Europeans and their bankcards I cittadini europei e le loro carte di pagamento bancario... risultati di una ricerca sul campo ABI Meeting Carte 2003, Rome 7th November 2003 David Stephenson Groupement des Cartes Bancaires "CB", France 1
Presentation Topics Overview & Role of Cartes Bancaires "CB" Are the French bankcard user s satisfied? Profile of other European cardholders 2
An Introduction to "CB" "CB": : non-profit organisation offering services to member banks. Established in 1984 to co-ordinate, promote and implement French card payment network rules & operations A A national payment system completely interoperable with Visa & MasterCard System based on Chip & PIN since 1992 3
CB Members 11 principal banks representing 170 financial institutions and credit establishments: all members of Gie des Cartes Bancaires «CB» 4
International Partners CB Member Banks 5
Interoperability: CB at the heart of the system * For transactions with International cards CB Member Banks CB Issuing Bank RCB Authorisation Network CB Acquiring Bank Cash ATM Payment (Cardholder) (Merchant) 6
Role of the "CB" organisation 1 / 4 1 Definition of interbanking rules, technical standards & type approval (cards, terminals, protocols) 2 Ensure interoperability with Visa, MasterCard and the French automated clearing system GSIT 7
Role of the "CB" organisation 2 / 4 3 Security & Risk Management: SICB: in-house information system, and RCB: domestic authorisation & switching network CB Issuing Banks CB Acquiring Banks VISA Issuing Banks Mastercard Issuing Banks 8
Role of the "CB" organisation 3 / 4 4 Providing the minimum legal framework for contractual relationships: between members & cardholders between members & merchants monitor European regulatory issues 5 Continuous co-operation with Merchant & Consumer Associations 9
Role of the "CB" organisation 4 / 4 6 Technology watch, surveys & development on behalf of Members eg: GSM card acceptance, e-purse, e-commerce,... 10
"CB" Members Share Technology & Offer Competitive Services Member Banks are completely independent with regard to: MARKETING POLICY CUSTOMER RELATIONS CARD ISSUANCE MERCHANT RELATIONS TARIFICATION TRANSACTION PROCESSING (in-house or third party) 11
Continual progression in CB card usage N transactions (millions) 5000 4808 5.309 billion transactions 4500 4000 3500 3000 2500 2585 Growth 8-10 % p.a. 3671 4.096 billion payments = 190 B uros 2002 Activity 2000 1500 1000 500 1867 718 1137 1.213 billion cash withdrawals = 75.9 B uros 0 1995 2001 2002 12
Growth in N o transactions & N o cardholders Brest 45.4 million cards average 21.3 m transactions per day peak = 25 m transactions 7 m authorisations daily 1 new card every 3 seconds Nantes Bordeaux Paris Reims Lyon Strasbourg Toulouse Marseille Monaco 13
Aim for the widest possible number of Points of Acceptance 1 million Points of Sale: 766,000 merchant terminals 230,000 card activated terminals Acceptance logos at CB merchants 3 million cardholder owned terminals with a chip card reader TV decoders, mobile phones, minitels, PC card readers 38,975 ATMs 14
CB Card Usage: Transaction types 96% domestic cash withdrawals 23.69% distance selling 1.00% 4.24% vending machines 71.07% eftpos payments Au 1er janvier 2002 15
CB Cards: the Users Opinions since 1990 CB undertakes regular surveys to understand the customers perception of the CB system & to measure: Cardholder Satisfaction Card usage and Merchant opinions User profiles & behaviour User Expectations & other Marketing related issues This year, in addition to France we also surveyed 6 other countries CB Members Strategy 16
Possession of CB cards in 2003 87% of the French aged 18 and over hold at least 1 bankcard On average 1.17 cards 1.26 in age group 50-64 1.28 in PCS+ social group Cards issued by Base : Ensemble des multi-détenteurs de CB % A 1 single seule banque bank 83 264 Number of Cards Two Deux 14% Three Trois 2% 2 banques banks 10 3 banques or more banks 7 4 4 or ou more plus 2% 4% of French adult population possesses a payment card for professional purposes One Une 82% 17
Increased Frequency of Use Continual Progression for payments... cash withdrawals stable - 75%: almost 8 out of 10 cardholders use their card at least once a week for purchases cf. 64% in April 1992 - on average 93 payments and 26 cash withdrawal per card per year Regular increase in use for Internet payments - 21% cardholders now use their card for Internet transactions (cf 13% in 2002 & 9% in 2001) 18
