Market Sharesof $286.71 Bil. in Purchase Volume 2014
Change in Basis Points2014 vs. 2013
Purchase Volume ($Bil.) in 2013 vs. 2014
7 Middle East/Africa General Purpose Cards 2014 vs. 2013 9 Purchase Volume U.S. Cards 2014, Consumer & Commercial
11 Purchase Transactions on Global General Purpose Cards Midyear 2015, Credit and Debit
2 – 4 Fast Facts 5 PerformLine Marketing Compliance Platform 8 Zazoo Mobile Virtual Cards
10 Merchant Litigations Update
INSIDE CHARTS
U.S. Commercial Cards — Part 3Commercial and consumer credit, debit, and prepaid general purpose cards in circulation in the U.S. in 2014 combined to generate $4.440 trillion in purchases of goods and services.
Mobile Payments in AustriaPayment Services Austria (PSA), which is owned by Austrian banks, provides debit card issuing and ATM acquiring services in Austria. PSA outsources debit card account processing to Switzerland-based
Chase Freedom Mobile AppChase Freedom is a cash back credit card product available since 2003 from the largest credit card issuer in the world. Cardholders earn 1% cash back from most card purchases and 5% in select
CashStar Private Label PrepaidA Series D funding round led by FTV Capital has brought another $15 million to private label prepaid card provider CashStar. Total venture funding in CashStar has reached $50 million. The
Global General Purpose Cards — Midyear 2015Credit, debit, and prepaid cards carrying Visa, UnionPay, MasterCard, American Express, JCB, and Diners Club/Discover brands generated $9.879 trillion in purchase volume of goods
Featurespace Machine Learning Fraud FightingPredictive models using adaptive behavioral analytic tools operating on a machine learning-based platform is the business of fraud fighter Featurespace. The company says that card issuers
Cards in the Middle East and AfricaCredit, debit, and prepaid cards issued in the Middle East and Africa region with the MasterCard, Visa, American Express, and Diners Club brands generated $786.32 billion in total volume in 2014. This included purchases for goods and services as well as cash transactions at ATMs and over the counter at branches. Total volume grew 16.3% from 2013. Purchase volume for good and services only
Rewards/Loyalty Platform for Europe’s SMBsIzicap offers a cloud-based platform acquirers use to offer small and midsized businesses (SMBs) rewards and loyalty programs, as well as analytics to support marketing campaign management.
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CONSUMER FINANCIAL PROTECTION BUREAU has fined Fifth Third Bank $500,000 and required it to provide an estimated $3 million in relief to eligible cardholders for deceptive marketing practices associated with insurance products that promised to cancel payments owed due to job loss, disability, hospitalization, or other hardship. Fifth Third is the 11th U.S. issuer to be fined by the CFPB for deceptive marketing practices of credit card add-on products.
BLUE STAR PAYMENT SOLUTIONS has become the preferred processing partner of ParkHub.com’s Prime mobile POS platform. Jerry Mooty is President at Blue Star Payment Solutions, (972) 525-0685, [email protected], www.bluestarpays.com. Jarrod Fresquez is CMO at ParkHub, (214) 663-0505, [email protected], www.parkhub.com.
KOUNT, a top provider to card-not-present merchants of fraud detection and sales support, has integrated into its SaaS platform Emailage, a technology that gives merchants the ability to assess and leverage risk based on a user’s email address. Brad Wiskirchen is CEO at Kount, (208) 489-3389, [email protected], www.kount.com. Rei Carvalho is CEO at Emailage, (480) 226-6822, [email protected], www.emailage.com.
EMERGENT PAYMENTS, formerly Live Gamer, will integrate into its payment acceptance platform Optimal Payments’ Neteller service and Net+ Card Stored Value products. Neteller offers more than 100 payment options through a single API connection. Emergent Payments focuses on emerging markets. Lorenzo Pellegrino is EVP at Optimal Payments, (646) 595-9212, lorenzo.pellegrino@ optimalpayments.com, www.optimalpayments.com. Mitch Davis is CEO at Emergent Payments, (917) 671-8201, [email protected], www.emergentpayments.net.
BANK OF AMERICA is promoting two new MasterCard credit cards to passengers of Amtrak. The Amtrak Guest Re-wards World MasterCard offers a complimentary companion coupon, one class upgrade, and a single-day Club Acela pass when accounts are opened, 20,000 Amtrak Guest Rewards bonus points after spending at least $1,000 within 90 days of account opening, 3 Amtrak Guest Rewards bonus points for every $1 spent with Amtrak, and more. Michael Simpson is Executive for Co-Brand Partnerships at Bank of America, (302) 432-0511, [email protected], www.bankofamerica.com.
ALLIANCE DATA SYSTEMS will provide private label credit cards and support services for Toyota and Lexus in the U.S. It will also assume ownership of an existing Visa co-branded card program currently owned by Toyota Financial Savings. Melisa Miller is President, Card Services at Alliance Data, (614) 729-4900, melisa.miller@ alliancedata.com, www.alliancedata.com.
