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Global Retailer Payment, Gift and Loyalty Cards

© Finaccord Ltd., 2014 1

Global Retailer Payment,

Gift and Loyalty Cards Report prospectus

July 2014

http://www.finaccord.com/

mailto:[email protected]




Prospectus contents

What is the research?

What is the rationale?

What methodology has been used?

How do retailers surveyed break down?

Which countries have been researched?

Which specific retailing groups have been researched

What is the report structure?

What are the key features of the research?

How can the research be used?

How can the Partner BASE™ be used?

Who can use the research?

What are some of the key findings?

What is the cost and format?

What other reports are available?

How can the research be purchased?

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What is the research?

Global Retailer Payment, Gift and Loyalty Cards is a report, based on a survey of over 6,000

prominent retail brands in 60 countries, about the provision of co-branded and private-label

payment cards, gift cards and loyalty cards by major retailers worldwide. Retailer participation in

coalition loyalty schemes is also considered.

In total, the research identifies close to 2,000 retailer payment cards, over 2,000 closed-loop gift

cards, and over 3,500 proprietary retailer loyalty programs and coalition loyalty schemes, thereby

providing a definitive global analysis of retailer co-branded, loyalty and private label programs

Moreover, the Partner BASE™ database that accompanies the report details each of the many

initiatives for retailer credit, deferred debit, debit and open-loop rechargeable prepaid cards traced

by Fin accord, specifying the operating models used by retailers, the payment networks to which

the cards are affiliated and the identity of the ultimate card issuers in each case.






What is the rationale?

A number of factors, some of which are specific to co-branded and private-label or store cards and

some to retailing, provide the rationale for the development of this report. With reference to co-

branded and private-label or store cards, in particular, the following assertions can be made:

- the credit, deferred debit and prepaid card markets of many countries are continuing to grow and

retailers can take advantage of this through co-branded or store card programs;

- the experience of card issuers is that the profitability of successful co-branded card schemes,

including retailer programs, usually exceeds that of standard credit cards;

- indeed, in terms of the outright number of schemes worldwide and, probably, as measured by the

pure number of cards issued, retailing is the most important co-branding arena for card issuers;

- once private-label store cards have built up a substantial customer base, these can be converted

into general purpose, international payment cards;

- the customer information gathered from co-branded or store cards can be used to cross-sell

banking, insurance and other services.






What is the rationale? (continued)

In addition, proprietary and coalition loyalty schemes that amass a significant number of members

can eventually be converted into cards with a payment function, thereby providing justification for

their inclusion in this publication. Indeed, coalition loyalty programs can be particularly important in

terms of the number of members that they accumulate and the number of active programs

worldwide is continuing to increase each year. These encompass a variety of initiatives including

bank-owned schemes, online programs and propositions oriented primarily to travel rewards.

Furthermore, dynamics in the retailing market itself also give rise to increasing rationale both for co-

branded and private-label or store card programs and a comprehensive global study on the subject.

Key developments in the retailing sector include:

- increasing usage of payment cards, generally, as a payment mechanism in preference to cash,

cheques and other traditional alternatives, thereby encouraging retailers to develop their own cards

in order to capture a share of the payments market;

- retailer consolidation in both more and less developed markets which helps to produce national

champions with the branding, muscle and general profile needed to succeed in the payment card

sector in these countries;






What is the rationale? (continued)

- retailer growth in the less developed markets as an increasing proportion of consumers allocate

their expenditure to formal retailing concepts as opposed to informal street markets and the like;

- a mature environment for retailing in the more developed markets which signifies that retailers

need to investigate new means of achieving revenue growth which can include financial services, in

general, and co-branded or store cards, in particular;

- increasing internationalisation which potentially paves the way for cross-border alliances between

retailers and mainstream card issuers as epitomised, for example, by the link between Carrefour

and BNP Paribas Personal Finance.






What methodology has been used?

The main research input into this study is Finaccord’s on-going investigation of the involvement in

financial services, in general, and payment cards and loyalty schemes, in particular, of over 6,000

major retailing brands across 60 countries worldwide.

In the specific context of this report, the aim of the investigation is to gather top level data concerning

the development of co-branded, loyalty and private-label card programs by the organisations in

question, the operating models that they use and the card issuers with which they work in this context.

Naturally, given that there are literally millions of smaller retailers in total in the territories reviewed, the

majority with just a single outlet, Fin accord has sought to focus on the very largest entities that are

likely to be of most strategic interest to organisations involved in the payment card and loyalty scheme

sectors and wider financial services markets. Indeed, the major retailers break down by category and

by country as illustrated in the graphics overleaf.






