visa international confidential unifying the european payments landscape marc temmerman executive...
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VISA INTERNATIONAL CONFIDENTIAL
Unifying the European Payments Landscape
Marc Temmerman
Executive Vice President, External RelationsVisa EU
VISA INTERNATIONAL CONFIDENTIAL
What is Visa?
A global non-profit making association
Owned by 20,000 banks worldwide
5,000 European banks– 230 million cards: credit, debit, charge and pre-paid
– €824 billion annual sales volume
Visa’s role– Managing the brand
– Providing the processing infrastructure
– Agreeing and enforcing the “regulations”
VISA INTERNATIONAL CONFIDENTIAL
Europe: a defining contribution
Cards as – primarily – a payment mechanism
A co-operative democratic constitution
The first to move to chip technology
Effective governance and control is a priority
VISA INTERNATIONAL CONFIDENTIAL
The commercial payment opportunity
A complete suite of products
Cost-effective, guaranteed multi-currency payments:– Tangible benefits:– Cash flow management– Access to funds– Reduced administration costs– Expenditure tracking– Compliance monitoring– Competitive buying policies
An indication of the potential: the UK Government Purchasing Card programme
VISA INTERNATIONAL CONFIDENTIAL
An indicator of economic well-being
The approximate composition of M1 in selected countries
11% 12% 19%35% 37%
47% 47% 48%
71%82% 87%
89% 88% 81%65% 63%
53% 53% 52%
29%18% 13%
Cash Deposits
VISA INTERNATIONAL CONFIDENTIAL
Macroeconomics of Cashless Payments
An electronic payment system is ⅓ to ½ the cost of an equivalent cash/paper-based system
Liberates aggregate cost savings of at least 1% of GDP
Equates to $58 billion in savings for the “Big 5” European economies alone
VISA INTERNATIONAL CONFIDENTIAL
Banking the unbanked
Electronic payments draw people – en mass – into the banking system
Promote financial inclusion and institutional trust
Immense economic benefits:– Harnesses low cost, lendable deposits – which fuel
economic growth
– Minimises shadow economies
– Maximises tax revenues
VISA INTERNATIONAL CONFIDENTIAL
Economic importance of banking the unbanked
UK
Switzerland
Spain
Saudi Arabia
Norway
Italy
Ireland
Hungary
Greece
GermanyFrance
UAE
Egypt
Denmark
Czech Republic
Canada
Russia
Poland
$0
$10,000
$20,000
$30,000
$40,000
0 20 40 60 80 100
Percent Banked Across Countries
GD
P P
er C
apit
a ($
US
)
VISA INTERNATIONAL CONFIDENTIAL
The global effect
A 10% shift in electronic payments typically creates a direct 0.5% increase in consumer spending
In Europe, a 2% increase in the proportion of electronic payments would liberate $26 billion in incremental consumer spending
VISA INTERNATIONAL CONFIDENTIAL
Our raison d’être
To increase the proportion of cashless payments– 16% of PCE by 2007
Enable banks to derive more value from VisaNet– Capable of processing any electronic payments
Working with accession countries to liberate the benefits
VISA INTERNATIONAL CONFIDENTIAL
A big change to our constitution
The creation of Visa Europe– A separately incorporated company
– A co-owner of Visa International
Europe’s banks become the exclusive owner-operators of their own regional payment system
Retaining global influence and interoperability
Coincides with the accession process– Creation of an Accession Council
VISA INTERNATIONAL CONFIDENTIAL
A defining moment
Creation of external relations function
Working in partnership with regulators and industry bodies
Promoting the benefits of Visa Direct – a low cost, high speed funds transfer solution
Leveraging the investment in chip
VISA INTERNATIONAL CONFIDENTIAL
Thank you