VERIFONE’S EMV-compliant, NFC-enabled UX Solutions unattended payment devices have been certified by Moneris Solutions. Shan Ethridge is VP and GM, North American Financial Services Group at Verifone, (770) 754-3432, [email protected], www.verifone.com. Chris Lee is President of North America Strategic Partnerships at Moneris, (502) 296-8457, [email protected], www.monerisusa.com.
PAYMENT DATA SYSTEMS’ wholly-owned subsidiary, FiCentive, is offering a reloadable prepaid card that busi-nesses can use for disbursements to customers, contractors, and employees. The Stream Prepaid MasterCard, issued by Metropolitan Commercial Bank, supports the delivery of commissions, rewards, and other payments. Houston Frost is SVP, Prepaid Products at Payment Data, (210) 249-4080, [email protected], www.paymentdata.com.
FAST
FACT
S
SEPTEMBER 2015 ISSUE 1072
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Conferences & Seminars
NFC Solutions Summit 2015: October 7-8, 2015. The Arizona Grand Resort, Phoenix, Arizona. Estimated attendance: 250. Cost for the three-day conference is $1,020 for members and $1,270 for nonmembers. Subscribers to The Nilson Report will receive a 20% discount. (Use code PDDSC.) Contact Bill Rutledge at Smart Card Alliance, (212) 866-2169, [email protected]. Register at www.nfcsolutionssummit.com.
ETA Strategic Leadership Forum 2015: October 13-15, 2015. The JW Marriott Scottsdale Camelback Inn Resort & Spa, Scottsdale, Arizona. Estimated attendance: 450. Cost for the three-day conference is $1,295. Subscribers to The Nilson Report will receive a $100 discount. (Use code NILSON.) Contact Del Baker Robertson at ETA, (202) 828-2635 x204, [email protected]. Register at www.electran.org/slf15.
Mobey Day 2015: October 14-15, 2015. The CosmoCaixa, Barcelona, Spain. Estimated attendance: 300. Cost for the two-day conference is $1,508 (+21% VAT). Subscribers to The Nilson Report will receive a 25% discount. (Use code MD1525%.) Contact Shalini Sharma at Mobey Forum, [email protected]. Register at http://mobeyday.com.
2015 WSAA Annual Conference: October 28-29, 2015. The M Resort Spa Casino, Henderson, Nevada. Estimated attendance: 1,000. Cost for the two-day conference is $99. Contact Xavier Ayala, President, WSAA, (707) 445-5401, [email protected]. Register at www.westernstatesacquirers.com.
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e-NABLER has certified three of Partner Tech’s PC-based, open architecture POS tablets for use with its eMobilePOS software. All three are Android-based and can be paired with chip & PIN readers to process EMV-compliant payments. Matthew Inan is Director of Business Development and Sales at e-Nabler, (954) 258-9773, [email protected], www.e-nablercorp.com. Keith Schroer is VP of Sales at Partner Tech, (513) 367-6935, [email protected], www.partnertechcorp.com.
CTRIP, one of the top travel agencies in China, is using Digital River World Payments to process Visa, MasterCard, and UnionPay payment cards at its Singapore site. It also intends to use Digital River in Korea. Hayden Reed is SVP & General Manager at Digital River, (952) 225-3438, [email protected], www.digitalriver.com.
U.S. DISTRICT COURT Judge Paul Magnuson for the District of Minnesota granted class action status on September 15, 2015, to litigation brought by U.S. community banks and credit unions against Target related to the 2013 data breach that resulted in the theft of more than 40 million payment card account numbers. Umpqua Bank, Mutual Bank, Village Bank, CSE Federal CU, and First Federal Savings of Lorain have been appointed to represent all entities in the U.S. and its territories that issued payment cards.
NACHA’S Payments Innovation Alliance has formed a team to explore topics related to mobile wallets, including best practices, provisioning and accep-tance issues, and implementation challenges. The Alliance has more than 200 member organizations. George Throckmorton is Managing Director, Advanced Payments Solutions at NACHA, (804) 737-8200, [email protected], www.nacha.org.
VISA has designed a biometric specification that can be integrated with EMV chips to support “match-on-card” authentication. Absa Bank in South Africa will use it at ATMs, where cardholders will use a fingerprint reader rather than a PIN. John Sheets is Senior Director of Risk Products at Visa, (415) 805-4078, [email protected], visa.com.
SAM’S CLUB, a division of Wal-Mart Stores and the 8th largest U.S. retailer, will accept American Express cards beginning October 1, 2015. Anré Williams is President, Global Merchant Services at American Express, (212) 640-8809, [email protected], www.americanexpress.com.