How do retailers surveyed break down? (1)

BY TYPE BY DISTRIBUTION MODEL

Mixed, 41.4%

Online only,

13.6%

Offline only,

45.0%

Fashion, 20.1%

Supermarket /

hypermarket,

16.0%

Consumer

electronics,

15.8%

DIY / furniture /

home, 11.1%

Department

store / variety,

9.0%

Health and

beauty, 7.6%

Specialty, 6.7%

Fuel, 6.3%

Sporting goods,

4.0%

Books and

media, 3.4%






How do retailers surveyed break down? (2)

BY REGION

Asia, 19.7%

Southern and

Western Europe,

19.7% Eastern and

South-Eastern

Europe, 12.3%

North America, 11.0%

Latin America, 10.8%

Australasia, 4.2%

South Africa, 2.9%

Northern and Central

Europe, 19.4%






Which countries have been researched?

Broken down across eight global regions, countries researched in this study are as follows:

Asia – China, Hong Kong, India, Indonesia, Japan, Malaysia, the Philippines, Singapore, South Korea, Taiwan,

Thailand and Vietnam;

Australasia – Australia, New Zealand;

Eastern and South-Eastern Europe – Bosnia-Herzegovina, Bulgaria, Croatia, Georgia, Greece, Romania, Russia,

Serbia, Slovenia, Turkey and Ukraine;

Latin America – Argentina, Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Paraguay, Peru and Uruguay;

North America – Canada, US;

Northern and Central Europe – Austria, Czech Republic, Denmark, Estonia, Finland, Germany, Hungary, Latvia,

Lithuania, Norway, Poland, Slovakia, Sweden and Switzerland;

South Africa – South Africa;

Southern and Western Europe – Belgium, France, Ireland, Italy, Netherlands, Portugal, Spain and UK.






Which specific retailing groups

have been researched?

Among the major retailing groups included in the research are:

3 Suisse's

AEON

Hold

Alde

Alabama

Alliance Boots

Amazon

AS Watson

Aachen

Bertelsmann

Best Buy

Best Denki

Bossing International

Brilliance Group

Canadian Tire

Carrefour

Casino

Cencosud

Chedraui

Coles Group

Conforama

Coop Norden

Dairy Farm International

Dansk Supermarked

Dixons Retail

E. Leclerc

EDEKA

El Corte Inglés

Empresas Ripley

Eroski

Euronics

Expert International

ExxonMobil

Falabella

FamilyMart

Famsa

Far Eastern Group

GOME

Groupe Galeries Lafayette

Grupo Deib Otoch

Grupo Elektra

Grupo Exito

Grupo Inditex

Grupo Pão de Açúcar

Harald Nyborg

Harvey Norman

Home Retail Group

House of Fraser

Hudson's Bay Company

ICA

IFH Peru

IKANO

Isetan Mitsukoshi

Jardines

Kering

Kesko

Kroger

Leroy Merlin

Lotte

Louis Delhaize

Macy’s

Mango

Marks & Spencer

Maus Frères

Mercator

Metro Group

Migros

Modelo Continente

Office Depot

Olímpica

OTTO

Overwaitea

President Chain Store

Rakuten

Reitan

Reliance Industries

Resurs Group

REWE

Royal Dutch Shell

Rustan Group

Sears

Sedmoi Continent

Seven & I

SOK

Soriana

Staples

Stockmann

Svyaznoy

Tata Retail

Tchibo

Tengelmann

Tesco

The North West Company

Viveks

Walmart

Warehouse Group

Wesfarmers Group

Weston

Woolworths (Australia)

Yamada Denki






What is the report structure?

0. Executive Summary: providing a concise evaluation of the principal findings of the report.

1. Introduction: offering rationale, description of methodology and other related notes.

2. Global Overview: a worldwide overview of the activity of major retail brands in co-branded and

private-label payment cards, gift cards, proprietary loyalty programs and coalition loyalty schemes.

As well as a comparative analysis of operating models used in the area of payment cards, this

section also analyses the extent to which retailer cards are affiliated to American Express, JCB,

MasterCard, Visa, UnionPay and other payment brands in each country.

3. Argentina: an in-depth analysis of the market for retailer payment, gift and loyalty cards in

Argentina. Key partnerships between major Argentine retail chains and card issuers are identified

and commented upon for both co-branded and private-label cards while detailed commentary is

also provided for both proprietary retailer loyalty programs and coalition loyalty schemes.

4 - 62: chapters for all other countries are structured along similar lines to that for Argentina.

63. Appendix: this final section provides a comprehensive listing of retailers operating through

captive or joint venture card issuers with over 130 such entities identified in total.






What are the key features of the research?

