Card Fraud WorldwideIssuers, merchants and acquirers of merchant and ATM transactions collectively lost $28.58 billion to card fraud in 2020, equal to 6.8¢ per $100 in purchase volume.
p11 Top 25 Domestic-Only Payment Cards Worldwide — Debit
p12 Fraud Fighting for SMBs
p12 In-Store Payment Orchestration
p13 VisionLabs Facial Biometrics and Card Payments
p14 Card Manufacturers — Part 1
p16 Barclaycard Payments Offers Fixed FX Rates
ISSUE 1209 DECEMBER 2021
FOR 51 YEARS, THE LEADING PUBLICATION COVERING PAYMENT SYSTEMS WORLDWIDE
COVER STORY
Card Fraud Losses Dip to $28.58 BillionLosses were incurred on global brand, domestic market-only, private label and ATM credit, debit and prepaid cards worldwide.p5
Voice-Activated In-Car PaymentsAI assisted technology that car manufacturers can install inside their vehicles is available from Cerence.p8
Top 150 Debit Card Issuers WorldwidePurchase volume generated by the largest issuers of debit
cards totaled $9.888 trillion in 2020, down 5.7% from 2019.p8
Fraud Fighting for SMBsSeon was formed to provide fraud protection to small and midsized businesses.p12
Ingenico’s In-Store Payment OrchestrationThe company is pivoting from hardware to software with a payments platform as a service.p12
Biometric POS PaymentsVisionLabs builds hardware and software for identification via facial recognition. p13
Payment Card Manufacturers RankedThere were 4.26 billion payment cards shipped by 45 manufacturers in 2020.p14
Barclaycard Payments Offers Fixed FX RatesEcommerce merchants in Europe can accept payments in 100+ local currencies with a fixed foreign exchange conversion rate.p16
REGULAR FEATURES
p16 Management Changes
p17 Investments & Acquisitions
FEATURED IN OUR UPCOMING ISSUE
U.S. Consumer Payment SystemsMarket shares of transactions—cards, paper-based and electronic—are presented for 2020 with a projection for 2025.
CONTENTS
Global Brand Card AcceptanceVisa and Mastercard operate the largest merchant acceptance networks with 80.0 million locations at the end of 3Q 2021.p10
Domestic-Only Debit Card IssuersThere are 93 general purpose card brands worldwide that operate only in their native country.p11
PHOTO CREDITS: Cover and Back Page Bady Abbas on Unsplash; p2 Alexander Tsang (top) and Zachary Xu (bottom) on Unsplash; p5 Joshua Fuller on Unsplash, p8 Charisse Kenion on Unsplash
merchant acceptance locations worldwide reached
100 million
Over the next ten years, the industry will experience losses to fraud totaling $408.50 billion
First Look
MARQETA is providing card account processing and related issuer support services for Square Card in Canada. Square Card is a Mastercard expense management credit product for small businesses. The card was launched in the U.S. in 2019. When business owners execute a sale, the revenue is immediately added to the card account balance. Merchants gain a day in their ability to access funds.
Christina Riechers is Head of Product, Square Banking, [email protected], www.squareup.com. Vidya Peters is COO at Marqeta, [email protected], www.marqeta.com.
UPLIFT, provider in Canada of a BNPL installment financing service to travel industry clients, has lowered the purchase amount for qualifying consumers to $300. The company has also added interest-free promotional financing on behalf of select merchant customers. Uplift integrates into its travel partner’s booking process.
Denise Heffron is Managing Director, dheffron@ uplift.com, www.uplift.com.
CROSS RIVER BANK, which provides financial services through an API-based platform, has formed a partnership with Payment Approved. That company provides clients in the money service business, ecommerce and retail sectors with end-to-end payment processing services, including FX exchange. All transactions are tracked on a digital ledger. Through this partnership with Payment Approved, Cross River’s payments and technology infrastructure will facilitate the disbursement of funds through its push-to-card capabilities on the Visa and Mastercard networks.
Keith Vander Leest is Director of Payments at Cross River, [email protected], www.crossriver.com. Jason Montoya is CEO at Payment Approved, [email protected], www.paymentapproved.com.
News in brief on payment industry trends around the world.
BOOST PAYMENT SOLUTIONS will provide its Boost Intercept straight-through-processing service to commercial card clients of Conferma Pay. Boost Intercept removes manual processing from commercial card payments and eliminates risks associated with sharing and storing sensitive data instructions. Boost is available in 37 countries.
Simon Barker is CEO at Conferma Pay, [email protected], www.confermapay.com. Dean Leavitt is CEO at Boost, [email protected], www.boostb2b.com.
CORNERCARD has opened Apple Pay to its customers in Luxembourg, Monaco, Austria, Ireland, Jersey, Guernsey and Isle of Man. The service was already available to the issuer’s cardholders in Switzerland and Liechtenstein.
Jennifer Bleth is CEO at Corner Europe, [email protected], www.cornercard.eu.
