Quick viewing(Text Mode)

Middle East/Africa Payments Over the Visa Network and Expand Paypal’S Reach Into In-Store Sales in the U.S

Middle East/Africa Payments Over the Visa Network and Expand Paypal’S Reach Into In-Store Sales in the U.S

FOR 45 YEARS, THE LEADING PUBLICATION COVERING SYSTEMS WORLDWIDE JULY 2016 / ISSUE 1091

Visa/PayPal Partnership A new agreement between Visa and PayPal will send more card Middle East/Africa over the Visa network and expand PayPal’s reach into in-store sales in the U.S. PayPal will no longer solicit consumers Purchase Volume 2015 vs. 2014 > see p. 12 Market Shares Mastercard to Purchase Mastercard will acquire 92.4% of U.K.-based real-time payments 57% 39% 3% 1% specialist VocaLink for $920 million (£701 million). That company’s current shareholders could receive up to an additional > see p. 6 Visa Mastercard Amex Diners

Gemalto/Worldline Mobile Card Partners Change in Worldline provides end-to-end account processing services to Basis Points +63 +5 payment card issuers in Europe and Asia. Through a partnership with Gemalto, Worldline will support card issuer participation in –52 –17 > see p. 9 Installment Payments for Mobile Web Purchases Providing consumers the opportunity to make installment Purchase Volume ($Bil.) payments for items that range in value from $100 to more than $10,000 is the business of Affirm, an online acceptance mark. ‘14 153.5 Visa• ‘15 175.3 > see p. 10 Mastercard• ‘14 102.6 Masterpass Goes Omnichannel ‘15 120.2 • ‘14 7.2 Since Masterpass, Mastercard’s digital payment service, was Amex ‘15 7.8 © 2016 launched in 2013 for ecommerce, it has grown to be a merchant ‘14 3.1 The Nilson Report Diners• ‘15 3.7 acceptance mark available at 270,000 online and in-app sellers > see p. 5 Top 50 U.S. Prepaid Card Issuers Middle East/Africa Cards — 2015 The 50 largest issuers of Visa, Mastercard, and Discover brand Visa, Mastercard, , and Diners Club general purpose prepaid cards in the U.S. accounted for $145.03 brand credit, debit, and prepaid cards issued in the Middle billion in purchase volume at merchants in 2015, an increase of East and Africa region generated $839.93 billion in total > see p. 8 volume in 2015. Total volume, which includes purchases for goods and services combined with cash transactions at Top U.S. Consumer Credit/Debit Issuers ATMs and over the counter at branches, increased 14.3% The largest U.S. issuers of Visa and Mastercard credit and debit/ from 2014. Purchase volume for goods and services only prepaid cards based on consumer purchase volume in 2015 are from these general purpose card brands grew 15.2% to shown on the table on page 7. Purchase volume does not include $306.98 billion. Cash volume of $532.95 billion accounted for > see p. 7 > see p. 10

INSIDE 2 – 4 Fast Facts CHARTS 7 Largest U.S. Issuers of Consumer 10 Purchase Transactions on Cards 5 Kerv Visa and Mastercard Cards — 2015 Issued in Middle East/Africa Ring 8 Prepaid Cards in the U.S. — Top 11 Middle East/Africa General Purpose 6 Mastercard’s New Look Issuers in 2015 Cards 2015 vs. 2014

© 2016 HSN Consultants, Inc. THE NILSON REPORT VISIT US ONLINE AT WWW.NILSONREPORT.COM VERIFONE has launched Curb, a ride-hailing app for taxis TABLESAFE’S patented RAIL 2 payment system for in New York, Philadelphia, Miami, Ft. Lauderdale, San Jose, restaurants has received PCI PTS certification. RAIL accepts and the Washington, D.C. area. Now live in 65 cities, Curb mag-stripe, EMV (chip and signature, and chip and PIN), connects more than 50,000 taxis and 100,000 professional NFC (, Android Pay), QR/UPC code, and payment taxi drivers. Amos Tamam is SVP, Global Taxi Systems at card network applications. Steve McKean is Verifone, (917) 359-1984, [email protected], President at Tablesafe, (206) 516-6100, smckean@ www.gocurb.com. tablesafe.com, www.tablesafe.com.

FIFTH THIRD BANCORP has joined the Network, WEX, provider of corporate payment products, has the world’s largest surcharge-free ATM network, adding concluded an agreement with global insurance technology FAST 43,000 new ATM locations across the United States for provider Aquarium Software, which specializes in niche the ’s customers. Chad Borton is EVP and Head of the sectors including pet, travel, and gadget. WEX virtual pay-

FACTS Consumer Bank at Fifth Third Bancorp, (513) 534-0630, ment products are available in 45 currencies and are used in [email protected], www.53.com. Bill Knoll is EVP and 190 countries. Renata Caine is VP, Virtual Payments at WEX, JULY 2016 Managing Director at Allpoint, (832) 308-4259, bknoll@ (650) 954 8154, [email protected], ISSUE 1091 allpointnetwork.com, www.allpointnetwork.com. www.wexvirtualpayments.com. ELAN FINANCIAL SERVICES, a division of U.S. Bank, SEQUENT SOFTWARE has received Payment Card No paid provides ATM and debit processing to and credit Industry Data Security Standards (PCI-DSS) Version 3.1 for advertising. unions. It has launched a suite of mobile services that allow Service Providers Level 1 certification. Lance Johnson is No sponsored cardholders to control how their can be used, Chief Security Officer at Sequent, (650) 241-3765, content of including turning off their card if it is misplaced, setting [email protected], www.sequent.com. location controls to indicate where the card can be used, re- any kind. Ever. FIRST DATA has given Class B+ certification on its Omaha stricting online purchases, setting spending restrictions, and platform to payment acceptance software from Ingenico more. Cullen is President at Elan Financial Services, It is never Group that supports EMV Tip Adjust and Common AID for (630) 443-3238, [email protected], www.elanfs.com. permissible for PIN-based transactions. Bernie Frey is SVP of Indirect Sales, subscribers to THE U.S. PAYMENTS FORUM is the new name for US at Ingenico Group, (678) 456-1822, bernie.frey@ forward or print the EMV Migration Forum. The U.S. Payments Forum will ingenico.com, www.ingenico.com. this issue. Doing address payment technologies that protect the security of, BANK OF THE WEST, the 25th largest debit card issuer so violates and enhance opportunities for, payment transactions within and 57th largest issuer on the Mastercard and the U.S., including EMV chip technology, tokenization, copyright laws. Visa networks, will offer cardholders a mobile wallet in card-not-present transactions, point-to-point encryption, partnership with Mastercard. The bank will also give card- and mobile and contactless payments. Membership includes holders to Masterpass, Mastercard’s global digital global and domestic payment networks, card issuers, pay- payment service. Paul Appleton is EVP, Consumer Banking ment processors, merchants, acquirers, vendors, and others. Product and Payment Solutions at Bank of the West, Randy Vanderhoof is Director, (609) 587-4208, rvanderhoof@ (925) 942-8300, [email protected], us-emvforum.org, www.emv-connection.com. www.bankofthewest.com. Conferences & Seminars

