SOFTWARE Alternet’s POS Assets No. Amer. Cannabis 1 * U.S. iParse Urban FT 1 * U.S. Bambora Ingenico 1 $1,740.0 Sweden SoftTelecom Vipera 1 $1.5 Spain Buckaroo BlackFin Capital 1 * Netherlands *Terms not disclosed. 1Acquisition. 2Led by GSR Ventures. 3Including Alsop Louie Part- Cashlez seed funding 14 $2.0 Indonesia ners. 4Led by Leap Global Partners. 5Led by Vista Equity Partners. 6Led by China Growth 7 8 9 Chip & PIN Solutions Valitor 1 * U.K. Capital. Led by New Enterprise Assoc. Led by SBI-FMO Fund. Led by Index Ventures. 10Led by GGV Capital. 11Led by Endeavor Catalyst. 12From Draper Esprit. 13Led by Paul Digital River World Pymts. Worldline 1 * Sweden Kraut. 14Led by Mandiri Capital. 15DST Global, General Atlantic, and Niklas Adalberth 16 17 15 sold shares to new investors from Permira. Joint venture. Including Santander Klarna equity stake * Sweden InnoVentures. 18Led by Robin Klein. 19Pacifi c Investment Mgmt., Parthenon Capital, Merchants’ Choice Paysafe 1 $470.0 U.S. and Reverence Capital each acquired less than 10% equity stakes in separate trans- 20 21 22 23 1 actions. From CSI Kick Start. Including Barclays. Led by Visa. Led by Our Innova- Paysafe Blackstone $3,840.0 U.K. tion Fund. 24Led by Motorola Solutions Venture Capital. © 2017 The Nilson Report
4 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive Vanstone POS Terminal
Among manufacturers of POS terminals, Vanstone The A90 provides a high- ranked 19th largest based on units shipped level cryptographic in 2016. It shipped more than 409,000 central processing terminals last year, up 30% over 2015. unit that is PCI The company’s newest device, the 5.0 and EMV Aisino A90 (shown here), uses approved. Network a customized Android connectivity options 5.1 operating system include 4G, 3G, 2G, Wi- and Qualcomm quad- Fi, and Bluetooth. In addition to chip core ARM. The A90 and mag-stripe readers, the A90 offers both supports EMV-compliant sound wave payments and QR code scanner NFC and QR code-based modules. GPS is built-in. mobile payments. It offers Nearly all Vanstone terminals were shipped in a 5.5-inch high-definition China last year. This year the company has shipped touchscreen for customer-facing devices to customers in Africa, South Asia, Europe, transactions. The 6000mAh rechargeable lithium and North America. battery can handle 700 transactions or 10 days screen Harold Cheng is Overseas Sales Director at Vanstone out standby. The A90 is configured with dual cameras Electronic (Beijing) Co. Ltd. in Beijing, China, on the back. One has a 2-megapixel fixed-focus lens 86 (10) 8804-8125, [email protected], and the other a 5-megapixel automatic-focus lens. www.vanstone.com.cn.