AMERICAN AIRLINES will provide BNPL financing options to eligible travelers. Customers can select Affirm at checkout and split the total cost of flights over $50 into monthly payments.
Derek Kerr is CFO at American Airlines, [email protected], www.aa.com. Silvija Martincevic is CCO at Affirm, [email protected], www.affirm.com.
PARKOPEDIA, a provider of products and services to connected vehicles, has integrated with Opngo, a digital parking service. Opngo parking reservations have been integrated with the Parkopedia app. Using license plate recognition technology, drivers in France, Spain and Belgium can enter and exit car parks without requiring a ticket or stopping at a pay station.
Hans Puvogel is COO at Parkopedia, [email protected], www.business.parkopedia.com. Pascale Bonnard is Managing Director at Opngo, [email protected], www.opngo.com.
VOYAGER DIGITAL, a publicly traded cryptocurrency platform provider in the U.S., will offer a Mastercard debit card that pays up to 9% in rewards annually. The card is based on the USD Coin (USDC), a stablecoin priced 1 to 1 to the U.S. dollar. Voyager has 2.7 million registered users. Metropolitan Commercial Bank issues the Mastercard card. Usio provides account processing and program management.
BANCABC ZIMBABWE will launch a suite of EMV-compliant commercial and consumer co-branded Zimswitch and Mastercard cards. Zimswitch is the national switch in Zimbabwe. The contactless cards will enable card-to-card funds transfers.
Lance Mambondiani is CEO at BancABC, [email protected], www.bancabc.co.zw. Charlton Goredema is VP of Business Development, Botswana and Zimbabwe at Mastercard, [email protected], www.mastercard.co.za. Cyril Nyatsanza is CEO at Zimswitch, [email protected], www.zimswitch.co.zw.
SPLITIT lets consumers use their existing credit cards to facilitate payments in monthly installments. The Splitit platform has completed integration with Wix, a cloud-based website development platform to over 210 million registered users. Other ecommerce platforms integrated with Splitit include Salesforce Commerce Cloud, Shopify, Magento, WooCommerce and BigCommerce. Splitit can operate in any country where Visa, Mastercard and Discover cards are accepted.
BANK OF QUEENSLAND has migrated its debit card portfolio to Fiserv’s cloud-based FirstVision card management platform. The bank gains the ability to add cards to digital wallets and gives cardholders the opportunity to pay with wearables. FirstVision provides issuers with fully integrated related services that span the card account lifecycle.
Sophie Tilden is Gen. Mgr. Everyday Banking and Deposits at BoQ, [email protected], www.boq.com. Kees Kwakernaak is Gen. Mgr. at Fiserv Australia, [email protected], www.fiserv.com/en-au.
MONEYGRAM has expanded its mobile wallet network by integrating with bKash in Bangladesh. The connection leverages MoneyGram’s partnership with Thunes. There are 55 million bKash wallets. Consumers use them to recharge mobile accounts, make utility bill payments and pay for ridesharing and delivery services.
Peter De Caluwe is CEO at Thunes, [email protected], www.thunes.com. Alex Holmes is CEO at MoneyGram, [email protected], www.moneygram.com.
PHONEPE, a mobile payment platform in India, handled over two billion transactions in October. The company operates on India’s UPI network. Transactions processed include P2P, P2M, mobile recharge and bill payment. PhonePe has 145 million active users. On an annualized basis, total payment volume has reached $600 billion.
FSS (Financial Software and Systems) will provide its omnichannel merchant acquiring platform to Brac Bank in Bangladesh. The platform consolidates online, mobile and in-store transactions. Merchants can offer card and QR code payment acceptance in-store and online. Brac supports 1,000 ecommerce and 10,000 in-store merchants.
Archit Mylandla is Executive Director at FSS, [email protected], www.fsstech.com. Khairuddin Ahmed Bappy is Head of Merchant Acquiring at Brac Bank, [email protected], www.bracbank.com.
ACI WORLDWIDE has added proprietary network intelligence technology to its ACI Fraud Management product. The technology augments fraud prevention strategies by enabling the sharing of fraud signals among a consortium of bank, processor, acquirer and network users of ACI Fraud Management for introduction to their custom machine learning models.
Cleber Martins is Head of Payments Intelligence and Risk Solutions, [email protected], www.aciworldwide.com.
CELLPOINT DIGITAL’S Velocity payment orchestration layer is used by Cebu Pacific, the largest airline based in the Philippines. Over 70% of Cebu bookings are made through the discount airline’s own digital channels. The partners have added to Velocity alternative payment methods widely used in the Philippines including GCash, GrabPay and PayMaya, with customer benefits including split payments between vouchers and cash.
Kristian Gjerding is CEO at CellPoint Digital, [email protected], www.cellpointdigital.com.