Mobile Payments Conference 2016 (MPC): 2016 WSAA Annual Conference: September SCA – Security of Things 2016: October 18- August 29-31, 2016. The Renaissance Chicago 14-15, 2016. The Hyatt Regency Scottsdale 19, 2016. The Hilton Rosemont/Chicago O’Hare, Downtown Hotel, Chicago, Illinois. Estimated Resort & Spa at Gainey Ranch, Scottsdale, Rosemont, Illinois. Estimated attendance: 300- attendance: 300. Cost for the three-day Arizona. Estimated attendance: 1,000. Cost for 350. Cost for the two-day conference is $795 conference is $899 until August 28 ($999 after the two-day conference is $99. Contact until August 31, then $895 until October 8, then that). Subscribers to The Nilson Report will Xavier Ayala, President & CEO, (707) 445-5401, $1,045 after that. Subscribers to The Nilson receive a 20% discount. (Use code [email protected]. Register at Report will receive a 20% discount. (Use MPC16NIL.) Contact Robin Albright at www.westernstatesacquirers.com. code NILSDISC.) Contact Bryan Ichikawa MP Associates, (303) 530-4562, robin@ at SCA, (703) 582-7862, bichikawa@ mpassociates.com. Register at smartcardalliance.org. Register at www.mobilepaymentconference.com. www.sca-securityofthings.com.

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 8th Edition

SURETAP a mobile payment venture in Canada of mobile network operators (MNOs) Bell, Telus, Koodo, and Virgin, has been shut down. Softcard in the Figures U.S. and Semble in New Zealand, mobile payment ventures of MNOs, also include shut down this year.

cards in 1,050 AMERICAN EXPRESS SERVE, a reloadable prepaid account that offers circulation free direct deposit, online bill pay, and ATM withdrawals (24,000+ MoneyPass and spending Card Issuers locations), will be used by Marketing Innovators, a global incentive company Credit 275 to disburse payments, commissions, incentives, rewards, and expense reim- bursements. Stefan Happ is EVP, Alternative Payments at American Express, & Debit Merchant (212) 640-2000, [email protected], www.americanexpress.com. Card Issuers AcquirersRichard Blabolil is President at Marketing Innovations, (847) 696-1111, in 115 [email protected], www.marketinginnovators.com. Countries “CONTACTLESS EMV PAYMENTS: BENEFITS FOR CONSUMERS, from all World WorldwideMERCHANTS AND ISSUERS” is a new white paper created by the Smart Regions Card Alliance’s . It can be downloaded at http://www.smartcardalliance.org/publications-contactless-emv-payments- benefits-for-consumers-merchants-and.issuers/.

Asia/Pacific, a 2016 Nilson Report Publication manner is a copyright violation subject to substantial fines. substantial to subject violation copyright a is manner United States, any in document this of portion any of dissemination or reproduction allowing or Reproducing www.nilsonreport.com/specialreport. REPORT, NILSON THE 2016 Inc. Consultants HSN © IDSCAN.NET, provider of cloud-based ID scanning applications called VeriScan Online and VS Max, now offers fully integrated payment processing. Europe, Canada Businesses can process card payments and automatically capture and Latin America, Middle East/Africa them to the purchaser’s ID. It allows two separate actions to be processed as one entry. Denis Petrov is CEO, (504) 434-0222, [email protected], Merchant Acquirers in 76 Countries www.idscan.net.

from all World Regions CAP COM FEDERAL CREDIT UNION will use Vantiv to provide debit, credit, and prepaid card account processing. The credit union has 126,000 members. Bill Hampton is General Manager, Financial Institution Services at Order Today Vantiv, (913) 254-7781, [email protected], www.vantiv.com. www.nilsonreport.com/specialreport Diana VanAmerongen is Chief Banking Officer at CAP COM FCU, (518) 458-2195, [email protected], www.capcomfcu.org.

