contactless card shipments jump enabling shoppers take advantage of everyday payment convenience

shaping the future of payment technology

SPA Members global smart payment card shipments 2013A unique set of data based on SPA Members’ actual volume sales

March 2014 – V2.7.3

shaping the future of payment technology2

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EMV is a truly established, global secure & interoperable infrastructure, with Smart payment card shipments exceeding 1.5 billion in 2013.

Contactless technology was present on 37% of all payment cards shipped in 2013

Over 450 million contactless cards delivered by SPA members in 2013 (twice the quantity that was shipped in 2012)

Move towards ever more secure ways to pay: DDA more than half of shipments


SPA’s role in shaping the futureof payment

01.


Who we are

The Smart Payment Association addresses the challenges of today’s evolving payment ecosystem. We offer leadership and expert guidance to help members and their financial institution customers realize the opportunities of smart, secure and personalized payment systems and services - both nowand in the future.

Since 2004

Members:


What we do

The SPA works in partnership with global standards bodies, its own vendor community, and an expanding ecosystem of established and emerging brands; offering an ever-growing portfolio of advisory and support services.

Fig 1Extending advisory and support across the evolving community, the SPA is addressing today’s challenges and shaping the future direction of payment technologies, standards and business models.

Ecosystem Expert Advisor ServicesHelp shape the future of payments

Members Customers ServicesBring Value to Financial Institutions

Members ServicesTrade Organization

Non Traditional

Traditional/ Smart Card Advanced/ New

Customers

Technologies


How we do it

By delivering the market’s most accurate barometer of payment trends

An annual analysis of payment trends based on actual manufacturer sales data

SPA members 85% of the total smart payments card market

By supporting the creation and adoption of standards and best practice

EMVCo: Technical Associate and Board Advisor for Card Sector

EPC-CSG/SEPA: Card Representative and Vendor Sector Spokeperson, Chair of the EPC-CSG Task Force to specify the SEPA functional and security requirements for emergent & remote payments ( Internet + Mobile), Convenor of the new EPC-CSG Expert Team on Card Innovative Payments, Member of the Preparatory Committee of the SEPA Security Certification Management Body

By extending expert advice and support across the payments ecosystem

An eye-growing library of expert technical resources and thought leadership collaterals to shape the future of payment


Latest SPA’s Publications

NEW! Tokenization

NEW! Digital Wallets

Instant Issuance

Biometrics for EMV Payment Cards

UICC Application Lifecycle Management

Software to Chip Fallback Solution

Security Certification for Mobile Platforms

Security for Mobile Payments

PIN by SMS

Private Label Payment Solutions

Business Continuity in the Payment Card Issuance Industry

May 2014

Download at www.smartpaymentassociation.com


SPA & its members in the US

Cartes America (http://www.cartes-america.com/ )

Smart Card Alliance (http://www.smartcardalliance.org/)

EMV Migration Forum (http://www.emv-connection.com/ )

ISO:

Smart cards, electronic authentication, biometrics, middleware / collaboration with NIST(ISO JTC 1)

Mobile payments / collaboration with major US Banks & Federal Reserve (ISO TC 68)

EMVCo Technical Associate & Board Advisor

EMVCo NextGeneration Taskforce

Optimize interoperable processing of contact / contactlessand mobile payment cards*

*tamper-resistant hardware, personal, portable device to executepayments, i.e. ID-1 card contact or contactless, SE (SIM/UICC)

http://www.cartes-america.com/

http://www.smartcardalliance.org/

http://www.emv-connection.com/


SPA global smart payment card shipments 2013

03.