Key features of this report include:

• definitive coverage of the involvement in co-branded, loyalty and private-label card schemes of

over 6,000 major retail brands in 60 countries worldwide;

• focus on close to 2,000 schemes for retailer credit, deferred debit, debit and prepaid cards: which

card issuers and networks are strong in which countries and with which retailers do they

collaborate?

• comprehensive listing of retailers using captive or joint venture card issuing divisions or

subsidiaries for their co-branded or store card schemes;

• identification of over 2,000 proprietary retailer loyalty programs including the split by country

according to whether they run in parallel to a payment card or remain unaccompanied by such a

card;

• identification of important coalition loyalty schemes with which major retail chains have affiliated

including Maximiles, Nectar, PAYBACK, Upromise and Webmiles.






How can the research be used?

You may be able to use this report and the Partner BASE™ that accompanies it in one or more of

the following ways:

• gain rapid access to a unique source of intelligence covering virtually all significant retail brands

across an extremely wide range of geographies worldwide;

• monitor the activity of key national and international competitors in the retailer payment card

sector including the many subsidiaries of BNP Paribas and Citigroup;

• evaluate the potential for acquiring the existing cardholder portfolios of retail groups by purchasing

equity stakes in captive card issuing entities or taking over internally-managed schemes;

• understand the potential in each country for converting existing proprietary retailer loyalty cards

into fully-fledged payment cards;

• learn more about the growing number of coalition loyalty programs around the world including the

payment cards that have been launched as a result of their popularity.





© Finaccord Ltd., 2014

Retailer Type Country Product type Product Operating model Partner(s) Network

offered?

HangTen Fashion Taiwan Credit card Yes External partner CTBC Bank Visa

Hankyu Department store / variety Japan Credit card Yes External partner Sumitomo Mitsui Visa

Hannahs Fashion New Zealand Credit card No

Hanshin Department store / variety Japan Credit card Yes Captive partner Persona American Express, JCB, PiTaPa, Visa

Hanshin Dispensing Pharmacy Health and beauty Japan Credit card No

Hanssem DIY / furniture / home South Korea Credit card Yes External partner Lotte Card MasterCard, Visa

15

How can the Partner BASE™ be used?

Filter by type

of retailer

Choose operating model Identify card

issuers

Look up

specific retailers

Filter by

type of card

Select country Identify card

networks






Who can use the research?

1. Payment card companies: this study is an up-to-date and comprehensive source of information about

co-branded and private-label / store cards in 60 countries and represents an indispensable guide to

over 1,700 retail brands that operate payment card programs;

2. Banks and insurance companies: retailer payment card schemes can form an effective basis either for

developing broader retailer banking and consumer finance operations or for marketing a range of

insurance products to large and well-defined groups of consumers;

3. Retailers: payment, gift and loyalty card programs represent an important activity for numerous retail

brands around the world but what types of card do they offer and with which partner organisations do

they collaborate for co-branded and private-label / store cards?

4. Loyalty management companies: the research offers a thorough guide to a global total of over 2,000

proprietary retailer loyalty schemes and coalition loyalty programs;

5. Management consultancies: are you either assisting a retailer with the development of a payment

card scheme or advising a card issuer with respect to partnership opportunities with major retail

brands? This research will help you to evaluate the options in retailer co-branded, loyalty and private-

label programs, saving time and effort on researching the subject yourself.






What are some of the key findings?

1. The operating models used for retailer payment cards

vary from region to region around the world

Source: Fin accord Partner BASE

Asia

Australasia

Eastern and South-Eastern Europe

Latin America

North America

Northern and Central Europe

South Africa

Southern and Western Europe

Total

% split of operating models used for retailer payment cards

Other

JV partner

Captive partner

Multiple external partners

External partner

Internal

0% 20% 40% 60% 80% 100%






What are some of the key findings? (cont.)

UNWEIGHTED SHARE OF PARTNERSHIPS WEIGHTED SHARE OF PARTNERSHIPS

Source: Fin accord PartnerBASE

2. Worldwide, private-label card schemes still account for the major of retailer

payment card programs, whether measured in unweighted or weighted terms

Private, 33.9%

Visa, 24.1%

MasterCard,

22.9%

JCB, 3.6%

other, 11.0%

UnionPay, 2.1% American Express, 2.4%

Private, 29.5%

Visa, 23.0% MasterCard,

20.5%

JCB, 5.0%

other, 15.9%

UnionPay, 2.2%

American Express, 4.1%







3. A majority of major retail brands in China provide or are involved in a loyalty

program with rates of activity of 70% or more across all retailer categories

% provision rate by category of retailer

0% 20% 40% 60% 80% 100%

Books and media

Department store / variety

DIY / furniture / home

Fashion

Fuel

Health and beauty

Specialty

Sporting goods

Supermarket / hypermarket

Online only

Offline only

Mixed

Source: Fin accord PartnerBASE

100.0%

88.5%

88.9%

70.0%

78.0%

83.3%

84.4%

85.7%

100.0%

86.3%

91.7%

74.3%

87.6%







4. Key findings from the executive summary include:

• of the payment card programs in evidence, 53.2% are based around the use of single external

card issuers, with a further 6.7% using multiple external partners and 14.8% captive card-issuing

entities, while 18.9% are reportedly managed by the retailers themselves, without support from a

separate partner, either external or captive;