ELAVON, the 5th largest U.S. acquirer, has renewed its merchant payment ACI WORLDWIDE’S SaaS-based UP eCommerce Payments provides processing agreement with Capital Bank, which operates 152 branches in the merchants worldwide with more than 350 alternative payment methods and Southeast U.S. Guy Harris is President, North America, at Elavon, connections to acquirers in over 160 countries, as well as plug-ins to all major (678) 731-5070, [email protected], www.elavon.com. Zahid Afzal is ecommerce shopping carts. Also included is fraud fighting capabilities. Chief Technology and Operations Executive at Capital Bank, (919) 645-0868, Mike Braatz is Chief of Product Officer, (781) 370-3600, michael.braatz@ [email protected], www.capitalbank-us.com. aciworldwide.com, www.aciworldwide.com. ALLIANCE DATA CARD SERVICES will purchase The Children’s Place private label credit card portfolio and will launch and manage a new loyalty Management Changes and private label credit card program for the children’s clothing brand. Melissa Miller is President at Alliance Data Card Services, (614) 729-4900, Ray Wizbowski has been appointed Chief Marketing Officer at [email protected], www.alliancedata.com. Entrust Datacard, (952) 988-1279, ray.wizbowski@ FIRST DATA and BYPASS have formed a partnership to bring EMV- entrustdatacard.com. Julie Yang has been appointed compliant card acceptance to food and beverage concessions at stadiums, Senior Vice President, Core Business, at Mastercard, arenas, and concert venues. First Data contributes its Clover family of point- 86 (21) 6105-1900, julie.yang@.com. Shawn Zheng has been appointed Senior Vice President, Account Management, of-sale devices and business management software. Bypass provides back- China at Mastercard, 86 (10) 8519-9300, shawn.zheng@ office software specific to those vendors. Brandon Lloyd is CEO at Bypass, mastercard.com. Yvonne Stelpflug has been appointed Vice (512) 217-5545, [email protected], www.bypassmobile.com. President of Operations at TMG, (515) 457-2000, yvonne.stelpflug@ Dan Charron is EVP, Head of Global Business Solutions at First Data, tmg.global. (404) 890-2000, [email protected], www.firstdata.com.

© 2016 HSN Consultants, Inc. THE NILSON REPORT JULY 2016 / ISSUE 1091 / THE NILSON REPORT 3 © HSN Consultants, Inc. 2015 THE NILSON REPORT JULY 2016 / ISSUE 1091 / THE NILSON REPORT 2 has renewed its agreement with TSYS to AUSTRIA CARD manufactured contactless and dual interface cards, as well continue processing commercial card accounts in the U.K. The group has more as NFC-based key fobs, stickers, and bracelets, have received FIDO certifica- than 30 million customers. It operates under the Lloyds Bank, Bank of tion for EMV smart payment cards. FIDO Alliance’s more than 200 company Scotland, and brands. Jennie Hill is Head of Commercial Cards at and government agency members share technology and collaborate to Lloyds Banking Group, 44 (207) 574-8148, [email protected], develop open specifications for universally strong authentication. Bernd Eder www.lloydsbankinggroup.com. Rob Hudson is Group Executive at TSYS is Head of R&D at Austria Card, 43 (1) 6106-5133, [email protected], International, 44 (190) 456-2025, [email protected], www.tsys.com. www.austriacardag.com.

ENTERSEKT’S authentication and mobile app security product, Transakt, MONERIS SOLUTIONS, the largest merchant acquirer in Canada and the delivers a user-friendly adaptation of the 3-D Secure merchant checkout 20th largest in the U.S., has relaunched the Moneris Developer Portal for service through a consumer’s smartphone. Netcetera, a Swiss software ecommerce and mobile developers that want payment integration tools. It company and provider of 3-D Secure service at its PCI DSS-certified data offers full search capabilities, an interactive knowledge base, and regular center, will offer the technology to its clients. Schalk Nolte is CEO at blogs. Rob Cameron is Chief Product Officer, (416) 734-8954, rob.cameron@ Entersekt, 27 (21) 815-2800, [email protected], www.entersekt.com. moneris.com, www.moneris.com. Thomas Fromherz is Head of Payment and Card Services at Netcetera, U.K. COMPETITION APPEAL TRIBUNAL has ruled that Mastercard must 41 (44) 297-5818, [email protected], www.netcetera.com. pay $90 million (£68.6 mil.) to supermarket chain Sainsbury related to litiga- AMADEUS, a travel technology company, has launched Amadeus B2B tion over interchange fees. Mastercard expects to take a pretax charge of Wallet Prepaid, a virtual card product for travel agencies to pay their approximately $90 million (U.S.) as a special item in its second quarter 2016 suppliers. Ixaris is the card program manager. Its payment platform enables financial results. Amadeus to source virtual cards through multiple issuers. Celia Pereiro is FIME has been accredited by JCB to support issuing banks with JCB EMV Head of Travel Payments at Amadeus, 34 (91) 177-1034, celia.pereiro@ migration and certification projects to confirm that their contactless, mobile amadeus.com, www.amadeus.com. Alex Mifsud is CEO at Ixaris, J/Speedy v3.0 products are personalized correctly. Arnaud Peninon is VP - 44 (207) 025-5545, [email protected], www.ixaris.com. Asia-Pacific and Global Laboratories at Fime Asia, 886 (2) 6636-0430, SELECTA, Europe’s largest operator of vending machines with more than [email protected], www.fime.com. 150,000 in 18 countries, is deploying Ingenico contactless terminals as well MASTERCARD will offer Apple Pay to issuers in France, along with the as that company’s omnichannel transaction management platform. One Mastercard Digital Enablement Service, which creates a unique device benefit is instant refunds to a payment card account. Refunds account for 1% account number (token) that is encrypted and stored in the secure element to 3% of total vending sales, and their processing cost is sometimes higher on the iPhone or Apple Watch. Bart Willaert is General Manager, France at than the value of the merchandise refunded. Guillaume Pascal is Managing Mastercard, 33 (1) 4273-8104, [email protected], Director Ingenico France, 33 (1) 4625-8200, [email protected], www.mastercard.com. www.ingenico.com. COMPUTOP, a payment service provider that processes $17 billion annually Featured Conference for more than 10,000 large international merchants and other partners, now offers those customers the Amazon Payments interface, used by more than WESPAY PAYMENTS SYMPOSIUM 2016 300 million Amazon customers in online stores worldwide. Ralf Gladis is CEO at Computop, 49 (951) 980-090, [email protected], www.computop.com. Three-Day Conference September 12-14, 2016 INGENICO EPAYMENTS has made its Ingenico Connect and developer The Green Valley Ranch Resort Spa & Casino hub available to any online business at its GlobalCollect platform. Businesses Henderson, Nevada benefit from the international payment methods, multicurrency management, and multiple languages for checkout. Ludovic Houri is VP Product, Topics include: payment channels, cybersecurity, faster payments, 33 (6) 0715-4992, [email protected], strategy and innovation, and same day ACH. Speakers represent: www.ingenico.com/ePayments. Federal Reserve Bank, WesPay, JPMorgan Chase, ECCHO, G2 Web Services, Ensenta, EZForex, and more. Cost is $895 (member); $1,395 SUVIDHAA INFOSERVE, which provides money transfer, prepaid cards, and (nonmember). (Use discount code 16PSNR.) Contact Kari Patrick at bill payment services in to 35 million people, has opened its network Professional Development Group, (812) 339-6374, kpatrick@ of 90,000+ retail outlets to consumers wanting to recharge their MobiKwik prodevmeetings.com. Register at mobile wallets. MobiKwik has 30 million users who can use their wallets to www.paymentssymposium.org. SAVE pay at 75,000 retailers. Paresh Rajde is Founder at Suvidhaa Infoserve, 91 (98) 2104-9194, [email protected], www.suvidhaa.com. Bipin Preet Subscribers to The Nilson Report 20% Singh is CEO at MobiKwik, 91 (783) 869-3548, [email protected], will receive a 20% discount. www.mobikwik.com.

