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U.S. General Purpose Cards Earthport, a U.K.-Based Provider of Cross-Border Payments, Including Settlement and Foreign Exchange Services for Banks, Outstandings Vs

FOR 48 YEARS, THE LEADING PUBLICATION COVERING PAYMENT SYSTEMS WORLDWIDE JANUARY 2019 / ISSUE 1145

Visa Wants B2B Cross-Border Payments Company Visa has offered to pay $252 million (£198 million) to buy U.S. General Purpose Cards Earthport, a U.K.-based provider of cross-border payments, including settlement and foreign exchange services for , Outstandings vs. > see p. 9 Purchase Volume Bl. 5,674 Card Transactions Projected Worldwide Global brand general purpose payment cards are projected to generate 882.08 billion purchase transactions in 2027, up 198.4% 4,326 versus 2017. These card-present and card-not-present purchase > see p. 11 PURCHASE Self-Sovereign Identity Using DLT VOLUME Distributed ledger technology (DLT) permits replication, sharing, 2,831 and synchronization of digital data across multiple sites, countries, and/or institutions. And it can operate without any central > see p. 8 1,870 Merchant Services 1,578 Pine Labs’ cloud-based services platform connects to 100,000 merchants in that operate 330,000 POS terminals. The 1,072 terminals operate on reduced functionality. They simply route 584 1,328 > see p. 6 310 1,071 IATA 733 711 801 579 The International Air Transport Association (IATA), the trade 374 186 organization of 290 airlines worldwide representing more than OUTSTANDINGS 80% of all air traffic, processed $480 billion in payments last ‘90 ‘95 ‘00 ‘05 ‘10 ‘15 ‘20 ‘25 > see p. 10 © 2019 The Nilson Report Fingopay Vein ID Biometric Authentication Outstandings in the U.S. When illuminated by near-infrared light, the patterns found inside any human’s veins are more unique than their fingerprints. (outstanding receivables) has been the villain in In addition, they are never impacted by degradation over time American financial services for so long it can be difficult to > see p. 7 remain objective about it. General purpose credit card debt has rebounded from the purge that followed the ePayments in when it fell to $711.27 billion at the end of 2010. It reached Gaining to the largest number of alternative payment $979.08 billion at the end of 2018. However, growth in recent methods to Visa, Mastercard, and other global card brands is years is partially attributable to two factors—increased an increasingly important way acquirers and payment service consumer spending to earn rewards and more commercial card > see p. 10 > see p. 12

INSIDE 2 –3 Fast Facts 5 EMV Solution for Gas Pumps CHARTS 11 Projected Growth of Purchase 4 Investments & Acquisitions— 6 JCB QR Code Payments in Asia Transactions Worldwide December 2018 7 Citi Rewards+ Credit Card 12 Outstandings as a % of Purchase 5 MoreFun POS Terminal 8 Mastercard Streamlines Corporate Logo Volume on U.S. Credit Cards

© 2019 HSN Consultants, Inc. THE NILSON REPORT VISIT US ONLINE AT WWW.NILSONREPORT.COM CROSS RIVER will provide with push-to-card ’S Shop Now, Pay Later installment payment app is payments for workers in ridesharing, food delivery, and other available to merchants using Salesforce Commerce Cloud. freelance occupations. In December, Cross River secured Sezzle integrated with Salesforce via the Technology $100 million in a venture funding round. Gilles Gade is CEO Partnership program. Paul Paradis is Co-founder at Sezzle, at Cross River, [email protected], [email protected], www.sezzle.com. www.crossriver.com. ARRIVE is the new name of ParkWhiz. More than 40 million EQUINOX PAYMENTS’ Luxe 8500i and Luxe 6200m POS customers in 230 cities in the U.S. and have access terminals have achieved EMV end-to-end certification on to parking reservations including payment through Arrive,

FAST ’s processing platform and are expected to be which operates the largest transactional parking network in submitted to the PCI Security Standards Council next month North America. Yona Shtern is CEO at Arrive, for validation. The terminals use software from Acceo Tender [email protected], www.arrive.com. FACTS Retail. Together, they leverage the First Data payment plat- SUNOCO has launched a new mobile app to support form, are PCI 5.x certified, and support First Data TransArmor payments at the pump and in-store at its U.S. retail gas point-to-point encryption and tokenization. Rob Hayhow is JANUARY 2019 stations and C-stores. The app, which serves iOS and Android ISSUE 1145 VP at Equinox Payments, [email protected], devices, connects to a digital commerce platform created by www.equinoxpayments.com. Joey Vaccaro is VP, Business Stuzo, which delivers rewards, offers, and digital receipts. No paid Development at Acceo, [email protected], advertising. No Dealers manage the platform through a digital storefront www.acceo.com. sponsored content manager. Gunter Pfau is CEO at Stuzo, gunter.pfau@ of any kind. PATIENTCO has added to its SmartFinance platform for stuzo.com, www.stuzo.com. Richard Hayes is Director, No company can medical payments financing options from ClearBalance. Electronic Payments at Sunoco, [email protected], pay to be featured SmartFinance offers integrated statement, text, and ebill, www.sunoco.com. in our newsletter. prepopulated enrollment fields to streamline self-service UNIONPAY prepaid cards issued by Global Bank of New enrollment, and targeted messaging based on bill bal- It is never permissi- York will be marketed by Ecard. U.S. consumers will open an ances. ClearBalance offers include a zero- financing account online and service it via an application downloaded ble for subscribers to program. Bruce Haupt is CEO at ClearBalance, bhaupt@ forward or print onto their mobile device. Funds can be added online or at clearbalance.org, www.clearbalance.org. Alan Nalle is Chief this issue. Doing retail locations. Wayne Tsao is CEO at Ecard, wtsao@ ecardinc.com, www.ecardinc.com. June Chen is General so violates Strategy Officer at PatientCo, [email protected], Manager–Americas at UnionPay Intl, chenjing@ copyright laws. www.patientco.com. unionpayintl.com, www.unionpayintl.com.