SMARTPAY has launched a BNPL service in Japan, where the company says shopping cart abandonment is in the 80% range. Consumers pay in three installments over 8 weeks. For the first time in Japan, a cross-merchant, cross-platform BNPL service is free to consumers with credit cards. Customers do not have to make their payments over the counter at convenience stores as is common in Japan.
CHARGEZOOM, provider of a cloud-based payment platform that connects to accounting systems, has integrated with FreshBooks. Clients of FreshBooks that select Chargezoom as their preferred payment processor receive automatic reconciliation of invoices. All records are GAAP compliant. Chargezoom also supports subscription billing and recurring payment management.
Matt Dubois is CEO at Chargezoom, [email protected], www.chargezoom.com.
WESTERN UNION and MASTERCARD have extended an existing 10-year partnership. The companies have expanded integration of WU’s global money network with Mastercard Send into 16 countries and integrated WU Business Solutions with Mastercard’s Cross-Border Services.
Gabriella Fitzgerald is President Americas at WU, [email protected], www.wu.com. Leigh Amaro is SVP Enterprise Partnerships at Mastercard, [email protected], www.mastercard.com.
PAGA GROUP in Nigeria is adding ultrasonic authentication technology from Lisnr to its Paga payment and Doroki merchant apps. The company supports 33,000 merchants and 19 million users. Lisnr data-over-sound proximity verification technology will be used for P2B and P2P payments. Paga’s goal is to have 120,000 merchant customers in two years.
FUTUREPAY, provider of a BNPL platform that offers consumers a $1,000 to $3,000 revolving credit line, has integrated with the digital-process automation platform of Axon Ivy. That company handles compliance, credit screening and merchant and consumer onboarding procedures.
Tim Harris is CEO at FuturePay, tim.harris@ futurepay.com, www.futurepay.com. Rolf Stephan is President at Axon Ivy, [email protected], www.axonivy.com.
MIFINITY offers a wallet-based, end-to-end payment service to more than 200 online gaming operators. The company’s eVoucher product can utilize barcodes, QR codes, alphanumeric codes or custom tokens to enable instant online deposits in multiple currencies and denominations in Europe, Asia-Pacific, Africa and the Americas. MiFinity also has customers in the travel and ecommerce sectors.
Global brand, domestic-market-only and private label credit, debit and prepaid card purchases for goods and services plus cash advances and ATM withdrawals (including on-us activity) generated $41.962 trillion in total volume in 2020, down 0.8% from 2019.
Gross card fraud, which is expressed in basis points (cents) per $100 in total volume, was 6.81 cents per $100 in total volume in 2020. The prior year, the figure was 6.78 cents per $100.
Fraud losses (measured in basis points) in the card payment industry have been steady for several years as fraud fighting capabilities deployed by issuers, merchants and ATM and merchant acquirers met the challenges of criminals who deployed ever more sophisticated means to compromise the system.
In 2020, the card industry was able to maintain stability in basis points lost to fraud, in part because cross-border credit card spending plunged as a result of the Covid-19 pandemic.
Card issuers, merchants, acquirers of ATM transactions and acquirers of merchant transactions incurred gross fraud losses of $28.58 billion. This was down slightly from $28.65 billion in 2019. That gross fraud figure does not include billions of dollars lost involving bank account to bank account transactions and QR code payments not connected to card accounts. The decline in the dollar amount of fraud losses in 2020 will not be repeated in 2021.
In the United States, fraud losses of $10.24 billion in 2020 compared to $9.62 billion in 2019. U.S. fraud was 10.89 cents per $100 in 2020 and 10.25 cents in 2019.
The U.S. accounted for 35.83% of global card fraud in 2020 even though it accounted for only 22.40% of total card volume. In 2019, the U.S. accounted for 33.58% of global fraud and 22.20% of total card volume. U.S. fraud is higher owing to the wider use of card-not-present (CNP) transactions.
Combined fraud losses for all countries outside the U.S. in 2020 amounted to $18.34 billion. This was down from $19.03
billion in 2019. Fraud outside the U.S. was 5.63 cents per $100 in total volume in 2020 versus 5.79 cents in 2019.
The actual losses experienced by card industry constituents exceed the $28.58 billion global fraud figure here because related costs can’t be accurately calculated. Issuers, merchants and acquirers have expenses tied to investigating fraud, managing call centers and maintaining operations. Those expenses tend to rise annually. However, progress was made in 2020 in containing expenses. In particular, issuers made gains through better management of chargebacks due to fraud.
The significant increase in card-not-present sales in 2020 owing to Covid-19 contributed to the ongoing trend of merchants incurring a steadily higher percentage of overall
industry losses to fraud. CNP sales reached 19% in 2020, up from 15% in 2019. Merchants continued the practice of manually reviewing questionable CNP sales, particularly as the average value of those purchases grew throughout the year. This added to their expenses. And criminals scored successes in using stolen card credentials to execute CNP sales to gain merchandise they could subsequently sell online. CNP fraud tied to payments for streaming services also boomed.