4 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive 3 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive Kerv Contactless Payment Ring

Wearable technology company that powers their contactless proprietary Oyster card payments Kerv has developed an NFC- functionality. Available in black for Transport of London. based contactless payment ring or white with a range of Kerv will begin that links to a at colors inside, rings shipping rings PSI-Pay, a Mastercard-licensed are waterproof, at the end of payment institution. Users are hypoallergenic, this month. also given the of a plastic scratch-resistant, The company prepaid Mastercard card for and do not need is looking in-store purchases or a virtual to be charged. for partners Mastercard number if they want They cost $65.50 interested in only an online payment option. (£49.99). promoting its rings The Mastercard products can be The Kerv app, along with future available for iOS and products, including bracelets ...does not need to be charged Android handsets, and watches. can be used to turn Phil Campbell is CEO at Kerv in or paired with a smartphone. a ring on and off London, United Kingdom, for added security, 44 (20) 8133-1654, [email protected], funded via PayPal, a bank transfer, but the ring does not need to www.kerv.com. or a credit or debit card. be paired with a smartphone to Phil Davies is Managing Director Kerv rings are made of zirconia enable a payment. In addition at PSI-Pay in Horsham, United ceramic, which does not interfere to EMV-compliant Mastercard Kingdom, 44 (1403) 788-331, phild@ with the electromagnetic field payments, rings can also initiate psipay.com, www.psipay.com.

Masterpass Goes Omnichannel from page 1... from 33 countries. Now it has expanded beyond EMV-compliant contactless payments. Masterpass ecommerce to be completely omnichannel, adding for Apple devices is not yet available for in-store acceptance at the point of sale as well as on the mobile web and in a mobile app with everything Consumers with Android devices operating on one integrated platform. can pay at over 5 mil. merchants. Consumers with Android devices will use Masterpass to pay at the more than 5 million in-store locations in 77 countries that accept NFC-based, purchases. Merchants will use Masterpass APIs and SDKs to enable checkout on the mobile web and within mobile apps for Android and iOS. Until now Mastercard has offered Masterpass directly to cardholders. The omnichannel version will launch through Masterpass mobile wallet partnerships with card issuers. Roll out began this month in the U.S. with Citi, Bank of America, Capital One, SunTrust, Fifth Third, KeyBank, Bank of the West, First Hawaiian, and eight other U.S. issuers. Outside the U.S., MBNA in the U.K. and Absa in South Africa are recently announced Masterpass wallet customers. Other banks in Europe and the Middle East/Africa that have signed on to issue omnichannel wallets will be announced by year-end, with issuers in Canada, > see p. 6

© 2016 HSN Consultants, Inc. THE NILSON REPORT JULY 2016 / ISSUE 1091 / THE NILSON REPORT 5 Masterpass Goes Omnichannel from page 5... Latin America & the Caribbean, such as shipping information and credentials on any future device and Asia–Pacific to follow in 2017. payment preferences. such as automobile keys. Existing commitments worldwide Cardholder credentials in Masterpass provides dynamic a Masterpass wallet ecommerce checkout buttons will always be in sync that can recognize a participating with Masterpass in all cardholder’s issuer and add the acceptance channels. issuer’s brand to the checkout If a consumer adds process. Merchants only need a payment card in the to add a single line of code for DYNAMIC represent 80 million Mastercard online channel, for example, it this upgrade. CHECKOUT card accounts. All accounts can will immediately show up as an Pablo Cohan is Vice President, BUTTONS PRESENT AN be automatically enrolled via their option for payments initiated by Product Management at Mastercard ISSUER’S issuer’s online banking app. their smartphone. in Purchase, New York, (914) 249- CORPORATE Unlike Visa’s competing Visa Issuers have the option of 2000, pablo.cohan@mastercard. LOGO WHEN Digital Commerce app, issuers can offering consumers the ability com, www.mastercard.com. CARDHOLDERS MAKE A choose to integrate Masterpass to pay with PAYMENT wallet features with their existing reward/loyalty ONLINE mobile banking apps. They will points at the Mastercard’s New Look use Masterpass APIs and SDKs point of sale. to design and develop their own In the future, branded products. issuers will Issuers store card details on gain the ability Mastercard and other brands, to manage card