TAM > 1.5 Billion units in 2013*

* 2013 Estimated Total Available Market (1546 units) by Geographies in Millions –

Includes all chip payment cards** Includes Turkey

NORTH AMERICA

TAM: 103M

SOUTH AMERICA

TAM: 248M

SOUTH EAST ASIA

TAM: 104M

NORTH ASIA

TAM: 495M

EUROPE

TAM: 329M

Payment Chip cards deployed or in advanced deployment

Chip cards in deployment

Chip cards migration initiated

No Chip cards

CISMEA** & EASTERN EUROPE

TAM: 267 M

May 2014

shaping the future of payment technology11 May 2014

US is the next wave

EMV migration started in 2013

Mindshift ignited among issuers and consumers, with a sense of ‘urgency’ , boosted by

Data breaches: an EMV enabled ecosystem would have been less attractive for fraudsters

2015 Liability shift: MasterCard and Visa reiterated that they would not push back October 2015 counterfeit liability shift deadlines

Common AID solution facilitating domestic debit networks migration

Fear of competitive disadvantage by turning too late

Translating now into concrete migration plans, and the first mass volume issuance

Expected growth for 2014 above 30% (including Canada)


450+ Mio. Acceleration in 2013 of Contactless Payment Card Shipments, notably Dual-Interface

Contactless technology = 37% share of smart payment card shipments

Dual-interface = 115 % YoY growth (represents 94 % shareof contactless shipments)

Driven by Asia and Europe

May 2014

Contactless

Contact

11%12%

13%

15%

580 675 798 975

2008 2009 2010 2012

898

2011

Adoption rate contactless cards

1 245

2013

23%

37%


More than half of shipments are DDA

DDA Growth in 2013: +50% Supported by Europe & Asia

675 798 898 975580

2008 2009 2010 2011 2012

26% 32% 41% 47% 56% 66%

DDA ADOPTION

2013

1245

May 2014

shaping the future of payment technology14 May 2014

US consumers would benefit from DDA & Dual Interface

Ensure a consistent consumer experience for the few offline transactions, with the optimal security level

Cardholders traveling abroad and doing transactions in offline environments (vending machines, unattended kiosks…)

For the sake of speed, Retailers may manage transactions in batch with deferred authorizations

Dual Interface

Co-branded programs with Transit operators

Ensure a consistent consumer experience in gesture & speed versus a magstripe transaction


Take away

04.


Take away

EMV is a truly established, global secure & interoperable infrastructure, with Smart payment card shipments exceeding 1.5 billion in 2013.

Acceleration of contactless payment penetration (37% in 2013 vs 23% in 2012). Paving the ground for the ®evolving connected world.

Move towards ever more secure ways to pay (DDA more than half of shipments).

These figures should definitely serve US issuers , and inspire them for a wiser migration path, going directly to DDA and Dual Interface


One Address: www.smartpaymentassociation.com

March 2013

Contact: [email protected]


Thank Youwww.smartpaymentassociation.com


Appendix

05.


SPA Market Data Monitoring Process

The figures in this presentation are actual shipments published by SPA.

Actual shipments data, segmented by region and by interface, are sent on a quarterly basis by SPA members to an independent third party.

There is no direct exchange of data between SPA members. Consistent with SPA's practices for the exchange of historical data, the third party aggregates and anonymizes the data so that no SPA member is able to identify another SPA member's contribution.

The data is published on an annual basis, at the end of the first quarter of the following year.

Once a year, total market estimates by region are also sent by SPA members to this independent third party to evaluate TAM (Total Available Market).


Comparing Market Figures

Cards in circulation / installed card base:

Cards in circulation means that all cards that have been issued in the current/covered year as well as all previously issued cards that are still valid are taken into account.

Card validity differs across markets, typically between 2 to 5 years.

Total Available Market (TAM):

Only cards issued in the current/covered year are counted (new cards, replacement cards, re-issued cards) – This number is estimated by SPA.

Actual Shipments:

Actual shipments data, segmented by region and by interface, are sent on a quarterly basis by SPA members to an independent third party who aggregates and anonymizes the data so that no SPA member is able to identify another SPA member's contribution.

Differences in card types counted

EMVCo reports on EMV payment cards only

Other reports may include local/domestic schemes and other non EMVCo member payment chip cards. *In million units

Source 2010* 2011* 2012*Grow

th

EMVCo Cards in Circulation

1,083 1,340 1,549 16%

SPA Estmated TAM

916 1,036 1,166 13%

SPA Actual Shipments

798 898 975 9%

March 2013

contactless card shipments jump enabling shoppers take advantage of everyday payment convenience

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