InComm to Buy Amex’s Prepaid Platform from page 1... Serve prepaid card management reloadable prepaid card brand, InComm already provides platform. InComm will become Bluebird, a product whose only activation and reload services for the exclusive program manager customer is Walmart. Today, American Express prepaid cards. and processor for all Amex the Serve platform supports all Some Amex personnel are prepaid card Amex prepaid cards including expected to move to InComm. products co-branded cards for tax preparer American Express B2B products including Jackson Hewitt, gift cards sold in will be integrated with InComm’s those sold retail stores, and B2B products existing Digital Solutions unit, online. (incentive, loyalty, and rewards). which also sells prepaid cards to Beyond card account businesses for loyalty, incentives, management, the Serve and rewards. platform offers features and InComm gains American functions that include a mobile Express’s shopping mall app, direct deposit, SMS text distribution channel, which it can American Express will remain alerts, email, and mobile check use for other prepaid cards. the issuer and network for those deposit. When products. Financial terms were the sale closes, not disclosed. The transaction Serve will be Serve will add functionality to is expected to close in the first integrated InComm’s legacy platform. quarter of 2018. with InComm’s Serve was created in 2010 network. when American Express paid It will add new functionality InComm sells reloadable $300 million to acquire the to InComm’s legacy card prepaid cards in 5 countries, technology platform of start–up management platform, which and other types of prepaid cards Revolution Money. operates from a data center in more than 30 countries. Two years later, Amex used in Georgia. Outside the U.S., InComm that platform to support a new > see p. 6
© 2017 HSN Consultants, Inc. THE NILSON REPORT AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT 5 InComm to Buy Amex’s Prepaid Platform from page 5... uses card account management services of Stefan Happ is Executive VP & General Manager, Global third-party providers. Prepaid & Alternative Payments at American Express in Matt Lanford is Senior VP and General Manager New York, (212) 640-2000, [email protected], Financial Services at InComm in Atlanta, Georgia, (404) www.americanexpress.com. 786-0040, [email protected], www.incomm.com.
Amex/MineralTree B2B Virtual Card Partners from page 1... larger enterprises. MineralTree, an accounts payable and payment automation provider, considers midsized companies to be those making between 50 and 10,000 payments a month. Amex applies the term invoice so they can be delivered two–factor payment verification to companies with automatically into a company’s to combat the growing problem of annual revenue ERP system—a feature already in corporate account takeover, limits between $10 million use for purchasing cards issued on the amount any one employee and $1 billion by American Express, Visa, can spend per invoice, and depending on the and Mastercard. integration with bank Positive Pay, industry, geography, In addition to the efficiencies a check fraud fighting service. and other gained from end-to-end American Express will work factors. By either automation, Amex virtual with midsized businesses using measurement, corporate cards improve a its corporate card to facilitate companies in the midsized company’s cash flow by providing their integration with the new AP category use paper checks to settle at least a 30-day float. They also platform. Amex will also identify approximately which of the client’s vendors 90% of Improves cash flow by providing accept American Express. Those their accounts. at least a 30-day float. that don’t can be approached as The Amex/ potential acceptance outlets. MineralTree MineralTree handled $3 billion partnership automates the generate either Membership in payments last year. entire invoice-to-pay process Rewards points or statement Gint Balodis is VP, B2B Products and includes letting companies credits for cash back earned. and Solutions at American Express pay suppliers with a virtual Another benefit is that Global Commercial Payments American Express card tied to business–to–business checks in New York, (212) 640-2000, their corporate card account. Each attract a disproportionate amount [email protected], transaction generates a single-use of fraud. Often the original payee’s www.americanexpress.com. card number. name is “washed” and replaced BC Krishna is CEO at MineralTree in MineralTree’s platform is with another name before being Boston, Massachusetts, (978) 371- able to extract the header and cashed. MineralTree provides two- 0673, [email protected], line-item data from a paper factor authentication of the payor, www.mineraltree.com.
Tokens for Personally Identifiable Information from page 1... a universal token to protect never been greater. Criminals on For companies that want to personally identifiable information the dark web will pay more for PII securely manage sensitive data (PII) and works with network than for card account numbers. internally, the TokenEx Cloud tokens. The need to secure PII has Security Platform tokenizes
6 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive that can integrate with a card processor or payment service provider (PSP). Incoming card payments can be tokenized using TokenEx’s universal technology. And TokenEx can pass along PII from mobile phone and tablet devices before it a network token already in place such as for Apple reaches the client’s back office. PII might be gathered Pay transactions. in conjunction with a payment card transaction or Retailers send a web service message to the obtained elsewhere, and can include loyalty program TokenEx Data Vault, which swaps the incoming token information, contact center transactions, Social Security numbers, and more. ...tokenizes PII before it reaches a Many of TokenEx’s clients are retailers that use a payment processor or gateway to tokenize card client’s back office. data but don’t want to be tied to that same vendor to secure noncard data. And many processors don’t have for the primary account number stored there. That a platform capable of tokenizing PII. number and transaction details are then forwarded For these clients, TokenEx can integrate with the to the processor or PSP. This service is of particular merchant’s processor to ensure that sensitive data sets value to merchants that use multiple PSPs and those obtained in a card transaction are tokenized before that use batch processing, private label cards, virtual transmission to their back-office system. terminals, and AS/400 systems. For companies such as ecommerce retailers that Alex Pezold is Chief Executive Officer at TokenEx want to arrange for their own tokenization of card in Oklahoma City, Oklahoma, (312) 375-3186, data, TokenEx offers a PCI DSS-certified gateway [email protected], www.tokenex.com.
