Payment opportunities in post-regulated world
Banking and Insurance Forum 2016
Marcel Gajdoš, Country manager Slovakia and the Czech Republic, Visa Europe
Agenda
• Overview of Payments Ecosystem
• Acceptance Challenges
• Opportunities to Accelerate Payments
Overview of Payments Ecosystem
Globally, the advancement of electronic
payments is occurring at widely varying rates
Acceptance expands from “entry” categories to a “tipping
point” where card payments become ubiquitous
High levels of electronic payment acceptance are
critical to reducing cash usage
Source: Euromontior, Passport (2015), 2014 data, straight averages.
Payments in Slovakia
€1 from €5.70 in Europe; €1 from €9 in Slovakia
522m Visa cards in Europe; 3.4m Visa cards in Slovakia (all contactless)
All tržieb
cards
Nárast
Ratio of card transactions at merchants to all
card transactions
73%
Ratio of card value at merchants to total card
value
35%
4
Overview of Payments Ecosystem
Recent developments are driving the
expansion of electronic payment acceptance
Transformation
of POS
• IP-enabled
terminals
• New products
and solutions via
the cloud
Payment
experience
Contactless
acceptance
Mobile
acceptance
• Tokenization
improves security
of data storage
• Growth of NFC
phones and
contactless cards
• Reach new
merchant
segments
• “Card-on-file” and
in-app purchases
lower friction
• Expansion of
acceptance into
new categories
• Allow greater
flexibility in
checkout process
Payment
facilitators
Improved risk
management
• Support new or
underserved
merchant
segments
• Increased realtime transaction
monitoring
• Offer promise in
developing
markets
• Better
identification of
high-risk
customers
Opportunities to Accelerate Payments
Three key types of policy levers have
successfully grown acceptance globally
Regulatory & Market
Support
Increased Investment
Opportunities
New Technologies &
Channels
Government policies to
incent and promote
electronic payment
acceptance
Market-driven programs
to increase collaboration
and investment in new
acceptance
Use of new technologies
to add value to payment
acceptance for merchants
and consumers
Opportunities to Accelerate Payments
Regulatory & Market Support
Program
Merchant Incentives
incentives
Government
policies to
incent and
promote
electronic
payment
acceptance
Examples
• Subsidized POS terminals
• Tax reductions for using electronic payments
• VAT reductions
Consumer incentives
• Income tax reductions
• Lotteries
Disincentives for cash
Government adoption of
electronic payments
Regulation of market
economics
• Taxes and limits on cash
• Mandate electronic payments
• Acceptance of electronic payments, including taxes and transit
• Electronic distribution of social benefits
• Merchant Discount Rate (MDR/MSF) caps and regulation
• Interchange Reimbursement Fee (IRF) caps and regulation
• Regulation of payment network pricing policies and rules
Opportunities to Accelerate Payments
New Technologies & Channels
Program
Use of new
technologies to
add value to
payment
acceptance for
merchants and
consumers
New platforms for
payment and
acceptance
Examples
• New modes of access
• Contactless
• Mobile solutions – QR codes, NFC
• “Card-on-file” payments – convenient, secure storage
• Internet of Things
• Low-cost acceptance technology and servicing
• Mobile POS (mPOS)
Enhancing and securing
the customer
experience
• Focus on commerce enablement
• Biometric authentication for mobile wallets
• “One-click” purchase
• Enhancing merchant security
• Tokenization
• Fraud detection and management
Mobile and technology are driving a transformation in banking
& payments
NFC Proximity Payment
Digital Wallets
Mobile Banking
( statements, deposits, ACH
payments & transfers)
(authentication)
(e.g. Starbucks)
Value Added Services
Tokenization
(e.g. Item Search & Price Check)
Cross selling
Card on File
(e.g. Amazon 1-Click)
Cryptocurrencies and
Blockchain
PayPal
mPOS
(e.g. Apple Pay)
(geo-located, data based)
Mobile notifications,
alerts & information
services
P2P Money Transfer
Payment Controls
Targeted Promotions
Identity Services
Post Purchase Transaction
Management
(e.g.. Instalments, Receipts &
Warranties)
‘In-App’ Payments
Closed Loop Proximity
Payment
(mobile acceptance)
Cardless ATM Withdrawal
Visa Token Service - Scope
A service to connect an issuer to all token requestors,
for all devices and channels, with one connection to Visa
Device/Channel
Token Requestor Domain Controls Token Type
Device-bound
ESE
Wallet-bound
Entity-bound
Merchant
& Many Others
ESE- embedded secure element, CBP- cloud based payment, COF- card on file
CBP
COF
Visa Token Service
Issuer
Visa’s Digital Enablement Program and Token Service
Is our Core, global platform capability for enabling new digital
payment experiences
Global
Enables new
channels
No-cost
Commercial
framework
Secure
No
Single
Interconnect
Bi-laterals
Europe
Payment Token
Service
Europe
Digital Enablement
Program
€
Minimises
ecosystem
impact
Standards based
& Interoperable
Supports new
participation
Brand
standards
Consumer
data
protections