Mastercard to Purchase VocaLink from page 1... $220 million (£169 million) if performance targets Pentagram, the inter- overlapping, which is how are met. The agreement, which will take three months national design firm they originally appeared. or more to close, requires a majority of VocaLink’s that updated visual Also back shareholders, which are financial institutions in the identities for Verizon, is letter- U.K. including , HSBC, Lloyds, RBS, and Saks Fifth Avenue, ing that Santander, to retain 7.6% ownership for at least New York Magazine, 1968 is entirely three years. Hillary Clinton, and lowercase, although the The U.K.’s Payment Systems Regulator, which others, is responsible for corporate name has been wanted more competition in the local payment Mastercard’s new look. moved from within the processing market, is expected to support the sale. The new circles to below them. VocaLink handles more than 90% of all salaries, logo The flat design that 70% of all household bills, and nearly all government retains eliminates shadows is in benefits transfers in the U.K. the paired 1996 keeping with a growing VocaLink had revenues of $240 million (£182 circles that have been trend that appears in million) for 2015, earned from processing more than around since 1968, but revamped graphics for 11 billion transactions from three payment platforms. they have gone from companies like Instagram interlocking to Bacs handles credit and debit payments between and Uber. bank accounts for corporations, consumers, and governments. Faster Payments is a real-time, account-to-account real-time mobile payment app that transfers funds service available for mobile, internet, and between bank accounts. VocaLink also provides telephone channels. services to support faster ACH processing in Sweden, Link is a nationwide ATM switch and offers Singapore, Thailand, and the United States. Its U.S. settlement services. VocaLink also offers Zapp, a partner is The Clearing House. Earlier this year,

6 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive VocaLink won a contract in the issuers — Lloyds, RBS/NatWest, Group (Lloyds, Bank of Scotland, Netherlands to support YourCash, Barclays, HSBC, Santander, and and Halifax) are customers of Pay Nationwide — are by Bank, which will launch as an Visa clients. The online payment acceptance mark acquisition will before year-end. David Yates is an independent ATM operator. CEO at VocaLink With the acquisition, Gains access to deposit accounts at in London, Mastercard will gain access to Barclays and Lloyds Banking Group. United Kingdom, nearly 100% of all checking 44 (203) accounts in the U.K., something it 818-4600, has lacked for several years as Visa bring Mastercard the Pay by Bank [email protected], dominates the U.K. debit card mobile app powered by Zapp. www.vocalink.com. market. The six largest debit card Barclays and the Lloyds Banking

Top U.S. Consumer Credit/Debit Issuers from page 1... spending tied to commercial card products. The 50 Those top 50 credit and debit/prepaid card largest issuers of credit cards in 2015 were listed in rankings combined consumer and commercial card issue #1081. The 50 largest issuers of debit/prepaid products. The largest issuers of Mastercard and Visa cards in 2015 were listed in issue #1084. commercial cards were ranked in issue #1089. Largest U.S. Issuers of Consumer Visa and Mastercard Cards 2015

Credit Consumer All Percent Basis Pt. Debit Consumer All Percent Basis Pt. Purch. Vol. Purch. Vol. Consumer Chg. vs. Purch. Vol. Purch. Vol. Consumer Chg. vs. Rank Issuer (bil.) (bil.) 2015 2014 Rank Issuer (bil.) (bil.) 2015 2014 1 JPMorgan Chase $433.28 1. 79.96% 1 Wells Fargo $255.90 2.00 89.17% 2 Bank of America $210.12 2.1 73.65% 2 Bank of America $255.42 20. 87.97% 6 3 Citibank $177.48 21.0 80.89% 3 JPMorgan Chase $190.07 20.6 92.83% 21 4 Capital One $169.51 210. 80.59% 1 4 U.S. Bank $54.64 .06 92.52% 1 5 Barclays $64.31 6.21 98.62% 1 5 PNC $53.01 .0 89.40% 1 6 Wells Fargo $61.93 10.26 57.21% 10 6 USAA $46.30 6.0 100.00% 7 U.S. Bank $52.14 10. 48.34% 7 Regions Bank $35.32 . 93.12% 2 8 $42.20 2.20 100.00% 8 TD Bank $32.23 6.1 89.11% 16 9 USAA $35.69 .6 100.00% 9 Navy FCU $29.74 0.0 98.98% 10 Cabela’s WFB $20.78 20. 100.00% 10 SunTrust $27.73 2.00 86.66% 11 Navy FCU $13.90 1. 99.40% 6 11 Capital One $27.17 2.0 95.65% 12 PNC $11.45 2. 41.08% 2 12 BB&T $25.90 0.0 86.10% 13 TD Bank $10.23 11. 89.00% 12 13 Fifth Third $24.61 26.1 92.14% 2 14 First Nat’l Nebraska $9.90 1.0 70.44% 1 14 Citibank $22.83 2.1 80.33% 6 15 Alliance Data $8.67 .6 100.00% 15 The Bancorp Bank $18.63 . 46.59% 601 16 ICBA Bancard $5.85 . 100.00% 16 Citizens Bank $17.33 1.0 87.53% 0 17 Fifth Third $5.41 10. 51.08% 17 ICBA Bancard $16.69 16.6 100.00% 18 Nordstrom $5.13 .0 95.12% 212 18 Green Dot $16.06 16.06 100.00% 19 Credit One $5.06 .06 100.00% 19 MetaBank $13.37 2. 47.79% 0 20 BB&T $4.63 .1 56.58% 21 20 State Empl. CU N.C. $11.58 11. 100.00% 21 State Farm $3.39 .6 91.66% 21 M&T Bank $10.99 12.0 91.36% 22 22 Pentagon FCU $3.21 .21 100.00% 22 KeyBank $10.22 11. 88.91% ebit card volume includes prepaid cards. Some prior year fi gures have been restated. © 2016 The Nilson Report

