Profits at Top U.S. Credit Card Issuers Purchase Volume ... · 2016 HSN Consultants Inc. THE NILSON...
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Global Card Spending ProjectedGeneral purpose payment card purchase volume worldwide is projected to reach $48.670 trillion by 2024. These card-present and card-not-present payments for goods and services are generated by credit, debit, and prepaid cards with American Express, Diners Club, Discover, JCB, MasterCard, Mir, RuPay, UnionPay, and Visa general purpose card brands as well as PIN-based EFT system cards in the U.S. and Canada.
Profits at Top U.S. Credit Card IssuersCard profits for the eight U.S. credit card issuers shown in the table on page 9 collectively reached $22.93 billion in 2015, up 1.1% compared to $22.67 billion for this same group in 2014.
American Express ResultsCredit and prepaid consumer and commercial payment cards issued directly by American Express in the United States generated $692.07 billion in purchase volume at merchants in 2015, up
Discover Financial ResultsCredit and prepaid cards issued directly by Discover Financial Services (DFS) generated $118.44 billion in purchase volume at merchants in 2015, up 2.5% over 2014. Cash advances including
Samsung/MasterCard IoT PartnersMasterCard Labs has worked for eight months to bring together new technology from hardware manufacturer Samsung, grocery chain stores Fresh Direct and ShopRite, and its own online
SAP/First Data Business-to-Business PartnersFor a consumer card payment, all of the financial settlement information tied to the transaction is immediately available. Business-to-business transactions are more complicated. Goods
Global Payments Mobile Acquiring in CanadaGlobal Payments will offer its merchant customers in Canada the ability to accept contactless payments from cards and smartphones without the need for a peripheral card reader or a dongle. It is
2 – 4 Fast Facts 5 Equinox POS Tablet 5 ING's Voice and HCE
Mobile Payments
6 BYOD Merchant Checkout
11 American Express Prepaid Products
8 Market Shares of Global Purchase Volume 9 Income at Top U.S. Credit Card Issuers 10 Discover Card U.S. Results 11 American Express U.S. Card Results
CHARTSINSIDE
Alpha Payments Cloud HubOne integration with Alpha Payments Cloud’s middleware gives acquirers, gateways, and payment service providers (PSPs) access to dozens of vendors selling cross-border payment processing,
57%
2%
14%
3%
2%
22%22%
14 14 1424 14 24 14 24 14 242424
4.94.90.60.6 1.01.0 0.70.7 1.41.4 3.43.4
0.30.3
9.49.4
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Purchase Volume Projected Worldwide
Market Sharesin 2024
UnitedStates Canada Latin
America Europe MideastAfrica
AsiaPacific
Volume ($Tril.)in 2014 vs. 2024
© 2016 The Nilson Report
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> see p. 10
> see p. 7
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Conferences & Seminars
9th Annual Mobile Payment Innovations Summit 2016: February 10-11, 2016. The Phoenix Marriott Tempe at The Buttes, Tempe, Arizona. Estimated attendance: 150. Cost for the two-day conference ranges from $1,395 to $1,695. Subscribers to The Nilson Report will receive a $300 discount. (Use code NILSON300.) Contact Aron Barkan at Strategic Solutions Network, (561) 674-0082, aron@ strategicsolutionsnet.com. Register at http://paymentinnovations.net.
SCA 2016 Payments Summit: April 4-7, 2016. The Loews Royal Pacific, Orlando, Florida. Estimated attendance: 600-800. Member rate for the four-day conference is $1,095; $1,540 nonmember until March 18. After that $1,395 mem-ber, $1,890 nonmember). Nilson Report subscribers receive a 20% discount. (Use code NILSDISC. Applies to nonmem-ber rate only. Does not include the preconference workshop.) Contact Bryan Ichikawa at SCA, (703) 582-7862, bichikawa@ smartcardalliance.org. Register at www.scapayments.com.
Cards & Payments Asia 2016: April 20-21, 2016. The Suntec Convention and Exhibition Centre, Singapore. Estimated attendance: 8,000. Cost for the two-day conference is $1,050. Subscribers to The Nilson Report will receive a 20% discount. (Use code EGAK.) Contact Jancis Yap at Terrapinn, (65) 6322-2708, [email protected]. Register at www.terrapinn.com/exhibition/cards-asia/.
NBPCA’s Power of Prepaid 2016: April 27-29, 2016. The Watergate Hotel, Washington, D.C. Estimated attendance: 300+. Cost for the three-day conference ranges from $495 to $1,995. Subscribers to The Nilson Report will receive a $300 discount. (Use code NR300.) Contact Matt Godson at Momentum, (646) 807-8555, [email protected]. To register and for information on workshop and group discounts, please visit http://prepaidevent.com/register/.
WESTERN UNION’S account payout network can connect to more than 1 billion bank accounts in approximately 50 countries to complete cross-border money transfers. Send-ers can transfer money using cash, debit card, or credit card directly to the receiver’s account online, through mobile devices, or where available at participating WU agent loca-tions. Hikmet Ersek is CEO, (720) 332-1000, [email protected], www.westernunion.com.
CARECREDIT CARDS can now be used for purchases at nearly 4,600 Rite Aid stores for pharmacy and general merchandise purchases. The card is issued by Synchrony Financial. Cynthia Hearn is Senior VP at CareCredit, (714) 434-4138, [email protected], www.synchronyfinancial.com.
PROPAY and PRACTICE-WEB offer dental offices a Patient Pay-by-Text option. The software requires no mobile app download or online payment portal. Payments by Visa, MasterCard, Discover, and American Express cards are also handled in the office, over the phone, and on the Web. ProPay is owned by TSYS. Mike Cottrell is VP of Sales at ProPay, (801) 341-5640, [email protected], www.propay.com. Samir Kothari is CEO at Practice-Web, (916) 987-9799, [email protected], www.practice-web.com.