Conferences & Seminars

22nd National Cards and Merchant Payments Ecosystem 2nd Emerging Asia E-Commerce 10th Mobile Money & Financial Payments on Campus 2019: 2019 (MPE): February 19-21, 2019. Summit 2019: February 26-27, Inclusion Summit 2019: February February 3-6, 2019. The Hilton The InterContinental Berlin, Berlin, 2019. The ParkRoyal Hotel, Yangon, 26-27, 2018. The ParkRoyal Hotel, Scottsdale Resort & Villas, . Estimated attendance: Myanmar. Estimated attendance: Yangon, Myanmar. Estimated Scottsdale, Arizona. Estimated 1,000+. Cost for the three-day 150. Cost for the two-day attendance: 150. Cost for the attendance: 125. Cost for the four- conference is $2,514 (€2.200). conference is $999 for retailers, two-day conference is $599 for day conference is $800. Use the Subscribers to The Nilson Report $1,499 for solutions providers. Myanmar banks, $1,299 for other coupon code NILSON25OFF for will receive a 20% discount. Subscribers to The Nilson Report banks and MFIs, and $1,699 for $25 off your purchase through (Use code NLSN_19MPE.) will receive a 15% discount. solutions providers. Subscribers January 31. Contact Sarah Yeager Contact Natalia Ivanis, Head of (Use code 2EAEC2019-MPNR.) to The Nilson Report will receive at Prodev, (812) 339-6374, syeager@ Event Production at Empiria, Contact Jose Carpio, Marketing a 15% discount. (Use code prodevmeetings.com. Register at 421 (917) 802-770, natalia.ivanis@ Manager at Magenta Global, 10MMFI2019-MPNR.) Contact www.prodev.com/pcards-regis- empiriagroup.eu. Register at www. (65) 6846-2366, jose@ Jose Carpio, Marketing Manager tration. merchantpaymentsecosystem.com. magenta-global.com.sg. Register at Magenta Global, (65) 6391-2535, at www.magentaglobalevents. [email protected]. com/2nd-emerging-asia-ecom- Register at www.magentaglobalev- merce-summit/. ents.com/mobile-money-financial- inclusion-summit.

