entrepreneurial ventures visa live case report

8/8/2019 Entrepreneurial Ventures VISA Live Case Report

http://slidepdf.com/reader/full/entrepreneurial-ventures-visa-live-case-report 1/22

Entrepreneurial Ventures CaseEntrepreneurial Ventures Case

Nolan Chao, David Ellis,Nolan Chao, David Ellis,

Jacob Evans & Lisa MongilloJacob Evans & Lisa Mongillo



• Executive Summary2

• Industry Overview3

• Visa Overview5

• Mobile Payment Technology8

• Options for Visa11

• Market Research13

• Appendix14



is the current industry leader in terms of credit card transactions,

transaction volume and total cards issued. It is one of the most

recognizable brands in the world. Recent news suggests that AT&T and

Verizon Wireless are in the process of developing a mobile payment system that works

via Smartphones. The system would function through Discover’s payment network and

with assistance from Barclays. After extensive research involving the credit card industry,

mobile payment technology and VISA itself, we do not recognize the development of the

AT&T-Verizon-Discover-Barclays system as an immediate and serious threat to VISA. Werecommend that VISA enter the mobile payment sector cautiously through further

developing its RFID technology (PayWave) for use with cell phones.

In the past, VISA has tried to be an industry leader in new forms of payment technology

and has been unsuccessful. The company’s failed launch of a new chip-card at the 1996

ymp cs serves as a rem n er o e r s s o aunc ng a new ven ure e ore ere s

substantial public demand to provide sustainability. For this reason, we reccomend that

VISA forgo developing a completely new system of payments, such as mobile-to-mobile

or SMS mobile-to-vendor, and instead focus on near-field-communications in the form of

RFID chips installed inside consumer mobile devices. An RFID payment transaction is

quicker and more convenient for both the merchant and consumer in comparison to

other forms of mobile payments. RFID is relatively cheap to implement as a continuation

of VISA’s current PayWave technology. While some consumers have expressed concerns

about the safety of such transactions, an RFID chip actually provides the same amount of

security found in a typical credit card swipe transaction.

VISA is a brand management company; it’s direct customers are not the cardholders but

the banks. Any new form of payment technology should provide incentive for more

transaction volume on the VISA network. RFID mobile technology will provide thisincentive because it is cool, quick, and convenient. It is for these reasons, which are

further explored in this report, that we recommend VISA enter the mobile payment

sector by incorporating its RFID technology into cell phones to be used with merchants’

PayWave readers.

2



HistorySince the 1980s, Visa and MasterCard International, the bank-controlled credit card associations

that together account for approximately 70 percent of today's credit card market, have been able to control the

use of and access to their networks to the advantage of their bank members. Recently, however, the credit card

industry has been changing: some merchants are now large enough to exert their own leverage, legal defeats

have impeded the ability of credit card associations to control the market, and some participants have developed

new arrangements and alliances that may be a prelude to further changes in the industry.

Although merchant credit may be as old as civilization, the present-day credit card industry in the

United States originated in the nineteenth century. In the early 1800s, merchants and financial intermediariesprovided credit for agricultural and durable goods, and by the early 1900s, major U.S. hotels and department

stores issued paper identification cards to their most valued customers. In 1949, Diners Club established the first

general purpose charge card, enabling its cardholders to purchase goods and services from many different

merchants in what soon became a nationwide network. The Diners Club card was meant for high end customers

and was designed to be used for entertainment and travel expenses. Merchants found that accepting Diners Club

cards brought more customers who spent more freely. The Diners Club program proved successful, and in the

following decade it spawned many imitators.

In the late 1950s, Bank of America, located on the West Coast, began the first general purpose

credit card (as opposed to charge card) program. To increase the number of consumers carrying the card and to

reach retailers outside of Bank of America’s area of operation, other banks were given the opportunity to licenseBank of America’s credit card. At first Bank of America operated this network internally. As the network grew, the

complexity of interchange—the movement of paper sales slips and settlement payments between member

banks—became hard to manage. Furthermore, the more active bank licensees wanted more control over the

network’s policy making and operational implementation. To accommodate these needs, Bank of America spun

off its credit card operations into a separate entity that evolved into the Visa network of today.

In 1966, in the wake of Bank of America’s success, a

competing network of banks issuing a rival card was established. This

effort evolved over time into what is now the MasterCard network.

In addition, firms that were not constrained by interstate banking

restrictions formed card networks on the single-issuer model .For

instance, the American Express Company (American Express)

introduced its charge card system in 1958, and Sears, Roebuck and

Co. (Sears) established the Discover Card credit card in 1986.