© 2016 HSN Consultants, Inc. THE NILSON REPORT JULY 2016 / ISSUE 1091 / THE NILSON REPORT 7 Top 50 U.S. Prepaid Card Issuers Prepaid Cards in the U.S. Top Issuers in 2015 Gemalto/Worldline Mobile Card Partners from page 1... from page 1... Purchase Volume Cards Purchase Trans. Avg. 13.0% over 2014. Spending was tied to 4.25 billion Rank Company (mil.) Chg. (000) Chg. (mil.) Chg. Amt. creates a token to replace a bank purchase transactions, an increase of 12.3% from the 1. The Bancorp Bank $32,296.7 . 83,228 10.6 767.1 2. $42 Apple Pay, , Android Pay, identification number, to Gemalto. prior year. Purchases averaged $34 per transaction and 2. MetaBank $27,942.2 .1 41,550 1. 847.1 . $33 and other mobile payment systems. Worldline will also provide cardholder $522 per card. Cash withdrawals at ATMs or obtained 3. Comerica Bank $16,387.4 10.1 12,652 1. 510.0 .2 $32 The largest payment card identity verification and other services. over the counter at financial institutions are not 4. Green Dot Bank $16,055.0 1. 4,500 . 565.0 10.1 $28 manufacturer in the world, Visa has made Worldline included in purchase volume shown in the table here. 5. JPMorgan Chase $12,847.0 .0 11,160 . 296.8 11.1 $43 the first processor in the world There were 278.0 million Visa, Mastercard, and 6. Bank of America $6,767.3 . 15,442 12. 220.9 . $31 to receive certification for an Discover branded prepaid cards in circulation from the 7. H&R Block $4,664.7 . 2,000 1. 143.4 6.0 $33 in-house HCE token service. 8. U.S. Bank $4,593.9 .0 19,726 .2 167.4 .0 $27 50 largest issuers at year-end 2015, an increase of 5.9% Worldline will first use its in-house 9. UMB Bank $3,532.1 1. 6,034 11. 45.8 .2 $77 over year-end 2014. Cards were reloadable or one- services to support four clients 10. MB Financial $3,089.5 1.1 2,030 .1 133.1 11. $23 time-only type issued with a specific monetary value. in France wanting Visa payWave 11. Wells Fargo $2,924.7 . 11,851 1. 92.5 1. $32 Prepaid cards with Visa, Mastercard, and Discover Gemalto is also a provider of the contactless payments on their 12. Citibank $2,782.8 12.1 12,501 22.0 124.9 .6 $22 brands include those bought by consumers for 13. BofI $2,121.4 6. 4,451 10.1 73.7 26.1 $29 cloud-based Allynis Trusted Services customers’ Android handsets. purchases of goods, healthcare costs, insurance 14. Sunrise Banks $1,492.2 10. 23,626 1.6 57.8 0. $26 Hub, which provides over-the-air Worldline is the top payment card premiums, and for travel/transportation/transit. They 15. Comdata $1,382.6 6. 3,742 .1 45.7 21. $30 provisioning of card credentials account processor in Germany and a are also issued by corporations and governments for 16. PNC Bank $1,119.2 1.1 4,942 12. 29.0 2.2 $39 and applications to payroll, tax and other refunds, benefits programs, 17. HSA Bank $936.3 2.0 2,112 10. 8.9 2.0 $105 mobile wallets. rebates/rewards, and corporate incentives. 18. Metropolitan Comm’l Bank $735.0 .0 5,250 .0 15.8 .0 $47 Gemalto links to The Bancorp Bank was the largest prepaid card 19. BB&T $672.1 0.2 570 1. 13.6 .6 $49 handset manufacturers, issuer last year, a position it has held since 2012. 20. Fifth Third $620.9 12.0 1,901 2.6 18.0 20. $34 mobile network operators However, its purchase volume market share among 21. Regions Bank $483.7 6. 349 1. 14.9 . $32 (MNOs), and other 22. SunTrust Bank $341.2 . 874 . 15.1 . $23 wallet providers. Worldline joins top seller of card account processing Cards in circulation from the 50 23. Central Bank o. $301.2 1. 260 1. 12.4 1. $24 other Allynis Trusted Services Hub software in Asia. 24. TD Bank $196.2 6. 2,824 6.0 7.3 10. $27 customers including third-party Worldline, which is majority largest issuers increased 5.9%. 25. Navy FCU $135.2 .0 593 6. 4.9 11.2 $28 processors Prosa in Mexico, DNP owned by Atos, reported revenue of 26. USAA $102.9 1.2 189 6.0 6.3 1. $16 in , InComm in the U.S., and $676.3 million (€614.8 mil.) for the 27. Commerce Bank o. $88.0 2.0 106 2. 3.4 0. $26 the 50 largest decreased to 22.27% from 23.88% in Jetco in and Macau, first six months of 2016, up 6.0%. 28. KeyBank $86.7 1.1 870 . 1.1 22. $80 2014. The Bancorp Bank’s market share of cards in Net income of $101.3 29. Arvest Bank $56.5 20.1 74 2. 1.8 21. $31 circulation was 29.94%, up from 28.65%. Its market 30. Synovus Bank $36.7 . 26 1. 0.9 .6 $41 million (€92.1 mil.) was ... links to Apple, Samsung, Google, share of purchase transactions was 18.04%, down 31. Patelco CU $33.2 . 42 . 0.3 . $110 up 89.1%. That figure from 19.73%. 32. BBVA Compass $27.9 1.0 27 26. 0.9 22. $30 MNOs, and other wallet providers. includes a gain of $56.3 MetaBank remained the second largest issuer, a 33. TIB-The Indep. BankersBank $25.2 . 262 20.0 0.5 . $51 million (€51.2 mil.) from position it has held since 2012. Its market share of 34. Kinecta FCU $22.4 1. 53 1.1 0.5 1.1 $43 shares in Visa Europe. purchase volume among the top 50 issuers increased to 35. State Employees’ CU N.C. $18.7 1. 184 0. 0.8 1.2 $23 payment card issuers in , France, Worldline shares trade on the 19.27% from 16.35% in 2014. MetaBank’s market share 36. BMO Harris Bank $17.4 6. 192 . 0.5 . $32 and Spain, as well as mobile network Euronext exchange. of cards in circulation was 14.95%, up from 13.67%. Its 37. Intrust Bank $15.7 . 49 26. 0.6 . $27 operators including Vodafone, Philippe Cambriel is President for market share of purchase transactions was 19.93%, up 38. IBC Bank $14.6 12.0 13 .6 0.3 2. $51 Orange, and NTT Docomo, and global Europe, Mediterranean and CIS at from 16.74%. 39. Zions Bancorporation $11.4 11. 14 0. 0.1 . $105 and domestic card and alternative Gemalto in Meudon Cedex, France, 40. Hancock/Whitney Bank $8.0 1.2 3 . 0.3 12.1 $30 Comerica Bank remained the third largest payment networks. 33 (1) 5501-6280, philippe.cambriel@ 41. First Citizens Bank $6.8 . 55 6. 0.5 .1 $14 issuer even though its market share of purchase Gemalto earns revenue on a gemalto.com, www.gemalto.com. 42. Members 1st FCU $5.3 1.1 98 6. 0.1 . $41 volume among the top 50 issuers slipped to 11.30% per-use and per-service basis for the Wolf Kunisch is Head of the Global 43. First Tennessee Bank $5.3 . 23 1. 0.2 . $26 from 11.60%. Hub. The Hub’s host card emulation Business Line Financial Processing 44. Umpqua Bank $4.8 .1 2 .0 0.1 6.0 $34 Among the top 25, MB Financial had the largest (HCE) software development kit & Software Licensing and Managing 45. State Farm Bank $4.7 11.2 1,200 6. 0.5 . $10 increase in purchase volume (up 134.1%), followed 26. VyStar CU $3.1 12. 131 1. 0.1 . $21 (SDK) is certified by most global Director of Germany & CEE at Worldline by Fifth Third Bank (up 132.0%), Navy FCU (up 47. Old National Bank $2.8 .1 110 . <0.1 1.2 $35 payment networks and select in Frankfurt, Germany, 49 (69) 6657- 49.0%), Comdata (up 46.4%), BofI Federal Bank (also 48. Affinity FCU $2.3 .2 39 2.0 <0.1 1.2 $31 domestic networks. It lets issuers 1500, [email protected], up 46.4%), MetaBank (up 33.1%), and PNC Bank 49. Randolph Brooks FCU $2.2 . 71 1. <0.1 11.2 $28 customize payment apps to receive www.worldline.com. (up 31.1%). 50. First National Bank Alaska $1.9 16.6 1 6. <0.1 1. $143 and manage tokens. The Worldline/Gemalto deal is Prior issues: 1070, 1063, 1060, 1053, Includes isa, asterCard, and iscover prepaid cards. se percent change to calculate 201 fi gures. Prior issues: 1067, 1043, 1020 Some prior year fi gures have been restated. © 2016 The Nilson Report global. Worldline will link its Token 1050 Service Provider platform, which