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 PHILLIPS 66 is collaborating with Honda Developer Studio to enable Honda OCEANPAYMENT, a China-based global (PSP), vehicle owners to reserve a pump and pay for fuel at approximately 7,500 has signed an agreement with Diners Club International to allow merchants Phillips 66, 76, and Conoco locations through their in-dash infotainment around the world to accept Discover, Diners Club, and affiliate network cards. system. John Barbour is Manager of Payments and Card Services at Phillips 66, The PSP offers more than 500 payment methods in 200 countries. [email protected], www.phillips66.com. Lanny Yan is Co-Founder at Oceanpayment, [email protected], www.oceanpayment.com.cn. Amy Parsons is SVP of Global Acceptance at THE NEIMAN MARCUS GROUP has reached a $1.5-million settlement with Discover, [email protected], www.discover.com. more than 40 state attorneys general over a data breach in January 2014 in which 370,000 credit cards were compromised. OMNIO GROUP, a banking and payment service provider formed by the merger of Payment Cloud Technologies and Tuxedo Money Solutions, has I2C, a global provider of payment processing services, has received certifica- launched the STA Travel Mastercard and digital account in Austria with STA tion as an issuer processor for UnionPay International card products. Travel, a student travel specialist. Ian Clowes is CEO at Omnio, ian.clowes@ Amir Wain is CEO at i2c, [email protected], www.i2cinc.com. June Chen is omnio.global, www.omnio.global. General Manager–Americas at UnionPay Intl, [email protected], www.unionpayintl.com. NATIONAL ASSOCIATION OF SAVINGS AND CREDIT UNIONS in Zambia will issue 1.5 million Mastercard contactless debit cards to its members over “CATCHING THE DUAL INTERFACE WAVE” is a white paper produced the next five years. Mark Elliott is Division President, at by CPI Card Group. It highlights factors contributing to increased interest in Mastercard, mark.elliott@.com, www.mastercard.com. contactless cards from U.S. issuers. The white paper is available at www.cpicardgroup.com/wp-content/uploads/2018/04/DI_Whitepa- “PSD2 & OPEN APIS: Threats and Opportunities for the Banking Sector— per_041218_Layout_V5.pdf. Jason Bohrer is SVP & General Manager, Secure Are We Moving Towards Open Banking?” is a new white paper produced by Card Solutions, [email protected], www.cpicardgroup.com. Galitt. Remi Gitzinger is Executive Director, Payment Consulting Business Unit, [email protected], www.galitt.com. BOKIS and NETS have renewed their processing agreement for global brand cards issued by banks in Denmark. The previous agreement has been expand- PNC BANK CANADA BRANCH offers Visa brand commercial card products ed to include card fraud protection services. Financial institution members of designed to support Canada-based companies and U.S. companies doing busi- Bokis comprise 40% of the Danish market. ness in Canada. Features include cardholder benefits and insurance specific to Soren Nicolaisen is Director of National Banking at Bokis, [email protected], Canada, the ability to pay rebates in Canadian dollars, and dual language Eng- https://www.lopi.dk/. Thomas Jul is Head of Financial & Network Services lish/French service and support. David Olsen is Regional President and Principal at Nets, thomas.jul@.eu, www.nets.eu. Officer, Canada Branch at PNC Bank, [email protected], www.pnc.com. SHIELDPAY’S instant digital escrow technology allows payment cards to be Management Changes used securely on peer-to-peer marketplaces and platforms. Shieldpay verifies the identity of all parties. It holds funds, releasing them once all sides agree to Liz Oakes has been appointed Executive Vice President of Market the exchange. Visa’s CyberSource platform will work with Shieldpay to open Development, New Payment Platforms at Mastercard, liz.oakes@ new verticals for secure peer-to-peer payments. The partnership will also allow mastercard.com. Kurt Bilafer, formerly at , has been Shieldpay’s partners to make use of the Visa Direct push payments service, appointed Executive Vice President, Chief Revenue Officer at Yapstone, enabling funds to be disbursed directly to a Visa card in real time in many [email protected]. Steven Lee has been appointed Senior Vice European markets. Peter Janes is CEO at Shieldpay, pjanes@ President, Business Development at Genesis Financial Solutions, shieldpay.com, www.shieldpay.com. Mike Lemberger is SVP Product [email protected]. Sasha Orloff has resigned as CEO at Solutions for Visa, [email protected], www.visa.com. LendUp. Anu Shultes has been appointed Chief Executive Officer at 3C PAYMENT, a multichannel payment service provider that mostly works LendUp, [email protected]. Vijesh Iyer has been appointed with merchants in the hospitality, quick service restaurant, unattended, and Interim Chief Executive Officer at Mission Lane, vijesh.iyer@ retail industries, will offer its customers acceptance for Discover, Diners Club, lendup.com. Kevin Olsen has been appointed Senior Vice President of Pulse, and affiliate network cards in Europe and the Middle East. Payment Solutions at VSoft Corporation, [email protected]. Amy Parsons is SVP of Global Acceptance at Discover, amyparsons@ Fernando Perez has been appointed Manager of PCI Services at discover.com, www.discover.com. Damien Estrade is Head of Business Develop- CompliancePoint, [email protected]. Donald Chesnut ment at 3C Payment, [email protected], www.3cpayment.com. has been appointed Chief Experience Officer at Mastercard, [email protected]. Christine Lee has been appointed FIRST DATA is offering Clover Mini and Clover Flex POS devices in Argentina Chief Executive Officer at BillingTree, [email protected]. in tandem with two software packages—Sistema de Pagos (employee Paul Franko has been appointed Chief Operating Officer at Payrailz, management, customers, and reports) and Punto de Ventas (order, inventory, [email protected]. Brian Radin has been appointed President of and fiscal printer). Gustavo Marin is EVP, Head of Latin America at First Data, Prepaid and Payroll Card Business at Comdata, [email protected]. [email protected], www.firstdatacorp.com.br.

© 2019 HSN Consultants, Inc. THE NILSON REPORT JANUARY 2019 / ISSUE 1145 / THE NILSON REPORT 3 © HSN Consultants, Inc. 2017 THE NILSON REPORT JANUARY 2019 / ISSUE 1145 / THE NILSON REPORT 2 Investments & Acquisitions—December 2018

Below is a list of 43 acquisitions, joint ventures, transactions totaled $1.22 billion. The $252-million and investment transactions (angel, seed, venture, Visa/Earthport deal was the largest in December. and other types) that occurred in 12 countries in That acquisition was valued slightly higher than the December 2018. The U.S. led with 19 transactions, $250-million investment in software company Plaid, followed by 12 in Europe, 6 in Asia, 3 in Africa, 2 in led by Kleiner Perkins. Canada, and 1 in Latin America. The monetary values of 15 of the transactions Prior issues: 1144, 1142, 1140, 1139, 1137, 1135, 1133, were not disclosed. The disclosed values of 28 1131, 1129, 1127, 1125, 1123