(Source: http://www.fdic.gov/bank/analytical/

banking/2005nov/article2.pdf)

3



The Industry TodayCurrently the U.S. credit card

industry is a mature market. Today credit cards

are widely held by consumers: in 2001 an

estimated 76 percent of families had some

type of credit card. Recent estimates suggest

that among all households with incomes over

$30,000, 92 percent hold at least one card, and

the average for all households is 6.3 credit cards.

Credit cards are also widely accepted by

merchants, and with the recent addition of

fast-food and convenience stores to the credit

card networks, credit card payments are now processed at nearly all retail establishments. (Source:

http://www.fdic.gov/bank/analytical/banking/2005nov/article2.pdf) The chart above shows the 2009

values for market share in terms of total volume.

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Diner’s Club, Discover and American Express and in terms of multiple-issuers such as VISA and Mastercard.

The Appendix of this report contains a diagram entitled The Anatomy of a Transaction, which

provides a more detailed look into the process of a

payment transaction under the multiple-issuer

model of VISA and Mastercard.

4



Imagine that you are out at Zable Stadium on a

Saturday night to watch the Tribe Football team take onone of their CAA rivals. In between quarters you stopby the concession stand to grab a bottle of Coke. Having spent your last few singles on the 50-50raffle tickets you bought before the game, all you haveleft are twenty dollar bills. Instead of having to breakone of these larger bills, however, you pull out a littlerectangular piece of plastic that has started to take overthe methods of payment in today’s world. This piece of

plastic, your credit card, has become a vital part of ourglobal economy for the past couple of decades. More

specifically, it is highly probable that you used a VISA card to buy your bottle of Coke, due to the factthat VISA, at the end of 2009, held just under half of the total market share for credit cards held in theUnited States (http://www.creditcards.com/credit-card-news/credit-card-industry-facts-personal-debt-statistics-1276.php).

Although many may believe that VISA makes its money by issuing their credit and debitcards to consumers, this is actually not how the company operates; VISA cardholders belong to theirbanks, and not to VISA itself. The customers of VISA, in turn, are the banks and other financialinstitutions that issue their cards to consumers. In addition to the cardholders, merchants are the otherkey players in the credit card payment system. In order for this entire system to work, there must bebenefits in place for each of the parties, otherwise they would have no incentives to enter the process.

First and foremost, the consumers or cardholders chose to buy on credit because of theconvenience of not having to actually pay until a later date. The merchants have accepted the systembecause the transactions are guaranteed payments when credit is involved. Next, banks benefit byreceiving revenue due to the fact that they are the ones handling all of the cardholder risk of not payingin these situations. This leaves the role of managing all of the transactions to VISA; essentially, VISA isstrictly a payments company, which may be eye-opening information to some who may believe thatVISA makes their money by selling their cards to consumers.

VISA entered the global marketplace in 1989 as VISA USA, VISA International, and VISACanada. All of these branches of VISA were essentially separate companies, each with their ownoperations and clients, but centralized under their system of monitoring transactions and payments. Allof the VISA branches were able to make money simply on transaction volume alone, which, in 1989, was$267 billion. Although this may seem like a large number, last year’s transaction volume totaled $4.4trillion, resulting in a quadrupling of income every ten years. Since VISA entered the scene, it has alsogrown to being one of the top ten most recognizable brands of any kind in the entire world.

5



Over the past ten years, VISA has undergone a multitude of changes to address its

increased power and influence over the global economy. The separate branches have now been

consolidated to VISA International and VISA Europe, with the United States falling under the

International heading. There have also been three different CEOs during this period, indicating just how

much VISA has needed to change and adapt in order to meet its growing demand. VISA is now

essentially a “brand management” company responsible for providing credit and managing transaction

processes with a vision for the future of a cashless, check-less society.

In the past, VISA has also taken charge of trying to be the first

company to institute new technologies into its processes. For example, when card swipers were firstintroduced on telephones in the early 1990s, VISA went ahead and made a large

investment on this new machinery. It felt that this method of payment was going

to be the new wave of completing payment transactions. Shortly thereafter when

online banking was introduced via the Internet, the telephone card swipers

became obsolete technology. Also during this time, VISA introduced chip cards to

the world, using the 1996 Summer Olympics in Atlanta, Georgia as their platform. Although these new

,

in order to read the new cards as well as traditional ones. In this case the

technology was actually ahead of its time which resulted in another unsuccessful

investment on VISA’s behalf. Because VISA has had trouble leading the way when

it comes to the introduction of new technologies in their arena, it makes sense that

they step back when it comes to mobile payments and enter the game once it has proven successful.