8 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive © 2016 HSN Consultants, Inc. THE NILSON REPORT JULY 2016 / ISSUE 1091 / THE NILSON REPORT 9 Installment Payments for Mobile Web Purchases from page 1 The company has contracts with more than 700 Affirm and customers is by text message. Nearly half U.S. merchants. Customers are mostly people who of all payments are facilitated by autopay from a do not have the option of using a credit checking account or debit card account. card or do not want to use one. They Affirm sees its biggest market opportunity with provide their the 75.4 million millennials (18 to 35 year olds). name, birth Fewer than half of the adults in this group have a Visa date, phone or Mastercard credit card. A majority have below number, average credit scores. Other opportunities exist with and the last new citizens, more than 1 million every year, who four digits do not yet have a full credit score, and more than 20 of their Social Security number to Affirm, which uses traditional and nontraditional databases to handle Affirm’s venture and capital market underwriting. Affirm’s proprietary scoring models for personal data, merchant data, and item data have funding has reached $425 mil. been fed by nearly two years of lending experience. Typically approvals are granted in less than 30 million people with bad credit who had average or seconds after a customer’s details are entered. It has better credit scores before the recession. created a mobile device interface that now accounts Affirm has received a total of $425 million in for more than 50% of loans. venture and capital market funding. It has more than If approved, customers select 3, 6, or 12 monthly 30 partnerships among acquirers who see installment installments. Merchants receive payment in full credit as a value-added service to merchant within two days. They pay Affirm from 1.9% to 2.9% processing contracts. Merchants can use Affirm tools of the value of the sale. Affirm is licensed to offer to offer special promotions such as 0% financing over loans in all 50 states through a partnership with 12 months, which gives them a marketing offer that Cross River Bank of Teaneck, New Jersey. Unlike doesn’t involve lowering their prices. Merchants pay a most alternative lenders, the loans are held on higher discount rate to fund 0% financing offers. Affirm’s balance sheet. Affirm also offers customers a virtual Mastercard Consumers pay different finance charge rates product that can be used at any retailer from a mobile ranging from 10% to 30%. Paying in 3 months is app. Cross River Bank is the issuer. Affirm purchased less expensive than 12 months. Finance charges personal financial management app Sweep earlier are not compounded. They are based on simple this year to expand its reach beyond consumer loans. interest. There are no balloon payments, hidden Carl Gish is Chief Marketing Officer at Affirm in San fees, or penalty fees. Before customers agree to the Francisco, California, (415) 984-0490, [email protected], sale, Affirm lets them know the exact amount of www.affirm.com. every monthly payment. All communication between

Middle East/Africa Cards — 2015 from page 1... P T 63.45% of total volume in 2015, I E/ vs down from 63.74% in 2014. arket Visa purchase volume was up hare Brand (Bil.) (Bil.) Increase $21.82 billion (14.2%) over 2014. Mastercard purchase volume was

up $17.58 billion (17.1%). Diners Club increased by $0.62 billion

(20.0%), and American Express grew by $0.58 billion (8.1%). Visa’s purchase volume market 29 0 share declined 52 basis points to 2016 The Nilson Report 57.12% and Mastercard’s increased