U.S. General Purpose Card Brands—Midyear 2017 from page 1... over the first six months of 2016. of those transactions, down cards accounted for 38.84%, up Debit cards accounted for 61.16% from 63.28% in 2016. Credit from 36.72%. Visa debit cards generated 43.70% of all U.S. General Purpose Cards MY 2017 vs. MY 2016 purchase transactions in the first six months of 2017, Volume Transactions Brand Total (bil.) Chg. Purch. (bil.) Chg. Cash (bil.) Chg. Purch. (bil.) Chg. down from 44.83% in the same period the prior year. Visa Credit $ 878.76 18.8% $ 850.27 19.7% $ 28.49 –1.9% 10.38 19.9% Visa credit cards Mastercard Credit $ 374.92 6.1% $ 357.29 5.6% $ 17.63 17.4% 3.98 3.2% generated 22.52% of all American Express Credit $ 343.00 –5.1% $ 340.39 –5.2% $ 2.61 9.0% 2.48 –3.0% purchase transactions, up from 19.74%. Discover Credit $ 68.06 6.3% $ 61.63 4.7% $ 6.43 24.5% 1.05 2.9% Mastercard debit cards CREDIT CARD TOTALS $ 1,664.74 9.6% $ 1,609.58 9.7% $ 55.16 6.9% 17.89 11.2% generated 17.47%, down Visa Debit & Prepaid $ 1,010.55 4.5% $ 765.67 4.4% $ 244.88 4.7% 20.13 2.5% from 18.45%. Mastercard Debit & Prepaid $ 408.62 –0.2% $ 313.77 0.3% $ 94.85 –2.0% 8.05 –0.4% Mastercard credit cards generated 8.64%, down DEBIT CARD TOTALS $ 1,419.17 3.1% $ 1,079.44 3.2% $ 339.73 2.7% 28.18 1.6% from 8.81%. CREDIT & DEBIT TOTALS $ 3,083.91 6.5% $ 2,689.02 7.0% $ 394.89 3.3% 46.07 5.1% American Express cards Visa Totals $ 1,889.31 10.7% $ 1,615.94 11.9% $ 273.37 4.0% 30.51 7.8% generated 5.39%, down from 5.84%. Mastercard Totals $ 783.54 2.7% $ 671.06 3.1% $ 112.48 0.6% 12.03 0.7% Discover cards generated VISA & MC TOTALS $ 2,672.85 8.2% $ 2,287.00 9.2% $ 385.85 3.0% 42.54 5.7% 2.29%, down from 2.34%. Includes all consumer and commercial credit, debit, and prepaid cards. Figures are for January 1 through June 30. American Express and Discover include business from third-party issuers. Figures include PIN-based debit fi gures for Visa Prior issues:1103, 1098, 1092 (Interlink) and Mastercard to match their reporting. © 2017 The Nilson Report
© 2017 HSN Consultants, Inc. THE NILSON REPORT AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT 7 Alternative Credit for Online Payments from page 1... funding and capital financing. Bread competes against companies that issue private label credit cards (Synchrony, Citi, and Alliance Data) as well as against those offering alternative credit (PayPal, Klarna, Affirm, and FuturePay). Unlike its competitors, Bread does not wait until merchant’s ecommerce platform, it can checkout to present credit options. Instead, options be configured to gather shipping details and check including 0% financing, short-term installments, the buyer out directly without sending them back to and long-term installments are integrated with home the merchant’s checkout system. Because applicants reach Bread by way of an API, Merchants receive assistance they never leave the merchant’s website. Cross River Bank in New Jersey is the lender with placement of credit offers. of record for Bread’s loans, a role it also performs for Affirm. Menlo Ventures led Bread’s Series B pages, product pages, marketing communications, equity round. Victory Park Capital is providing