The key process which is the underlying basis for the entire system is known as

interchange. This process, also referred to as “balancing the system,” was designed in order to give

banks incentives to issue payment cards to consumers, as well as for merchants to accept these cards in

their places of business. Every time that a transaction using one of these cards is made, there is a small

fee paid from the merchant’s bank, the acquiring bank, to the cardholder’s bank, the issuing bank. This

payment compensates the issuing bank for the risks and costs it incurs while maintaining their

cardholder’s accounts. In addition, there is also an interchange fee paid from the acquiring bank to the

issuing bank when a purchase is made with a payment card; this is done in order to offset other costs

involved in the process. Eventually, this fee is collected by the acquiring bank from the merchant as a

component of the merchant discount fee. Interest rates for the cardholders themselves are often high

in order to protect against missed payments and also credit card fraud.

6



Selected Financial Data for VISA

Based on payments volume, total volume, number of transactions and number of cards incirculation, Visa is the largest retail electronic payments network in the world. The followingchart compares the VISA network with those of major general-purpose payment networkcompetitors for calendar year 2008:

The following table presents selected Visa Inc. financial data for fiscal 2009 and 2008 and

Company Payments Volume Total Volume Total Transactions Cards

(billions) (billions) (billions) (millions)

Visa Inc. $ 2,727 $ 4,346 56.7 1,717

MasterCard 1,900 2,533 29.9 981AmericanExpress 673 683 5.3 92Discover 106 120 1.6 57JCB 63 68 0.7 60Diners Club 30 31 0.2 7

. . . , .which VISA U.S.A., Visa International, Visa Canada and Inovant became direct or indirectsubsidiaries of Visa Inc. occurred in October 2007. The operating results of the acquiredinterests are included in the consolidated financial results of Visa Inc. beginning October 1,2007.

7

Fiscal Year Ended September 30, 2009

Statement of Operations

Data: 2009 2008 2007 2006 2005

(in millions, except per share data)

Operating revenues $ 6,911$ 6,263 $ 3,590 $ 2,948 $ 2,665

Operating expenses 3,373 5,031 5,039 2,218 2,212

Operating income (loss) 3,538 1,232 (1,449 730 453

Net income (loss) 2,353 804 (1,076 455 360

Basic net income per share—

class A common stock(2) 3.11 0.96 N/A N/A N/A

Diluted net income per

share—class A common

stock(2)

3.1 0.96 N/A N/A N/A



The term “mobile payment” is used very loosely today and can incorporate a number of

different meanings. In order to fully understand mobile payments and VISA’s suggested

strategy, we’ll have to understand the different categories of types of technologies. There

are a myriad of ways to classify these payments—in fact, it’s incredibly difficult to find

consensus for categorization.

For the purpose of this report, we will identify five categories:

Mobile-to-mobile“Western Union” style transfers amongst people transferring money fromaccounts to accounts, e.g. via Paypal or banking applications. Generally,mobile-to-mobile payments are for consumer to consumer for personaluse rather than business/transactional merchant use—such as cnet.com’sexample of “paying a babysitter” (http://www.cnet.com/8301-17918_1-20013480-85.html).

8

SMS mobile-to-vendor

In this category, a customer goes to a register to purchase a product.Instead of handing over their card, they send an SMS text messageconfirming the amount. The merchant confirms payment and thecustomer is free to take their purchases. The customer is billed via theirexisting mobile service payments or their credit card bill. This is often usedfor digital goods, such as music and cell ringtones. However, this process isnot cost effective at all (http://www.merchantequip.com/merchant-account-blog/1368/what-the-heck-is-a-mobile-payment).

Truly “mobile” payments/applications

This is commonly referred to “mobile commerce”. Think of this technologyas when someone uses an iPhone to place an order to Chipotle using theirofficial application on their phone, or perhaps when someone browseseBay and bids on something using their Nokia phone. This generallyrequires a network connection. Essentially, it provides freedom andmobility to those wishing to purchase products by releasing them fromwires and cords and is a mobile payment in the literal sense.



Mobile acceptance

This is accepting payments through mobile phones or mobile devices. Themost popular example today would be that of Square, a company foundedby twitter co-founder Jack Dorsey. Square has created technology thatenables merchants to attach a card swiper to the headphone jack of aniPhone or iPad that is capable of reading and accepting payment.