The global general purpose brand cards—Visa, Mastercard, UnionPay, American Express, Discover/Diners Club and JCB—accounted for a combined $34.173 trillion in total volume in 2020. This amounted to 81.44% of global volume. Their losses to fraud in 2020 were $25.27 billion. This was down from $25.53 billion in 2019. Global brand cards accounted for 88.43% of all card losses to fraud worldwide in 2020.
The Nilson Report has identified 93 domestic-market-only general purpose debit and credit card brands worldwide, including 20 in the U.S. The largest of these brands are RuPay, Elo, Star, Mir, Nyce and Pulse. All 93 combined accounted for $5.134 trillion in total volume in 2020, up from $4.524 trillion in 2019. Fraud losses for this group were $1.24 billion in 2020 compared to $0.92 billion in 2019. These cards were tied to 4.33% of all card fraud worldwide in 2020.
Payment cards usable only for purchases from select retailers, fuel stations, medical and dental facilities and other private label locations generated $937.75 billion in total volume in 2020, down from $975.22 billion the prior year. Losses to fraud on these cards was $0.67 billion in 2020, up from $0.66 billion the prior year. Private label cards were tied to 2.34% of global fraud losses in 2020.
ATM cash advances and withdrawals initiated by global brand cards are counted in this report in the total volume attributed to those credit and debit cards. Another $1.717 trillion in cash volume at ATMs occurred outside of the global brand card networks in 2020. This was down from $1.908 trillion in 2019.
Fraud losses from ATM transactions of $1.40 billion in 2020 was down from $1.55 billion in 2019. ATM fraud accounted for 4.90% of global fraud losses in 2020.
In 2030, when total volume on all payment cards is expected to reach $79.140 trillion, fraud losses are projected to be $49.32 billion, equal to 6.23 cents per $100. In the U.S., total volume in 2030 is projected at $18.953 trillion and fraud losses are expected to be $17.00 billion, equal to 8.97 cents per $100.
Over the next 10 years, card industry losses to fraud will collectively amount to $408.50 billion.
Four constituents in the card payment industry incur fraud losses—issuers, merchants, merchant acquirers and ATM acquirers. Gross fraud losses incurred by issuers of credit, debit and prepaid cards were $18.69 billion in 2020 compared to $19.59 billion in 2019. Card issuers accounted for 65.40%
of gross losses to fraud worldwide in 2020. The other 34.60% of fraud losses, which equaled $9.89 billion, were incurred by merchants, ATM acquirers and merchant acquirers. In 2019, that group experienced $9.06 billion in losses to fraud.
In 2020, debit card fraud increased and credit card fraud declined. Of rising concern to issuers were losses from valid cardholders who claimed fraud on transactions even when they or a member of their family made the purchase. Previously called “friendly fraud” when largely involving digital purchases by minors, this fraud is now also referred to as “first party misuse.” The new name reflects the growing awareness that during Covid, fraudulent claims involved intent and moved beyond digital goods as consumers exploited fraud liability protections. The industry as not yet made first party misuse an official category for fraud but is moving in that direction.
Personally identifiable information (PII) available for sale on the dark web continued to plague the payment card industry. Social engineering attacks on consumers aimed at obtaining PII also continued. In the U.S. in particular, issuers battled fraud tied to new credit card accounts opened with the intent to commit fraud. Criminals utilized a mix of legitimate and bogus credentials to create a synthetic identity and sneak past fraud protection. Synthetic fraud is still not an official category for reporting purposes.
Total Volume Fraud Cents perYEAR (TRIL.) (BIL.) $100 VOLUME
2020 $41.962 $28.58 6.81
2021 $47.229 $32.20 6.82
2022 $50.868 $34.36 6.75
2023 $54.061 $36.13 6.68
2024 $57.323 $38.07 6.64
2025 $60.583 $39.89 6.58
2026 $64.038 $41.73 6.52
2027 $67.570 $43.76 6.48
2028 $71.221 $45.54 6.39
2029 $75.111 $47.50 6.32
2030 $79.140 $49.32 6.23
Card Fraud Projected through 2030
6 NILSON REPORT December 2021 Issue 1209
PII sold to sophisticated criminals for use in synthetic fraud breakouts results in more expensive losses than what typically occurs from the sale of existing card account details. This remains mostly a U.S. problem.
Another problem for issuers everywhere was the takeover of legitimate accounts by criminals who were able to buy all or some valid card credentials on the dark web. Account takeovers have steadily worsened in the last three years.
Issuers were unprepared for the big increase in CNP transactions when Covid hit. Their fraud risk models were not built to handle the avalanche of first-time CNP authorization requests from valid cardholders. The shake-up enabled criminals to quickly seize the opportunity to activate cards previously stolen but lying dormant.
In the U.S. and other markets where governments provided citizens money to stimulate Covid-wracked economies, criminals siphoned off billions of dollars, and some of that money was added to stolen reloadable prepaid card accounts. Criminals then bought goods and sold them online or returned them to get a cash refund.