10 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive

Middle East and Africa at year- YOY / P end 2015 totaled 246.2 million, up I E/ 12.7%. Visa and Mastercard cards accounted for 99.24%. Mastercard added 19.9 million cards and its market share grew to 44.57% from 41.10%. Visa added 7.7 million cards and its market share fell to 54.67% from 58.10%. Visa cards issued in the Middle East and Africa region accounted for 4.53% of all Visa cards in circulation worldwide at the end in local currenc of 2015, up from 4.43% in 2014. The Middle East and Africa 2016 The Nilson Report region accounted for 2.53% of Visa’s worldwide purchase volume in 2015, up from 2.45% in 2014, and 1.84% of its purchase 63 basis points to 39.14%. Visa and Mastercard cards transactions, up from 1.81%. American Express’s share declined generated 4.21 billion purchase Mastercard cards issued by 17 basis points to 2.53%. Diners transactions in 2015, which in the Middle East and Africa Club’s share increased 5 basis equaled 98.03% points to 1.21%. of the Middle Purchase transactions reached Cash accounted for 67.89% of East and Africa 4.29 bil. in 2015, up 16.3%. total volume for Visa (down from region total for 68.48%), 57.41% for Mastercard all global brand (up from 56.71%), 2.53% for cards, up from 97.99%. region accounted for 6.97% of all American Express (down from Visa’s purchase transaction Mastercard cards in circulation 2.65%), and 2.08% for Diners market share slid to 54.05% from worldwide at the end of 2015, up Club (up from 1.96%). 55.26%. Mastercard gained share from 6.33% in 2014. Purchase transactions for goods to 43.97% from 42.74%. American The Middle East and Africa and services generated by Visa, Express’s share fell to 1.31% region accounted for 3.58% of Mastercard, American Express, from 1.37%. Diners Club’s share Mastercard’s worldwide purchase and Diners Club cards issued in increased to 0.66% from 0.64%. volume, up from 3.42%, and the Middle East and/or Africa Global brand credit, debit, and 3.16% of its purchase transactions, reached 4.29 billion, up 16.3%. prepaid cards in circulation in the up from 3.06%.

Middle East/Africa General Purpose Cards 2015 vs. 2014

Volume bil. Transactions mil. Cards Brand Total Chg. Purchases Chg. Cash Chg. Total Chg. Purchases Chg. (mil.) Chg. Visa $546.07 12.1 $175.35 1.2 $370.73 11.1 4,630.2 10.2 2,319.8 1. 134.6 6.0 Mastercard $282.09 1.0 $120.15 1.1 $161.94 20. 2,841.1 20. 1,887.1 1.6 109.7 22.2 American Express $7.96 .0 $7.76 .1 $0.20 .0 58.1 11. 56.4 11. 1.4 . Diners Club $3.80 20.1 $3.72 20.0 $0.08 2.2 28.7 1.6 28.3 1. 0.4 0.2 Totals $839.93 14.3% $306.98 15.2% $532.95 13.8% 7,558.1 14.0% 4,291.6 16.3% 246.2 12.7% Includes all general purpose consumer and commercial credit, debit, and prepaid cards. Currency fi gures are in .S. dollars. Change fi gures are based on local currency. Some prior year fi gures have been restated. Includes . isa includes Electron. astercard ecludes aestro Cirrus. © 2016 The Nilson Report

© 2016 HSN Consultants, Inc. THE NILSON REPORT JULY 2016 / ISSUE 1091 / THE NILSON REPORT 11 © 2016 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.

Visa/PayPal Partnership from page 1... to tie payments for goods accounts to their bank purchased to Automated accounts via their Clearing House (ACH)-based cards. This bi-directional service transactions that disintermediate will disintermediate the ACH. the Visa network. Instead, it will Consumers will gain increased give consumers the opportunity Visa opens all Visa payWave liquidity because the Visa service to position a Visa card as their contactless POS terminals in the is faster than the ACH. preferred payment option for U.S. (and worldwide) to PayPal The new deal will also shore up PayPal transactions in any channel wallets in Android smartphones. a minor problem in the current This puts PayPal on par exchange of data between the with Apple Pay, Samsung companies on PayPal transactions Pay, Android Pay, and involving Visa cards. Some mobile wallets from Visa smaller web sellers are classified and Mastercard. as “miscellaneous.” The new Any merchant with a deal calls for coding them with a — online, in store, mobile web, Visa payWave terminal will be specific merchant category. Issuers and in app. PayPal will design able to handle a PayPal wallet will benefit from transactions that customer notification strategies to transaction. When transactions qualify for higher interchange. communicate that fact. occur at a merchant with which Cardholders could benefit from Last year, there were 4.28 PayPal does not have an existing transactions that qualify for billion (up 13.4%) transactions relationship, the payment will rewards points. through the ACH classified be handled by as “Internet.” That category the merchant’s Venmo, PayPal’s P2P money trans- includes PayPal wallet payments existing acquirer. fer service, also gets Visa tokens. to merchants. Firm figures for If there is a PayPal are not available. However, contract, PayPal it is known that a majority of will deliver the transaction to PayPal’s contract with Visa is ACH Internet payments are for Wells Fargo Merchant Services, not exclusive. Similar deals will insurance premiums. The Nilson which acquires card payments be completed with the other card Report estimates PayPal accounts for PayPal. networks. Visa and its issuers for 30%. Visa held a 76% share Venmo, PayPal’s person- do have a 12-month exclusive on of debit card spending in the U.S. to-person money transfer marketing initiatives tied to the versus Mastercard from 36.85 service, also gets access to the new partnership. billion Visa debit card purchase Visa token service, supporting PayPal has received financial transactions. When some of its repositioning to a more incentives from Visa for increased PayPal’s ACH transactions move comprehensive mobile wallet volume. Visa has also promised to cards, the Visa network and its product. What is only true for PayPal price stability. issuers could see an increase of up in-app sales today could include Jim Magats is Head of Global to 1 billion transactions. in-store sales tomorrow. Core Payments at PayPal in PayPal will join the Visa Digital Visa and PayPal have agreed San Jose, California, (408) 967- Enablement Program (VDEP) to provide U.S. consumers the 1000, jmagats@.com, to gain access to the Visa token opportunity to move money www.paypal.com. service. Other payment facilitators into and out of their PayPal and in VDEP include Samsung and Alphabet (Android Pay). The David Robertson, Publisher ability to request a token from July 29, 2016

12 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive

Top View