the and elsewhere, so that they appear throughout the capital financing. consumer’s ecommerce experience. When financing Bread provides credit mostly on a white- options are presented multiple times, Bread retailers label basis. So far, 100 merchants in the U.S. use see sales increase, some greater than 10%. Bread, which handles all loan underwriting using Credit offers most often appear as a button near proprietary models. Bread says that merchants pay a product description. Merchants receive assistance rates similar to credit card discount fees. with placement of credit offers as well as with how Josh Abramowitz is CEO at Bread in New York, to test various credit options. When consumers (844) 922-7323 x835, [email protected], click on the offer, their credit is approved or denied www.breadfinance.com. within a minute. Because Bread integrates with the
Type–Ahead Address Verification
Consumers are familiar with type– mobile devices to apply for bank other countries it uses third–party ahead address verification through accounts and credit cards, or to databases. Beyond convenience the GPS device in their cars. Once pay ecommerce merchants. In to the consumer, the company they enter a sufficient these instances, Addressy’s type– provides businesses with accurate combination of ahead feature provides a home address information. numbers and address instead of a destination. Addressy has 11,000 customers letters to And instead of using GPS, in the U.K., Western Europe, suggest a Addressy’s service identifies the Australia, New Zealand, Canada, destination, location of the user’s IP address. and the U.S. Merchant acquirers a list of Addressy presents consumers and other companies can resell possibilities is with a list of nearby addresses as Addressy’s service and receive a soon as they begin entering their percentage of the annual revenue. address. Auto– suggestions The service identifies the location continue with presented so the desired address every keystroke. of the user’s IP address. can be selected without having to The software is finish typing. multilingual. It also can identify Tom Mucklow is Head of Addressy (known as PCA misspellings and abbreviations. Partnerships at Addressy in New Predict in the U.K.) provides In the U.S., Canada, and the U.K., York, (415) 619-2287, tomm@ similar type–ahead convenience to Addressy accesses databases of addressy.com, www.addressy.com. consumers who use computers or the national postal systems. In
8 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive Middle East–Africa Cards 2016 from page 1 Mastercard purchase volume from 68.18%), 58.12% for Mar et S are of Purc a e increased 15.6% to $130.62 Mastercard (up from Tran act on Brand billion. Visa purchase volume 56.60%), 2.32% Chg.‘16 increased 10.3% to $184.59 for American Brand Share vs.’15 Express (down billion. American Express Visa . 173 increased 8.1% to $8.72 billion, from 2.44%), .10 and Diners Club increased 21.7% and 2.44% for bil. Mastercard . 1 5 to $3.94 billion. Diners Club (up Amex 1.2 12 Visa’s purchase volume market from 2.38%). Diners 0.7 0 share declined 82 basis points Purchase to 56.30% and Mastercard’s transactions © 2017 The Nilson Report