All losses to CNP fraud are the responsibility of the merchant and their acquirers, and they were hit hard in 2020. Dollars lost to CNP fraud losses were more than six times higher in 2020 than the prior year. By comparison, in 2019, CNP losses were four times higher than in 2018.
In 2020, CNP accounted for 68% of all losses to fraud experienced by merchants and acquirers.
Beyond actual fraud, issuers, merchant acquirers and travel and event industry merchants absorbed extraordinary expenses related to cancellations after Covid lockdowns were put in place. Chargebacks exploded to unprecedented levels. Concurrently, rather than wait for refunds, many cardholders denied ever making the transactions and claimed fraud. Because so many issuer and merchant employees were working from home, the backlog of disputes became nearly impossible to handle. Acquirers lost money and criminals took advantage of the overburdened environment to sneak fraudulent transactions into the system.
Stolen unemployment compensation funds made their way into the card industry in 2020. Criminals placed them on mobile phones for use in digital wallets. These purchases are outside the boundaries typically considered payment card fraud but prepaid card accounts were used to perpetuate fraud.
Positive factors in 2020 included a decline in losses to counterfeit cards. The drop was linked to the collapse in cross-border travel. Without any travelers, cards were not exposed to the various means criminals deploy to gain credentials. In the U.S., chip readers at automated fuel dispensers grew from 10% to 40% of the installed base. This helped reduce fraud tied to stolen cards with magstripes.
Another positive in the fight against card fraud in 2020 was the use of tokenization, which is being even more widely used this year. Tokenization is a bulwark against increases in card fraud as a percent of total volume.
While tokenization worked to help prevent fraud from worsening in the U.S., the wider use of two-factor authentication and 3D Secure protocols outside the U.S. helped mitigate fraud there.
Successful fraud attempts by organized crime gangs and state-sponsored agents from North Korea, Nigeria, Brazil and Russian-speaking countries declined in 2020. The ability to fight organized crime was improved by deployment of 24/7 monitoring within the Visa, Mastercard and American Express networks. The ability to inform merchant and ATM acquirers of fraudulent activity early on helped blunt bot-based attacks as well as skimming, PIN compromise, dispenser jackpotting, cash trapping, malware and network packet switching. Criminals were also impacted by improvements in cooperation between the card networks and global law enforcement agencies.
Fraud fighting systems available from technology providers and deployed by large online sellers gained traction against organized efforts to commit fraud. Success in fighting card fraud has led to the most sophisticated criminals to engage in cryptocurrency fraud and ransomware.
Prior issues: 1187, 1164, 1142, 1118, 1096, 1068
Voice Activated In-Car Payments
COVE
R ST
ORY
CONT
D.Fraud Inside vs. Outside the U.S.Market Shares (%) 2002 — 2020
Top 150 Debit Card Issuers WorldwidePurchase volume generated by the 150 largest issuers of debit cards totaled $9.888 trillion in 2020, down 5.7% from 2019.
The top 10 issuers accounted for 60.1% of purchase volume in 2020. That group was dominated by five issuers from China, where most of the purchase volume was generated
Voice-Activated In-Car PaymentsVoice-activated, AI-driven technology that car manufacturers can install inside their vehicles is available from Cerence. The company has partnered with manufacturers to deploy its products on a white-label basis in more than 400 million vehicles.
Intellectual property owned by Cerence includes 1,420 patents. The company has expanded its technology to include payments initiated from vehicles. Cerence Pay can be used for fuel, parking, tolls, restaurant ordering, and QSR purchases.
The technology will debut in Audi vehicles. Cerence has relationships with BMW, Daimler, Toyota, Stellantis, Volkswagen and others. Many of those companies are expected to add Cerence Pay functionality to their vehicles in 2022.
Vehicles equipped with Cerence Pay will prompt consumers for a voiceprint enrollment, followed by prompts to connect a user’s credit or debit card to a virtual wallet, which is provisioned by the car’s manufacturer. PCI compliance and authorization is handled by that partner.
In markets that require it, two-factor authentication can be accomplished with an onboard camera or voice biometrics.
The acquirer of in-vehicle payments could be the acquirer of the seller, or one used by the auto manufacturer. In some instances, Cerence will act as a merchant aggregator and use Elavon as its acquirer.
Cerence has announced several partners including Visa and its Cybersource subsidiary, which will provide token and wallet technology, respectively to car manufacturers and mobility companies.
Other partners include P97, which has 45,000 gas stations connected to its in-car payment service; Parkopedia, which has parking spots in 15,000 cities; voice-assisted parking specialist Arrive, which says 40 million consumers have used its service; Ryd (ThinxNet), whose owners include Mastercard and Daimler; and CarPay-Diem, a European fuel-service platform.
Cerence plans to expand into EV charging, tolling and food ordering.
