Blog Cartes

Prepaid Poised to Change Payments Landscape

Walmart thrust prepaid cards into the limelight this week with its introduction of Bluebird, a new U.S. prepaid offering in conjunction with American Express that boasts consumer-driven value-added services and ratchets up the stakes for all payments industry players. This is the latest and most compelling example of how prepaid is taking on growing significance around the world. At CARTES 2012, Paris, experts will highlight innovation, a necessity for those attempting to retain control of payments and banking services as well as a huge opportunity for newcomers looking to exert or extend their presence.

As several major players introduce increasingly sophisticated prepaid products, it’s clear that opportunity abounds.

For financial institutions, prepaid offers new revenue streams and opportunities to solidify customer relationships. For non-traditional players, it offers entree or entrenchment into the payments stream. For government entities, employers, and healthcare providers, it delivers efficient ways to dispense benefits. For merchants, it provides partnership, relationship, and sales opportunities. And for consumers -- banked, unbanked, and debanked alike -- modern prepaid offerings allow expanded choice and greater control over their finances.

The CARTES “Prepaid Market: New Opportunities” segment is Nov. 7 and is chaired by Gilles Coccoli of Edenred, France. Among the speakers is David Parker of the U.K.’s Polymath Consulting. He will highlight prepaid innovation around the world.

Antoine Laronze Groine of Oberthur Technologies, France, will focus on how innovation extends beyond product features. He will spotlight the smart kiosk, a new way of distributing prepaid cards.

Predictably, prepaid’s success means greater scrutiny from regulators. Chris Ellis of Yalamanchili, United Kingdom, will discuss addressing prepaid issues in Europe and beyond.

The final session “Prepaid Cards ready to change Retail, Loyalty and e-Commerce Business!” will be led by Hasan Erdal of TEB (BNP Paribas J.v.), Turkey.

SourceMedia

 

The Fattening Mobile Wallet

One of the key themes at the Cartes 2012 show in Paris next month is the growth of the mobile wallet, arguably the most important, potentially market-changing trend in the payments industry. A report from Juniper Research this past summer estimated that the NFC retail payments market will surpass $180 billion worldwide by 2017, and more than 25% of the mobile users in the U.S. and Western Europe will make in-store purchases with their mobile wallet.

Those are lofty forecasts, to be sure, but recent developments within the mobile payments world—and from retailers, in particular—only support the expectation for continued exponential growth of NFC mobile payments.   Just last week, coffee giant Starbucks said it plans to accept purchases from Square starting in November and plans to list all of its stores in the Square directory.  (For more info on this story from Payments Source, read the full story here: http://bit.ly/Peqj34) 

Meanwhile, more large retailers are joining the Merchant Customer Exchange, formed this past August with the objective of creating a new platform for mobile-based transactions. At the beginning of October, news emerged that Gap Inc. and Bed, Bath & Beyond were joining the consortium. 

The mobile track at Cartes on Nov. 6 begins with a panel that asks who will win in the era of mobile payments.  The panel is anchored by Ian Hermon, director of payments security for Thales, the information systems security company, and Zilvinas Bareisis, senior analyst for consulting company Celent.  Bareisis recently posted a blog about the European Commission approving ‘Project Oscar’, which the leading telecom companies in the UK are launching to drive mobile payments in the country.

At the other end of the spectrum, the program also focuses on merchant customers, whose comfortability with the mobile wallet—not just with security, but in terms of reliability and convenience—is one of the keys to sustaining its rapid expansion.  Merchant Warehouse’s director of product marketing, Matt Cicciari, will speak on customer engagement during the afternoon session.

SourceMedia

New Payment Landscape by ADN'Co

Angelo Caci, Co-Managing Director at ADN'Co, delivers the results of ADN’co market research on the new payment landscape. The results centre on five major trends:

• Trend 1 – Boom and variety of payment methods

Beyond cash, cards are still the most used payment means across the world and the range of cards offers keeps on thriving and getting even more personalized in order to stick to card holders’ affinity, status, purchasing power, preferences, flavour...
However, consumers' adoption for new technology and channels leads to new usages and changes in behaviour. New ways to buy and pay have triggered the emergence of alternative payment methods especially through the internet (e-wallet, prepaid, micropayment, online credit, online transfer...) as well as the arrival of new market players such as payment institutions or IT/Telco/Web giants.
This phenomenon is currently being boosted by the promises of mobile payment and its multiple applications in both emerging and developed countries.

• Trend 2 - The arrival of new players calls into question the traditional banking card business model and forces the market to restructure itself with greater transparency and increased legislation.

Beyond the SEPA move, Europe has launched the E-Money and Payment Services Directives and is regularly putting pressure on domestic and international card schemes as well as on banks’ tariffs.
In the USA, the Durbin amendment has led to a significant decrease of interchange fees on debit cards transactions. French banks reduced their own domestic scheme’s interchange fee by about 36% on October 2011 while the European Commission has issued its "Green Paper on card, internet and mobile payments" drafting new measures to be implemented in Europe.
Hundreds of Payment Institutions and E-Money Institutions in Europe are now competing against the incumbent stakeholders in the cards & payment arena.

• Trend 3 - Consumers have got the power  

Consumers are benefiting from the numerous changes and the diversity of offers (tariffs, competition, new models etc). Now consumers have choice! Furthermore, social networks, blogs and the internet allow them to be better informed and more independent in their decisions than ever. As such, market players have to rethink their CRM strategies and build an innovative and flexible cross-channel approach when it comes to payment.

