Emerging gtrends and Innovation in Payments
Introduction & Agenda Transaction Network Services is the strategic partner driving payments behind the Civica ICON solution Some headline facts about TNS: We handle >15 billion card payment transactions per annum globally We operate specialist payment gateways covering Europe, AsiaPac, and North America ~75% of all UK card payments come across our network We provide services to 9 out of 10 of the largest UK retailers Our UK settlement service handled > 238 Billion in 2013 TNS has operated td as a key player in the global l payments since 1990 We understand payments and drive/support innovation in the market
European Electronic Payments Overview UK 2012 France 2012 Germany 2012 587.9 Billion 421.6 198.2 Billion Billion 10.3 Billion Txns 9% CAGR Billion 8.4 Txns 3.2 Billion Txns 7% CAGR 9% CAGR 2009-2012 2009-2012 2009-2012 Italy 2012 Spain 2012 Ireland 2012 130 Billion 17 1.7 Billion Txns 5% CAGR 2009-2012 106.7 Billion 24.3 Billion 24 2.4 Billion Txns 035Billion Txns 4% CAGR 2009-2012 0.35 5% CAGR 2009-2012 The above headline numbers of European electronic payments include all consumer card payments at POS (card present) and e-commerce (card not present)
Major trends identified across entire stakeholder framework Market research was conducted to identify the major trends in the payments ecosystem Stakeholder Framework Consumer Merchant Payment Technology Provider Acquiring Bank Card schemes & issuers New Entrants
6 major trends were identified Major trend #1: Several of the key participants are expanding their activities across the payments ecosystem Major trend #2: The usage of alternative payment methods (APMs) is no longer nascent Major trend #3: Merchants and providers are adopting new business models for the acceptance and processing of payments Major trend #4: With a shift in customer shopping behaviour merchants want to be responsive but need to invest in technology Major trend #5: Regulatory changes have affected the whole payments industry in the last 10 years and will continue to have impact Major trend #6: A number of new players and entrants into the acceptance ecosystem are looking to disrupt the value chain
Technology & consumer adoption will drive future payments Cloud computing 1950 1960 1970 1980 1990 2000 2010 2020 Physical Digitalit
Online vs Offline = Integrated multichannel Cards offline Cards online M Wallet There is a blurring of what is offline and online Online Prepaid Offline Prepaid
The customer takes centre stage POS Terminal Customer Centric Design New devices E Commerce Mobile Social lcommerce
Redesign of the point of sale Combining virtual and physical worlds Adidas Marks & Spencer
Mobile shopping today Seoul South Korea London Paris Chicago
Virtual mirrors
Click and collect expected to reach 20 to 25bn by 2018
Increasing consumer awareness of contactless Progressive Contactless Markets Nascent Contactless Markets UK Italy Contactless terminals: 158,000 Contactless terminals: 6,000 Contactless cards: 34.5 million Contactless cards: ~ 1 2 million Number of transactions: 6 7 million Number of transactions: n/a France Contactless terminals: 100,000 120,000 Contactless cards: 12.3 million Number of transactions: 0.5 1 million Spain Contactless terminals: 180,000 200,00 Contactless cards: 3 4 million Number of transactions: 1 2 million Germany Contactless terminals: 15,000 20,000 Contactless cards: 2 million Number of transactions: n/a Ireland Contactless terminals: 6,000 Contactless cards: 1 2 million Number of transactions: 0.5 million Sources: UKCA, CB, Visa, MasterCard, NFC Times (all figures are 2012/2013)
NFC Payments - Ti Trials ongoing with Visa and MasterCard Other major players are also driving their own branded alternatives By 2017 one in three mobile phones will come with NFC
Mobile Payment Acceptance
Mobile Point of Sale &Tablets A buzz in retail around MPOS & Tablets Will bring new POS players to market Transition for existing market players Strong products will win through
The push for recurring payments on card The UK DD & STO market was worth 4.15 Trillion in 2012 Merchants concerned about card expiry during life of payment cycle Visa & MasterCard have both developed Updater Services to address the issue Other benefits inc: Support for International customers Immediate confirmation of result No customer penalty fees for declines Merchant has more control
New business models are being adopted...has the ability to fundamentally change the economics in acquiring it is not about payments anymore!!! Payment processing costs 2.75% When combined with advertising & loyalty 0% (no acquiring bank can compete)
Security & Simplicity are key. What are the key challenges you face to accept payments? 55% 55% No 32% Security & simplicity for 45% 42% consumers are the top concerns Yes 68% for payment py acceptance 33% 18% 12% Source: EDC 2013 Retailer Survey
Shift of power and influence from the bank to the consumer High Po ower and influen nce Bank Bank Branch Merchant High Street Shop Consumer Bank Merchant Internet Banking High St & Web Shop Consumer Smartphone & tablet Merchant Multichannel Consumer Bank Low Yesterday Today Time Tomorrow
Conclusions and recommendations
Conclusions.. Trusted Payment Partners are key Evolution not revolution Use appropriate payment methods Changing consumer behaviour is never easy A consistent way to pay Don t neglect the core requirements
Thank You John Walls Business Development Director Merchants & Partners