IN THIS ARTICLE
INTERVIEWED FOR THIS ARTICLE
Dhruv Gupta is Senior Product Manager at Cerence in Aachen, Germany, dhruv.gupta@ cerence.com, www.cerence.com.
by UnionPay cards. Those five issuers collectively accounted for $4.375 trillion in purchase volume. The three U.S. issuers among the top 10 combined generated $1.123 trillion. Russia’s largest debit card issuer moved into the top 10 with purchase volume of $246.76 billion. The largest U.K. issuer had $232.18 billion in purchase volume.
400million vehicles worldwide have Cerence technology onboard
Global Brand Card Acceptance Locations Exceed 100 MillionVisa and Mastercard merchant acceptance networks are the largest among the global card brands with 80.0 million at the end of the third quarter of 2021. This includes in-store, online and micromerchants that use smartphones and tablets as POS terminals.
However, the 80 million figure does not include as many as 20 million additional small and micromerchants connected to payment aggregators worldwide, such as Stripe and Square, that don’t have independent acceptance location identification.
This puts total acceptance locations above 100 million. Not included in that figure are more than 3.0 million automated teller machines worldwide that are open to Visa and Mastercard cards.
The Visa and Mastercard networks are boosted by the success of digital wallets, the expanded use of smartphones and tablets as POS terminals and growth at in-store locations in every world region. The pandemic forced many businesses to go online for the first time, which also expanded networks.
The Discover Global Network (DGN) has reached 61 million merchant locations worldwide and overtook UnionPay to become second largest among all global brands. Acceptance locations grew most recently through partnerships with Flywire, Allinpay, Bank of East Asia, Bank of Communications, Lakala, 99Bill and Flutterwave. Existing partnerships with Santander, Comerica, SumUp, SuMi Trust, VietinBank and BC card also brought in new merchant locations.
As with Visa and Mastercard, the 61 million DGN merchant acceptance locations do not include merchants connected to aggregators, payment facilitators, wallets and marketplaces.
The American Express merchant network reached 60 million, moving it ahead of
UnionPay. Recent expansion came from a partnership with JCB in Japan as well as in China, where last year Amex became the first global network to directly do business with acquiring banks.
UnionPay cardholders had access to 27 million merchant acceptance locations in China and another 32 million in more than 180 other markets. Outside China, the UnionPay network is built on partnerships with more than 2,000 acquirers. Recently, partnerships were established with Stripe, Bank of Ceylon, Absa Bank, IATA and Huawei.
JCB merchant acceptance exceeds 36 million worldwide, a figure that includes Discover acceptance locations in the U.S. Among the most recent deals were partnerships with Worldline, ACI Worldwide, Checkout.com, ABA, GB Prime Pay, Nets, Uzpromstroybank, Post Bank, Alinma Bank and Paymentwall.
Top 150 Debit Card Issuers Worldwide
Acceptance LocationsMillions as of September 30, 2021
45DINERS
CLUB
61DISCOVER
36JCB
80MASTERCARD
80VISA
59UNIONPAY
60AMERICAN EXPRESS
10 NILSON REPORT December 2021 Issue 1209
Fraud Fighting for SMBs
Top Domestic-Only Payment Card Issuers — Debit
There are 93 general purpose card brands worldwide that operate only in their native country.
These cards can be debit or credit.
In our annual survey of domestic market-only cards outside the U.S., we identified 73 issuers.
Collectively, debit cards from these issuers generated $237.81 billion in purchase volume for goods and services in 2020. Credit cards from these issuers generated $162.85 billion in purchase volume.
At year-end 2020, debit cards accounted for 93% of all domestic market-only cards in circulation and 59% of $400.66 billion in combined debit and credit purchase volume.
The number of domestic debit cards issued in 2020 grew 18% from 2019 while purchase volume increased 30%.
The 25 largest issuers are shown here.
Purchase volume at Sberbank, Russia’s largest issuer of Mir debit cards, grew 89% (in local currency) over 2019, and cards issued increased 31%. Brazil’s largest issuer of Elo debit cards, Caixa Econômica Federal, experienced purchase volume growth of 106% (in local currency) over 2019, and cards issued increased 7%.
The largest domestic-market-only credit card issuers will be ranked in our next issue.
Largest Domestic-Only Card Issuers
ISSUER, COUNTRY RANK
PURCHASE VOLUME
(MIL.)
TOTAL VOLUME
(MIL.)CARDS(000) BRAND NAME
Sberbank, Russia 1 $65,439.8 $133,612.3 55,419 Mir
Caixa Econômica Federal, Brazil 2 $35,379.8 $35,379.8 71,127 Elo
Commonwealth, Australia 3 $20,966.7 $47,019.5 4,552 Keycard eftpos
Merchants as small as sole proprietorships can benefit from ecommerce fraud fighting from Seon. The four-year-old company was formed to provide fraud protection to small and midsized businesses. The company gains new customers, in part, from its 30-day free trial. Merchants onboard themselves and test the Seon scoring engine through a user interface that lets them launch the service without needing to train a model.