MUFG UNION BANK in the U.S. has launched a commercial card program offering Purchasing, T&E, ePayables Virtual Cards, and other products. The cards are MasterCard branded. Ray Fattell is Head of Product and Innovation for Transaction Banking at MUFG Union Bank, (646) 452-4782, [email protected], www.unionbank.com/commercialcards.
or dissemination of any portion of this document in any manner is a copyright violation subject to substantial fines.
Card Issuers
Merchant Acquirersand
in
Asia/Pacific, United States, Europe, Latin America, Middle East/Africa, and Canada
Over 1,000* Card Issuersfrom 115 countries in all world regions*includes over 700 outside the U.S.
7th Edition
275* Merchant Acquirersfrom 65 countries in all world regions
*includes over 190 outside the U.S.
Figures include cardsin circulationand spending for
credit & debit card issuers
Order Todaywww.nilsonreport.com/specialreport
Steve Aliferis has been appointed President, Asia Pacific at Verifone, 65 (63) 903-218, [email protected], www.verifone.com. Patricia Watson has been appointed CIO at TSYS, (706) 644-3033, [email protected]. Philip Julian, formerly at Visa, has been appointed Head of Sales, Australia and New Zealand at i2c, 61 (2) 9004-7087, [email protected]. Greg Mallin, formerly at MasterCard, has been appointed Director of New Business Development at BillingTree, (602) 443-5900, [email protected]. Elizabeth Buse has resigned as CEO at Monitise. Lee Cameron has been appointed CEO at Monitise, 44 (207) 947-4300, [email protected]. Manav Gupta has been appointed Vice President, Issuer Products at Verifi, Inc., (323) 655-5789, [email protected]. Bill Lodes has been appointed Senior VP, Business Development and Strategy at First American Payment Systems, (817) 317-9145, [email protected]. John Wordley has been appointed Head of Sales at AccessPay, 44 (203) 282-7152, [email protected]. Ron Fetzer has been appointed Vice President of Finance at Ubiquity Global Services, (917) 576-9686, [email protected]. Raymond D’Aponte has been appointed Chief Financial Officer at Planet Payment, (516) 941-1885, [email protected]. David Laferla has been appointed Chief Financial Officer at The Strawhecker Group, (402) 964-2617, [email protected]. Pawan Chawla, formerly at Visa, has been appointed Vice President Merchant Solutions & Strategy at Emergent Payments, (650) 320-9300, pchawla@ emergentpayments.net.
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ARUBA BANK has implemented Euronet Software Solutions’ EMV chip card acquiring platform for ATMs and POS terminals. Marc Kwaad is Executive Director at Aruba Bank, (297) 527-7610, [email protected], www.arubabank.com. Cindy Ashcraft is Managing Director at Euronet Software Solutions, (501) 218-7000, esw-cindyashcraft@ euronetworldwide.com, www.euronetsoftware.com.
PREMIER BANK in Bangladesh, a card account processing client of TSYS since 2003, will upgrade management of its portfolio to PRIME 4, the latest version of TSYS’s PRIME platform. Jaffar Agha-Jaffar is Mng. Dir., PRIME Licensing & Group Exec. at TSYS Int’l, (971) 4391-2823, jagha-jaffar@ tsys.com, www.tsys.com. Omar Faruque Bhuiyan is Sr. EVP & Head, Cards Division at Premier Bank, 880 (2) 982-08448 x226, faruque.bhuiyan@ premierbankltd.com, www.premierbankltd.com.
EVERTEC will pay $5.4 million to buy 65% of the shares of payment processor Processa in Colombia. Evertec is the 8th largest acquirer in the Caribbean and Central America, and handles 2.1 billion transactions annually. Alan Cohen is EVP at Evertec, (787) 773-5331, [email protected], www.evertecinc.com.
CARREFOUR BELGIUM will install POS terminals from Worldline in 747 locations. The terminals will be equipped with the Visa PayWave NFC technology to process contactless payment cards. Jean-Marie de Crayencour is Country Manager BeLux at Visa Europe, 32 (2) 274-4767, [email protected], www.visaeurope.com. Willy Walraeve is CEO at Worldline Benelux, 32 (2) 727-7028, [email protected], www.atosworldline.com.
INFORM and GLOBAL RISK TECHNOLOGIES are partners on an end-to-end, card-not-present chargeback prevention service for merchants and acquirers in Europe and the U.S. Stanley Harmsen van der Vliet is RiskShield Marketing Manager at Inform, 49 (2408) 9456-5000, [email protected], www.riskshield.com. Gary Cardone is CEO at Global Risk Technologies, (213) 400-9189, [email protected], wwwglobalrisktechnologies.com.
MBNA, the 5th largest credit card issuer in the U.K. and the 19th largest in Europe, has launched the MBNA Everyday Plus American Express Credit Card. Features include a 7.4% finance charge rate and no annual fee as well as no fees for: money transfers, balance transfers, ATM usage anywhere in the world, credit card handling, and foreign exchange transactions. Ian O’Doherty is CEO at MBNA, 44 (1244) 672-251, [email protected], www.mbna.co.uk. Andy Besant is VP and Head of Global Network Partnerships, Europe at American Express, 44 (1273) 215-657, [email protected], www.americanexpress.com.