SIONIC MOBILE has launched its ION Loyalty Small Busi-ness Center, which gives small business owners and local merchants a mobile payments, loyalty, and marketing plat-form that also provides a 1% credit card processing rate. Spencer White is COO, EVP Business Dev., (404) 375-6448, [email protected], www.sionicmobile.com.
NCR will offer 7-inch or 12-inch interactive touchscreen payment terminals to the retail petroleum market. The terminals are manufactured by Invenco. They support pay-ment cards, contactless mobile payments, loyalty, vouchers, coupons, and are small enough to fit into all major fuel pump manufacturer models. Jason Groff is Director of Petroleum and Convenience Retail at NCR, (770) 299-6592, [email protected], www.ncr.com. Dan Harrell is Chief Innovations Officer at Invenco, (512) 550-7935, dan.harrell@ invenco.com, www.invenco.com.
FIRST BANKCARD, a division of First National Bank of Omaha and the 12th largest issuer of Visa/MasterCard credit cards in the U.S., offers its cardholders free access to their FICO score through a mobile app. FICO scores are updated monthly. Steve Farrell is SVP, Consumer Product Marketing at First Bankcard, (402) 602-6042, sfarrell@ fnni.com, www.fnni.com.
NAVY FEDERAL CREDIT UNION, the 10th largest U.S. is-suer of Visa and MasterCard credit cards, no longer charges a fee for transactions involving foreign currency conversions. Randy Hopper is VP, Credit Cards at NFCU, (703) 206-4452, [email protected], www.navyfederal.org.
BB&T, the 12th largest issuer of Visa/MasterCard debit cards in the U.S., has launched BB&T Deals. Active debit cardholders receive targeted offers from retailers through a new online and mobile banking platform. Cardholders receive cash back on their purchases. Scott Qualls is Retail Payments Manager at BB&T, (919) 745-5080, [email protected], www.bbandt.com.
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“OVERCOMING THE CHARGEBACK CHALLENGE” is a new white paper from Vesta Corporation. It states that in-house chargeback management and fraud prevention efforts account for between 13% to 20% of merchants’ operations budgets. The paper also explores the benefits of outsourcing and provides guidelines for choosing the right third-party provider. Download a free copy at http://info.trustvesta.com/eliminatechargebacks.
EXPERIAN’S Phone Number ID gives phone number verification and a link to all contact details on 220 million U.S. consumers. The new service anticipates upcoming changes to regulations covering collection of debt. Paul DeSaulniers is Sr. Director, Risk Scoring & Trended Data Solutions, (714) 830-7580, [email protected], www.experian.com.
PRAIRIE CLOUDWARE’S Digital Payments Guardian mobile wallet soft-ware will be deployed by Union Bank & Trust in Nebraska. Digital Payments Guardian integrates with the bank’s payment processing services. It supports Android devices. UBT issues Visa debit cards. Doug Parr is Chief Revenue Officer at Prairie Cloudware, (402) 699-4594, [email protected], www.prairiecloudware.com.
U.S. BANK has added Apple Pay to the features available on its three FlexPerks American Express card products. All U.S. Bank consumer and small business credit and debit card products now offer Apple Pay. Cliff Cook is SVP, Retail Credit Card Division at U.S. Bank, (215) 328-4956, [email protected], www.usbank.com.
INCOMM now offers digital Visa prepaid cards for gifts or rewards. They can be delivered to an email address. Mike Fletcher is General Manager, Digital Solutions at InComm, (678) 262-4646, [email protected], www.incomm.com.
MAIN STREET SOFTWORKS has completed EMV certifications for its Monetra middleware software with TSYS, Vantiv, WorldPay, and First Data’s CardNet and Nashville platforms. Previous EMV certifications were provided by Global Payments, Chase Paymentech, as well the Moneris and Chase Paymentech platforms in Canada. Monetra EMV certifications cover retail and restaurant transactions, including tip adjustments. Darryl Wright is President, (352) 244-0544, [email protected], www.monetra.com.
VISA CHECKOUT had grown to more than 10 million consumer accounts and 600 financial institutions in 16 countries at year-end 2015. Registered cardholders log in at a registered merchant’s checkout page to complete their purchase with a single click. Starbucks, Walgreens, NFL Shop, HSN, and Match have recently added Visa Checkout. Walmart.com will support it later this year. Sam Shrauger is SVP Digital Solutions at Visa, (415) 805-5923, [email protected], www.visacheckout.com.
WELLS FARGO has launched its third American Express credit card product. The latest Wells Fargo Propel American Express Card offers triple rewards points on gas purchases and double points on restaurant charges in the U.S. Cardholders also receive an annual Wells Fargo relationship bonus of 10% on their rewards points if they maintain a qualifying Wells Fargo deposit account. Points are redeemed in the Wells Fargo Rewards Program. Beverly Anderson is Head of Consumer Financial Services at Wells Fargo, (415) 222-3344, [email protected], www.wellsfargo.com.
AJB SOFTWARE DESIGN, a Toronto-based payment gateway and switch provider for Tier I retailers in the U.S. and Canada, will be acquired by Veri-fone. The transaction is expected to close in the second quarter of 2016. AJB has more than 145 customers. Jennifer Miles is President of North America at Verifone, (770) 754-3417, [email protected], www.verifone.com. Naresh Bangia is President at AJB, (905) 282-1877, [email protected], www.ajbsoftware.com.
DBS BANK in Singapore offers DBS mLoan, an unsecured working capital loan to small businesses. AMP Credit Technologies’ patented loan origina-tion and automated portfolio management and repayment system assesses each DBS mLoan application, using electronically verifiable cash flows, such as card payments. Joyce Tee is Regional Head of SME Banking at DBS Bank, (65) 6878-8888, [email protected], www.dbs.com. Thomas DeLuca is CEO at AMP Credit Technologies, (852) 2541-3180, thomas.deluca@ amp-creditech.com, www.amp-creditech.com.
MONERIS SOLUTIONS, Canada’s largest payment card acquirer, will offer electronic payment processing to the business-to-business marketplace in Canada in partnership with Boost Payment Solutions. Moneris’s B2B services will also include consulting, onboarding management, supplier enablement, and reporting analytics. Rob Wilkinson is VP, B2B Sales at Moneris, (416) 734-1335, [email protected], www.moneris.com. Dean Leavitt is CEO at Boost, (212) 750-7771, [email protected], www.boostb2b.com.
SAXO PAYMENTS, specialist in providing foreign exchange services to acquirers, payment service providers (PSP), and other businesses, has signed a contract with SafeCharge, a PSP and multinational acquirer. SafeCharge will be able to offer its merchants bank accounts as well as settle with them in multiple currencies. Saxo Payments is a subsidiary of Saxo Bank. David Avgi is CEO at SafeCharge, 44 (203) 051-3031, [email protected], www.safecharge.com. Anders La Cour is CEO at Saxo Payments, 44 (203) 705-8610, [email protected], www.saxopayments.com.
Kevin Watters has been appointed Chief Executive Officer at Chase Card Services, (302) 282-3277, [email protected]. Michael O’Laughlin has been appointed President, Biller Solutions at Fiserv, (678) 375-3592, michael.o’[email protected]. Úna Dillon has been appointed Managing Director of Europe at The Merchant Risk Council, 353 (8) 7204-7579, una.dillon@ merchantriskcouncil.org. Scott Conti has been appointed Head of Sales at BlueSnap, (781) 790-5013, [email protected]. Dan Vaith has been appointed Senior Director, Finance at BillingTree, (602) 443-5960, [email protected]. Jay Hensen has been appointed Compliance Officer and General Counsel at Align Commerce, (914) 414-3475, [email protected]. Michael Mutrie has been appointed General Manager of the Omaha facility at Catalyst Card, (402) 513-8885, [email protected].
Management Changes
© HSN Consultants, Inc. 2015 THE NILSON REPORT 2JANUARY 2016 / ISSUE 1079 / THE NILSON REPORT© 2016 HSN Consultants, Inc. THE NILSON REPORT 3JANUARY 2016 / ISSUE 1079 / THE NILSON REPORT
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ID TECH, a top manufacturer of point-of-sale peripherals to retailers and kiosk and vending operators, has formed a partnership with Creditcall to offer its customers access to that company’s omnichannel payment gateway and EMV migration consulting services. Sian Bosley is VP Business Development at CreditCall, 44 (117) 930-4455, [email protected], www.creditcall.com. Bill Rorick is VP Business Development at ID Tech, (714) 761-6368, [email protected], www.idtechproducts.com.
MBNA is offering its U.K. cardholders Travel Alerts, a service from mobile network operator O2, which lets the issuer know that a cardholder’s mobile phone is in proximity to the point of sale in a foreign country. Knowing that the phone is close to the card can be used as added security to authorize transactions. MBNA is a subsidiary of Bank of America. Richard Whatmough is Director of Marketing and Digital at MBNA, 44 (124) 457-4534, [email protected], www.mbna.com.
FIRST CASH SOLUTION, a wholly owned subsidiary of Volksbank Offenberg, will offer its 14,000+ merchants in Germany dynamic currency conversion (DCC) and multicurrency pricing technologies from Fexco. DCC technology lets international credit and debit card customers pay for products in their home currency when they make a purchase. Viljem Brielmayer is Head of Product Management at First Cash Solution, 49 (780) 5916-96168, [email protected], www.1cs.de. Denis Cleary is Managing Director at FEXCO DCC, 353 (66) 976-1258, [email protected], www.fexcoms.com.
CREDITCALL has received EMV certification from First Data for its ChipDNA EMV software development kit for iOS and Android devices linked to the Miura M010 PIN pad. Jeremy Gumbley is CTO at Creditcall, 44 (117) 930-4455, [email protected], www.creditcall.com. Mark Roberts is SVP, Sales at Miura Systems, 44 (7919) 558-422, [email protected], www.miurasystems.com.
GEMALTO is the first mobile payment vendor to receive full MasterCard approval for a complete cloud-based payment (CBP) service. The certifica-tion encompasses Gemalto’s CBP server platforms as well as the payment software running on cardholders’ mobile phones. Jean-Claude Deturche is SVP Mobile Financial Services at Gemalto, 33 (6) 2399-2141, [email protected], www.gemalto.com.
REVEL SYSTEMS, an iPad point-of-sale platform provider, has opened an office in London to serve as the hub for its business in the EMEA market. Mark Tuart is Client Success Manager, Team Lead, 44 (759) 980-1191, [email protected], www.revelsystems.com/uk.
E-NABLER, developer of eMobilePOS software for tablets, will be offered in Canada to the 250,000+ small and midsized business members of Millenium Micro Group. EMobilePOS accepts card payments, keeps track of inventory, and has an integrated prepaid card and rewards program. Joel Vazquez is President at e-Nabler, (787) 763-5959, [email protected], www.e-nablercorp.com.
BARNES INTERNATIONAL, a supplier of EMV test tools, training, and consulting services, has received Discover Contact D-Payment Application Specification (D-PAS) qualification for its CPT3000v3 and CAT3000v3 Person-alization Validation Test Tools. Brian Summerhayes is Managing Director at Barnes, 44 (1730) 231-313, [email protected], www.barnestest.com.
DESJARDINS, previously only a Visa card issuer in Canada, now offers MasterCard credit cards too. Dejardins Cash Back MasterCard is a no-annual-fee product that provides up to 1% cash back. Desjardins Cash Back World MasterCard, which has a $50 annual fee, offers up to 2% cash back. Brian Lang is President, MasterCard Canada, (416) 365-5556, brian_lang@ mastercard.com, www.mastercard.com. Caroline Lavallee is Director, Desjardins Card and Payment Services, (514) 397-4789, ext. 5228879, [email protected], www.desjardins.com/ca/.
SIA, a processor that handles 3.6 billion card payments annually, will inte-grate into its issuer and acquirer systems fraud prevention and risk manage-ment services from Inform. Gabriele Boni is Financial Institutions Director at SIA, 39 (2) 6084-4359, [email protected], www.sia.eu. Stanley Harmsen van der Vliet is Marketing Manager Risk & Fraud Division at Inform, 49 (2408) 9456-5000, [email protected], www.riskshield.com.
INGENICO EPAYMENTS is the new brand name of Ingenico Group’s online and mobile commerce division. It combines the former Ogone and GlobalCollect businesses, which have completed their integration. Pierre-Antoine Vacheron is ePayments EVP, 33 (1) 5801-9197, [email protected], www.ingenico.com.
3RD ANNUAL EUROPEAN PAYMENTS FORUM 2016
Two-Day ConferenceMarch 3-4, 2016Crowne Plaza Amsterdam City CentreAmsterdam, Netherlands
Topics include: the latest updates on SEPA, PSD2, AMLD 4, innova-tions and what’s next in the European payments landscape, instant payments and where Europe stands, newest solutions to fight against payment card fraud and how to gain back consumers’ trust, consumer payment behavior and the effects of cashless payment methods, and blockchain and its implications on banking and B2B transactions. Speakers represent: DNB, Alstom, AGES Maut System, Dutch Payments Association, Europe ATM Industry Association, GE Power & Water, Q Park, Payments Compliance and Blockchain Briefing, Online, Banco de Portugal, European Central Bank, European Banking Authority, and more. Cost is $1,630. (Use this link https://glceurope.com/product/conference-pass-payment-3rd/.) Con-tact László Árvai, Company Director at Global Leading Conferences, 36 (18) 480-531, [email protected]. For more information visit https://glceurope.com/3rd- annual-european-payment-forum/.
Featured Conference
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The Luxe 8000i integrated multimedia payment terminal from the Equinox Payments unit of NBS Payment Solutions meets PCI 4.1 security standards. The payment app resides securely in the device, which supports point-to-point encryption and permits in-lane remote key injection to update cryptographic keys. It manages up to four encryption keys for secure product-level routing.
The Luxe 8000i comes with either a 5-inch or 7-inch full color touch display, which
features scratch-resistant Corning Gorilla Glass 3. Passive pen and fingerprint signature capture can be
accommodated simultaneously. The card readers are mounted at the top of the terminal.
The Luxe 8000i uses a Linux/HTML5-based operating system for application development including advertising and promotion. One cable provides both power and communications. Robert Hayhow is VP, North America Business
Development at Equinox Payments in Scottsdale,
Arizona, (480) 551-7857, rhayhow@equinoxpayments.
com, www.equinoxpayments.com.
The Luxe 8000i comes with either a 5-inch or 7-inch full color screen.
Equinox Payments’ POS Tablet
> see p. 6
ING’s Voice and HCE Mobile Payments
ING Bank, the largest credit and debit card issuer in the Netherlands, has more than 2.5 million customers that use its mobile banking app in their Android, iOS, and Windows phones. They can view balances and prior transactions, transfer money to any International Bank Account Number (IBAN) in Europe, and make payments for online purchases through iDeal, the Dutch ecommerce payment system.
Using a virtual assistant called Inge, in combination with speech recognition, banking app
customers can check balances and initiate transactions. If
they say, “I want to transfer money,”
Inge responds by asking for the amount and continues from there. Speech recognition is particularly
helpful with IBANs, which
would otherwise require typing in numbers ranging from 15 to 34 alphanumeric digits. Currently, 5% of ING’s
mobile banking app customers use Inge.
Voice biometrics technology was added in the third quarter of 2015, and is used by 2% of customers. It lets them log into the app and confirm transactions
by speaking the sentence — “Listen to my voice and you will know who I am.” Every voice has unique features, which makes voice biometrics acceptable to secure transactions.
ING tested host card emulation (HCE), NFC-based contactless payments from its mobile banking application in September 2015 and made it available in December 2015. ING calls that service Mobiel Betalen. An estimated 24% of its mobile banking customers own an HCE-compatible Android handset capable of supporting Mobiel Betalen.
ING customers can use Mobiel Betalen at the 4 million stores worldwide that have MasterCard contactless POS terminals, including 120,000 in the Netherlands. Payments to merchants are made using a Maestro debit card. Card credentials are stored in the cloud.
© 2016 HSN Consultants, Inc. THE NILSON REPORT 5JANUARY 2016 / ISSUE 1079 / THE NILSON REPORT
Nuance Communications provided the recognition and biometrics technology to ING. Other banks using Nuance’s technology are USAA and U.S. Bank in the U.S., Tangerine Bank in Canada, Atom Bank in the U.K., and Widiba Bank in Italy. Nuance Communications will bring its technology to banks in India through a partnership with Uniphore Software Systems.
Jeroen Losekoot is Manager of Mobile Banking at ING
in Amsterdam, Netherlands, 31 (20) 591-3889, jeroen.
[email protected], www.ing.nl.
Jan van den Brink is Sales Engineer at Nuance
Communications in Amsterdam, Netherlands,
31 (6) 2029-5972, [email protected],
www.nuance.com.
Existing self-checkout systems in Europe involve consumers using a handheld barcode scanner provided when they
enter the store. In the U.S., self checkout is done in-lane using
countertop systems. Diebold has a bring-your-own-
device (BYOD) concept for self checkout. Consumers will use the camera in their smartphone to scan the barcode on items they want to purchase. When they are finished, they can either walk out of the store, or tap their phone on the Diebold-manufactured self-checkout terminal (shown here)
to complete the purchase. The concept uses the same modules for ATM cash withdrawals
Diebold sells to banks worldwide. For self-service checkout, payment
occurs via preloaded general purpose or proprietary credit, debit, or prepaid cards stored in the merchant’s IT system or by cash inserted into
the terminal. Diebold will provide a software development kit (SDK) to large merchants and value-added resellers to create the mobile wallet. That SDK also includes a geolocation service that links phones to Diebold’s terminals.
Although consumers who pay by card do not need to tap on Diebold’s terminal, merchants could give them an incentive to do so by offering instant cash back on items they just purchased. Cash is dispensed by the terminal.
If consumers don’t have NFC-enabled Android or Microsoft devices capable of proximity communication with Diebold’s terminal, they can trigger a transaction by using the camera in their phone to scan a QR code on the terminal. For security purposes, the QR code changes every five seconds. Richard Harris is VP, New Technology, Incubation and
Design at Diebold in North Canton, Ohio,
(330) 490-6866, [email protected],
www.diebold.com.
and services are invoiced when delivered, but payment typically occurs 30 to 45 days later. In addition, buyers and sellers might settle multiple invoices in a single payment. Reconciling payments with invoices is difficult because existing networks such as the automated clearing house (ACH)
system in the U.S. and SEPA in Europe utilize only 94 characters (ACH) or 140 characters (SEPA), which are not sufficient to give sellers the information they need.
The AribaPay service from SAP’s Ariba Network was created
to facilitate rich remittance information and additional
services including fraud protection and dispute resolution between the back-end systems of more than 2 million buyers and sellers. Last year AribaPay facilitated $40 billion in
The terminal delivers instant cash back on items purchased.
ING’s Voice and HCE Mobile Payments from page 5
BYOD Merchant Checkout
SAP/First Data Business-to-Business Partners from page 1...
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business-to-business commerce in the U.S. and Canada. However, it does not deliver financial settlements directly. The $40 billion AribaPay handled last year was settled through the ACH using a partnership with Discover Network.
A new partnership with First Data covering North America, Europe, and Latin America will
settle payments and include more information for sellers and buyers than what is provided by existing settlement networks in those regions. Integration between
Ariba Network and First Data will occur later this year.
As part of its Track and Trace payment service for sellers, AribaPay will deliver tokenized payment instructions from the buyer to First Data to be delivered
in real time to the seller’s actual bank or merchant account. First Data
has connections to financial institutions. It settles more than $1 trillion annually into the bank accounts of merchants worldwide that accept card payments. First
Data will debit the Ariba Network buyer’s account and send a credit to the seller’s
bank. There is no credit exposure. Track and Trace provides sellers the benefit of forecasting and managing their cash flow because they know exactly when payment will be received. Greg Hammermaster is Senior VP,
Commercial Payments at First Data
in Atlanta, Georgia, (404) 890-2224,
greg.hammermaster@firstdata.
com, www.firstdata.com.
Drew Hofler is Senior Director,
Solutions Marketing at SAP in
Minneapolis, Minnesota, (651)
280-9540, [email protected],
http://go.sap.com.
By 2020, all Samsung hardware will have Internet connectivity.
AribaPay facilitated more than $40 bil. in B2B commerce last year.
Samsung/MasterCard IoT Partnersfrom page 1...
shopping cart app — for a refrigerator. Samsung’s Family Hub refrigerator will launch in the U.S. in
May. It contains a 21.5-inch screen built into the door. MasterCard engineers in Dublin, Ireland, developed the multimerchant, integrated shopping cart app and a companion mobile app that will let users contact Fresh Direct and ShopRite with a list of groceries they want to buy. MasterCard will sign additional grocery chains in the U.S.
for the Samsung Family Hub program.
The refrigerator has an internal camera, which lets owners remotely view its contents. The mobile app for iOS and Android devices works with Wi-Fi and Bluetooth to sync to the app in the refrigerator, allowing items to be added to a shopping list remotely.
Research shows that 70% of the items in the refrigerator’s shopping cart
will likely be reorders of previous purchases. All transactions between the Samsung refrigerator and the grocery stores will be online. By the end of 2016 they will be tokenized. When that occurs, merchants will not keep any card accounts on file. Transactions will be routed to MasterCard’s vault where tokens will be united with the original personal account number.
Samsung is first to market with its new Family Hub refrigerator hardware. It has said that by
2020, all devices it manufactures will have Internet connectivity. MasterCard is first to build the shopping cart and mobile app for this kind of service.
As the Internet of Things moves to maturity, and more products become available, there will be many opportunities to add payment and commerce capabilities.
MasterCard Labs is working on partnerships in other verticals including takeout food restaurants, pet stores, and pharmacies. Betty DeVita is Chief Commercial Officer at MasterCard
Labs in New York, (917) 408-2719, betty_devita@
mastercard.com, www.mastercard.com.
© 2016 HSN Consultants, Inc. THE NILSON REPORT 7JANUARY 2016 / ISSUE 1079 / THE NILSON REPORT
General purpose credit, debit, and prepaid cards issued in the Asia-Pacific region are expected to
generate 57.05% of worldwide spending at merchants in 2024, up from a 48.67% share of global purchase volume in 2014. Asia-
Pacific is projected to generate $27.768 trillion in purchase volume by 2024.
The United States held a 25.48% share of global purchase volume for general purpose cards in 2014. That share is expected to decline to 22.37% by 2024, when card spending is projected to reach $10.887 trillion.
In Europe, credit, debit, and prepaid cards with general purpose brands accounted for 17.83% of global purchase volume in 2014. Europe’s market share of global purchase volume is projected to fall to 14.01%
by 2024. Purchase volume is projected to reach to $6.820 trillion.
Latin America’s general purpose payment cards accounted for a 3.58% share in 2014. By 2024, market share is expected to fall to 2.95%. Purchase volume is projected to reach $1.435 trillion.
Payment cards issued in Canada held a 2.96% share of the global market in 2014. By 2024, they are projected to fall to 1.96% when purchase volume is expected to reach $0.953 trillion.
Market share of global purchase volume tied to cards issued in the Middle East/Africa
region was 1.49% in 2014. It is projected to reach 1.66% of the global total by 2024. Purchase volume is expected to reach $0.806 trillion.
working with Mobeewave, whose technology turns an Android smartphone with embedded secure element into an NFC-enabled payment acceptance point.
Merchants will download Global Payments’ payment acceptance application into the smartphone’s embedded secure element. Mobeewave’s platform will then provision the device over the air. Its software encrypts the cardholder’s personal account number. When Mobeewave’s data
center receives transactions from the merchant’s smartphone, they will be routed to Global Payments for authorization.
Global Payments, Mobeewave, Samsung, and Visa were involved in September 2015 in a test of
the new technology, which will be introduced in the second quarter of 2016 after the release of the new
Samsung Galaxy 7 smartphone. Both Samsung and Mobeewave have partnerships with Oberthur Technologies (OT). That company’s secure elements are shipped in the
Samsung device. OT also acts as the trusted service manager, handling over-the-air provisioning of information to the Samsung phones.
Global Payments is introducing this new acceptance technology in Canada because all Visa, MasterCard, and American Express cards in the country are dual-interface-type — EMV compliant for both contact and contactless transactions. The ubiquitous contactless card base supports the scalability of merchant acceptance devices of this kind for untraditional merchants such as those in any home services industry as well as for charities, local events, and person-to-person social payments, in addition to traditional merchants.
Asia-Pacific is expected to gener-ate 57.05% of spending by 2024.
Can work with eSEs and handsets from any manufacturer.
©2016 The Nilson Report
Market Shares of Purchase Volume Worldwide
with Change in Basis Points
25% 22%
2024
2014
3%
2%3%
4%
2%
18%
14%
49%49%
57%57%
U.S.-311
Europe-382
AsiaPacific+838
MEA+17
LatinAmerica
-63
Canada-100
Global Card Spending Projectedfrom page 1
Global Payments Mobile Acquiring in Canada from page 1...
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Their combined provisions for anticipated card loan losses was $18.81 billion at year-end 2015, up 7.5% from year-end 2014.
Bank of America’s Consumer Lending division includes its card business as well as retail loans and banking services for the auto, recreational vehicle, and marine industries. The division had net income of $4.05 billion in 2015, up 0.8% versus 2014. Provisions for losses fell 3.6% to $2.33 billion.
JPMorgan Chase’s Card Services had net income of $3.93 billion, up 10.8%. Provisions for losses increased 1.4% to $3.12 billion. When measuring only card
profits, Chase is the top business in the U.S. and worldwide.
Citigroup’s North America Citi-Branded Cards and Citi Retail Services businesses had net income of $3.60 billion, down 11.4%. Provisions for losses increased 15.5% to $3.46 billion.
American Express’s U.S. Card Services business had 2015 net income of $3.41 billion, up 6.7%. Provisions for losses increased 4.1% to $1.45 billion.
Discover Financial Services’ net income fell 1.1% to $2.30 billion. Provisions for losses increased 4.8% to $1.51 billion.
Capital One’s Domestic Card subsegment’s net income slipped 0.3% in 2015 to $2.23 billion. Provisions for losses increased 28.5% to $3.20 billion.
Synchrony Financial’s net income grew 5.0% in 2015 to $2.21 billion. Provision for losses increased 1.2% to $2.95 billion.
U.S. Bancorp’s Payment Services segment net income increased 1.5% to $1.19 billion. Provisions for losses increased 2.7% to $0.79 billion.
Mobeewave sees its technology facilitating any business involving the exchange of money between smartphones. Its technology can work with embedded secure elements and handsets from any manufacturer.
Benjamin du Hays is CEO at Mobeewave in Montreal,
Canada, (514) 798-5474, benjamin.duhays@
mobeewave.com, www.mobeewave.com.
Frank Young is Senior VP, Global Product at Global
Payments in Atlanta, Georgia, (770) 829-8226, frank.
[email protected], www.globalpaymentsinc.com.
Provisions for anticipated loan losses of $18.81 bil. was up 7.5%.
up11%
down11%
up7%
down1%
down<1%
up5%
up2%
© 2016 The Nilson Report
$4.05
$4.02
$3.93
$3.55$4.83
$15.89
$24.44
$3.60 $3.41 $2.30 $2.23$2.30$4.05
$4.06 $3.20 $2.32 $2.24 $2.11 $1.17
$1.19$2.21
$17.24
$21.75
$7.31 $5.89$2.32
$4.43$5.85
$5.88
$2.11
$2.21$5.16
up1%
2015
2014
Bank ofAmerica CitigroupJPMorgan
ChaseAmericanExpress
SynchronyFinancial
U.S.BancorpDiscover Capital One
Income at Top U.S. Credit Card Issuers ($Bil.): Card Net vs. Company Net
Profits at Top U.S. Credit Card Issuersfrom page 1
© 2016 HSN Consultants, Inc. THE NILSON REPORT 9JANUARY 2016 / ISSUE 1079 / THE NILSON REPORT
balance transfers of $9.38 billion dipped 2.2% from 2014. Purchase volume and cash volume
combined reached $127.83 billion, up 2.2%. Cash volume accounted for 7.34% of total volume in 2015 compared to 7.67% the prior year.
Outstanding credit card debt increased $1.77 billion to $57.90 billion, up 3.1%.
Net principal charge-offs grew 2.4% to $1.22 billion. The net principal charge-off rate of 2.22% was down 5 basis points from 2014.
Card debt delinquent for more than 30 days past the payment due date declined 1 basis point to 1.72%. Delinquencies greater than 90 days past the payment due date were unchanged at 0.85%.
Discover brand credit cards were also issued in 2015 by DFS network partners First National Bank of Nebraska, Alliance Data, and UMB. Synchrony Financial was a DFS network partner until it stopped issuing Discover cards
in the fourth quarter of 2014, when it converted Discover cards to the MasterCard brand. This
accounted for the decline in third-party figures. Purchase volume on cards issued
by DFS network partners fell to $45.5 million, down 99.6%.
Network partner issuers accounted for 0.04% of total Discover card purchase volume in 2015, down from 9.25% in 2014. As a percentage of total outstandings on all Discover brand credit cards, network partners accounted for 0.07% compared to 0.08% in 2014.
The number of Discover credit cards in circulation issued by DFS and its network partners combined reached 52.7 million, up 1.2%.
Discover Financial Services reported net income of $2.30 billion for 2015, down 1.1%. This
included the company’s mortgage, student loan, and personal loan businesses. Its Direct Banking segment generated pretax income of $3.51 billion, down 2.6%. Total loans reached $72.39 billion, up 3.5%.
Discover’s Payment Services, a segment that includes the PIN-based Pulse Network, network partners, Diners Club International, and business-to-business transactions handled for AribaPay, contributed $100 million in pretax income, up 12.4% from 2014.
Diners Club purchase volume in 2015 slipped 1.5% to $26.57 billion. Total volume on Pulse
cards in 2015 (including purchases, cash back at the point of sale, and ATM
cash withdrawals) fell by 9.5% to $150.15 billion.
The number of transactions processed on the Pulse Network totaled 3.89 billion, down 9.2%. The Pulse declines were due to the loss of volume from a large debit issuer.
Credit card outstandings owned by DFS reached $57.90 bil., up 3.1%.
2015 2014 Chg. 2015 2014 Chg. 2015 2014 Chg.
Cards (mil.) 52.6 52.0 1.2% <0.1 <0.1 1.5% 52.7 52.0 1.2%Accounts (mil.) 44.7 44.0 1.6% <0.1 <0.1 2.1% 44.8 44.0 1.6% Active Accounts (mil.) 20.1 19.6 2.3% <0.1 <0.1 –7.8% 20.1 19.7 2.3%Transactions (bil.) 2.07 2.06 0.4% 0.07 0.14 –99.5% 2.07 2.20 –6.0% Purchases (bil.) 2.03 2.02 0.5% 0.07 0.14 –99.5% 2.03 2.16 –6.0% Cash (bil.) 0.04 0.04 –2.3% <0.01 <0.01 –99.5% 0.04 0.05 –6.4%Volume (bil.) $127.83 $125.11 2.2% $0.06 $11.90 –99.5% $127.88 $137.01 –6.7% Purchases (bil.) $118.44 $115.52 2.5% $0.05 $11.77 –99.6% $118.49 $127.29 –6.9% Cash (bil.) $9.38 $9.59 –2.2% $0.01 $0.13 –91.2% $9.39 $9.72 –3.4%Outstandings (bil.) $57.90 $56.13 3.1% $0.04 $0.04 –1.5% $57.94 $56.17 3.1%
Some prior year fi gures have been restated. Third-party outstandings are not owned nor managed by Discover. © 2016 The Nilson Report
Issued Directly Issued by Third Parties Total
Discover Card U.S. Results 2015 vs. 2014
Discover Financial Resultsfrom page 1...
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4.9% over the prior year. Credit card outstandings increased by 4.4% to $98.33 billion, up $4.18 billion over 2014. Cards issued directly by American Express grew to 47.1 million, up 2.3 million or 5.1% over 2014.
Amex branded cards issued by third parties — Bank of America, Bank of Hawaii, Barclays, BBVA Compass, Citigroup, First National of Nebraska, Pentagon Federal Credit Union, USAA, U.S. Bancorp, and Wells Fargo — generated purchase volume of $25.22 billion, up 1.9%. Outstandings tied to these cards totaled $9.43 billion, down $0.10 billion or 1.1%. Combined, these third parties issued 10.5 million American Express cards, up 3.9% over 2014.
Purchase volume and cash advances on all American Express cards issued directly and by third parties in the U.S. increased by 4.8% or $32.90 billion in 2015 to $721.00 billion. Of that amount, 74% was for non-T&E expenses, which grew 5%. T&E-related volume was up 4%. On cards issued directly by American Express, consumer volume was up 5%, small business volume was up 7%, and corporate (T&E and purchasing) volume was up 2%.
Total volume (purchases and cash) generated by American Express cards issued worldwide including
by all third-party partners was $1.040 trillion in 2015, up 5.7% on a local currency basis. Also on a local currency basis, volume was up 4% on cards issued directly by American Express, while cards issued by the hundreds of partners linked to the Amex Global Network Services business grew by 15%.
In its Japan/Asia/Pacific/Australia region, total volume was up 15% on a local currency basis. For Latin America and Canada it was down 3%. For Europe, the Middle East, and Africa it was up 8%.
Cards issued in the U.S. accounted for 69.35% of total Amex volume worldwide in 2015, down from 69.99% on a local currency basis in 2014.
Business and consumer one-time-use prepaid gift and incentive cards, reloadable prepaid cards, travelers cheques, foreign exchange services for businesses, and research and development of new products
such as a prepaid card for the Mexico market have been businesses in American Express’s
Enterprise Growth Group. As part of a $419 million ($335 million after-tax) charge against earnings that includes restructuring costs as well as goodwill and technology assets, Amex will discontinue the experimental/new product work. Foreign exchange services will now be part of Global Commercial
Cards issued directly by Amex grew to 47.1 mil., up 5.1%.
2015 2014 Chg. 2015 2014 Chg. 2015 2014 Chg.
Cards (mil.)(1) 47.1 44.8 5.1% 10.5 10.1 3.9% 57.6 54.9 4.9%Accounts (mil.) 36.4 34.5 5.4% 8.4 8.1 4.3% 44.8 42.6 5.2% Active Accounts (mil.) 25.9 24.8 4.4% 3.5 3.3 6.0% 29.4 28.1 4.6%Transactions (bil.) 4.82 4.50 7.1% 0.29 0.29 1.5% 5.11 4.78 6.8% Purchases (bil.) 4.79 4.47 7.2% 0.29 0.28 1.5% 5.08 4.75 6.8% Cash (bil.) 0.03 0.03 –0.5% <0.01 <0.01 –3.9% 0.03 0.03 –0.6%Volume (bil.) $694.18 $661.75 4.9% $26.82 $26.35 1.8% $721.00 $688.10 4.8% Purchases (bil.) $692.07 $659.64 4.9% $25.22 $24.74 1.9% $717.29 $684.38 4.8% Cash (bil.) $2.11 $2.11 –0.1% $1.60 $1.60 –0.4% $3.71 $3.72 –0.2%Outstandings (bil.) $98.33 $94.14 4.4% $9.43 $9.53 –1.1% $107.76 $103.68 3.9%
(1) Excludes retail co-branded partner cards/accounts that had no out-of-store spending activity during the prior 12-month period. © 2016 The Nilson Report
Issued Directly Issued by Third Parties Total
American Express U.S. Card Results 2015 vs. 2014
American Express Results from page 1...
American Express Prepaid Products
> see p. 12
© 2016 HSN Consultants, Inc. THE NILSON REPORT 11JANUARY 2016 / ISSUE 1079 / THE NILSON REPORT
Payments. All prepaid products will be part of a newly created Prepaid and Alternative Payments division.
American Express’s reloadable prepaid cards are Serve and Bluebird. Serve is
available in multiple versions. One offers cash reloads for no charge at more than 45,000 locations. Another version offers up to 1% cash back on purchases, a value no other reloadable prepaid card issuer offers. Also available is a co-brand with tax preparer Jackson Hewitt. American Express does not provide detailed financial information but says it will continue to invest in reloadable prepaid products.
Bluebird is the American Express reloadable prepaid product Amex has sold at more than 4,000 Walmart stores and online since 2012. Serve and Bluebird operate on the Revolution Money platform that American Express bought for $300 million in 2009. Both are alternatives to a standard bank checking account. They offer online and mobile account management, text alerts, free lost card replacement, online bill payment, ATM withdrawals, and direct deposits.Stefan Happ is Executive VP, Global Prepaid and
Alternative Payments at American Express in New
York, (212) 640-2000, [email protected],
www.americanexpress.com.
Prior issues: 1076, 1048, 1030, 1004, 1003, 977, 974, 973,
971, 969
fraud fighting services, loyalty programs, identification services, regulatory compliance support, and more. Alpha Payments Cloud’s multivendor switch lets its clients offer their merchants a customized mix of products and services not available from competitors. This helps create loyalty. The middleware is an overlay to existing processing systems. Once completed, the hub can deliver a vendor to an acquirer, gateway, or PSP in less than 500 milliseconds.
Alpha Payments Hub operates on a white-label basis, and charges a switch fee for every transaction but not for the initial integration with new clients. It
does not receive any revenue from vendors, although it does pass along wholesale prices it negotiates.
Alpha Payments Cloud will finalize another 30 integrations in the next three months. Integrations occur quickly because
Alpha has figured out how to use existing work as a template. It reuses much of the code it has already written. And each new integration makes subsequent work easier to execute. Alpha
Payments Cloud offers its clients consulting services tied to the various vendors it represents. Because
it charges only for transactions
it switches, it is motivated to link clients to as many vendors as possible.
Some customers have made small equity investments in Alpha Payments Cloud, which expects to switch at least 300 million transactions this year. Oliver Rajic is CEO at Alpha
Payments Cloud in Dublin,
Ireland, 353 (1) 960-9024, oliver.
www.alphapaymentscloud.com.
Can deliver a vendor to an acquirer or PSP in less than 500 milliseconds.
American Express Prepaid Products from page 11...
Alpha Payments Cloud Hubfrom page 1...
© 2016 HSN Consultants, Inc. THE NILSON REPORT All Rights Reserved. Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for any purpose is strictly prohibited and may violate the intellectual property rights of HSN Consultants, Inc. dba The Nilson Report.
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David Robertson, PublisherJanuary 29, 2016
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