Near Field Communication

This categorization implies “waving” a phone over a reader just as swipinga credit card. This is the most efficient type of mobile phone payment interms of cost. Under this category, phones can be used as credit cars, bus

The category that pertains most to Visa is that of Near Field Communication (NFC)

payments. It is the mobile technology with the most room for expansion and growth (e.g. using

phones not only as credit cards but as metro tickets, bus passes, cab fair) but it is also the most

efficient in terms of time (much more sufficient than an SMS transaction) and implementation (a

number of merchants already feature Visa’s “PayWave” technology, which enables customers of

over 32,00 retailers (http://usa.visa.com/merchants/payment_technologies/paywave.html) to

wave their credit card instead of swiping it).

In terms of implementation, Visa has intended on installing the RFID chips on

mobile phones in two different ways—through a microSD card or through an external case. TheRFID chips themselves are very inexpensive to manufacture. The MicroSD card slots present a

great opportunity—94% of the US has a mobile phone, and 60% of those users have a card slot in

their mobile phone. By having a MicroSD RFID chip, customers can simply use their phone as they

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passes, and more—providing what the industry calls a “mobile wallet”.Essentially, a phone is installed with an RFID chip (radio frequency) usedto store payment data. The merchant would then have some sort of reader that confirms payment after reading the RFID chip in the phone.



always have without having to purchase a new phone or without a noticeable change to their

existing ones. The phone case would primarily be developed for the more popular phone

models that don’t have an existing MicroSD slot—e.g. the iPhone.

The RFID technology also has a variety of features. Security wise, users will be

able to deactivate the RFID chips via password protection in the case that they lose their phone

or “accidentally” purchase something. In terms of having to “sign” for payments—customers in

a test market in Spain had to enter a PIN over payments of €20, and we can expect something

similar in the United States. Lastly, consumers may have concerns about if their phone dies.

Luckily, a fully charged battery isn’t necessary for the RFID transmission (http://www.silicon.com/technology/mobile/2010/09/22/mobile-wallets-coming-to-uk-in-time-for-olympics-

39746371/). Finally, INSIDE Contactless has developed RFID stickers for credit card payment,

enabling customers to pay with almost anything—say, a banana or their Diet Coke.

A number of existing test markets and markets have already been established by

Visa. For instance, Visa launched the world’s first commercial mobile payment service last April

in Malaysia (http://corporate.visa.com/media-center/press-releases/press921.jsp) using Nokia’s

6212 (the RFID chip was embedded). The 6212 enabled Malaysians to not only use it as a card

but also for metro systems, bus terminals and carparks. Additionally, in just late September Visa

started a mobile payment trial amongst NYC and LA public transportation systems. The future

brings about a number of possibilities for NFC payments. For instance, a merchant could useGPS to give an incoming customer a text message coupon for the specific store they just

entered. The integration of mobile payments with existing services could also prove to be

attractive for customers—e.g. combining the Oyster Card for London’s Tube with mobile credit

card payments eliminates the needs for consumers to carry so many things.

10



In the market for more advanced payment technology, VISA is faced with

several options. Whatever it chooses, the new method(s) of payment must be relatively

inexpensive, backwards compatible with the existing payment terminals, and at least as

quick to process payments as the traditional card method.

The easiest option in any changing market is, naturally, to continue offering

the same technology. In the case of credit cards this is especially tempting, since VISA and

MasterCard currently operate with such little overhead and competition. Credit cards in the

United States are now ubiquitous, and it’s rare in 2010 to find a vender that doesn’t accept

the two major cards. Their enviable position makes it easy to become complacent, but both

companies can see their future in the Asian market and the technologies that are currently

rising in popularity in a famously trendy tech market. For this reason, we don’t believe that

inaction is a viable option for VISA. If VISA were to market solely the traditional cards, it

technologies). The loss of competitive strength would be especially strong among younger

clients, who will certainly pioneer whatever new technology is released.

Another option our group considered is payment by text messaging (SMS).The most common use of phone payments at this time is for online purchases on smart

phones, at sites such as eBay. These types of purchases don’t differ practically from a

purchase made on a regular computer. For use with mobile payments, some companies such

as PayPal and Obopay have already developed the ability to transfer funds by SMS. Our group

believes that there are five major drawbacks to this particular payment system. The most

crippling problem with SMS retail payments is slow processing. No business wants to adopt a

system that makes cashiers, waiters, and most importantly customers, wait any longer. The

time to pull out the phone, sign into Obopay, enter the amount and number of the recipient,

then send the SMS is slower than that needed to simply swipe the card. For this reason

alone, SMS payment has significant hurdles if it is to be adopted on more than a trial scale.The other main drawback is technology dependency.