Year O er Year Gro t /Dec ne n Purc a e o u e equaled 98.10% of the Middle on Card I ued n M dd e Ea t Afr ca in local currency East and Africa region total for all global brand cards, up 0 Ma tercard from 97.98%. a 2 Visa’s purchase transaction market share slid to 53.58% from 20 55.31%. Mastercard gained share 1 to 44.52% from 42.67%. American 10 A e Express’s share fell to 1.23% from 1.34%. Diners Club’s share D ner 0 increased to 0.68% from 0.67%. 1 1 1 Global brand credit, debit, and ©2017 prepaid cards in circulation in the 10 The Nilson Report 11 12 1 Middle East and Africa at year- 1 0 0 0 0 07 0 10 0 end 2016 totaled 264.0 million, up 20 for goods and services 8.4%. Visa and Mastercard cards 02 01 00 generated by Visa, accounted for 99.27%. increased 70 basis points Mastercard, American Express, Mastercard added 19.8 million to 39.84%. American Express’s and Diners Club cards issued cards and its market share grew to share increased by 13 basis points in the Middle East and Africa 48.06% from 43.94%. Visa added to 2.66%. Diners Club’s share reached 5.10 billion, up 21.6%. 0.5 million cards and its market declined by 1 basis point to 1.20%. Visa and Mastercard cards share fell to 51.20% from 55.28%. Cash accounted for 67.14% generated 5.00 billion purchase of total volume for Visa (down transactions in 2016, which > see p. 10
Middle East and Africa General Purpose Cards 2016 vs. 2015
Volume Transactions Cards Brand Total ($bil.) Chg. Purch. ($bil.) Chg. Cash ($bil.) Chg. Total (mil.) Chg. Purch. (mil.) Chg. (mil.) Chg. Visa $ 561.66 6.8% $ 184.59 10.3% $ 377.07 5.2% 5,196.2 12.2% 2,731.4 17.7% 135.2 0.4% Mastercard $ 311.85 19.7% $ 130.62 15.6% $ 181.23 22.9% 4,028.2 26.7% 2,269.7 26.8% 126.9 18.5% Amer. Express $ 8.93 8.0% $ 8.72 8.1% $ 0.21 3.0% 64.4 10.8% 62.6 11.0% 1.5 2.8% Diners Club $ 4.04 21.7% $ 3.94 21.7% $ 0.10 24.9% 35.0 22.0% 34.5 22.0% 0.5 4.2% Totals $ 886.48 11.1% $ 327.86 12.4% $ 558.61 10.3% 9,323.9 18.1% 5,098.2 21.6% 264.0 8.4% Includes all general purpose consumer and commercial credit, debit, and prepaid cards. Currency fi gures are in U.S. dollars. Change fi gures are based on local currency. Some prior year fi gures have been restated. Includes Israel. Visa includes Electron but excludes Plus. Mastercard excludes Maestro and Cirrus. © 2017 The Nilson Report
© 2017 HSN Consultants, Inc. THE NILSON REPORT AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT 9 Middle East–Africa Cards 2016 from page 9 Visa cards issued in the Middle East and Africa Mastercard cards issued in the Middle East and region accounted for 4.38% of all Visa cards in Africa region accounted for 7.60% of all Mastercard circulation worldwide at cards in circulation the end of 2016, down Mastercard’s purchase volume worldwide at the end of from 4.57% in 2015. share increased 70 basis points. 2016, up from 6.99% The Middle East and in 2015. Africa region accounted The Middle East and for 2.57% of Visa’s worldwide purchase volume Africa region accounted for 3.72% of Mastercard’s in 2016, up from 2.56% in 2015, and 1.96% of its worldwide purchase volume, up from 3.45%, and purchase transactions, up from 1.84%. 3.37% of its purchase transactions, up from 3.00%.
