Changing Times: Trends in the Payments Value Chain

Fintan Byrne, SVP & General Manager, TNSMark Beresford, Director, Edgar Dunn & Company

TNS – Central to the payments ecosystem

Major trends identified across entire stakeholder framework

Consumer MerchantPayment

Technology Provider

Acquiring Bank Card schemes &

issuers

Stakeholder Framework

6 major trends were identified…

Value chain expansion

Alternative payment methods

The way customers shop and

pay

New business models

Regulatory changes

New players

6 major trends were identified…

Value chain expansion

Alternative payment methods

The way customers shop and

pay

New business models

Regulatory changes

New players

Technology is changing the way customers shop and pay. Merchants want to be

responsive but need to invest in the right technologies

Integrated multichannel – the offline and online worlds have merged

CARDS OFFLINE CARDS ONLINE

ONLINE PREPAID OFFLINE PAYMENT

M-WALLET

A bewildering array of investment choices

202019901980197019601950

Physical Digital

Cloud computing

2000 2010

Customer interaction has changed

Click and collect expected to reach €20 to €25bn by 2018

Mobile shopping today

Paris

Chicago Seoul

LondonLondon

Paris

Redesign of the point of saleCombining virtual and physical worlds

Adidas

Marks & Spencer

Virtual mirrors

Mobile point of sale & tablets

Personalised shopping Up-selling & cross-selling Stock checking Queue busting Assisted selling Wow factor Reduced walk-aways

Consumers beginning to embrace ‘tap to pay’ concept

UK

France

Spain

Germany

Italy

Ireland

Contactless terminals: 158,000Contactless cards: 34.5 millionNumber of transactions: 6 -7 million

Contactless terminals: 100,000 – 120,000Contactless cards: 12.3 millionNumber of transactions: 0.5 – 1 million

Contactless terminals: 180,000 – 200,000Contactless cards: 3 – 4 millionNumber of transactions: 1 – 2 million

Contactless terminals: 15,000 – 20,000Contactless cards: 2 millionNumber of transactions: n/a

Contactless terminals: 6,000Contactless cards: ~ 1 – 2 millionNumber of transactions: n/a

Contactless terminals: 6,000Contactless cards: 1 – 2 millionNumber of transactions: 0.5 million

Sources: UKCA, CB, Visa, MasterCard, NFC Times (all figures are 2012/2013)

Progressive Contactless

Markets

Nascent Contactless

Markets

…laying the foundations for Mobile Wallets

How should retailers respond?

Security, simplicity & reliability must be maintained….

Yes68%

No32%

What are the key challenges you face to accept payments?

Securit

y

55% 55%

45% 42%

33%

18%12%

Simplic

ity fo

r

cust

omer

s

Paym

ent f

ees

Frau

d

Accep

tance

of A

ltern

ativ

e

Paym

ents

at P

oS

Finan

cial

dat

a

reco

ncilia

tion

Accep

tance

of A

ltern

ativ

e

Paym

ents

at m

y on

line

stor

e

Source: EDC 2013 Retailer Survey

Security

Simplicity

Reliability

Conclusion

SecuritySimplicity ReliabilitySecurity

SecuritySimplicity Simplicity SecurityReliability Reliability

Simplicity Reliability

Questions

Mark BeresfordDirector, Edgar Dunn & Company

 www.edgardunn.com

 Fintan Byrne

Senior Vice President and General Manager, TNS 

www.tnsi.com