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Consumers wouldn’t want to use SMS payment as their sole means of payment, because

they would be effectively broke when faced with situations where either their phone broke,

lost power, or simply wasn’t in range of a cell tower. And if you have to carry a card as a

backup in these cases, why bother with SMS payment at all?

The final option, and the best for VISA, is RFID

technology. Through its Wave system, VISA has

already implemented this payment system to

great success in Asia. The VISA Wave programuses an RFID chip implanted in either a regular

credit card or cell phone (or anything else for

that matter, because the RFID chip doesn’t

require a power source) so the customer

merely “waves” the card in front of the credit

card reader. The signal from the RFID chip

identifies the customer, and the payment is

processed as usual. VISA is currently testing another proximate payment method with Wells

Fargo. In the Wells Fargo trial, a chip is implanted in a microSD card that is then inserted

into the memory slot of a smart phone. The phone can then be waved in front of the reader

for contactless payment just as a Wave card or phone. For other phones, the same chipcould be inserted into a special case to achieve the same contactless payment capabilities.

Unlike SMS payment, this technology offers the same fraud and theft protection as any

other credit card. In our survey of college students, security was the chief concern about

new payment methods. The contactless payment technology is already developed and

experiencing strong growth in Asia and our group believes that it represents the strongest

choice for VISA

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While we are familiar with the usage and functions of credit cards within the

US, we needed insight into how credit cards are used and how new payment technologies

might be perceived in other countries. VISA is an international corporation, so a new

technology venture has the potential to affect the way consumers pay for goods across the

globe. In order to gain a global perspective, we enlisted the help of several W&M

international students.

The majority of our subjects were from Europe, where credit cards are

generally not used as frequently as in the US. While none of these students had previouspersonal experience with mobile payments, the majority of them expressed an interest in

the technology, with the exception of the student from Holland. The student from England

thought that mobile payments could be convenient, but raised concerns about security. The

student from France gave us further insight into these concerns, informing us about how his

friends and family back in Europe were very cautious in their use of credit cards. Also, the

French are less likely to use their cards for smaller purchases, especially since Euro coins and

bills are available in higher denominations than US currency.

We also surveyed a student from India who expressed interest in mobile

payments via PayWave and other methods. While consumers in India still prefer to pay forgoods with cash, much like those in Europe, they do place trust in the credit card companies.

Thus, a new payment technology introduced by VISA has the potential to be widely accepted.

Security issues were not an overwhelming concern in the eyes of this student.

All of these students are in their early to mid

twenties, representing an age group that has grown up with

increased usage of credit cards and cell phones. While they

still have some reservations about the security risks

associated with new forms of payment, they are also open

to adopting methods that are quicker and more convenient.

13



Interview with international students regarding use of mobile phones to pay for purchases:

Q: Have you / your family / your friends ever used your cell phone to pay for something you bought?

Q: If yes, what do you think that the advantages or disadvantages of paying with your cell phone are?

Q: If no, do you think that paying with your cell phone could become popular where you are from?

A1: (Jeltje Loomans, Holland)

“I have never used or know someone who used their cell phone to pay for something. I'm from Holland and I

don't think it will be popular there.”

A2: (Hope Johnson, England)

“No I don't know anyone who has ever used a cell phone to pay for something in that method. I would say

that the advantages would be it is useful, but the negatives would be obvious security problems, the cost of

cell phones would probably increase? (I don’t if this is true I'm guessing). I think that yes it would, I am

someone who tries to use my phone for everything, if the security problems were sorted then it would be

useful for sure....and I think British people would come around to it eventually. There are always people whohate change.”

A3: (Anik Cepeda, Spain)

“In Spain they aren't so big on the iPhone and Blackberry (at least not since I was there last) and I don't know

of anyone in my family who has paid for things via their cell phone. If the cell phone plans became less

expensive, like some plans are here, I can see that becoming popular for sure. ”

A4: (Marlen Mezgarzadeh, Germany)

“I have never used my cell phone for payments either. In Germany many people are buying the newesttechnology in regard to phones; many use them for emails and internet nowadays, too. I think once people

gain trust in the system and understand how it works it might become popular.”

