KONTAKTLOS, DIGITAL, MOBILE, INSTANT WIE GEHT CB IN FRANKREICH DAMIT UM?

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1 KONTAKTLOS, DIGITAL, MOBILE, INSTANT WIE GEHT CB IN FRANKREICH DAMIT UM? Dr. Cédric Sarazin, EVP Europe & International Standardisation Groupement Cartes Bancaires CB June

2 CB in Brief 1. European 4 party Local Card Scheme, mainly active in France. Known as the French domestic card scheme 2. 66M cards, 1.6M POS and 12 Billion card transactions ~90% of card transactions in France, >40% of French Household Consumption Credit, debit, prepaid & commercial cards, e-money, Lunch Vouchers Cash Withdrawals, Contact payments, Pre-Authorized payments MOTO, Internet & Mobile (1.1 Billion transactions) Contactless payments (1.2 billion transactions) 3. Co-founder of ECPA, the European Card Payment Association, composed of European Local Card Schemes and Local Card Organizations 2 Note: 2017 figures. Just the % are based on 2016 figures.

3 ECPA in Brief European Card Payment Association with: 11 national schemes 3 domestic card organisations The European voice for local card schemes & card organizations Handling around 40 billion transactions annually & 7 million points of acceptance Contributing to security and developing international standards (member of PCI & EMV) Sharing non-competitive information Identifying projects with a common interest 3

4 Advantages of Domestic Card Schemes such as CB or girocard 1. Cost effectiveness (very low cost-based prices thanks to high local volumes) 2. All product lines or segments addressed (all client segments, all products, incl. cash,) 3. Fully adapted & focused on local player needs (local banks, merchants ) 4. Full compliance to local laws & regulations (legislation, regulation, oversight ) 5. Full focus on security and operational quality (fraud prevention, continuity planning) 6. Local data protection (domestic processing allows full local data protection) 7. Guaranteed sovereignty (decisions on payments and regulation are taken locally) 8. Domestic Schemes can more easily interconnect, cobadge or cooperate with global or other domestic/regional players (processing interconnection, standardization, security, e-id, Biometrics, e-transport, Health care sector, Mobile, Education programs and Instant Payment!) 4

5 Some recent European domestic card scheme moves 1. New partnerships 2. Low value (Contactless) payments 3. Digital adaptation to specific sectors 4. Mobile & Digital strategy 5. Instant payment 6. e-id 7. Split 8. Merge 9. Creation 10. and Europe 5

6 One Video is worth words Videos: Wie die Franzosen mit Kontaktlos bezahlen Le Saut by CB > 6 million views on social networks Le Geste by CB On-going campaign 6

7 CB Transaction Split Contactless & Digital represent both already more than 1 Billion transactions each They are by far the highest growth segments in CB scheme Cash Withdrawals Contactless > +100% Digital +20% Next highest growth segment is: cross-border payments, eg. German customers in France!.. Face to Face & Pre-auth F2F Payments Cash withdrawals Contactless Digital 7

8 2017 : A truly successful year for CB Volume growth More than 1 Billion Contactless transactions in 2017, 4 historical records and a AAGR of more than 6% in recent years Acceleration in upgrade of acceptance terminals Compliant with CB 5.5 and contactless usage Innovation: "Le Lab" by CB Successful launch in 2017 P2P payment launch with Facebook Continuous efforts and positive results in Fraud Reduction 4 th consecutive year for CB fraud reduction and sharp drop of ecommerce digital fraud 8

9 In 2018, CB will accelerate even more! New target for contactless transactions > 2 Billion transactions targeted in 2018 Upper limit increased to 30 Delivery of the new EMV 3DS 2.0 digital platform Directory, rules & scoring compliant by design with the new PSD 2 RTS Completion of an independent mobile & digital platform X-Pay & HCE Mobile Payments fully independent of ICS technologies "Le LAB" by CB Explore new innovation themes (transport, data ) & deployment of pilot projects Continuation of the terminal migration Compliant with CB 5.5 and contactless usage Retail Advisory Board New customer experiences, adapt to new retailers needs, legislation, monitor upgrades, and a constant investment in combatting fraud, improving security and service levels 9

10 Cards have a bright future in the new digital world Rather than abandon the card, the leaders in the digital world have placed the card at the centre of their innovation strategy Paypal, Uber, Amazon, etc. have all issued their own plastic cards Facebook relies on payment cards, and in France on to launch its P2P payment service 10

11 3 new opportunities for CB and girocard? Multi-payment Synergies European Interoperability Diversification Between cards and new types of digital payments (Paylib, IP, wallet ), particularly investments in real-time and security Definition of a framework of common specifications & rules for interconnection of card processing in Europe In particular via the EMV 3DS 2.0 platform : authentication & trusted services for multiple sectors (health, transport, eid ) Instant Payments SEPA for cards 11

12 Final Thoughts: Card initiated Instant Payment or Instant Payment based Card Transaction? Convergence between card world (authorisations, rules & chargebacks, contactless, card & POS infrastructure) & Instant Payment world is on its way! European Card Processing Interoperability will benefit from the new pan-european instant payment based clearing & settlement system Newly designed systems will allow pan-european reachability, system optimisation and more importantly new services, notably for retailers 12

13 DANKE FÜR IHRE AUFMERKSAMKEIT Contact for more information: 13