ALPHA PAYMENTS CLOUD, provider of an omnichannel platform that links risk and commerce vendors with merchants and financial institutions, has added Paysera payments. Paysera is a Lithuanian-based payment system with more than 200,000 users. Ronan Gallagher is Chief Product Officer at Alpha Payments Cloud, 353 (1) 960-9024 x503, [email protected], www.alphapaymentscloud.com. Daumantas Barauskas is Head of Development Projects at EVP International, Developers of Paysera, 370 (618) 662-03, [email protected], www.paysera.com.
DINERS CLUB SA, the Diners Club franchise in South Africa, which is owned and operated by Standard Bank of South Africa, will migrate to EMV compliance using technology from Proxama for issuing, transaction process-ing, and PIN management. Ebrahim Matthews is Managing Director at Diners Club South Africa, 27 (11) 358-8500, ebrahim.matthews@ dinersclub.co.za, www.dinersclub.co.za. Patrick Regester is EVP for Strategic Accounts and Partnerships, Digital Payments Division at Proxama, 44 (203) 668-2888, [email protected], www.proxama.com.
CONTIS GROUP provides end-to-end banking and payment programs for private label and co-branded contactless prepaid and debit cards. It owns an e-money license in the EU, is a Principal Member of Visa Europe, and is a certified processor. Peter Cox is Executive Chairman at Contis Group, 44 (7970) 131-888, [email protected]. www.contisgroup.com.
BANK OF IRELAND will convert all Visa credit cards in its portfolio to MasterCard over the next 9 months. Its debit cards will remain Visa branded. Bank of Ireland owns the 35th largest credit card portfolio in Europe. Austin Cleary is Head of Consumer Cards at Bank of Ireland, 353 (07) 662-43927, [email protected], www.boi.com.
RUSSIAN STANDARD BANK processed 258.6 million payment card transactions in 2014, making it the 38th largest merchant acquirer in Europe. Ivan Glazachev is Head of Acquiring & e-Commerce at RSB, 7 (903) 960-8031, [email protected], www.rsb.ru.
PAY.ON has integrated into the payment platform it white labels to PSPs GFKL Group’s PayProtect risk management service, which offers online merchants 100% protection against payment default for direct debit and open invoice payments. PayProtect is particularly valuable in Germany, Austria, and Switzerland. Markus Rinderer is CEO at PAY.ON, 49 (89) 452-300, [email protected], www.payon.com. Marc Schillinger is Member of the Management Board at GFKL Financial Services, 49 (201) 102-1195, [email protected], www.gfkl.com.
NEW PAYMENTS LANDSCAPE 2015
Two-Day ConferenceOctober 8-9, 2015The Sofitel London St. James, London, U.K.
Featured Conference
Topics include: the potential of the block chain, opportunities in Iran, the present and future role of cards, regulation, securing web payments and innovation and disruptors. Speakers represent: BBVA, Equity Bank, Fidor, iZettle, MasterCard, Reliance Payment Services, Visa, and more. Cost is $1,400 industry rate and $2,495 standard rate. (Use code Nilson2015. Excludes any early bird rates.) Contact Caroline Hastings at Lafferty Group, 44 (203) 008-8415, [email protected]. Register at www.laffertyevents.com.
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merchant categories. They redeem their rewards via credits on
monthly statements or as money deposited in their bank accounts.
In 2009 Chase Freedom cardholders gained access to Chase Ultimate Rewards, a loyalty program open to all Chase credit and debit cardholders. Their cash back points could be redeemed for hotel, air, car rental reservations, and private label prepaid cards.
This month Chase Freedom cardholders were given another
redemption option — the Chase Freedom mobile app, which lets them use cash back points to pay for purchases at 30 participating merchants. Qualitative and quantitative research showed Chase that cardholders wanted to act spontaneously with their rewards.
While in the merchant’s store, cardholders open the app to check their cash back balance, select the merchant, and then trigger the app to generate a barcode or QR code, which clerks scan in the checkout lane.
If the available cash back amount is insufficient to cover the entire purchase amount, the merchant’s POS system creates a split tender, and accepts payment by cash, check, or card to cover the balance.
Merchants participating in the Chase Freedom Mobile app do not need to be customers of Chase Commerce Solutions, the 4th largest U.S. acquirer.
Chase Freedom and all other credit card customers of Chase
already have access to a mobile app that lets them pay their credit card bill, check account status, and view recent transactions and rewards balances.
Chase Freedom Mobile is an app dedicated to payments. It has a second feature — person-to-person (P2P) money transfers. The P2P transactions are an extension of Chase’s existing Chase QuickPay service.