Investments & Acquisitions December 2018

Company Buyer/Investor Amount Country Company Buyer/Investor Amount Country (mil.) (mil.) B2B PAYMENTS MERCHANT ACQUIRING (CONTINUED) SourceDay Series A 1 $6.5 U.S. UMS Banking Celero Commerce 10 * U.S. YayPay Series A 2 $8.4 U.S. MOBILE PAYMENTS BLOCKCHAIN CityCash series unknown 11 * India GrainChain series unknown 3 $2.5 U.S. Springboard Retail debt fi nancing 12 $0.4 U.S. CARRIER BILLING UnDosTres Series A 13 $6.5 Danal Boku 4 $112.0 So. Korea Viva Republica (Toss) Series E 14 $80.0 So. Korea CREDIT BUREAUS MONEY TRANSFERS Compuscan Experian 4 * So. Africa Earthport Visa 4 $252.0 U.K. CREDIT CARDS Monito Series A 15 $2.5 Catella Bank Advanzia Bank 4 * Luxembourg TransferGo Series B 16 $7.6 U.K. CRYPTOCURRENCY BetterCoins Coinify 4 * Denmark B-Social seed funding 5 $4.1 U.K. Bitnomial venture round 5 $7.5 U.S. Earnin Series C 17 $125.0 U.S. BlockEQ Coinsquare 4 $8.9 Canada TotallyMoney venture round 18 $36.9 U.K. ECOMMERCE PREPAID PRODUCTS Infi beam Suvidhaa 6 $5.4 India Swych UAE Exchange 19 * U.S. FOREIGN EXCHANGE Titres Cadeaux Natixis 4 * France Devisenwerk TransferMate 4 * Switzerland PROCESSING LENDING Instant Global Paytech undisclosed round 20 $0.8 India Cross River Bank venture round 7 $100.0 U.S. Nordic API Gateway venture round 21 $6.0 Denmark Jumo venture round 8 $12.5 So. Africa OpenNode seed funding 22 $1.3 U.S. MobiKwik Series E 9 $3.8 India PPRO Financial private equity round 23 * U.K. LOYALTY SECURITY Outside Networks PDI 4 * U.S. Pindrop Series D 24 $90.0 U.S. ReUp Lightspeed 4 * Canada angel funding 5 $2.0 U.S. MERCHANT ACQUIRING SOFTWARE Alliance Financial (eXPO) AppTech 4 * U.S. Flux Systems Series A 25 $7.5 U.K. Blue Parasol Priority Technology 4 * U.S. Plaid Series C 26 $250.0 U.S. Direct Connect Priority Technology 4 * U.S. Propel Series A 27 $12.8 U.S. Interpay Emergent Technology 4 * Ghana ShopKeep Series E 28 $65.0 U.S. Terms not disclosed. 1 Including Silverton Partners. 2 Led by Information Venture Partners. 3 From Medici Ventures. 4 Acquisition. 5 Investors not disclosed. 6 Purchased 5% equity stake. 7 Including CreditEase Fintech Investment Fund. 8 From Odey Asset Management. Including et1 UEPS. 10 Purchased undisclosed equity stake. 11 From FIO Paytech. 12 From Lighter Capital. 13 Including InnoCells (Banco Sabadell). 14 Led by ibbit Capital and leiner Perkins. 15 Led by Tamedia. 16 Led by Vostok Emerging Finance. 17 Including DST Global. 18 Led by Elliott Advisors. 1 Purchased equity from CerraCap Ventures. 20 From Infi beam. 21 From DB and Danske Bank. 22 Led by Draper Associates. 23 From orthleaf Capital Partners. 24 Led by Vitruvian Partners. 25 Led by e.ventures. 26 Led by leiner Perkins. 27 Led by yca Partners. 28 Led by Tribeca Venture Partners. © 2019 The Nilson Report

4 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive MoreFun POS Terminal

The MF919 POS terminal shown reads barcodes MoreFun shipped here from Fujian MoreFun and is available its first point-of- Electronic Technology features a with optional sale terminals in 5-inch IPS (in-plane switching) 0.3 megapixel 2015. Last year, color display with 720 x 1280 resolution. The it shipped more pixels and a multipoint capacitive 5 megapixel than 2.5 million touchscreen. It uses the Android autofocusing POS terminals. 5.1 operating system, which can be camera on Most went to updated to Android 7.0. The NFC the back customers in China. card reader supports ISO 14443 comes with MoreFun also shipped type A/B, Mifare card, Felica, an optional more than 2.3 million and qPBOC L1 & L2 standard. flashlight. card reader dongles for Certifications include EMV Level The MF919 smartphones and tablets 1 and 2, PCI PTS 5.0, Mastercard has built-in last year to customers in Paypass, Visa Paywave, TQM, CE, GPS that China and other markets. and FCC. Audio supports voice supports Yuki Zhang Ying is playing and recording. A-GPS, International Sales Team Leader at Fujian MoreFun Also shipped more than 2.3 mil. Electronic Technology Co., Ltd. in Fuzhou, Fujian, China, card reader dongles last year. Glonass, 86 (591) 8820-3260, and Compass. [email protected], The MF919 includes one Its built-in high-speed thermal www.morefun-et.com. micro USB 2.0 port. It has two printer supports graphics printing. cameras. The camera on the front

EMV Solution for Gas Pumps

Merus Capital, a Silicon Valley-based early-stage Gas Pos offers a POS system integrated with venture capital firm, has invested $1 million in Gas existing hardware and software. It is a hybrid cloud- Pos to execute a plan based service that utilizes a dashboard. All data is for gas pump upgrade gathered at the location and then pushed to the cloud. technology that There is no capital expenditure for the retailer. independent retailers Instead, they will pay $149.95 per month 2.5% need to become and 10¢ per transaction. EMV-compliant. Gas Pos estimates that 80% to 90% of all Independent gasoline stations account for 55% to independent gasoline retailers are candidates for 60% of the 120,000 total outlets in the U.S. its products. EMV regulations call for all gas stations to install chip-reading pumps by October 2020. However, the Independents account for 55% to per-station costs are high. Replacing automated fuel dispensers (AFDs) 60% of total outlets in the U.S. can cost $25,000 to more than $150,000 for each retail location depending on the number of pumps. Currently, Gas Pos is facilitating $1 million a Locations owned by gasoline marketers ExxonMobil, month in card payments and is growing at 17% Shell, Chevron, etc. can be expected to be EMV- month-over-month. compliant on time. Joshua Smith is CEO at Gas Pos in North Little Rock, However, the financial hit on smaller independent Arkansas, (205) 948-7523, [email protected], retailers can be expected to result in tens of www.gaspos.co. thousands of locations missing the deadline.