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International Student Survey Responses:

Respondant #1: Sukrit Sehgal, India

1. Would you use a Visa wave credit card? (for proximate pay, you would simply wave the card in front of areader)

Yes, it would be very convenient.

2. Would you use the same RFID chip technology implanted in a cell phone?

Yes

3. Would you use technology that allowed you to transfer funds by text message?

I would say yes, but GPRS/ EDGE is still not very common back home as its expensive. 3G isbeing rolled out but is not in the reach of the common man as of now. But online bankinghas become quite popular in the recent years. So it should be a matter of time.

4. If any, what convenience and security preferences do you have?

Visa and mastercard are trusted back home. Also, since they have a secure technology and have next to zero liability, its safe to assume that people will not be hesitant while usingthese cards.

5. Overseas (either your acquaintances, or just general observation), what types of payment are most popular?Trusted?

Cash is the still the most popular medium of payment in India. Smaller vendors don’t prefer Debit/ Credit cards due to payments that they have to make to Visa. But that said, larger establishments have Visa and Mastercard tie-ups.

15



International Student Survey Responses:

Respondant #2: Alexandre Pouille, France

1. Would you use a Visa wave credit card? (for proximate pay, you would simply wave the card in front of a reader)

For me, I think the wave would be awesome. In Hong Kong they have this thing called the octopus card. You load it up any 7-11 or a ton of other places around Hong Kong and you use it as the exclusive payment method on bus, taxi, ferry, at dinning halls, restaurants, haagan dazs, etc. It's really cool and at the university you even use it to pay for photocopies. As

for the French, a little less comfortable with this. On both sides of my family, they are paranoid about leaving a paper trail

in the US whenever they come and visit. In France, they use their cards but not for everyday purchases like we do. Like at WaWa, they would laugh if they saw me using my visa for a 99 cent purchase of gummy bears. This has something to dowith the prevalence of coins in the Euro zone (in larger denominations (up to 2euros) and the belief that credit cards areinherently bad. You know, we have this type of banking system in this country where we are comfortable spendingeverything on plastic, and then paying at the end of the month. As long as you pay it off, no service fees. Well in Franceand I assume other places, consumer power isn't as high and banks still depend on fees or inconvenient web transfers todiscourage people from doing what I do with my credit cards.

2. Would you use the same RFID chip technology implanted in a cell phone?

Cell phone minutes work very differently in France. So a cell phone for the youth isn't as indispensable because with some plans you have to go into a Tabac to add money to them. I feel like our generation is attached to their phones. In france, alittle less so. If an RFID chip was in my phone I would be wary of compatibility. It would have to be the same system for all retailers. And I'd like some sort of protection from theft. Like a pin or a thumbprint or something.

3. Would you use technology that allowed you to transfer funds by text message

I actually think this exists already. Bank of America? But no. I don't ever transfer funds. You know, in France they might beup for this but just look at how banks are set up over there. To even get into a public branch you have to press this greenbutton to call an attendant. The attendant then activates the door. But there is another door. This time you have to again

press the green button, but the door won't open until the door directly behind you is closed. To get out, same procedure. Soeven getting into a bank is more difficult. Therefore, this would make text message banking more appealing. Would French

people trust it? They are skeptical people - and they smell from time to time - so not the older generation.

4. If any, what convenience and security preferences do you have?Me? I hate it when CVS says I don't have to sign under $20, Target says $50, and I have to sign for a .35 cent purchase at the daily grind. Why can't they just be standardized. For convenience, I like a bank that has a lot of branches and visibility.For payment, I haven't carried cash in over a year. I like it when my bank statement shows me all of my transactions.

5. Overseas (either your acquaintances, or just general observation), what types of payment are most popular? Trusted?

Well, all of their credit cards have these "puse" in them, or a microchip. Rather than reading the easily to scan magnet strip, you stick your card in this portable card reader and type in your pin. The device sends the data over a secureconnection to a base, and your done. No signature required, nothing like that. That is popular. But Coins and Cash areridiculously popular. I mean with a bill that goes up to $500, you can pay for most anything in cash by just carrying a few bills.

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17



18

Source: CPSS Red Book statistical update , December 2009

http://www.bis.org/publ/cpss88p2.pdf



19Source: CPSS Red Book statistical update , December 2009




20

Source: CPSS Red Book statistical update , December 2009




Standard Credit Card Swipe Machine

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We would like to thank John Van Aken, Charlie Raphael & Bob McKnewfor their contributions to this project.

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