Latin America’s Largest Acquirers from page 1... Visa payment card transactions Added to Visa To Ac u rer of e from 6.4 million active merchant and Mastercard card outlets in the region. Purchase payments handled last Tran act on 2016 Trans. Portfolio volume (spending for goods and year, these acquirers Rank Country Acquirer (mil.) Share services) generated by those also processed 1.73 1 RA Cielo 27 .0 transactions was $1.739 trillion. billion transactions 2 RA Getnet 1 1.0 1 The five largest acquirers—Cielo, generated by American RA Rede 1 1.7 Rede, BBVA Bancomer, Getnet, Express, Diners Club, CHL Transbank .1 and Prisma Medios de Pago— and Discover cards as AR Prisma 2 . combined to process 68% of the well as by domestic- E Banorte 2 . 10 Mastercard and Visa transactions only credit and debit 7 AR First Data . acquired by the group. cards issued in Brazil, Chile, Colombia, E Serv. de Pago 7. 2 Costa Rica, Ecuador, PER VisaNet .7 Mexico, Panama, 10 E BBVA Bancomer .7 1 Top Acquirers in Puerto Rico, Peru, 11 E Elavon/Santander .2 Latin America 2016 Venezuela, and four 12 EN Banesco . 1 other countries. Among 1 PRI Evertec .2 1 Trans. Volume those card brands were Rank Company (bil.) (bil.) 1 COL Occidente .0 7 Elo, Banricompras, 1 PER Procesos 2. 1 Cielo 6.80 $ 168.66 Redcompra, Clave, ©2017 The Nilson Report 2 Rede 4.00 $ 111.67 Infonet, ATH, and 3 BBVA 1.73 $ 267.38 Ripley. Purchase 4 Getnet 1.25 $ 31.21 volume was $67.90 billion. masks the devaluation of a local 5 Prisma Medios de Pago 1.07 $ 51.04 With global and domestic currency to the U.S. dollar in a brand purchase volume combined, country such as Venezuela. The 6 Transbank 1.03 $ 41.37 these acquirers handled 21.17 problem is further exacerbated 7 Banesco Banco Universal 0.80 $ 586.69 billion card transactions, up 15% by currency manipulation by that 8 Serv. de Pago Banamex–EVO 0.44 $ 19.83 from 2015. Purchase volume country’s government. 9 Evertec Group 0.43 $ 16.23 tied to those transactions was Concurrently, inflation has 10 First Data 0.33 $ 15.82 $1.806 trillion. had a positive effect on debit card Growth rates shown in this usage in Venezuela, where cash Rankings are based on consolidated volume and trans- actions. Figures include all Latin America business. Volume chart are in nominal dollars purchases require an ever larger is net (gross minus chargebacks) for American Express, to reduce distortion owing to number of banknotes, which can Diners Club, Discover, JCB, Mastercard, UnionPay, Visa, and inflation and conversion to U.S. be in short supply. domestic general purpose payment cards such as Elo, Hiper- dollars. Foreign exchange rates do card, Cabal, and Redcompra. © 2017 The Nilson Report not keep up with inflation, which 10 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive Largest Merchant Acquirers in Latin America 2016
Visa/Mastercard 1 Other Cards 2 Active Rank Transactions Volume Transactions Volume Merchant POS ‘16 ‘15 Company, Headquarters (mil.) Chg. (mil.) Chg. (mil.) (mil.) Outlets Terminals 1 1 Cielo Brazil 5,500.0 4% $ 142,017.2 1% 1,300.0 $ 26,639.0 1,760,000 1,946,000 2 2 Rede Brazil 3,999.9 -1% $ 111,666.3 1% — — 1,279,770 1,471,000 3 3 BBVA Bancomer Mexico 1,348.0 20% $ 36,568.2 23% — — 158,443 367,959 4 5 Getnet Brazil 1,247.0 52% $ 31,207.2 30% — — 383,479 558,672 5 4 Prisma Medios de Pago Argentina 1,070.2 15% $ 50,995.0 43% 1.3 $ 47.3 344,800 487,200 6 6 Transbank Chile 974.6 25% $ 38,998.8 17% 57.3 $ 2,367.8 199,515 275,116 7 7 Banesco Banco Universal Venezuela 800.8 25% $ 