• across all retailer payment card schemes identified worldwide, Visa is used as an associated

payment network brand slightly more frequently than MasterCard although, by number of programs,

private-label schemes continue to outnumber both by quite a wide margin;

• with regards to loyalty programs, also included in Finaccord's research due to their importance as

a platform for marketing payment cards, 55.7% of retail brands researched are involved in either a

proprietary or coalition loyalty scheme, or in both;

• when segmented by region, retailer involvement in loyalty programs is most prevalent in Asia,

where 66.7% of retail brands surveyed participate in one or more loyalty schemes, followed by

Eastern and South-Eastern Europe (63.9%) and North America (61.2%).






What is the cost and format?

Global Retailer Payment, Gift and Loyalty Cards is available as a standard PDF document. The

Partner BASE™ that accompanies it at no further charge is in format. Costs for this research set

and selected other comparable, international titles are as follows:

* For UK-based clients, VAT at the prevailing rate will be added to the basic price. Costs quoted are for a single site user licence only. For

a corporate user licence, please see the final slide for further details. Invoices can be paid in EUR or USD, at the prevailing exchange rate,

if preferred. For acquisition of multiple reports, please contact Fin accord - discounts may be available.

Global Retailer Payment, Gift and Loyalty Cards GBP 3,495

Global Retailer Consumer Finance and Banking GBP 2,495

Global Retailer Insurance and Assistance GBP 2,495

Global Retailer Online Payment Acceptance GBP 3,495

Retailer Consumer Finance and Banking in the Asia-Pacific Region GBP 995

Retailer Consumer Finance and Banking in Europe GBP 1,295

Retailer Consumer Finance and Banking in North and Latin America GBP 995

Retailer Insurance and Assistance in the Asia-Pacific Region GBP 995

Retailer Insurance and Assistance in Europe GBP 1,295

Retailer Insurance and Assistance in North and Latin America GBP 995

Retailer Online Payment Acceptance in the Asia-Pacific Region GBP 1,295

Retailer Online Payment Acceptance in Europe GBP 1,995

Retailer Online Payment Acceptance in North and Latin America GBP 1,295

Retailer Payment, Gift and Loyalty Cards in the Asia-Pacific Region GBP 1,295

Retailer Payment, Gift and Loyalty Cards in Europe GBP 1,995

Retailer Payment, Gift and Loyalty Cards in North and Latin America GBP 1,295






What other reports are available?

Australia GBP 795 France GBP 795 Malaysia GBP 795 South Korea GBP 795

Brazil GBP 795 Germany GBP 795 Mexico GBP 795 Spain GBP 795

Canada GBP 795 India GBP 795 Poland GBP 795 Turkey GBP 795

Chile GBP 795 Italy GBP 795 Russia GBP 795 UK GBP 795

China GBP 795 Japan GBP 795 South Africa GBP 795 USA GBP 795

Retailer Payments, Banking, Insurance and Assistance in...

A variety of country-specific reports and associated Partner BASE™ datasets about retailer

payments, banking, insurance and assistance are also available from Fin accord, as listed below.

These are based in part upon the same research programs as the multi-country titles but focus

instead on particular countries.

* The same notes apply here as on the previous page






How can the research be purchased?

Simple. Just go to the relevant area of the Fin accord web site available at

www.finaccord.com/order_global_rfsr.htm and fill in the online order form, clearly indicating:

• report required

• type of corporate user licence, if required *

• billing name

• address and e-mail address

• purchase order number, if applicable

Please allow up to one working day for the delivery of electronic copy by e-mail.

* For the corporate user licence please choose one of the following options:

1. One office, one country: no supplement over and above basic cost of reports ordered

2. Multiple offices, one country: additional 20% over and above basic cost of reports ordered

3. Multiple offices, two to ten countries: additional 50% over and above basic cost of reports ordered

4. Global (unlimited offices in unlimited countries): additional 100% over and above basic cost of reports ordered

VAT at the prevailing rate will be added to the price of any corporate user licence acquired by UK-based buyers.



http://www.finaccord.com/order_global_rfsr.htm







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