Once merchants become Seon customers, they are guided to create custom models that help more quickly identify fraud and approve good transactions. The company has 5,000 merchant customers.
Seon offers APIs that can be used in groups or independently. Scores are created even if only one API is used. Companies including Revolut, Afterpay, Wise, Nubank and KLM use the APIs to buy data in real time to enrich their existing fraud fighting systems. They gain access to phone numbers, email
addresses, IP addresses, device fingerprinting, social media profiles, lists, credit card details and customer behavior. Seon uses a phone number or email address to check in real time to see if a potential buyer exists on over 35 digital and social networks. Buyers are not aware of the background check. Data is encrypted when delivered to users.
The company operates a machine learning module via an API that lets its customers share their latest information about valid transactions and fraudulent transactions. The feedback loop builds the risk engine’s efficacy, which the company says adapts by the hour.
Seon, which has offices in Budapest, London, Austin and Jakarta, has raised $13 million from investors including Creandum, Zettle, SumUp and Revolut. INTERVIEWED FOR THIS ARTICLE
Tamas Kadar is CEO at Seon in London, [email protected], www.seon.io.
Prior issues: 1198, 1187, 1186, 1181
IN THIS ARTICLE
In-Store Payment Orchestration from Ingenico
Worldline’s Ingenico business unit is known for its POS terminals. Nearly 40 million devices worldwide carry the Ingenico brand. However, the company is pivoting from hardware to software with the commercial launch of PPaaS—payments platform as a service. The cloud-based, API-driven PPaaS, which will launch in 9 countries, was created to give merchant acquirers the ability to compete in-store and omni-channel with digital-first payment/commerce aggregators such as Square, Stripe and Zettle.
Traditional POS terminals use embedded software to perform payment and commerce applications on the devices. PPaaS, which works with POS terminals from any manufacturer, adds a simple app that enables the device to communicate with the cloud to execute payment and commerce applications.
Ingenico has formed partnerships with over 30 companies worldwide to deliver alternative payment methods (APMs), buy now, pay later (BNPL), financing for merchants,
$13 million
has been raised by investors including Creandum, Zettle, SumUp and Revolut
Top Domestic-Only Debit Card Issuers
12 NILSON REPORT December 2021 Issue 1209
VisionLabs Facial Biometrics and Card Payments
Facial recognition specialist VisionLabs builds hardware and software for biometric identity verification, primarily for customers in the access control industry. The company recently announced expansion into payments with its Luna Platform software for face recognition and Luna POS terminal for large merchants, acquirers and banks.
Luna POS terminals will accept payments initiated by cards as well as via facial recognition. An earlier generation facial-
recognition-only terminal was deployed by Sberbank and Visa in Russia. Sberbank is the largest merchant acquirer in Europe. Mastercard was a partner in a public transit application in Belarus. VisionLabs estimates that 3,000 first-generation devices are in service today.
The new Android-based Luna POS device includes infrared and color cameras for improved face identification and liveness spoofing protection. For face-based payments, the device sends images to the server of the acquirer or issuer, which hosts the Luna Platform. VisionLabs says that face recognition can be accomplished in as little as 200 milliseconds for databases of tens of millions of persons.
Compliance with local payment regulations is handled by partners. VisionLabs does not retain or collect any biometric data. The company says that 4,000 second-generation Luna devices will ship by the end of 2021.
INTERVIEWED FOR THIS ARTICLE
Anton Nazarkin is Global Business Development Director in Amsterdam, the Netherlands, [email protected], www.visionlabs.ai.
IN THIS ARTICLE
IN THIS ARTICLEloyalty, tokenization, data intelligence and enrichment, tax refunds, coupons and fraud control applications. Integration with PPaaS was designed to be very simple so acquirers can choose the applications they want to offer and quickly deploy them to POS terminals.
Payment orchestration is a term widely used by online gateways. In addition to providing access to scores of commerce applications, payment orchestration suggests access to APMs, of which there are approximately 900 worldwide. Currently, it is unusual for there to
be several APMs available at POS terminals in any country. PPaaS opens up hundreds of APMs for in-store purchases if merchants want that option.
Ingenico, which has connections to over 1,000 acquirers worldwide, will not operate PPaaS as a gateway or as an acquirer. One of the first customers for PPaaS will be Bambora, a merchant acquirer in Europe, which is also owned by Worldline.
INTERVIEWED FOR THIS ARTICLE
Giulio Montemagno is Senior VP and Managing Director at Ingenico in Paris, France, giulio.montemagno@ worldline.com, www.ingenico.com.
Card Manufacturers — Part 1There were 4.26 billion payment cards shipped in 2020 by the manufacturers listed here. That figure included 3.53 billion chip cards and 695.9 million magnetic-stripe-only cards. Another 31.1 million cards used barcodes, scratch-off or other means to initiate transactions but had neither chips nor magstripes.