© 2019 HSN Consultants, Inc. THE NILSON REPORT JANUARY 2019 / ISSUE 1145 / THE NILSON REPORT 5 JCB QR Code Payments in Asia

JCB cardholders can use their smartphones to scan flower markets, and taxis. It expects to expand the QR code displayed at the merchant its merchant base for QR code payments to more to make payments in using the Origami Pay than 3,000 locations. JCB cardholders can also mobile app (see issue #1142). JCB is an make contactless payments investor in Origami. Cardholders in in . Japan can also make NFC-based Apple In Vietnam, JCB cardholder Pay contactless mobile payments. customers of Sacombank Pay who use Now JCB International has launched the bank’s mobile app can choose their an EMV-compliant QR code-based JCB card as a source of funds for QR payment service with banks in Taiwan code payments. Sacombank will offer and Vietnam. Contactless payments, the QR code payment service at more including some that are QR code-based, are already than 2,000 merchants. used in both countries. Bank SinoPac in Taiwan and JCB cards are issued in 22 countries and Sacombank in Vietnam are the first banks to offer the territories. Cards are accepted at more than 33.5 JCB QR Code Payment service. Both banks issue JCB million locations worldwide. credit cards and acquire JCB transactions. Daisuke Sakurai is Executive Vice President, Business SinoPac aims the service at merchants who Development at JCB in Tokyo, Japan, 81 (3) 5778-8373, typically accept only cash, including fish markets, [email protected], www.global.jcb/en/.

Pine Labs Merchant Services from page 1... transactions to Pine Labs, which sales. When lending to smaller received two funding rounds then routes them to acquiring merchants, Pine Labs and partners totaling $200 million last year. banks. Payments can be initiated share the risk. Sixty percent of Pine Pine Labs’ net after allowing for Labs’ clients are Tier 1 merchants. secondary sales was $140 million, Those large merchants all of which now sits in the bank. handle 80% of all Expansion plans for 2019 and card payments 2020 include signing merchants in India. in Thailand, Indonesia, and the by cards, QR codes, or phone- A loyalty-services platform United Arab Emirates. Within number billing. Pine Labs also operated by Pine Labs is used by India, where the company already handles mobile payments from clients including Starbucks. The connects to 75% of the country’s apps such as PhonePe and company also offers a prepaid 80,000 Tier I merchants, Pine Pay when merchants are not rewards card called Pine Perks, Labs will expand by approaching directly signed to acceptance deals usable at all Pine Labs’ merchants. Tier II and Tier III merchants. by the wallet provider. Clients for this business-to- Many of those smaller merchants In addition to payments, Pine business product include telecoms. will use a mobile app in their Labs’ platform also facilitates India experienced growth in smartphones to handle bill business to merchants and transactions in the payments in addition to purchases installment loans to cardholders 17% range last making in-store purchases. year after the ...connects to 75% of the coun- Installment loans are handled government try’s 80,000 Tier I merchants. by connecting cardholders to credit required and debit card issuers that handle two-factor all underwriting. Merchant loans authentication, causing consumer initiated by cards, QR codes, and are underwritten by Pine Labs confidence to rise. phone-number billing. and nonbank finance company Pine Labs’ own growth last Vicky Bindra is CEO at Pine Labs Pvt. partners. Pine Labs integrates year included an expansion into Ltd. in Bangalore, India, 91 (180) with a merchant’s billing system, , where it connects to 0103-9765, vicky.bindra@pinelabs. which gives a full picture of all multiple acquirers. The company com, www.pinelabs.com.

6 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive Citi Rewards+ Credit Card

Every purchase made with the 4. The no-annual-fee card also three months of opening an Citi Rewards+ Mastercard credit gives cardholders 10% of their account. Those bonus points points back for the first 100,000 are redeemable for a prepaid ThankYou Points redeemed card with $150 in value. Citi is per year. the second largest U.S. general Cardholders earn 2 purpose credit card issuer and ThankYou Points per $1 the largest issuer of Mastercard spent at supermarkets and credit cards. gas stations (on up to $6,000 The Citi Rewards+ credit in purchases per year) and 1 card replaces the Citi ThankYou ThankYou Point per $1 spent on Preferred Card, which has stopped all other purchases. accepting applications. card rounds up to the nearest 10 Other features of the card Chris Fred is Head of Proprietary ThankYou Points. This means if include 15,000 ThankYou Products at Citi in New York, (845) cardholders spend $4 they earn Points after spending $1,000 781-6257, christopher.fred@citi. 10 ThankYou Points instead of in purchases within the first com, www.citi.com.