CB is preferred payment instrument in France Q.57 : When you have the choice between using Cash, Cheque or your CB card, which do you prefer? Rappel.. oct-98 Rappel.. sept-02 sept-03 81% in PCS + group 66% 68% 69% 24% in population 65 and over 32% in 18-24 age group 23% 18% 17% 11% 14% 13% CB CARD CB Chèque CHEQUE Liquide CASH in 2002: more transactions made with CB cards than using cheques 19
CB is preferred payment instrument in France October 2002 CB CARD Cheque Cash PREFERRED PAYMENT INSTRUMENT 68 % 14 % 18 % REASONS % % % Convenient... 44 12 18 Easy to use... 41 7 11 Rapid... 28 1 4 Secure... 20 19 8 Better control of spending... 8 32 40 Discrete... 3-3 Use out of habit... 3 34 13 Use because no cash at hand... 20 3 October 2003 figures are similar with 51% finding it easy to use cf. 41% in 2002 20
97% Cardholder Satisfaction Très very satisfait satisfied Peu fairly satisfait satisfied 74 66 34 not really Assez satisfied satisfait 51 24 31 Pas not du at all tout satisfait satisfied 2 3 12 3 Merchants ATMS Merchants Commerçants France (B : 826) DAB France (B : 838) Commerçants étranger (B : 375) in France (France) outside France 21
Points of Acceptance: where CB cardholders would like to be able to use their card more often Q93 Quels sont les lieux où vous souhaiteriez pouvoir utiliser plus souvent votre carte bancaire? (citer) sept-02 sept-03 Base : Porteurs de cartes CB de 18 ans et + 879 935 Health Professionals % % Les professions de santé 73 69 Public Les services Services publics 47 48 Home Les livraisons deliveries à domicile 41 40 Taxis Les taxis 40 38 vending Les distributeurs machines automatiques 47 32 open Les marchés air markets 31 31 local Les commerces shops de proximité 35 30 others Autres 10 2 NR 13 16 no reply 22
Reasons for NOT using a CB card for payments and / or cash October 2002 October 2003 % population which doesn t have a CB card 16% 13% % Don t need a card / can use something else... 91 79 pay by cheque... 80 63 prefer to go to the bank for cash... 72 59 use other cards... 16 4 Reservations... 44 49 afraid of losing card or card being stolen... 57 41 afraid of controlling spending with a card... 27 19 Don t have the opportunity... 37 19 bank has never suggested it... 23 9 use a member of my family s card... 14 7 used to have one but bank cancelled it... 5 2 bank refused to issue one... 2 1 Other reasons... 53 39 too expensive... 39 27 It s too complicated to use (must remember pin, etc...)... 22 16 Some merchants don t accept it... 17 4 23
Win-Win for "CB" Stakeholders The Merchants Petrol Stations Local Shops Hypermarkets / Department Stores Hotels / Restaurants Specialised Consumer Goods Health Professionals Leisure & Transport Luxury Commerce 24
Merchant Opinions > 70-90%: CB cards provide a better guarantee (versus cheques) > 80% payment with CB cards is more secure than cash > 90% CB card acceptance is an essential service for today s clientele 90% payment with a CB card guarantees merchant will be paid 60% payment by CB card simplifies merchant accounting 50-60% CB card payments reduce checkout times or time needed to process invoice only 15-30% think CB card payments are less expensive to manage than cash 25
Chipcards: the cardholder s perception Q104 : Grâce à la puce, l utilisation de la carte bancaire à l étranger sera bientôt sécurisée au même niveau qu en France. Cette nouvelle garantie de sécurité vous inciterait-elle à utiliser plus souvent votre carte à l étranger pour le paiement de vos achats? 80% of cardholders consider that the smart CB bankcard is secure 77% of cardholders will use their card more often abroad with the arrival of EMV NSP 1% ST Non 22% 12% 10% 36% 41% ST Oui 77% NO NO YES YES NOT REALLY PROBABLY DEFINITELY 26
PIN code as an identifier: what does the user think? Q.28 : Today, it is your bank which for security reasons which selects your PIN code. Would you like to be able to choose it yourself? Q.29 : Would you be willing to use a code longer than 4 digits? Q.30 : Do you use your CB PIN code for other uses? e.g. code for GSM telephone Q.31 : In the future, would you accept using your fingerprint instead of the PIN? 68% of which 18% wanted 5 digits and 66% 6 digits 46% replied OF COURSE!! 34% 32% 10% Fingerprint Longer PIN Choice of PIN by User PIN used for other uses 27