Senders need only the recipient’s email address or phone number to initiate a transfer. Recipients do not need to be a Chase Freedom cardholder or a Chase deposit account customer. Chase is planning on additional features for the Freedom Mobile app.
Digital communications including search and display ads as well as speech communication by customer service agents and sales staff are potential problems for card issuers and other financial services companies if they don’t fully comply with regulatory requirements including the Truth in
Lending Act, the Card Act, and Unfair, Deceptive, or Abusive Acts or Practices.
PerformLine is a seven-year-old company that offers a compliance platform on a software-as-a-service (SaaS) basis to help companies with all or some of their communications. The aim is to provide proper compliance monitoring while supporting aggressive marketing of profitable products. Large fines have been paid over the last four years by most top card issuers, and they have become reluctant
...lets cardholders use cash back points to make in-store purchases.
...helps prevent fines and financial settlements with regulators.
to market some products to their credit and debit card customers.
PerformLine helps prevent fines and financial settlements with regulators including the Consumer Financial Protection Bureau. It also protects against reimbursements to cardholders.
Clients including Barclaycard US receive a dashboard they can use to monitor the actions of their outside agents and their own marketing efforts. When messages are not in compliance, they can be corrected
immediately. The process is more efficient and more scalable than the legacy practice of manually reviewing communications, which typically covers less than 10% of all activity.
PerformLine use a monthly subscription revenue model. It has clients in the U.S., Canada, and the U.K.Alex Baydin is CEO at PerformLine in Morristown,
Merchant customers of Credit Agricole in the Provence area of France have beta tested Izicap’s
platform over the last six months. Izicap says that the test has demonstrated proof of concept and that acquirers and their merchants have valid benchmarks for returns on their investments.
Markadis, currently an ISO in the U.K. and Ireland, has licensed Izicap’s platform and will begin marketing it on a white-label basis to its merchants in October as a service called Mii-Promo. Credit Agricole merchants continue to use it under Izicap’s Twiing service mark.
Merchant rewards including cash back and loyalty programs can be tied to a payment card and delivered through QR codes on smartphones, through paper vouchers, or directly on POS terminals. Cardholder spending triggers merchant communication through automated email or SMS text messages. The Izicap platform handles all account management for cardholders such as the amount of cash back rewards they
have earned. Cardholders can view their accounts online and generate a voucher for in-store use.
Merchants are given a portal to see all of their transactions. Consulting services from Izicap help merchants set
up loyalty programs and develop marketing campaigns. Izicap’s platform analyzes card transaction data during nightly batch processing.
Izicap expects to deliver its platform to acquirers in Portugal and other European markets in 2016, as well as to a partner in Brazil. The start-up has raised $1.0 million in equity and debt financing since 2013. Miguel Mateus is CEO at Izicap
Markadis, a joint venture between Valitor, an Iceland-based acquirer, and Witstock, a consulting service specializing in cards and payments, opened for business in 2014. It leverages Valitor’s processing platform for acquiring services and sees Mii-Promo as a way to differentiate
itself from companies competing mainly on the lowest price for card processing. Valitor’s data center in Iceland processed 74.8 million card transactions last year. It ranks 67th among merchant card acquirers in Europe.
Markadis has applied for a license from the U.K.’s Financial Conduct Authority to become a payment institution. Once the license is granted, Markadis will be able to handle small and midtier merchant card receivables in the U.K. and Ireland. It sees revenue opportunities associated with providing marketing programs to local merchants.
It promises to help them grow their businesses in the 3% range annually while offering card processing with no hidden fees. Markadis also offers merchants an opportunity to avoid certain PCI DSS compliance costs. Adrian Cannon is Managing
from these global general purpose card brands increased 16.8% to $286.71 billion. Cash volume of $499.60 billion accounted for
63.54% of total volume in 2014, down from 63.71% in 2013.
Both MasterCard and Visa had double-digit growth in purchase volume in 2014. Visa’s purchase volume grew by $25.25 billion or 18.5% over the prior year. MasterCard’s purchase volume grew by $15.48 billion or 15.9%. American Express’s purchase volume grew by $0.45 billion or 5.6%, while Diners Club’s increase was $0.10 billion or 3.4%.
Visa’s share of purchase volume grew 78 basis points to 56.55%. MasterCard’s market share declined 32 basis points to 39.37%. American Express’s share dropped 32 basis points to 3.00%.
Diners Club’s share fell 14 basis points to 1.08%.
Purchase transactions generated by these cards
reached 3.62 billion, up 18.3%. MasterCard and Visa cards generated 3.55 billion purchase transactions in 2014, equal to 97.95% of the total in the Middle East and Africa region for global cards, up from 97.71%.
Visa’s market share of purchase transactions fell to 56.52% from 58.09%. MasterCard’s share grew to 41.43% from 39.62%. Amex’s share declined to 1.39% from 1.55%. Diners Club’s share of 0.65% was down from 0.74%.