585,750.0 275% 0.8 $ 936.4 10,962 109,652 8 8 Serv. de Pago Banamex–EVO Mexico 426.7 5% $ 18,664.3 6% 12.0 $ 1,168.3 139,821 135,863 9 9 Evertec Group Puerto Rico 3 389.9 13% $ 14,640.7 10% 39.9 $ 1,587.6 60,826 83,256 10 11 First Data Argentina 331.9 14% $ 15,676.7 45% 2.1 $ 141.8 243,110 224,265 11 10 BBVA Provincial Venezuela 325.0 7% $ 207,954.3 260% 24.9 $ 21,215.5 38,667 62,911 12 14 VisaNet Peru 265.8 16% $ 9,892.2 14% — — 132,128 142,060 13 12 Banorte Mexico 260.5 4% $ 10,756.4 16% — — 106,812 148,999 14 13 Mercantil Banco Universal Venezuela 252.0 6% $ 128,768.0 255% — — 32,501 52,454 15 — BAC Credomatic Costa Rica 4 247.1 — $ 17,456.8 — 15.5 $ 1,396.5 305,714 305,714 16 16 Elavon/Santander Mexico 219.3 28% $ 11,220.8 27% 0.1 $ 18.8 110,835 164,280 17 15 Banco de Venezuela Venezuela 192.1 8% $ 89,577.8 316% — — 25,610 29,207 18 17 Vero Brazil 165.8 35% $ 4,224.1 33% 132.2 $ 3,016.8 209,538 1,728,663 19 — Stone Brazil 140.3 — $ 1,047.2 — — — 42,086 51,953 20 18 Bancolombia Colombia 129.2 13% $ 6,330.9 18% 9.0 $ 757.8 109,000 5 21 20 HSBC Mexico 108.2 11% $ 4,163.3 15% — — 43,793 75,099 22 21 CardNet Dominican Republic 87.8 -1% $ 4,073.2 -4% 0.3 $ 18.8 24,342 41,732 23 — Banco Exterior Venezuela 84.7 — $ 64,665.5 — — — 10,573 13,804 24 22 Bancaribe Venezuela 78.3 5% $ 33,591.7 209% — — 13,895 14,172 25 25 Banco Davivienda Colombia 73.7 44% $ 4,430.4 34% 7.3 $ 689.2 77,000 5 26 27 Banco Nac’l de Credito Venezuela 64.0 57% $ 50,387.5 231% — — 13,466 16,607 27 23 Banco de Occidente Colombia 58.9 7% $ 2,526.1 9% — — 24,732 5 28 24 Banco Nacional Costa Rica 56.5 6% $ 2,033.1 3% — — 53,924 45,750 29 28 Banco Inbursa Mexico 51.9 34% $ 1,567.0 35% 0.6 $ 5.9 60,044 66,262 30 19 Elavon Brazil 6 49.1 — $ 1,266.3 — <0.1 $ <0.1 0 0 31 26 BCR Costa Rica 48.0 13% $ 1,637.0 -17% — — 18,736 20,725 32 37 Servicios Digitales Popular Dominican Republic 42.8 120% $ 2,080.6 104% 1.7 $ 109.6 12,526 15,623 33 29 Procesos de Medios de Pago Peru 41.5 13% $ 1,724.4 7% 15.4 $ 992.3 78,524 94,986 34 30 Scotiabank Mexico 37.7 15% $ 1,190.8 7% 34.0 $ 1,015.2 22,435 23,059 35 31 Bancard Paraguay 31.8 18% $ 1,234.8 13% 4.3 $ 100.3 23,770 28,213 36 33 BBVA Colombia 30.1 14% $ 1,618.3 28% 0.4 $ 24.7 17,312 5 37 32 Banco del Pacifi co Ecuador 28.3 6% $ 1,504.0 -4% — — 54,451 43,142 38 36 Interdin & Diners Club Ecuador 26.6 36% $ 1,634.9 -19% 36.6 $ 3,539.8 60,441 64,818 39 38 Firstbank Puerto Rico 24.4 26% $ 1,019.9 23% 18.0 $ 537.2 5,712 7,949 40 34 Banco Sofi tasa Venezuela 24.3 4% $ 14,724.3 261% — — 3,026 3,610 41 39 Maduro & Curiel’s Curacao 7 22.4 22% 1,764.6 9% 1.0 $ 196.5 8,135 9,401 42 40 Banco Caja Social Colombia 22.0 28% $ 798.1 34% <0.1 $ 1.0 11,747 5 43 42 Banco Agricola El Salvador 18.8 28% $ 892.7 35% — — 1,662 3,614 44 41 Scotiabank Puerto Rico 18.8 14% $ 3,463.2 12% 1.9 $ 948.5 12,802 15,641 45 35 VisaNet Dominican Republic 11.7 -42% $ 355.2 -59% — — 6,427 6,684 46 43 Banco General Panama 11.1 3% $ 1,057.3 -1% 12.3 $ 429.9 7,464 9,402 Figures are net (gross minus chargebacks). Change in volume is based on local currency. 1Visa and Mastercard credit, debit, and prepaid cards including Electron and Maestro. 2Includes American Express, Diners Club/Discover, JCB, and UnionPay, and domestic debit and credit cards. 3Also U.S. Virgin Islands, British Virgin Islands, and Costa Rica. 4Includes all Central America business. 5POS terminals are owned by Credibanco and Redeban. 6Sold to Stone in April 2016. 7Also Aruba, Sint Maarten, and Bonaire. © 2017 The Nilson Report