Bankcard holders by Country France Royaume Uni Pays Bas Belgique Allemagne Espagne Italie Base : ensemble 1073 481 266 298 499 494 1001 % % % % % % % Possèdent Possesses une a carte bankcard bancaire 87 70 90 90 81 67 57 Cartes * a National bancaires card nationales 27 27 12 60-28 17 Cartes * an International bancaires internationales card 69 59 90 76 81 39 46 Ne does possèdent not have aucune any de card ces cartes 13 30 10 10 19 33 43 Porte-monnaie électronique * Electronic Purse 10-18 39 11 2? Carte privative * Private Label Card 25 11 16 13 12 26 1 ε =% inférieur à 0,5% 28
Adult population holding bankcards Belgium and Holland lead the way * 90% possess at least one bankcard * followed by the French (87%) and the Germans (81%) * well ahead UK (70%), Spain (67%) and Italy (57%). Cardholder profiles significantly more in the 25-34 age group in France (94%), in Spain (86%) and in Italy (74%) generally male in Spain (74%) and Italy (65%) in the upper social classes in all countries except Germany and Belgium where no difference was apparent possession of multiple cards is highest in the UK (average 2.8) and Spain (2.5) followed by Germany(2.2), Holland (2), Belgium (1.9), Italy (1.5) and France (1.2) 29
Cash Withdrawals France Royaume Uni Pays Bas Belgique Allemagne Espagne Italie Base : ensemble des porteurs 935 337 238 267 402 329 573 ST au moins une fois par semaine At least once a week % % % % % % % 59 67 71 62 55 58 49 * Tous every les day jours 3 10 8 4 3 8 2 * 2 à or 33 fois times par per semaine week 17 30 25 23 18 22 20 * about once a week 1 fois par semaine environ 39 26 38 36 34 29 26 ST au moins une à trois fois par at least moisonce a month 33 13 23 23 36 22 33 * 2 or à 3 fois times par per mois month 22 7 16 15 27 13 23 * about once a month 1 fois par mois environ 11 6 8 8 9 9 11 Moins Less often souvent Jamais Never 5 6 4 6 4 13 9 3 14 2 9 5 6 6 30
Payments France Royaume Uni Pays Bas Belgique Allemagne Espagne Italie Base : ensemble des porteurs 935 337 238 267 402 329 573 ST au moins une fois par semaine At least once a week % % % % % % % 75 77 80 70 45 47 43 Tous les jours * every day 25 26 30 16 11 8 8 * 2 or à 3 fois times par per semaine week 35 34 37 35 20 24 20 * about once a week 1 fois par semaine environ 14 17 13 20 13 14 15 ST au moins une à trois fois at par least mois once a month 12 10 12 14 27 24 29 * 22 or à 3 times fois par per mois month 8 4 8 9 17 13 18 * about 1 fois once par mois a month environ 4 7 4 5 10 12 12 Less Moins often souvent Never Jamais 3 6 3 7 13 20 13 9 7 5 8 15 9 13 31
Frequency of use & cardholder satisfaction Card usage: very different throughout the different countries 71% of the Dutch say that they use their card at least once a week to withdraw cash, although only 1 in 2 Italians do so similarly for payments : 80% of the Dutch use their cards for payments at merchants cf. 43% in Italy Level of satisfaction is generally quite high highest in UK, 95% using card for cash withdrawals are satisfied (71% very satisfied) for payments the most satisfied is also UK (98% + 68% very satisfied) France (97% + 70% very satisfied) Belgium (97% +67% very satisfied) heavy users are not necessarily the most satisfied cf. Holland 32
Preferred Payment Methods major differences across Europe 69% 58% 72% 58% 54% 64% 17% 13% 38% 24% 42% 30% 40% 44% 34% 2% 0% 1% 0% 0% 1% France Royaume Uni Pays Bas Belgique Allemagne Espagne Italie CB Chéque Espèce e = % < à 0,5% 33
Preferred payment methods & perceived security The bankcard is generally the preferred payment method throughout Europe, with relatively high rates in Holland (72%), France (69%) and Italy (64%)... only Spain and Germany prefer cash the level of security associated with bank cards is similar throughout Europe * 92% of the Dutch find the bankcard secure * a possible anomoly could be in Italy where only 68% of cardholders think the card is secure 34
Are Bankcards Secure? quite similar perceptions in each country 80% 84% 92% 83% 82% 85% 68% 14% 22% 27% 37% 18% 27% 20% 58% 57% 78% 46% 64% 58% 48% France Royaume Uni Pays Bas Belgique Allemagne Espagne Italie Tout à fait sécurisé Plutôt sécurisé 35
In the migration to chipcards throughout Europe: Remember your PIN! 36
Remember what happens if you don t!! 37
But if the French can do it so can you!! 38
Questions? www.cartes-bancaires.com david-stephenson@cartes-bancaires.com Telephone : + 33 1 5389 3596 39