Fingopay Vein ID Biometric Authentication from page 1... from working or an accident. It is also true that while fingerprints are very useful for identification, they are not a foolproof biometric for maximum security because they are external and can be replicated and because systems can be spoofed. present offers before the cardholder chooses a Vein ID technology can’t be spoofed by a bot because payment method. a living human being’s hemoglobin is required to , the national debit network in Denmark absorb the infrared light to capture a vein pattern. managed by Nets, tested Fingopay beginning in Hitachi, the Japan-based technology vendor, March 2018 for eight weeks. That test concluded, but developed the ability to read veins for identification, most of the 1,000 students participating wanted to anticipating an opportunity to make money in the continue using the technology. Individual merchants offer it using Fingopay enrollment devices. It takes 200 milliseconds to catch Unlike the fingerprint authentication in Apple Pay, which occurs within each iPhone, Fingopay’s the vein identification. verification occurs in the cloud. The company says it takes 200 milliseconds to catch the vein identification and 1 second to match it in the cloud and trigger medical industry. However, the medical market wasn’t a receipt for a purchase. All vein identification is as lucrative as originally believed. Hitachi did find anonymized. Fingopay does not store any biometrics. a use for vein ID in Japan to secure transactions at The Fingopay database is parallelized into multiple 80,000 ATMs in combination with a PIN. pools to deliver the quick match. The factors for Fingopay in the U.K. believes there is a market pools include time of day and merchant location. The for a vein ID system in card payments. It has created company is continuing to invest in refining how it can mobile and kiosk-based systems for enrollment work at scale. of cardholders who could link multiple cards to Intesa Sanpaolo in and Santander Bank their vein identification to secure transactions. Polska (formerly Bank Zachodni) in Poland will test The company also believes retailers could use its Fingopay this year. Hitachi offers Fingopay in Japan. technology to replace loyalty cards. Fingopay’s Nick Dryden is CEO at Fingopay in London, U.K., system also includes software to manage loyalty and 44 (7498) 060-091, [email protected], www.fingopay.com/sthaler.

© 2019 HSN Consultants, Inc. THE NILSON REPORT JANUARY 2019 / ISSUE 1145 / THE NILSON REPORT 7 Mastercard Streamlines Corporate Logo

Mastercard is dropping its name from its corporate brand refresh in 2016 made the “c” lowercase, de- logo and will use only the interlocking red and emphasizing the word “card.” yellow circles at acceptance locations Eliminating the word in the physical and digital worlds. Mastercard altogether is a further The interlocking circles have been acknowledgment that in coming the central feature of the brand years the Mastercard network will since 1968 when Mastercard was include an increasing number known as Master Charge: the of consumer and commercial Interbank Card. payments initiated not by plastic In 1979, the wording was but by phones, computers, and simplified to MasterCard—the IoT devices. Also, in a marketplace internally capitalized “C” reflecting a where a diminishing amount of space is trend that became popular during the ‘70s and ‘80s allotted to any single logo, removing a name gives called camel case and led to producing names like a symbol alone more space to stand out—a strategy CompuServe, VisiCalc, and NetWare. The Mastercard that has already worked for brands like Nike, Target, and Apple.

Self-Sovereign Identity Using DLT from page 1... administrator or centralized one-time passwords, or any other U.S., the U.K., Serbia, and Russia, data storage. A start-up called means of security commonly include experts in cryptography, Evernym took those attributes and found with online transactions. blockchain, digital privacy and created a new model for validating Entities can share different types trust, and DLT. of data, including Barclaycard, the largest credit identity information, card issuer in the U.K. based on in a private and outstanding receivables, recently decentralized way. joined Evernym’s 12-month The Sovrin Accelerator Program to test the use the identity of individuals, Foundation is currently comprised of SSI. For payments, particularly organizations, and devices while of more than 50 businesses called ecommerce, SSI offers the promise preserving privacy and, if required, stewards, including IBM, Cisco, of considerable reductions anonymity. The concept is referred Absa, Swisscom, NEC, InfoCert, in fraud. to as self-sovereign identity (SSI). and Digicert. Individuals and organizations The foundation Barclaycard has joined Evernym’s maintain control of their identities is actively 12-month Accelerator Program. independent of any intermediary seeking new and use SSI to prove any aspect participants of their identity at any time from worldwide in multiple sectors, Other companies in the any place. including health organizations, program include pharmaceutical In 2016, Evernym turned over banks, nongovernmental firm Novartis, the International all designs and code to its DLT organizations, and Red Cross, and Irish Life model for self-sovereign identity insurance companies. Assurance. Participants get a set of to a not-for-profit entity called the U.S.-headquartered Evernym, tools to build their own products Sovrin Foundation, which governs which has raised $23 million and services. They can also connect the Sovrin Network based on open in funding, now operates as with the other participants. source code and open standards. a for-profit company selling Recent proof-of-concept tests Any person, organization, or digital products and services that on the Sovrin Network have device on the Sovrin Network leverage the Sovrin Network. included ticketless airline flight communicates with others without The company’s more than 80 bookings, border crossings without usernames and passwords, employees, who are located in the passports, car rentals, processing

8 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive of refugees, and governments in Canada worked with IBM are developing MyCUID using issuing credentials to citizens. and Evernym to reduce the time Evernym technology. The provincial governments it takes to open an account to Jamie Smith is Strategic of Ontario and British Columbia less than a minute, down from Engagement Director at Evernym, in Canada have used the Sovrin more than four minutes. Credit Inc. in London, U.K., 44 (754) 537- Network to issue credentials to unions in the U.S., through 5945, [email protected], more than 1.4 million businesses their jointly owned blockchain www.evernym.com. to facilitate registrations, permits, technology company CULedger, and licenses. Alberta Trust Bank