Global brand credit, debit, and prepaid cards in circulation at year-end 2014 totaled 218.4
million, up 9.5%. MasterCard and Visa cards accounted for 99.19%.
Visa added 4.4 million cards but its market share fell to 58.12% from 61.43%. MasterCard added 14.5 million cards and its market share grew to 41.08% from 37.72%.
Visa cards issued in the Middle East and Africa region accounted for 4.48% of all Visa cards in circulation worldwide at the end of 2014, down from 4.59% in 2013. The region accounted for 2.38% of Visa’s worldwide purchase volume in 2014, up from 2.22% in 2013, and 1.81% of its purchase transactions, up from 1.73%.
MasterCard cards issued in the Middle East and Africa region accounted for 6.24% of all
MasterCard cards in circulation worldwide at the end of 2014, up from 5.95% in 2013. The region accounted for 3.44% of MasterCard’s worldwide purchase volume, up from 3.33%, and 2.91% of its purchase transactions, up from 2.67%.
Both MasterCard and Visa had double-digit growth in 2014.
Volume (bil.) Transactions (mil.) Cards Brand Total Chg. Purchases Chg. Cash Chg. Total Chg. Purchases Chg. (mil.) Chg.
Includes all general purpose consumer and commercial credit, debit, and prepaid cards. Currency fi gures are in U.S. dollars. Change fi gures are based on local currency. Some prior year fi gures have been restated. Includes Israel. Visa includes Electron. MasterCard excludes Maestro & Cirrus.
Six Payment Services. PSA has developed a SIM-based NFC mobile payment application called Bankomatkarte Mobile in partnership with Vienna-
based technology company Research
Industrial Systems Engineering (Rise). Bankomatkarte Mobile will be available to all banks and mobile network operators in Austria in the fourth quarter of this year.
The Bankomatkarte Mobile app is available only for Android handsets running version 4.1 (Jelly Bean) or higher. Over 75% of the Austrian mobile handset market is Android-based. A virtual Maestro PayPass debit card is linked to a bank account to fund transactions initiated by the app. Maestro is a service mark of MasterCard.
Consumers will be able to order a virtual debit card through their bank’s website. That virtual card is generated by the bank’s payment card account processor. The card account number will be provisioned to the SIM over the air by PSA. It uses the Rise banking service manager technology platform, and PSA is the trusted service manager
between the banks and mobile network operators A1, T-Mobile Austria, and Drei Austria.
Bankomatkarte Mobile can be used in any country where PayPass contactless payments are accepted. There are more than 250,000 PayPass outlets worldwide, including an estimated 35,000 in Austria. Consumers will be able to use
Bankomatkarte Mobile for online purchases if they sign up for MasterCard SecureCode.
Next year Bankomatkarte Mobile will be open to Visa credit and debit cards when VPay is rolled out in Austria. MasterCard credit cards will also be able to be loaded into the wallet.
Rainer Schamberger is
Chief Executive Officer at
Payment Services Austria in
Vienna, Austria, 43 (1) 7171-
8100, rainer.schamberger@
psa.at, www.psa.at.
Rise provides PSA with a payment and banking transaction platform and payment transaction processing software. The platform can handle more than 2,000 transactions per second. Rise also provides transaction processing software for national transport ticketing in Austria.Thomas Grechenig is Chief Executive Officer at
Research Industrial Systems Engineering in Vienna,
Austria, 43 (664) 6084-441080, thomas.grechenig@
rise-world.com, www.rise-world.com.
Approximately four million unbanked and underbanked people in South Africa use
mobile phone-based payments and MasterCard branded virtual payment cards from Zazoo, which manages mobile products on its parent company’s Net1 Universal Electronic Payment System
(UEPS) platform. Transactions for banking, loans, insurance, cash withdrawals, payroll, and remittances are secured by fingerprint and voice biometrics. Grindrod Bank is the MasterCard card issuer.
Net1 is South Africa’s largest transaction processor of social welfare payments. Recently it added support for similar products in Nigeria. Zazoo mobile technology is offline. Virtual cards are created on a phone, not at a remote data center. Net1 created Zazoo to take virtual prepaid MasterCard card technology to
Europe and the U.S. It is looking for customers outside of social welfare payments.
Because there is no need to connect to a host, one-time card numbers can be instantly created for both online and contactless payments. It can offer prepaid card managers voice authentication to verify the identity of a caller and create a card using that authentication method. Because its platform also offers a split payment app, a group of friends can contribute to a restaurant charge or online purchase while the merchant
Virtual Maestro PayPass cards linked to bank accounts fund transactions.
Mobile Payments in Austriafrom page 1...
Zazoo Mobile Virtual Cards
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Commercial card products used by employees of small, medium, and large private companies, federal, state, and local government agencies, and nonprofit organizations generated $988.84 billion or 22.27% of the total, up from 21.75% in 2013.