• Trend 4 - New expectations, new ways to buy and pay

Consumer independence and new usages are blurring the boundary between 'online' and 'offline' commerce. To achieve consumer satisfaction and loyalty, we are currently witnessing the emergence of complementary value-added payment services (private sales, coupons, cash back, loyalty, good deals, personal finance management etc). With the objective to better serve the customers wherever and however they’re buying, some stakeholders are trying to encapsulate the payment method within those services while others are pushing the exact opposite...

• Trend 5 - Both consumers and businesses expect greater security and confidence.

Cybercrime is keeping pace with technology developments and the intense usage of remote channels, generating new vulnerabilities. In 2010, 431 million people around the world were victims of cybercrime, equal to over a million users every day or 14 every second. In France, 9 million people were directly affected and damages totalled €872 million. Banks often remain the best placed and rightful institutions for dealing with security, but in order to make new methods of payment secure, all players must redouble their efforts to respond to user expectations.

• Conclusion

Know how to reinvent yourself for tomorrow's world
Banking and payment service models have arrived at a crossroads where they must now take on the market from other angles.

A mixture of awareness and uncertainty
At the heart of this revolution (an abundance of players, services, new business models etc), consumers hold the power and their independence has been boosted. We have the key trends in front of us, but what choices and tactics should we adopt to succeed and endure?

Heading towards better management of data and customer paths
Who will succeed in best managing, exploiting and monetizing information, interactions, transactions and audiences in order to control customer relations and associated payment flows?

The winners will probably be those who will have interpreted at best these key questions and make purchase and payment experiences simple, friction less and always secure... 

 

The importance of Instant Issuance to customers in the Card Industry

Contribution from the Datacard Group present at booth 3D055

In recent years, there has been an emerging trend towards instantly issuing and personalizing financial payment cards at the branch or retail location, providing an alternative to the traditional central issuance distribution model.

According to the 2010 Debit Issuer Study sponsored by Discover Financial Services’ Pulse electronic funds transfer network, “Instant issuance is growing sharply. Banks and other issuers said they are increasingly handing out debit cards in the branch as they sign up new customers, to facilitate immediate use and to eliminate the expense of having to replace cards lost or stolen in the mail. And, 35 percent of debit-card issuers offered instant issuance in 2009, up from 28 percent in 2008. Those considering it jumped to 36 percent, from 26 percent, in the same time period.

What does that mean for the industry ? 

The JavaCard Forum has a new technical director

Christian Goire, President of the Java Card Forum (JCF), has announced the appointment of Christian Kirchstaetter as head of the Technical Committee. He was elected by the members to replace the outgoing head Dr. Eric Vetillard.

The primary purpose of the Java Card Forum is to promote and develop Java as the preferred programming language for multiple-application smart cards. Java, invented by Sun Microsystems in (now Oracle America) 1995, has important features that make it the ideal choice for smart cards.

The JavaCard forum is supported by many big names of the Industry such as Gemalto, Giesecke & Devrient, Incard, Morpho, NXP, Oberthur Technologies, Renesas Technology, and Watchdata. All of those companies are present this year at Cartes & IDentification 2011.

 

EuroSmart at CARTES 2011

From Bruno Dupont, General Secreteray of EUROSMART

Presentation of the market figures for 2011 and 2012 trends & Live demos on “Smart applications”

As official sponsor of CARTES 2011, Eurosmart will open the World Card Summit and present the market figures for 2011 and forecast for 2012, i.e. the total of microprocessor based smart secure devices shipped in 2011 with the main growth drivers, as well as new market opportunities in 2012.

Interview of Sirpa Nordlund, Executive Director of Mobey Forum

Sirpa Nordlund, Executive Director of Mobey Forum, discusses the launch of the association’s latest white paper, plans for CARTES and the organisation’s current work focus.

Identity and Data theft; the supreme art of Fraud.

Last September, Guy de Felcourt published a reference book on identity and data fraud. 

Data security is a very important matter to the actors of the CARTES & IDentification exhibition this year and has been for a long time.  This book will help its readers to grasp the entirety of the new threats related to the digital age and share the author’s opinions and best practices to tackle them in the most efficient manner.

Interview with the author, Guy de Felcourt.

The marketing face of the display card

By Bassam Chour, Managing Director at CHOURADVISER

Current innovations in the smart card industry are typically focused on environmental responsibility and sustainability. As an expert in loyalty and CRM, it is refreshing to see diversification and new products that are also geared towards customer satisfaction and marketing opportunities.

Thanks to display card technology, we saw the emergence of a new breed of smart cards that not only address the challenges of security but also enables an unprecedented level of interaction between issuers and cardholders.  

The display card actually embeds a powerful computer and is just as flexible and convenient as a standard credit card form factor device. 
In addition to standard banking and payment functionalities, the following is just a sample of the security features and hidden aspects of the wide marketing potential of this product:

• Generate a one time password (OTP) for secure eBanking and eCommerce transactions
• Perform secure remote Card Not Present transactions
• Consult account balance, transactions history after typing in a PIN code
• Have anywhere, anytime access to balance of reward points, coupons and even store multiple loyalty cards onto one single convenient device

We were pleased to discover this innovative product last December during CARTES. I hope that this year we will have the opportunity to gain even more knowledge about their marketing, banking and loyalty card capabilities