Visa Wants B2B Cross-Border Payments Company from page 1... money transfer companies, and other businesses. regulated and governed similarly to banks and money Earthport, which is headquartered in London, transfer companies. It is a member of Swift. maintains offices in New York, Miami, , Earthport customers include Xoom, WorldRemit, and Dubai. The company is regulated by the U.K.’s Japan Post Bank, , Hyperwallet, and Bank of Financial Conduct Authority (FCA). Earthport is America Merrill Lynch. The company positions itself as a less-expensive option than traditional correspondent bank networks Money Transfer Deals 2018 participating in moving cross-border business-to- business (B2B) payments. Amount Company Buyer/Investor (mil.) Country Earthport maintains local bank partnerships with access to local clearing houses covering 88 Airwallex Series B 0.0 Hong ong countries. It can facilitate payments to 200+ countries Avenues Payment ICICI 1. India and territories. Azimo Series C 20.0 .. Earthport has used Ripple’s distributed ledger Convoy Payments Currency Fair ¹ Hong ong technology in its blockchain-based B2B money transfers since 2015. * . .S. Shareholders of Earthport include Oppenheimer Earthport Visa ¹ 22.0 .. Funds, International Finance Corp., Schroeder Eko India * 1. India Investment Management, and Wellington Eurogiro Inpay ¹ Denmark Management. Oppenheimer, Earthport’s largest shareholder, has agreed to the acquisition. However, InstaReM Series C 20.0 Singapore shareholders who account for a collective 7.8% are Inward International Ebix ¹ $7. India withholding their approval, hoping there will be LianLian * 10.0 China a better offer. Monito Series A 2. Switzerland PaySend * 20.0 .. Competitors include blockchain- Rebtel Series B .0 based money transfer companies. Resolut Series C 20.0 .. Satispay Series B 11. Italy The Earthport transaction was Visa’s second Saxo Payments EQT ¹ 00.0 Denmark business-to-business acquisition in 2018. In February, TransferGo Series B 7. .. it purchased Fraedom, also based in the U.K. Fraedom TransferMate ING ² 2. is a B2B expense management company whose TransferZero BitPesa ¹ Spain invoice payment feature supports Visa’s IntelliLink Wallex seed funding Singapore Spend Management platform for commercial card programs. ot disclosed. Acquisition. Purchased minority stake. © 201 The Nilson Report Prior issues: 1127, 1122, 1119, 1111

© 2019 HSN Consultants, Inc. THE NILSON REPORT JANUARY 2019 / ISSUE 1145 / THE NILSON REPORT 9 IATA Financial Services from page 1... year through the IATA Financial IATA Pay is the is a direct participant in Settlement System. Those association’s latest financial Chaps, one of the largest payments included services high-value from travel agencies to airlines, initiative. payment payments between airlines, It is aimed systems in payments by freight forwarders at consumers the world. for shipments of cargo, and who buy tickets The IATA Pay payments to airports and air directly from an test was possible navigation providers. airline website. under the U.K.’s The IATA helps airlines Transactions are Open Banking lower payment acceptance direct debits initiated from the framework that, along with the costs in multiple ways. The on- consumer’s bank account and European Commission’s second time settlement rate of IATA’s deposited into the bank account Payment Services Directive Billing and Settlement Plan for of the airline. IATA Pay will offer (PSD2), encourages faster and lower costs to more secure access by consumers airlines versus to their funds on deposit. ...will be tested in Germany in card payments IATA Pay will be tested in March 2019 with Deutsche Bank. as well as a Germany in March 2019, with higher level of Deutsche Bank acting as the security. Airlines payment initiator. The IATA will 400 participating airlines is should also experience faster compare the bank’s service versus 99.999%. The IATA Financial cashflow and fewer lost sales. ipagoo’s to see which kind of third- Gateway consolidates different The first IATA Pay ticket party provider partner it prefers to sales payment processes across purchases took place in December support rollout of IATA Pay. various distribution channels 2018 in the U.K. Cathay Pacific, Jose Antonio Rodriguez is Director and networks. IATA EasyPay is Scandinavian, and Emirates were of Operations, Financial and a recently launched business-to- among the airlines participating in Distribution Services at the IATA business wallet product available the test of IATA Pay. Transactions in Geneva, Switzerland, 41 (22) to accredited travel agents for the were facilitated by ipagoo, a 770-2525, [email protected], purchase of tickets through IATA’s nonbank payment service provider. www.iata.org. Billing and Settlement Plan. Ipagoo is the first nonbank payment service provider that Prior issues: 873, 620

Ingenico ePayments in Russia from page 1... providers (PSPs) help merchants increase sales a Russia-based information technology and outside their native country. To boost sales in gateway provider. Russia, global merchants want access to , the Global merchants connect to Ingenico through country’s domestic-only a single link to reach the four local acquirers. card program. Ingenico has a routing engine Ingenico recently that identifies the Mir card and became the first pushes the transaction to the international PSP to card-issuing bank, which makes offer merchants the them on-us transactions. That opportunity to accept payments process increases by 2% to 3% the from the 47 million Mir cards in circulation as on-us authorization rates for merchants domestic payments, which improves authorization and it lowers per-transaction costs. rates. It did so by connecting to acquiring banks Mir cards can only be authorized by a domestic in Russia—Sberbank, VTB, Alfa Bank, and Tinkoff bank. Of the 47 million Mir cards in circulation, more Bank. Ingenico reaches those acquirers through than 30 million have been issued to government

10 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive workers. More than 3 million Mir cards are expected Having a payment authorized in Russia by a local to come into circulation each month this year. acquirer helps global merchants with issues including Before setting up the link with the domestic value-added tax, repatriation of funds remitted gateway provider, Ingenico, which supports more locally, and domestic laws regarding storage of than 500 large global merchants, had been processing personal data. Ingenico focuses on authorizing travel global card payments initiated in Russia using non- industry, video game, and retail merchants, including Russian acquirers to handle authorizations. Other China-based marketplaces, interested in reaching PSPs and acquirers that handle transactions initiated Russian consumers. by global brands in Russia do the same. If they want Mike Goodenough is Head of Strategic Initiatives at to handle Mir card transactions, they set up a link to Ingenico in Hoofddorp, , 31 (0) 6301-58185, individual banks. [email protected], www.ingenico.com.