Purchase volume on commercial cards grew by 11.5% last year compared to spending for goods and services by cards issued to consumers, which was up 8.2%.
Visa remained the top brand for commercial cards in 2014, with purchase volume growth of 12.7% to $393.86 billion. Visa cards held a 39.83% market share
last year versus American Express, MasterCard, and Discover. Visa’s market share of commercial card spending was up from 39.41% in 2013. Visa’s consumer card purchase volume grew by 9.1% in 2014, and its market share of those card products was 60.59%, up from 60.08%.
Commercial card purchase volume of $328.05 billion for American Express was up 9.6%. Its commercial card market share dropped to 33.18% from 33.74% in 2013. Consumer card purchase volume at Amex was up 6.7% in
2014 and its market share of those card products was 10.32%, down from 10.47%.
Purchase volume of $264.73 billion from MasterCard commercial card products was
up 12.2%. Its market share of 26.77% was up from 26.60% in 2013. Consumer card purchase volume grew 7.9% in 2014, and its market share of those products at 25.46% was down from 25.54% the prior year.
Discover commercial card purchase volume of $2.20 billion increased by 1.14%. Its share dropped to 0.22% from 0.24%. Consumer card purchase volume at Discover grew by 0.1% in 2014, and its market share of those products was 3.62%, down from 3.92% the prior year.
As a percentage of each brand’s combined consumer and commercial purchase volume, commercial cards generated: 47.93% at American Express, 23.15% at MasterCard, 15.85% at Visa, and 1.73% at Discover.
Prior issues: 1049, 1026, 1002, 979
receives only one consolidated payment. Zazoo also sees opportunities for remittances. Receivers of money transfers could immediately make a local bill
payment using a one-time-only MasterCard number using the Zazoo app.
In the U.S., Zazoo tested its mobile virtual payment card service under the name “Pay in Private.”
The Bancorp Bank was the issuer. Fiserv handled the account processing.
In Korea, Net1 owns KSNET, a POS terminal network linking 200,000 merchants. EasyPay in South Africa operates on Net1’s switch. It is linked to more than 60,000 merchants.
Recent acquisitions by Net1 include Transact24, an acquirer in Hong Kong, and OneCredit, a personal loan provider in Nigeria. Philip Belamont is Managing Director at Zazoo in
and gambling sites benefit from a reduction of up to 70% in false positive transactions
(valid business misidentified as fraud) versus legacy, rules-based fraud fighting systems. Featurespace can host its platform or install it onsite. It receives an annual licensing fee. Top card issuers in the U.K. have added Featurespace’s platform as a supplement to their existing systems that fight fraud at the point of sale as well as in the online and mobile channels.
In addition to booking more sales because they reduce false positive transactions, issuers benefit from protection in real time against new kinds of fraud. Featurespace can identify fraud from factors criminals deploy for the first time. By comparison,
legacy systems only catch fraud that they have already been trained to identify because they
have been introduced to factors previously used by fraudsters. Issuers often become aware of a new fraud scheme only after a cardholder reports a problem. Featurespace scores every transaction and spots red flags immediately, reporting them to fraud managers.
Featurespace is privately held. It has received $8.5 million (£5.5 million) in three rounds of venture funding. The company has 21 customers in the U.K. including card issuers, online and offline gambling sites, and Vocalink’s Zapp mobile service.
Featurespace models create a statistical profile of every entity — cardholder, merchant, as well as anything specified by a client such as ATMs or bank identification numbers. This permits behavioral analysis based on context within the total population of the customer database. Fraud attacks can be monitored at the individual and network level.
Prospective clients can install a Featurespace model on a proof-of-concept basis to quantify its benefits before deploying the entire system. Martina King is CEO at Featurespace
in Cambridge, U.K., 44 (122) 334-
5925, martina.king@featurespace.
co.uk, www.featurespace.co.uk.
Lawyers representing plaintiffs and defendants filed arguments in U.S. District Court for the Eastern District of New York on Tuesday, September 1, 2015, in favor of overturning or retaining a $7.25 billion settlement of class action litigation that pitted Visa, MasterCard, and 12 credit card issuers against U.S. merchants. The settlement was finalized more than a year ago after a decade of legal proceedings that originated with large merchants filing individual price-fixing lawsuits regarding interchange fees they paid to acquirers of Visa and MasterCard card payments. The cases were ultimately consolidated into a class action.
A number of large merchants opposed the settlement agreement reached in 2013 because they contend it precludes any future litigation on similar grounds. Beyond that, they now say it was compromised and seek to overturn it after learning
about the email exchange of documents between an attorney representing MasterCard (Keila Ravelo) and an attorney representing the merchants (Gary Friedman). Ravelo was retained by MasterCard but was not the lead counsel for MasterCard. That firm is Paul, Weiss, Rifkind, Wharton & Garrison. Mr. Friedman was the lead attorney representing merchants in litigation against American Express
concerning surcharging. Plaintiffs and defendants disagree on the size of his role in the Visa/MasterCard case.