The six largest manufacturers combined shipped 3.07 billion payment cards in 2020, down 10.4% from 2019. Shipments included 2.47 billion chip cards and 585.8 million magstripe cards, with chip cards accounting for 80.45% of the group’s 2020 total. In 2019, chip cards accounted for 78.57%.
Payment cards included the high-security type with global brands—Visa, Mastercard, UnionPay, American Express, Diners Club, Discover, JCB and Maestro. These cards include credit, debit and prepaid. High-security products also include
VisionLabs Facial Biometrics and Card Payments
Payment Cards TotalPayment Cards
with Chips 1Mag-
Stripe
RANK MANUFACTURER, HEADQUARTERS (MIL.) RANK (MIL.) % OF TOTAL (MIL.)
18 Thomas Greg & Sons, Brazil 35.7 17 34.2 95.8% 1.5
19 Tag Systems, Andorra 31.0 18 30.3 97.7% 0.7
20 Exceet Card, Germany 25.2 20 21.9 87.0% 3.3
21 PGP Group, Hong Kong 6 23.2 31 8.1 35.0% 11.9
22 Kona I, South Korea 21.6 21 21.4 99.1% 0.2
23 JallCard, Brazil 7 21.1 30 8.5 40.3% —
Card Manufacturers 2020
1 Chip card types include dual interface, microprocessor, memory and contactless. 2 Includes 124.0 mil. shipped to other manufacturers. 3 Includes 15.3 mil. nonchip/nonmagstripe cards. 4 Includes 12.1 mil. shipped to other manufacturers.
ATM-only cards that access deposit accounts and domestic-market-only general purpose credit, debit and prepaid cards. Other payment cards include retail, petroleum, medical, airline and other private label credit and debit cards. Private label prepaid cards are not included.
In an upcoming issue, shipment figures by manufacturer will be published for other types of cards: SIM telephone cards, prepaid phone cards and other telephone cards; transportation/ticketing cards; private label prepaid and gift cards; and nonpayment cards such as those for access, identification, membership, driver’s licenses, healthcare, promotions, etc.
Management Changes Donna Embry, formerly at Evolve Bank & Trust, has been
appointed President and Chief Operating Officer at Klear Technologies, [email protected].
Robert Blair, formerly at Elavon Merchant Services, has been appointed President at Fintainium, [email protected].
Cynthia Scott has been appointed ANZ Managing Director at Zip Co., [email protected].
Trent Millane has been appointed Chief Financial Officer at Limepay, [email protected].
Kino Becton has been appointed Vice President of Government Relations at Passport, [email protected].
Todd Raque has been appointed Head of Financial Crimes Compliance & Anti-Money Laundering at Featurespace, [email protected].
Nev Cowley has been appointed Regional Director—New Zealand at Till Payments, [email protected].
Michael Santner has been appointed Head of PSP DACH at Nets Group, [email protected].
Max Attias has been appointed Group Chief Technology Officer at Nuvei, [email protected].
Marc Brichs has been appointed Country Manager, Spain at Wayflyer, [email protected].
Matthijs Onland has been appointed Country Manager, the Netherlands at Wayflyer, [email protected].
Robert Heinrich has been appointed Vice President of Product Strategy at Simpay, [email protected].
Deidre Hudson has been appointed Vice President of Growth and Marketing at Payability, [email protected].
Barclaycard Payments Offers Fixed FX RatesIn partnership with Barclays Corporate & Investment Bank, Barclaycard Payments is offering ecommerce merchants in Europe the opportunity to accept payments in the local currency of a buyer and to receive settlement in British pounds sterling, euros or U.S. dollars.
Barclaycard Multicurrency provides merchants an assurance of the foreign exchange conversion rate when they authorize a sale in more than 100 local currencies. Ecommerce merchants of any size can utilize the new service without any additional integrations.
Applicable foreign exchange rates are fixed for 1 to 7 days. To help merchants with treasury management, midrates are published daily before trading periods begin.
By comparison, foreign exchange rates provided by Visa and Mastercard typically are applied one day after transactions occur, which means merchants cannot be immediately certain of the final settlement on a transaction.
Barclaycard Payments, the fourth largest merchant acquirer in Europe, is the largest in the U.K. It handles a third of all credit and debit card purchase volume in the country. The company, which serves 350,000 small and midsized merchants and 19,000 enterprise customers, handles its own transaction processing, payment gateway, corporate treasury management, foreign exchange and value-added services.
Over the next three years, Barclaycard Payments expects to generate more than $1.20 billion (£900 million) in revenue.
INTERVIEWED FOR THIS ARTICLE
Paul Adams is Head of Product at Barclaycard Payments in London, U.K., [email protected], www.barclaycard.co.uk.
This year the Nilson Report has covered more than 150 executive level management changes in the card payment industry. There are thirteen shown in this issue. Each has an email address. We hope this resource helps readers stay up to date with each other in a rapidly evolving industry.
David Robertson, Publisher December 7, 2021
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