Card Transactions Projected Worldwide from page 1... transactions are generated by Hipercard, , J-Debit, KNet, the first time. The Asia-Pacific consumer and commercial credit, Mada, Mir, , Nyce, region is projected to reach debit, and prepaid cards. Global Pagobancomat, PostFinance, Pulse, 54.03% of the worldwide total by brands are Visa, Mastercard, Redcompra, RuPay, Samsung 2027 when purchase transactions UnionPay, , Card, Shetab, SmartPay, Star, , are projected to be more than Discover, JCB, and Diners Club. and others. Not counted in that 882.08 Among Asia–Pacific will account for billion figure are transactions the global 54.03% of the world total by 2027. generated by more than 60 brand cards, domestic-only brands that those issued function within single countries. in the Asia–Pacific region triple those generated by the U.S., They include Accel, Allatm, generated 102.50 billion purchase reaching 476.56 billion. This ATH, Bancontact/Mister Cash, transactions in 2017, accounting includes QR code-based payments BankAxept, Banricompras, BC for 34.68% of the worldwide made by mobile phones. Card, Cartes Bancaires, Dankort, purchase transaction total. This Cards issued in the United eCash, epal/, , , surpassed the for States generated 95.11 billion purchase transactions in 2017, accounting for 32.18% of the worldwide purchase transaction Projected Growth of total. Its market share is projected Purchase Transactions to drop to 17.42% by 2027, even 2017 though the region is expected to Worldwide have payment card transactions 2027 grow to 153.62 billion. Cards issued in Europe generated 65.70 billion purchase transaction in 2017, or 22.23% of the worldwide total. Europe’s share is projected to drop to 18.22% of the worldwide total by 2027, even U.S. Canada Latin Europe MEA Asia America Pacic though the region is projected 2017 (bil.) 95.11 5.68 20.24 65.70 6.35 102.50 to reach 160.76 billion card transactions, about 7 billion more 2027 (bil.) 153.62 12.94 46.29 160.76 31.91 476.56 than the United States. 10-yr. Change +61.5% +127.8% +128.7% +144.7% +402.5% +364.9% Cards issued in Latin America © 2019 The Nilson Report generated 20.24 billion purchase > see p.12

© 2019 HSN Consultants, Inc. THE NILSON REPORT JANUARY 2019 / ISSUE 1145 / THE NILSON REPORT 11 © 2019 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.

Card Transactions Projected Worldwide from page 11... transactions in 2017, a 6.85% share of the worldwide worldwide total when transactions are projected to total. This share is projected to drop to 5.25% in 2027 reach 31.91 billion, including QR code-based mobile when purchase transactions are projected to reach phone payments. 46.29 billion. Cards issued in Canada generated 5.68 billion Cards issued in the Middle East and Africa purchase transactions in 2017, a 1.92% share of the totaled 6.35 billion in 2017, accounting for 2.15% of worldwide total. This share is expected to fall to 1.47% the worldwide total. Middle East-Africa is the only in 2027 when transactions are projected to reach region besides the Asia-Pacific region whose share 12.94 billion. is projected to grow, reaching 3.62% of the 2027

Credit Card Outstandings in the U.S. from page 1... spending by U.S. businesses. All finance charges, the card debt on Visa, consumer and commercial card debt component of outstanding Mastercard, American Express, purchase volume (spending for receivables, has declined and Discover cards as a percentage goods and services) on credit cards almost every year over the last of purchase volume on those credit creates debt. However, neither two decades. consumer spending motivated by Commercial Card debt was only 62.6% the size rewards nor commercial card credit card spending for businesses spending grew of student debt in 2018. contributes much to revolving from 24.4% credit card balances subject to of all general purpose credit cards peaked in 1996 at 64.7% and finance charges. card spending in 2007 to 29.8% slipped to an all-time low of 26.5% The percentage of total in 2017. at the end of 2018. Even in 2009, credit card debt subject to when purchase volume fell 9.3% in response to the recession, card Outstandins as a Percentae o Purchase olue debt fell 10.4%. Since the Great Recession of 2008, card debt has on .S. eneral Purose Cards 1990–2018 grown 13.5% while card spending has grown 90.0%. Card debt of $979.08 billion at year-end 2018 was only 62.6% the 60.9 64.7 57.8 size of outstanding student loan 54.0 49.3 debt of $1.564 trillion. 44.4 Student loan debt is much 32.0 28.1 26.5 more of a liability in the American economy because it largely encumbers younger adults. By comparison, credit card debt is spread out over the entire 131211100908070605040302010099989796959493929190 1817161514 adult population. 201 The ilson eport

David Robertson, Publisher January 17, 2019

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