The documents sent by Friedman to Ravelo concerned the Amex surcharge case and were protected by court order. They should not have been disclosed to a MasterCard attorney. The Amex surcharging case had received preliminary, but not final, approval by the court. In August, Judge
Plaintiffs and defendants disagree on the size of his role in the case.
U.K. issuers added the platform as a supplement to existing systems.
and services worldwide from January 1 to June 30, 2015, up 19.4% over the first six months of 2014. These global brand general purpose cards generated 106.56 billion purchase transactions in this period, up 15.5% over the first half of 2014.
Credit card purchase volume in the first six months of 2015 increased 18.3% over the same period in 2014. Purchase volume on debit cards (including prepaid) grew 20.5%.
When measuring combined credit and debit/prepaid purchase volume, debit cards generated 50.39% of spending, up from 49.94% for the same period in 2014. Purchase transactions on
debit cards accounted for 54.84% of combined credit and debit card
payments for goods and services, up from 54.33%.
Visa remained the global leader when measuring combined
credit and debit card purchase transactions worldwide for
the first six months of 2015. Nonetheless, its share fell to 56.20% from 58.64%. MasterCard’s share slipped to
26.39% from 26.52%. UnionPay’s share grew
to 12.18% from 9.20%. American Express declined to 3.34% from 3.64%. JCB grew to 0.87% from 0.83%, and Diners Club/Discover fell to 1.01% from 1.17%.
UnionPay was the global leader in combined credit and debit card purchase volume worldwide. Its market share increased to 42.73% from 38.04%.
Visa’s share declined to 34.06% from 36.85%. MasterCard’s share dropped to 16.43% from 17.51%.
American Express’s share fell to 5.08% from 5.69%. JCB’s share increased to 1.01% from 0.99%, and Diners Club/Discover’s share dropped to 0.70% from 0.92%.
Prior issues: 1060, 1049,
1037, 1026
Dollar Volume Purch. Trans. Brand Total (bil.) Chg. Purch. (bil.) Chg. Cash (bil.) Chg. (bil.) Chg.
Visa Credit $1,821.84 10.9% $1,693.00 11.9% $128.84 –0.7% 21.50 10.2%
company provides digital and plastic prepaid card and related services to retailer and restaurant
customers that own 300 brands in the U.S., Canada, the U.K., and Australia. Its platform processes 8 currencies and handles purchases from 157 countries.
CashStar offers its technology platform on a software-as-a-service (SaaS) basis. Clients use it to operate their own digital and plastic card programs as well as other prepaid promotions and incentives. By comparison, companies including Blackhawk and InComm sell private label prepaid cards on behalf of their customers.
While approximately 95% of the private label prepaid card market remains tied to plastic cards, at CashStar 75% of all sales are digital. When customers use CashStar for plastic cards, fulfillment is handled by card
manufacturer Valid. CashStar doesn’t provide card account processing, it integrates with the
processors used by its clients.CashStar delivers digital
prepaid cards to a computer or a smartphone. For in-store purchases, customers use a barcode that they either print at home or use on their
smartphone. They can also use their card number at the merchant’s checkout page for online purchases.
CashStar’s top competition comes mostly from in-house digital systems designed by retailers for use on card account processing platforms supplied by third parties. The company says these in-house systems don’t usually stay current with the latest trends in features and functionality. CashStar’s core competency is
software development, and it plans to use some of the proceeds from its Series D round to expand its software development staff.
CashStar also focuses on fraud prevention and risk management, critical factors in private label prepaid, which is the riskiest transaction among all card-not-present purchases. Prepaid products are effectively purchases of cash. CashStar uses mostly proprietary predictive models based on known good and fraudulent purchases of private
label prepaid cards, supplemented by some third party technology and data sources. Ben Kaplan is CEO at CashStar
Nicholas Garaufis denied final approval when informed about the document exchange. That case now remains open to be resettled or taken to trial.
Objectors wanting to overturn the settlement in the Visa/MasterCard case filed a motion citing the Friedman/Ravelo document exchange in addition to their complaint about giving up the right to sue. Lawyers for MasterCard, Visa, and the 12 banks responded, saying the settlement was not influenced by the document exchange. Objectors filed a rebuttal to the defendants’ motion. A judge or magistrate will now decide if there is enough information to make
a decision or whether the parties need to make oral arguments. A decision is likely in October.
Not impacted by the Friedman/Ravelo document exchange is the Department of Justice (DOJ) lawsuit versus American Express concerning steering — Amex rules that prevent merchants from asking consumers to use another card brand. The DOJ prevailed in that case and American Express is appealing the decision. Both parties have filed motions in the appellate court.
Prior issues: 1069, 1031, 1018, 998
...processes 8 currencies and han-dles purchases from 157 countries.
CashStar Private Label Prepaid from page 1...
Merchant Litigations Update from page 10...
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