© 2017 HSN Consultants, Inc. THE NILSON REPORT AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT 11 © 2017 HSN Consultants, Inc. THE NILSON REPORT All Rights Reserved. Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for any purpose is strictly prohibited and may violate the intellectual property rights of HSN Consultants, Inc. dba The Nilson Report.
QR Code Payment Global Interoperability from page 1... payments—both merchant- presented and consumer- presented models. QR codes are two-dimensional (2D) machine-readable barcodes and POS hardware. Its work on consumer uses their mobile device used in mobile phones. They are QR code-based payments aims to to launch an app from a payment achieve the same results. network or a bank. The app uses The largest QR the phone’s image sensor to read a Countries Using QR Codes for Payments code-based QR code displayed at a merchant’s on Visa/Mastercard Networks* payment countertop or on a merchant’s * Programs are either systems— phone. Transaction data is first live or pending. • KAZAKHSTAN Alipay and sent to the issuing bank. The • CHINA WeChat Pay in subsequent flow of messages China—exist outside between the merchant’s acquiring • EGYPT of any legacy card bank and the merchant is specific • GHANA network. Both seek global to the implementation. • NIGERIA • PAKISTAN acceptance for international Payment industry companies • INDIA travelers that use their and their representative • THAILAND mobile wallets. associations can become EMVCo • UGANDA • CAMBODIA Consumer-presented business associates or technical • KENYA • VIETNAM • PHILIPPINES mobile payments made associates, and participate in the • RWANDA • MALAYSIA with QR codes work development of specifications. • TANZANIA • INDONESIA similarly to contactless Technical documents are EMV payments that use available on a royalty-free basis capable of holding 100 near-field communication to all interested parties from the times the information found on (NFC) radio frequencies. EMVCo website. the one-dimensional barcodes The difference is that instead EMVCo is developing a self- printed on consumer packaged of putting a card or phone in testing framework that will be goods—enough data to initiate a able to evaluate payment on any network. Technical documents are avail- whether American Express, Discover/ able on a royalty-free basis. QR codes Diners, JCB, Mastercard, comply with UnionPay, and Visa, the six global specifications. networks, hold equal one-sixth proximity to an NFC reader, EMVCo technical associates ownership stakes in EMVCo. consumers open an app on their will meet September 25-28 in Approximately two-thirds phone to display a QR code that Vancouver, Canada, and the Board of the global population has a can be read by a merchant’s of Advisors will meet October 18- mobile phone. Nearly every make 2D optical scanner. Resulting 19 in Sydney, Australia. and model of smart and feature information about the purchase, Brian Byrne is Director of mobile phones can accommodate merchant, and consumer is then Operations at EMVCo in San QR code-based payments, transferred to the merchant’s Francisco, California, (650) 454- which require only a camera and acquiring bank. 5113, [email protected], an application. Merchant-presented QR-code www.emvco.com. EMVCo is responsible for the payments are initiated when a specifications that established David Robertson, Publisher secure global interoperability for August 29, 2017 EMV-compliant payment cards
12 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive