or 46 ears the leading publication covering pament … · integrated its software platform with...
TRANSCRIPT
7 U.S. General Purpose Cards MY 2017 vs. MY 2016 9 Middle East and Africa General Purpose Cards 2016
Including YOY Growth/Decline in Purchase Volume 11 Largest Merchant Acquirers in Latin America 2016
2 – 3 Fast Facts 4 Investments & Acquisitions—July 2017 5 Vanstone POS Terminal 8 Type–Ahead Address Verification
INSIDE CHARTS
U.S. General Purpose Card Brands—Midyear 2017Visa, Mastercard, American Express, and Discover credit, debit, and prepaid cards generated 46.07 billion purchase transactions from January 1 through June 30, 2017—up 2.25 billion or 5.1%
Latin America’s Largest AcquirersSee page 11 for a ranking of the 46 largest merchant acquirers in Latin America and the Caribbean based on transactions handled in 2016. This group processed 19.44 billion Mastercard and
Amex/MineralTree B2B Virtual Card PartnersAmerican Express and MineralTree have created a platform that lets midsized companies automate the supplier payment process from invoice to remittance, an option previously available only to
QR Code Payment Global InteroperabilityEMVCo, the global technical body that manages specifications for contact and contactless EMV card transactions, has released specifications for QR (quick response) code-based mobile
Alternative Credit for Online PaymentsProviding consumers with credit for big-ticket retail purchases from online merchants is the business of U.S.-based Bread, a start–up that recently received $126 million in Series B equity
Tokens for Personally Identifiable InformationVisa, Mastercard, American Express, Discover, and other networks provide tokens that secure the primary account number of a payment card. TokenEx provides a service that both creates
InComm to Buy Amex’s Prepaid PlatformPrepaid card payment processor InComm will be the exclusive distributor in the U.S. of American Express prepaid card products as part of a transaction that involves its acquisition of Amex’s
Middle East–Africa Cards 2016
The total volume of purchases for goods and services combined with cash transactions at ATMs and over the counter at branches generated by Visa, Mastercard, American Express, and Diners Club brand credit, debit, and prepaid cards issued in the Middle East and Africa reached $886.48 billion in 2016, up 11.1% from 2015. Purchase volume for goods and services from these global brand general purpose cards reached $327.86 billion, up 12.4%. Cash volume was $558.61 billion and accounted for 63.02% of total volume in 2016, down from 63.45% in 2015.
‘15‘16 3.94
3.24
‘15‘16 8.72
8.06
‘15‘16 130.62
113.03
‘15‘16 184.59
167.34
Diners
Amex
Mastercard
Visa•
•
•
•
1%3%40%56%
Visa–82 bps
Mastercard+70 bps
Amex+13 bps
Diners–1 bps
Middle East & Africa
MARKET SHARESOF PURCHASE VOLUME
2016
PURCHASE VOLUME ($BIL.) 2015 VS. 2016
© 2017 The Nilson Report
> see p. 6
> see p. 10
> see p. 5
> see p. 7
> see p. 12
> see p. 6
> see p. 9
> see p. 8
VISIT US ONLINE AT WWW.NILSONREPORT.COM
FOR 46 YEARS, THE LEADING PUBLICATION COVERING PAYMENT SYSTEMS WORLDWIDE AUGUST 2017 / ISSUE 1115
© 2017 HSN Consultants, Inc. THE NILSON REPORT
Conferences & Seminars
Finovate Fall 2017: September 11-14, 2017. The New York Hilton Midtown, New York. Estimated attendance: 1,500. Cost for the four-day conference is $2,195. Subscribers to The Nilson Report will receive a 20% discount. (Use code F17FALLNLT.) Contact Tyler Ferst at The Finovate Group, (646) 895-7329, [email protected]. Register at https://finance.knect365.com/ finovatefall/purchase/ select-package.
PayThink 2017: September 18-20, 2017. The Arizona Biltmore, Phoenix, Arizona. Estimated attendance: 450. Cost for the three-day conference is $1,495. Subscribers to The Nilson Report will receive a 20% discount. (Use code NILSON.) Contact Brent Hendrix at SourceMedia, (212) 803-8369, [email protected]. Register at https://www.paymentssource.com/conference/paythink.
PayExpo Europe 2017: October 4-5, 2017. The ExCeL London, London, U.K. Estimated attendance: 2,200+. Cost for the two-day confer-ence is $1,600. Subscribers to The Nilson Report will receive a 20% discount. (Use code TNR20.) Free passes are available for retail banks, retailers, gaming operators, government authorities, CEOs, and start-ups. Contact Andrew Earle at Clarion Events, 44 (20) 7384-7893, [email protected]. Register at www.payexpo.com/europe.
Seamless Payments Indonesia 2017: October 10-11, 2017. The Pullman Central Park Hotel, Jakarta, Indonesia. Estimated attendance: 1,500. Cost for the two-day confer-ence is $750. Subscribers to The Nilson Report will receive a 15% discount. (Use code JYWQ.) Contact Kalyani Lakshmanan at Terrapinn, (65) 6322-2330, [email protected]. Register at www.terrapinn.com/exhibition/seamless-indonesia.
TSYS’S MERCHANT SERVICES segment will provide pay-ment processing services to Monetary’s network of software developers and merchants. Monetary offers a single, integrated platform with its own payment gateway. Tim Munto is Group Executive at TSYS Merchant Services, (502) 693-1821, [email protected], www.tsys.com. Shelley Plomske is CEO at Monetary, (970) 828-3223, [email protected], www.monetary.co.
PAYROC, a merchant services provider with more than 10,000 customers in the U.S. and Canada, offers iTransact Mobile Merchant, a mobile point-of-sale card acceptance service from iOS and Android devices. An EMV chip and magnetic stripe card reader with Bluetooth connectivity is also available. Payroc is an ISO for Fifth Third Bank and uses Vantiv for processing support. Ryan Hallett is CRO at Payroc, (708) 675-4580, [email protected], www.payroc.com.
RISK IDENT, a provider of fraud prevention software supported by machine learning, has opened an office in the U.S. The company specializes in helping large enterprises identify and prevent online fraud, including payment fraud, account takeover, and identity theft. Dustin Clinard is Managing Director for U.S. Operations, (617) 935-0007, [email protected], www.riskident.com/en/.
CONSUMER FINANCIAL PROTECTION BUREAU (CFPB) says that over at least 10 years, more than 200,000 consumers in Puerto Rico, the U.S. Virgin Islands, and other U.S. territories were harmed by discriminatory practices by American Express, which included higher interest rates, stricter credit cutoffs, and less debt forgiveness. American Express has paid $95 million in redress and will pay at least another $1 million to fully compensate consumers.
FACTOR4, a provider of private label prepaid card and loyalty programs to small and midsized merchants, has integrated its software platform with Click a Waiter, a POS system that offers online and Facebook ordering services. Dan Battista is President at Factor4, (484) 614-6813, [email protected], www.factor4gift.com. Osvaldo Rodriguez is CEO at Click a Waiter, (978) 401-9191, osvaldo@ clickawaiter.com, www.clickawaiter.com.
AMERICAN EXPRESS CHECKOUT, available at participat-ing online merchants, permits U.S.-based cardholders to check out using their Amex account login credentials instead of manually adding their personal information. Participating merchants include Delta Air Lines, Avis and Budget car rental firms, Hulu, Neiman Marcus, Preferred Hotels & Resorts, Staples, 1-800-Flowers.com, Airbnb, Braintree, Stripe, Ticketmaster, and others. Luke Gebb is SVP, Enterprise Digital at American Express, (212) 640-2000, [email protected], www.americanexpress.com.
COMMERCE BANK offers its small and midsized merchant customers “CashFlow Complete,” digital tools that create an automated service for accounts payable and accounts receivable. Bill.com provides the tools and payment platform. Users can send and receive electronic payments, eliminate paper, manage approvals digitally, and integrate with accounting software. Bill.com’s payment network links 2 million U.S. businesses that collectively process more than $36 billion annually. Rene Lacerte is CEO at Bill.com, (650) 353-3301, [email protected], www.bill.com. Matt White is Director of Commercial and Small Business Strategy at Commerce Bank, (816) 234-8993, matt.white@ commercebank.com, www.commercebank.com.
FAST
FACT
S
Order Back Issues / Preview Upcoming Conferences / View Newsletter ArchiveVISIT US ONLINE AT WWW.NILSONREPORT.COM1
AUGUST 2017 ISSUE 1115
No paid advertising.
No sponsored content of any kind. Ever.
It is never permissible for subscribers to forward or print this issue. Doing so violates copyright laws.
2 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive
UNITED BANK FOR AFRICA MOZAMBIQUE (UBA) offers the first Mastercard debit card in Mozambique. Helder Chambisse is Managing Director at UBA Mozambique, 258 (84) 300-8641, [email protected], www.ubagroup.com. Charlton Goredema is VP and Area Business Head, Emerging Markets & Indian Ocean Islands, Southern Africa at Mastercard, 27 (11) 780-3900, [email protected], www.mastercard.com.
BARCLAYCARD has started a pilot test with eight retail stores in the U.K. for in-store acceptance of QR code-based Alipay mobile wallet payments. Rita Liu is Head EMEA at Alipay, 44 (20) 7395-8310, [email protected], www.antfin.com. Paulette Rowe is Managing Director, Payment Solutions at Barclaycard, 44 (78) 8018-4298, [email protected], www.barclaycard.co.uk.
CHINA GUANGFA BANK CREDIT CARD CENTER uses FICO Customer Communication Services to help reduce its cost of collections and improve customer service. The average daily rate of repayment has improved by 2% over the last year. The number of complaints the bank receives has dropped to one-tenth of what they were when it used manual collections. Lin Deming is General Manager at CGB Credit Card, 86 (020) 3873-8891, [email protected], www.cgbchina.com.cn/Site/Home/EN. John Chen is Managing Director. China at FICO, 86 (10) 5839-7127, [email protected], www.fico.com.
ALIPAY, the QR code-based mobile payment system operated by Ant Financial Services, is moving into South Africa through Peach Payments, a payment service provider. Peach Payments is integrated with ACI Worldwide’s global network of more than 350 acquirers and alternative payment methods. ACI has a global partnership with Alipay. Markus Rinderer is SVP at ACI Worldwide, 49 (89) 452-300, [email protected], www.payon.com. Rita Liu is Head of EMEA at Alipay, 44 (20) 7395-8310, [email protected], www.antfin.com. Rahul Jain is COO at Peach Payments, 27 (21) 200-5877, [email protected], www.peachpayments.com.
ALPHA PAYMENTS CLOUD has formed a joint venture with Australia Post called AlphaCommerceHub (ACH). The ACH platform provides merchants with a single user interface to connect to all venders they need to support ecommerce including payment processing, identity verification, fraud protection, loyalty programs, and more. Ronan McDonnell is Marketing Coordinator at Alpha Payments Cloud, 353 (8) 6376-2313, ronan.mcdonnell@ alphapaymentscloud.com, www.alphapaymentscloud.com.
MERCADOTECNIA IDEAS Y TECHNOLOGIA (MIT), a payment processor in Mexico serving 17,000 merchants with more than 80,000 outlets, will use adaptive behavioral analytics risk management technology from Featurespace for real-time monitoring and protection against fraud as well as for reduction of chargebacks and false alerts. Juan Carlos Viramontes is CEO at MIT, 52 (55) 1500-9002, [email protected], www.mitec.com.mx. Martina King is CEO at Featurespace, 44 (12) 2334-5940, martina.king@ featurespace.co.uk, www.featurespace.co.uk.
© HSN Consultants, Inc. 2017 THE NILSON REPORT 2AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT
in
Asia-Pacific, United States, Europe, Latin America, Middle East-Africa, and Canada
1,073 Card Issuersfrom 114 countries in all world regions
282 Merchant Acquirersfrom 78 countries in all world regions
Figures include cardsincirculationandspending for
credit & debit
Order Todaywww.nilsonreport.com/specialreport
IOT PAYMENTS 2017
Two-Day ConferenceOctober 10-11, 2017Hyatt Regency AustinAustin, Texas
Topics include: digital currency as a cybersecurity weapon, how artificial intelligence, IoT, and connectivity are remaking retail pay-ments, the connected home: the key to top of wallet status, smart payments and wearables, risk-based payments security and IoT, making the case for IoT device hardware security, securing IoT pay-ments, IoT risks without hardware-based device security, risk-based payments security and IoT. Speakers represent: Samsung Pay, Mastercard, Bitmint, G+D Mobility, Gemalto, Glenbrook Partners, and more. Cost is $1,095. (Use discount code NILS20OFF.) Contact Bryan Ichikawa at Secure Technology Alliance, (703) 582-7862, [email protected]. Register at www.iot-payments.com.
Featured Conference
Subscribers to The Nilson Report will receive a 20% discount. 20%
SAVE
© 2017 HSN Consultants, Inc. THE NILSON REPORT 3AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT
The chart below lists 50 acquisitions and investments that occurred in 18 countries in July 2017. Merchant acquiring deals dominated, led by acquisitions including Worldpay by Vantiv, Paysafe by Blackstone, Bambora by Ingenico, Digital River World Payments by Worldline, Buckaroo by BlackFin Capital, and Chip & PIN Solutions by Valitor. All six takeover targets were headquartered in Europe.
In the first seven months of 2017, The Nilson Report identified 337 acquisitions and investments in 41 countries. Of those 337 transactions, 78 or 23.1% were investments in, or acquisitions of, merchant acquiring companies. Of those 78 merchant acquiring companies, 25 were headquartered in Europe.
Prior issues: 1113, 1111, 1109, 1107, 1105, 1103
Company Buyer/InvestorAmount
Country(mil.)
ARTIFICIAL INTELLIGENCE
Brighterion Mastercard 1 * U.S.
B2B PAYMENTS
InstaReM Series B 2 $13.0 Singapore
Karmic Series B 3 $17.2 U.S.
Payable Stripe 1 * U.S.
PayStand venture round 4 * U.S.
CASH LOGISTICS
Temis Brink’s Company 1 $71.0 France
CORPORATE GOVERNANCE
Odava MassRoots 1 * U.S.
DATA ANALYTICS
Upserve undisclosed round 5 * U.S.
FOREIGN EXCHANGE
Sunrate Series A 6 * China
IDENTITY
Juvo Series B 7 $40.0 U.S.
LENDING
BW Pay AU Card 1 * U.K.
Innoviti Series B 8 $18.0 India
Revolut Series B 9 $66.0 U.K.
LOYALTY
Chatter Commerce Rakuten Viber 1 * U.S.
Ibotta undisclosed round 10 * U.S.
Meliuz Series B 11 * Brazil
Perkbox equity stake 12 $8.6 U.K.
POSpulse Series B 13 $3.5 Germany
MERCHANT ACQUIRING
Alternet’s POS Assets No. Amer. Cannabis 1 * U.S.
Bambora Ingenico 1 $1,740.0 Sweden
Buckaroo BlackFin Capital 1 * Netherlands
Cashlez seed funding 14 $2.0 Indonesia
Chip & PIN Solutions Valitor 1 * U.K.
Digital River World Pymts. Worldline 1 * Sweden
Klarna equity stake 15 * Sweden
Merchants’ Choice Paysafe 1 $470.0 U.S.
Paysafe Blackstone 1 $3,840.0 U.K.
Company Buyer/InvestorAmount
Country(mil.)
Paysbuy Omise 1 * Thailand
Wallezz Jukir 1 * Indonesia
Worldpay Vantiv 1 $9,860.0 U.K.
MOBILE PAYMENTS
CIMB’s Touch ‘n Go Ant Financial 16 * Malaysia
Curve Series A 17 $10.0 U.K.
Docdata Payments CM Telecom 1 * Netherlands
FreeCharge Axis Bank 1 $59.6 India
Microtronic Crane 1 $17.9 Latvia
NETWORK TECHNOLOGY
Girocard Six Payment Services 1 * Germany
PERSONAL FINANCE
Cleo seed funding 18 $2.6 U.K.
PREPAID CARD
Transact Payments Neptune Int’l 1 * Gilbraltar
PROCESSING
CardWorks new shareholders 19 * U.S.
ConnexPay undisclosed round 20 * U.S.
First Data Baltics Worldline 1 $85.0 Latvia
Form3 Series A 21 $5.0 U.K.
Marqeta Series D 22 $25.0 U.S.
SECURITY
EFTsure Series A 23 $2.0 Australia
G2 Web Services Verisk Analytics 1 $112.0 U.S.
Nok Nok Labs Series D 24 $8.0 U.S.
SafePak BranchServ 1 * U.S.
Skycure Symantec 1 * Israel
SOFTWARE
iParse Urban FT 1 * U.S.
SoftTelecom Vipera 1 $1.5 Spain
*Terms not disclosed. 1Acquisition. 2Led by GSR Ventures. 3Including Alsop Louie Part-ners. 4Led by Leap Global Partners. 5Led by Vista Equity Partners. 6Led by China Growth Capital. 7Led by New Enterprise Assoc. 8Led by SBI-FMO Fund. 9Led by Index Ventures. 10Led by GGV Capital. 11Led by Endeavor Catalyst. 12From Draper Esprit. 13Led by Paul Kraut. 14Led by Mandiri Capital. 15DST Global, General Atlantic, and Niklas Adalberth sold shares to new investors from Permira. 16Joint venture. 17Including Santander InnoVentures. 18Led by Robin Klein. 19Pacifi c Investment Mgmt., Parthenon Capital, and Reverence Capital each acquired less than 10% equity stakes in separate trans-actions. 20From CSI Kick Start. 21Including Barclays. 22Led by Visa.23Led by Our Innova-tion Fund. 24Led by Motorola Solutions Venture Capital. © 2017 The Nilson Report
Investments & Acquisitions July 2017
Investments & Acquisitions—July 2017
4 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive
Among manufacturers of POS terminals, Vanstone ranked 19th largest based on units shipped in 2016. It shipped more than 409,000 terminals last year, up 30% over 2015. The company’s newest device, the Aisino A90 (shown here), uses a customized Android 5.1 operating system and Qualcomm quad-core ARM. The A90 supports EMV-compliant NFC and QR code-based mobile payments. It offers a 5.5-inch high-definition touchscreen for customer-facing transactions. The 6000mAh rechargeable lithium battery can handle 700 transactions or 10 days screen out standby. The A90 is configured with dual cameras on the back. One has a 2-megapixel fixed-focus lens and the other a 5-megapixel automatic-focus lens.
The A90 provides a high-level cryptographic
central processing unit that is PCI 5.0 and EMV approved. Network
connectivity options include 4G, 3G, 2G, Wi-
Fi, and Bluetooth. In addition to chip and mag-stripe readers, the A90 offers both
sound wave payments and QR code scanner modules. GPS is built-in.
Nearly all Vanstone terminals were shipped in China last year. This year the company has shipped devices to customers in Africa, South Asia, Europe, and North America.Harold Cheng is Overseas Sales Director at Vanstone
Electronic (Beijing) Co. Ltd. in Beijing, China,
86 (10) 8804-8125, [email protected],
www.vanstone.com.cn.
Serve prepaid card management platform. InComm will become the exclusive program manager and processor for all Amex
prepaid card products including
those sold online.
American Express will remain the issuer and network for those products. Financial terms were not disclosed. The transaction is expected to close in the first quarter of 2018.
Serve was created in 2010 when American Express paid $300 million to acquire the technology platform of start–up Revolution Money.
Two years later, Amex used that platform to support a new
reloadable prepaid card brand, Bluebird, a product whose only customer is Walmart. Today, the Serve platform supports all Amex prepaid cards including co-branded cards for tax preparer Jackson Hewitt, gift cards sold in retail stores, and B2B products (incentive, loyalty, and rewards).
Beyond card account management, the Serve platform offers features and functions that include a mobile app, direct deposit, SMS text
alerts, email, and mobile check deposit. When the sale closes, Serve will be integrated with InComm’s network. It will add new functionality to InComm’s legacy card management platform, which operates from a data center in Georgia.
InComm already provides activation and reload services for American Express prepaid cards.
Some Amex personnel are expected to move to InComm. American Express B2B products will be integrated with InComm’s existing Digital Solutions unit, which also sells prepaid cards to businesses for loyalty, incentives, and rewards.
InComm gains American Express’s shopping mall distribution channel, which it can use for other prepaid cards.
InComm sells reloadable prepaid cards in 5 countries, and other types of prepaid cards in more than 30 countries. Outside the U.S., InComm
Serve will add functionality to InComm’s legacy platform.
Vanstone POS Terminal
> see p. 6
InComm to Buy Amex’s Prepaid Platform from page 1...
© 2017 HSN Consultants, Inc. THE NILSON REPORT 5AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT
a universal token to protect personally identifiable information (PII) and works with network tokens. The need to secure PII has
never been greater. Criminals on the dark web will pay more for PII than for card account numbers.
For companies that want to securely manage sensitive data internally, the TokenEx Cloud Security Platform tokenizes
larger enterprises. MineralTree, an accounts payable and payment automation provider, considers midsized companies to be those making between 50 and 10,000 payments a month. Amex
applies the term to companies with annual revenue between $10 million and $1 billion depending on the industry, geography, and other factors. By either measurement,
companies in the midsized category use paper checks to settle approximately 90% of their accounts.
The Amex/MineralTree partnership automates the entire invoice-to-pay process and includes letting companies pay suppliers with a virtual American Express card tied to their corporate card account. Each transaction generates a single-use card number.
MineralTree’s platform is able to extract the header and line-item data from a paper
invoice so they can be delivered automatically into a company’s ERP system—a feature already in use for purchasing cards issued by American Express, Visa, and Mastercard.
In addition to the efficiencies gained from end-to-end automation, Amex virtual corporate cards improve a company’s cash flow by providing at least a 30-day float. They also
generate either Membership Rewards points or statement credits for cash back earned.
Another benefit is that business–to–business checks attract a disproportionate amount of fraud. Often the original payee’s name is “washed” and replaced with another name before being cashed. MineralTree provides two-factor authentication of the payor,
two–factor payment verification to combat the growing problem of corporate account takeover, limits on the amount any one employee can spend per invoice, and integration with bank Positive Pay, a check fraud fighting service.
American Express will work with midsized businesses using its corporate card to facilitate their integration with the new AP platform. Amex will also identify which of the client’s vendors accept American Express. Those that don’t can be approached as potential acceptance outlets.
MineralTree handled $3 billion in payments last year.Gint Balodis is VP, B2B Products
and Solutions at American Express
Global Commercial Payments
in New York, (212) 640-2000,
www.americanexpress.com.
BC Krishna is CEO at MineralTree in
Boston, Massachusetts, (978) 371-
0673, [email protected],
www.mineraltree.com.
uses card account management services of third-party providers.Matt Lanford is Senior VP and General Manager
Financial Services at InComm in Atlanta, Georgia, (404)
786-0040, [email protected], www.incomm.com.
Stefan Happ is Executive VP & General Manager, Global
Prepaid & Alternative Payments at American Express in
New York, (212) 640-2000, [email protected],
www.americanexpress.com.
Improves cash flow by providing at least a 30-day float.
Tokens for Personally Identifiable Information from page 1...
Amex/MineralTree B2B Virtual Card Partners from page 1...
InComm to Buy Amex’s Prepaid Platform from page 5...
6 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive
over the first six months of 2016. Debit cards accounted for 61.16%
of those transactions, down from 63.28% in 2016. Credit
cards accounted for 38.84%, up from 36.72%.
Visa debit cards generated 43.70% of all purchase transactions in the first six months of 2017, down from 44.83% in the same period the prior year.
Visa credit cards generated 22.52% of all purchase transactions, up from 19.74%.
Mastercard debit cards generated 17.47%, down from 18.45%.
Mastercard credit cards generated 8.64%, down from 8.81%.
American Express cards generated 5.39%, down from 5.84%.
Discover cards generated 2.29%, down from 2.34%.
Prior issues:1103, 1098, 1092
PII from mobile phone and tablet devices before it reaches the client’s back office. PII might be gathered in conjunction with a payment card transaction or obtained elsewhere, and can include loyalty program information, contact center transactions, Social Security numbers, and more.
Many of TokenEx’s clients are retailers that use a payment processor or gateway to tokenize card data but don’t want to be tied to that same vendor to secure noncard data. And many processors don’t have a platform capable of tokenizing PII.
For these clients, TokenEx can integrate with the merchant’s processor to ensure that sensitive data sets obtained in a card transaction are tokenized before transmission to their back-office system.
For companies such as ecommerce retailers that want to arrange for their own tokenization of card data, TokenEx offers a PCI DSS-certified gateway
that can integrate with a card processor or payment service provider (PSP). Incoming card payments can be tokenized using TokenEx’s universal technology. And TokenEx can pass along
a network token already in place such as for Apple Pay transactions.
Retailers send a web service message to the TokenEx Data Vault, which swaps the incoming token
for the primary account number stored there. That number and transaction details are then forwarded to the processor or PSP. This service is of particular value to merchants that use multiple PSPs and those that use batch processing, private label cards, virtual terminals, and AS/400 systems. Alex Pezold is Chief Executive Officer at TokenEx
in Oklahoma City, Oklahoma, (312) 375-3186,
[email protected], www.tokenex.com.
...tokenizes PII before it reaches a client’s back office.
Volume TransactionsBrand Total (bil.) Chg. Purch. (bil.) Chg. Cash (bil.) Chg. Purch. (bil.) Chg.
Visa Credit $ 878.76 18.8% $ 850.27 19.7% $ 28.49 –1.9% 10.38 19.9%
Mastercard Credit $ 374.92 6.1% $ 357.29 5.6% $ 17.63 17.4% 3.98 3.2%
American Express Credit $ 343.00 –5.1% $ 340.39 –5.2% $ 2.61 9.0% 2.48 –3.0%
Discover Credit $ 68.06 6.3% $ 61.63 4.7% $ 6.43 24.5% 1.05 2.9%
CREDIT CARD TOTALS $ 1,664.74 9.6% $ 1,609.58 9.7% $ 55.16 6.9% 17.89 11.2%
Visa Debit & Prepaid $ 1,010.55 4.5% $ 765.67 4.4% $ 244.88 4.7% 20.13 2.5%
Mastercard Debit & Prepaid $ 408.62 –0.2% $ 313.77 0.3% $ 94.85 –2.0% 8.05 –0.4%
DEBIT CARD TOTALS $ 1,419.17 3.1% $ 1,079.44 3.2% $ 339.73 2.7% 28.18 1.6%
CREDIT & DEBIT TOTALS $ 3,083.91 6.5% $ 2,689.02 7.0% $ 394.89 3.3% 46.07 5.1%
Visa Totals $ 1,889.31 10.7% $ 1,615.94 11.9% $ 273.37 4.0% 30.51 7.8%
Mastercard Totals $ 783.54 2.7% $ 671.06 3.1% $ 112.48 0.6% 12.03 0.7%
VISA & MC TOTALS $ 2,672.85 8.2% $ 2,287.00 9.2% $ 385.85 3.0% 42.54 5.7%
U.S. General Purpose Cards MY 2017 vs. MY 2016
Includes all consumer and commercial credit, debit, and prepaid cards. Figures are for January 1 through June 30. American Express and Discover include business from third-party issuers. Figures include PIN-based debit fi gures for Visa (Interlink) and Mastercard to match their reporting. © 2017 The Nilson Report
U.S. General Purpose Card Brands—Midyear 2017 from page 1...
© 2017 HSN Consultants, Inc. THE NILSON REPORT 7AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT
funding and capital financing. Bread competes against companies that issue private label credit cards (Synchrony, Citi, and Alliance Data) as well as against those offering alternative credit (PayPal, Klarna, Affirm, and FuturePay).
Unlike its competitors, Bread does not wait until checkout to present credit options. Instead, options including 0% financing, short-term installments, and long-term installments are integrated with home
pages, product pages, marketing communications, and elsewhere, so that they appear throughout the consumer’s ecommerce experience. When financing options are presented multiple times, Bread retailers see sales increase, some greater than 10%.
Credit offers most often appear as a button near a product description. Merchants receive assistance with placement of credit offers as well as with how to test various credit options. When consumers click on the offer, their credit is approved or denied within a minute. Because Bread integrates with the
merchant’s ecommerce platform, it can be configured to gather shipping details and check the buyer out directly without sending them back to the merchant’s checkout system.
Because applicants reach Bread by way of an API, they never leave the merchant’s website.
Cross River Bank in New Jersey is the lender of record for Bread’s loans, a role it also performs for Affirm. Menlo Ventures led Bread’s Series B equity round. Victory Park Capital is providing the capital financing.
Bread provides credit mostly on a white-label basis. So far, 100 merchants in the U.S. use Bread, which handles all loan underwriting using proprietary models. Bread says that merchants pay rates similar to credit card discount fees.Josh Abramowitz is CEO at Bread in New York,
(844) 922-7323 x835, [email protected],
www.breadfinance.com.
Consumers are familiar with type–ahead address verification through the GPS device in their cars. Once
they enter a sufficient combination of
numbers and letters to
suggest a destination, a list of
possibilities is
presented so the desired address can be selected without having to finish typing.
Addressy (known as PCA Predict in the U.K.) provides similar type–ahead convenience to consumers who use computers or
mobile devices to apply for bank accounts and credit cards, or to pay ecommerce merchants. In these instances, Addressy’s type–ahead feature provides a home address instead of a destination. And instead of using GPS, Addressy’s service identifies the location of the user’s IP address.
Addressy presents consumers with a list of nearby addresses as soon as they begin entering their address. Auto–suggestions continue with every keystroke. The software is multilingual. It also can identify misspellings and abbreviations. In the U.S., Canada, and the U.K., Addressy accesses databases of the national postal systems. In
other countries it uses third–party databases. Beyond convenience to the consumer, the company provides businesses with accurate address information.
Addressy has 11,000 customers in the U.K., Western Europe, Australia, New Zealand, Canada, and the U.S. Merchant acquirers and other companies can resell Addressy’s service and receive a percentage of the annual revenue.
Tom Mucklow is Head of
Partnerships at Addressy in New
York, (415) 619-2287, tomm@
addressy.com, www.addressy.com.
The service identifies the location of the user’s IP address.
Merchants receive assistance with placement of credit offers.
Alternative Credit for Online Payments from page 1...
Type–Ahead Address Verification
8 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive
Mastercard purchase volume increased 15.6% to $130.62 billion. Visa purchase volume increased 10.3% to $184.59 billion. American Express increased 8.1% to $8.72 billion, and Diners Club increased 21.7% to $3.94 billion.
Visa’s purchase volume market share declined 82 basis points to 56.30% and Mastercard’s
increased 70 basis points to 39.84%. American Express’s share increased by 13 basis points to 2.66%. Diners Club’s share declined by 1 basis point to 1.20%.
Cash accounted for 67.14% of total volume for Visa (down
from 68.18%), 58.12% for Mastercard (up from 56.60%), 2.32% for American Express (down from 2.44%), and 2.44% for Diners Club (up from 2.38%).
Purchase transactions
for goods and services generated by Visa,
Mastercard, American Express, and Diners Club cards issued in the Middle East and Africa reached 5.10 billion, up 21.6%.
Visa and Mastercard cards generated 5.00 billion purchase transactions in 2016, which
equaled 98.10% of the Middle East and Africa region total for all global brand cards, up from 97.98%.
Visa’s purchase transaction market share slid to 53.58% from 55.31%. Mastercard gained share to 44.52% from 42.67%. American Express’s share fell to 1.23% from 1.34%. Diners Club’s share increased to 0.68% from 0.67%.
Global brand credit, debit, and prepaid cards in circulation in the Middle East and Africa at year-end 2016 totaled 264.0 million, up 8.4%. Visa and Mastercard cards accounted for 99.27%.
Mastercard added 19.8 million cards and its market share grew to 48.06% from 43.94%. Visa added 0.5 million cards and its market share fell to 51.20% from 55.28%.
Volume Transactions CardsBrand Total ($bil.) Chg. Purch. ($bil.) Chg. Cash ($bil.) Chg. Total (mil.) Chg. Purch. (mil.) Chg. (mil.) Chg.
Visa $ 561.66 6.8% $ 184.59 10.3% $ 377.07 5.2% 5,196.2 12.2% 2,731.4 17.7% 135.2 0.4%
Mastercard $ 311.85 19.7% $ 130.62 15.6% $ 181.23 22.9% 4,028.2 26.7% 2,269.7 26.8% 126.9 18.5%
Amer. Express $ 8.93 8.0% $ 8.72 8.1% $ 0.21 3.0% 64.4 10.8% 62.6 11.0% 1.5 2.8%
Diners Club $ 4.04 21.7% $ 3.94 21.7% $ 0.10 24.9% 35.0 22.0% 34.5 22.0% 0.5 4.2%
Totals $ 886.48 11.1% $ 327.86 12.4% $ 558.61 10.3% 9,323.9 18.1% 5,098.2 21.6% 264.0 8.4%
Includes all general purpose consumer and commercial credit, debit, and prepaid cards. Currency fi gures are in U.S. dollars. Change fi gures are based on local currency. Some prior year fi gures have been restated. Includes Israel. Visa includes Electron but excludes Plus. Mastercard excludes Maestro and Cirrus. © 2017 The Nilson Report
Middle East and Africa General Purpose Cards 2016 vs. 2015
Visa 53.6% –173
Mastercard 44.5% +185
Amex 1.2% –12
Diners 0.7% 0
Chg.‘16Brand Share vs.’15
Market Shares of PurchaseTransactions by Brand
5.10bil.
© 2017 The Nilson Report
30%
25%
20%
15%
10%
5%
0%
–5%
–10%
–15%
–20%‘10‘09‘07 ‘08‘06‘05‘04‘03
‘02‘01‘00
‘11 ‘12 ‘13
‘14 ‘15 ‘16
©2017The Nilson Report
Year-Over-Year Growth/Decline in Purchase Volume*on Cards Issued in Middle East & Africa
Visa
Amex
Diners
Mastercard
*in local currency
Middle East–Africa Cards 2016 from page 1
> see p. 10
© 2017 HSN Consultants, Inc. THE NILSON REPORT 9AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT
Visa payment card transactions from 6.4 million active merchant outlets in the region. Purchase volume (spending for goods and services) generated by those transactions was $1.739 trillion. The five largest acquirers—Cielo, Rede, BBVA Bancomer, Getnet, and Prisma Medios de Pago—combined to process 68% of the Mastercard and Visa transactions acquired by the group.
Added to Visa and Mastercard card payments handled last year, these acquirers also processed 1.73 billion transactions generated by American Express, Diners Club, and Discover cards as well as by domestic-only credit and debit cards issued in Brazil, Chile, Colombia, Costa Rica, Ecuador, Mexico, Panama, Puerto Rico, Peru, Venezuela, and four other countries. Among those card brands were Elo, Banricompras, Redcompra, Clave, Infonet, ATH, and Ripley. Purchase volume was $67.90 billion.
With global and domestic brand purchase volume combined, these acquirers handled 21.17 billion card transactions, up 15% from 2015. Purchase volume tied to those transactions was $1.806 trillion.
Growth rates shown in this chart are in nominal dollars to reduce distortion owing to inflation and conversion to U.S. dollars. Foreign exchange rates do not keep up with inflation, which
masks the devaluation of a local currency to the U.S. dollar in a country such as Venezuela. The problem is further exacerbated by currency manipulation by that country’s government.
Concurrently, inflation has had a positive effect on debit card usage in Venezuela, where cash purchases require an ever larger number of banknotes, which can be in short supply.
Visa cards issued in the Middle East and Africa region accounted for 4.38% of all Visa cards in circulation worldwide at the end of 2016, down from 4.57% in 2015.
The Middle East and Africa region accounted for 2.57% of Visa’s worldwide purchase volume in 2016, up from 2.56% in 2015, and 1.96% of its purchase transactions, up from 1.84%.
Mastercard cards issued in the Middle East and Africa region accounted for 7.60% of all Mastercard
cards in circulation worldwide at the end of 2016, up from 6.99% in 2015.
The Middle East and Africa region accounted for 3.72% of Mastercard’s worldwide purchase volume, up from 3.45%, and 3.37% of its purchase transactions, up from 3.00%.
Mastercard’s purchase volume share increased 70 basis points.
Top Acquirers of WebTransactions 2016
Trans. Portfolio Rank Country Acquirer (mil.) Share 1 BRA Cielo 275.0 4%
2 BRA Getnet 181.0 15%
3 BRA Rede 141.7 4%
4 CHL Transbank 64.1 6%
5 ARG Prisma 29.4 3%
6 MEX Banorte 25.5 10%
7 ARG First Data 8.4 3%
8 MEX Serv. de Pago 7.6 2%
9 PER VisaNet 6.7 3%
10 MEX BBVA Bancomer 6.7 <1%
11 MEX Elavon/Santander 6.2 3%
12 VEN Banesco 4.8 1%
13 PRI Evertec 4.2 1%
14 COL Occidente 4.0 7%
15 PER Procesos 2.6 5%©2017 The Nilson Report
Rank CompanyTrans. Volume(bil.) (bil.)
1 Cielo 6.80 $ 168.66
2 Rede 4.00 $ 111.67
3 BBVA 1.73 $ 267.38
4 Getnet 1.25 $ 31.21
5 Prisma Medios de Pago 1.07 $ 51.04
6 Transbank 1.03 $ 41.37
7 Banesco Banco Universal 0.80 $ 586.69
8 Serv. de Pago Banamex–EVO 0.44 $ 19.83
9 Evertec Group 0.43 $ 16.23
10 First Data 0.33 $ 15.82
Rankings are based on consolidated volume and trans-actions. Figures include all Latin America business. Volume is net (gross minus chargebacks) for American Express, Diners Club, Discover, JCB, Mastercard, UnionPay, Visa, and domestic general purpose payment cards such as Elo, Hiper-card, Cabal, and Redcompra. © 2017 The Nilson Report
Side note BG Box Original Color: PANTONE P 24-11 C @ 70%Bands Original Color: PANTONE P 24-11 C @ 100%
Top Acquirers inLatin America 2016
Latin America’s Largest Acquirers from page 1...
Middle East–Africa Cards 2016 from page 9
10 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive
Visa/Mastercard 1 Other Cards 2
Active Merchant
OutletsPOS
TerminalsRank Transactions Volume Transactions Volume
‘16 ‘15 Company, Headquarters (mil.) Chg. (mil.) Chg. (mil.) (mil.)
1 1 Cielo Brazil 5,500.0 4% $ 142,017.2 1% 1,300.0 $ 26,639.0 1,760,000 1,946,000
2 2 Rede Brazil 3,999.9 -1% $ 111,666.3 1% — — 1,279,770 1,471,000
3 3 BBVA Bancomer Mexico 1,348.0 20% $ 36,568.2 23% — — 158,443 367,959
4 5 Getnet Brazil 1,247.0 52% $ 31,207.2 30% — — 383,479 558,672
5 4 Prisma Medios de Pago Argentina 1,070.2 15% $ 50,995.0 43% 1.3 $ 47.3 344,800 487,200
6 6 Transbank Chile 974.6 25% $ 38,998.8 17% 57.3 $ 2,367.8 199,515 275,116
7 7 Banesco Banco Universal Venezuela 800.8 25% $ 585,750.0 275% 0.8 $ 936.4 10,962 109,652
8 8 Serv. de Pago Banamex–EVO Mexico 426.7 5% $ 18,664.3 6% 12.0 $ 1,168.3 139,821 135,863
9 9 Evertec Group Puerto Rico3 389.9 13% $ 14,640.7 10% 39.9 $ 1,587.6 60,826 83,256
10 11 First Data Argentina 331.9 14% $ 15,676.7 45% 2.1 $ 141.8 243,110 224,265
11 10 BBVA Provincial Venezuela 325.0 7% $ 207,954.3 260% 24.9 $ 21,215.5 38,667 62,911
12 14 VisaNet Peru 265.8 16% $ 9,892.2 14% — — 132,128 142,060
13 12 Banorte Mexico 260.5 4% $ 10,756.4 16% — — 106,812 148,999
14 13 Mercantil Banco Universal Venezuela 252.0 6% $ 128,768.0 255% — — 32,501 52,454
15 — BAC Credomatic Costa Rica4 247.1 — $ 17,456.8 — 15.5 $ 1,396.5 305,714 305,714
16 16 Elavon/Santander Mexico 219.3 28% $ 11,220.8 27% 0.1 $ 18.8 110,835 164,280
17 15 Banco de Venezuela Venezuela 192.1 8% $ 89,577.8 316% — — 25,610 29,207
18 17 Vero Brazil 165.8 35% $ 4,224.1 33% 132.2 $ 3,016.8 209,538 1,728,663
19 — Stone Brazil 140.3 — $ 1,047.2 — — — 42,086 51,953
20 18 Bancolombia Colombia 129.2 13% $ 6,330.9 18% 9.0 $ 757.8 109,000 5
21 20 HSBC Mexico 108.2 11% $ 4,163.3 15% — — 43,793 75,099
22 21 CardNet Dominican Republic 87.8 -1% $ 4,073.2 -4% 0.3 $ 18.8 24,342 41,732
23 — Banco Exterior Venezuela 84.7 — $ 64,665.5 — — — 10,573 13,804
24 22 Bancaribe Venezuela 78.3 5% $ 33,591.7 209% — — 13,895 14,172
25 25 Banco Davivienda Colombia 73.7 44% $ 4,430.4 34% 7.3 $ 689.2 77,000 5
26 27 Banco Nac’l de Credito Venezuela 64.0 57% $ 50,387.5 231% — — 13,466 16,607
27 23 Banco de Occidente Colombia 58.9 7% $ 2,526.1 9% — — 24,732 5
28 24 Banco Nacional Costa Rica 56.5 6% $ 2,033.1 3% — — 53,924 45,750
29 28 Banco Inbursa Mexico 51.9 34% $ 1,567.0 35% 0.6 $ 5.9 60,044 66,262
30 19 Elavon Brazil 6 49.1 — $ 1,266.3 — <0.1 $ <0.1 0 0
31 26 BCR Costa Rica 48.0 13% $ 1,637.0 -17% — — 18,736 20,725
32 37 Servicios Digitales Popular Dominican Republic 42.8 120% $ 2,080.6 104% 1.7 $ 109.6 12,526 15,623
33 29 Procesos de Medios de Pago Peru 41.5 13% $ 1,724.4 7% 15.4 $ 992.3 78,524 94,986
34 30 Scotiabank Mexico 37.7 15% $ 1,190.8 7% 34.0 $ 1,015.2 22,435 23,059
35 31 Bancard Paraguay 31.8 18% $ 1,234.8 13% 4.3 $ 100.3 23,770 28,213
36 33 BBVA Colombia 30.1 14% $ 1,618.3 28% 0.4 $ 24.7 17,312 5
37 32 Banco del Pacifi co Ecuador 28.3 6% $ 1,504.0 -4% — — 54,451 43,142
38 36 Interdin & Diners Club Ecuador 26.6 36% $ 1,634.9 -19% 36.6 $ 3,539.8 60,441 64,818
39 38 Firstbank Puerto Rico 24.4 26% $ 1,019.9 23% 18.0 $ 537.2 5,712 7,949
40 34 Banco Sofi tasa Venezuela 24.3 4% $ 14,724.3 261% — — 3,026 3,610
41 39 Maduro & Curiel’s Curacao 7 22.4 22% 1,764.6 9% 1.0 $ 196.5 8,135 9,401
42 40 Banco Caja Social Colombia 22.0 28% $ 798.1 34% <0.1 $ 1.0 11,747 5
43 42 Banco Agricola El Salvador 18.8 28% $ 892.7 35% — — 1,662 3,614
44 41 Scotiabank Puerto Rico 18.8 14% $ 3,463.2 12% 1.9 $ 948.5 12,802 15,641
45 35 VisaNet Dominican Republic 11.7 -42% $ 355.2 -59% — — 6,427 6,684
46 43 Banco General Panama 11.1 3% $ 1,057.3 -1% 12.3 $ 429.9 7,464 9,402
Figures are net (gross minus chargebacks). Change in volume is based on local currency. 1Visa and Mastercard credit, debit, and prepaid cards including Electron and Maestro. 2Includes American Express, Diners Club/Discover, JCB, and UnionPay, and domestic debit and credit cards. 3Also U.S. Virgin Islands, British Virgin Islands, and Costa Rica. 4Includes all Central America business. 5POS terminals are owned by Credibanco and Redeban. 6Sold to Stone in April 2016. 7Also Aruba, Sint Maarten, and Bonaire. © 2017 The Nilson Report
Largest Merchant Acquirers in Latin America 2016
© 2017 HSN Consultants, Inc. THE NILSON REPORT 11AUGUST 2017 / ISSUE 1115 / THE NILSON REPORT
payments—both merchant-presented and consumer-presented models.
QR codes are two-dimensional (2D) machine-readable barcodes used in mobile phones. They are
capable of holding 100 times the information found on the one-dimensional barcodes printed on consumer packaged goods—enough data to initiate a payment on any network.
American Express, Discover/Diners, JCB, Mastercard, UnionPay, and Visa, the six global networks, hold equal one-sixth ownership stakes in EMVCo.
Approximately two-thirds of the global population has a mobile phone. Nearly every make and model of smart and feature mobile phones can accommodate QR code-based payments, which require only a camera and an application.
EMVCo is responsible for the specifications that established secure global interoperability for EMV-compliant payment cards
and POS hardware. Its work on QR code-based payments aims to
achieve the same results. The largest QR
code-based payment systems—Alipay and
WeChat Pay in China—exist outside
of any legacy card network. Both seek global
acceptance for international travelers that use their
mobile wallets. Consumer-presented
mobile payments made with QR codes work similarly to contactless EMV payments that use
near-field communication (NFC) radio frequencies.
The difference is that instead of putting a card or phone in
proximity to an NFC reader, consumers open an app on their phone to display a QR code that can be read by a merchant’s 2D optical scanner. Resulting information about the purchase, merchant, and consumer is then transferred to the merchant’s acquiring bank.
Merchant-presented QR-code payments are initiated when a
consumer uses their mobile device to launch an app from a payment network or a bank. The app uses the phone’s image sensor to read a QR code displayed at a merchant’s countertop or on a merchant’s phone. Transaction data is first sent to the issuing bank. The subsequent flow of messages between the merchant’s acquiring bank and the merchant is specific to the implementation.
Payment industry companies and their representative associations can become EMVCo business associates or technical associates, and participate in the development of specifications. Technical documents are available on a royalty-free basis to all interested parties from the EMVCo website.
EMVCo is developing a self-testing framework that will be
able to evaluate whether QR codes comply with specifications.
EMVCo technical associates will meet September 25-28 in Vancouver, Canada, and the Board of Advisors will meet October 18-19 in Sydney, Australia.Brian Byrne is Director of
Operations at EMVCo in San
Francisco, California, (650) 454-
5113, [email protected],
www.emvco.com.
Technical documents are avail-able on a royalty-free basis.
• EGYPT• GHANA• NIGERIA
• UGANDA • KENYA
• RWANDA• TANZANIA
• THAILAND• CAMBODIA• VIETNAM • PHILIPPINES
• MALAYSIA• INDONESIA
• PAKISTAN • INDIA
• KAZAKHSTAN • CHINA
Countries Using QR Codes for Payments on Visa/Mastercard Networks*
* Programs are either live or pending.
QR Code Payment Global Interoperability from page 1...
12 VISIT US ONLINE AT WWW.NILSONREPORT.COM Order Back Issues / Preview Upcoming Conferences / View Newsletter Archive
© 2017 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.
David Robertson, PublisherAugust 29, 2017