haddad efma sept 2008
DESCRIPTION
Aneace's presentation at the EFMA conference in Paris, September 11th 2008.TRANSCRIPT
Copyright 2008 © Welcome Real-time
All rights reserved. Material in this presentation can be copied on condition that
“Source : Welcome Real-time” is included in a clearly visible fashion next to the copied material.
How to reduce pricing pressure from merchants and generate new
revenue streams for banks
Aneace Haddad Chairman & Founder Welcome Real-time
Paris, September 2008
Interchange revenues of all banks worldwide: $64B Revenues of all publicly traded biotech companies worldwide: $70B
Interchange is as big as
biotech
2x Global interchange industry: $64B Global microprocessor industry: $35B
…and twice as big as the microprocessor industry
$16Billion
Annual R&D spending by US biotech companies
1964
1967
1967
“I can present it and sign the bill in 35,000 shops, garages, restaurants etc., throughout Britain.”
“Instead of making dozens of separate payments, I can make just one a month. To you.”
“I get all these advantages, yet the card and the service cost me nothing.”
“BARCLAYCARD is all I need to go shopping.”
1969
1982
Source: http://thehistoryof.net/history-of-credit-cards.html
1979 A turning point in the credit
card processing industry
“In 1979, magnetic stripes on the back of credit cards allowed retailers to swipe the customer’s card through an electronic dial-up terminal, which accessed the bank’s cardholder information.
“The advantage of this system, besides saving paper, was the increased speed of processing authorizations – one to two minutes. It also decreased credit card fraud.”
29 years
Source: 24th April 2006 BusinessWeek, BCG.
Internet payments
Mobile payments
Contactless Biometrics
Prepaid
Loyalty
Micropayments
EMV
P2P
NFC Mobile
banking
“What problem does this innovation solve?”
“What pain does it alleviate?”
“What value does it deliver?”
“Who cares?”
The key questions
Source: The Paradox of Pain, www.chrisoleary.com
“A great idea eliminates a significant source of pain for a large number of people.”
Source: The Paradox of Pain, www.chrisoleary.com
Contactless: a card innovation
that benefits merchants?
1 out of 133 “There are 6 million places where you can use your credit card, 45,000 (contactless locations) doesn’t excite me.”
John Suchanec, Bank of America
“Waving a card in front of a reader takes about as much time as swiping one through.”
Manager, Sheetz, Inc.
Contactless forecasts for 2007
230 million
Jupiter Report (2004)
37 million
Jupiter Report (2006)
25 million
Card Technology (June 2007)
WHERE’S THE PAIN ?
US$16 billion
Return Fraud (US)
US$3 billion
Card Fraud (US)
Newspaper ad, half page:
9,000 - 12,000
Co-op package mailing,
1 insert: 350
Local coupon book,
1 page: 350
Europe Pakistan China
Promotional marketing is huge ($342 billion in the US alone!)
“Introduce payment information value-added services to reduce pricing pressure from merchants and convince them of the real value of bank-sponsored retail payment networks.”
“The retailer will have a platform to deliver tailored promotions
at the POS.”
“The promotion or message can be delivered via a POS receipt.”
He has obviously been filling
up somewhere else.
----------------------------
Coupon
TRY OUR NEW EZ CAR WASH AND
ENJOY A COFFEE WHILE YOU WAIT
CAR WASH+COFFEE
SPECIAL $2.00
Expires Nov. 15, 2007
Since he is here now, why not print an offer at the bottom of his card receipt?
A feature that is simple, low cost and valuable for all types of merchants.
1st visit
----------------------
M---R---S--
Use your Visa payWave card at McDonald’s. When all the
letters above are filled,
win your McSurprise!
2nd visit
----------------------
MC--RPR-S--
Use your Visa payWave card at McDonald’s. When all the
letters above are filled,
win your McSurprise!
3rd visit
----------------------
MC--RPRISE-
Use your Visa payWave card at McDonald’s. When all the
letters above are filled,
win your McSurprise!
4th visit
----------------------
Coupon
MCSURPRISE!
Congratulations! Present
this ticket to any clerk
and get your McSurprise!
Not valid with any other
offer. Expires 31 Jan 2008
Card receipts don’t have to be boring.
London Apr 2008
“The profit margin for solving the merchants’ commerce problems and delivering new customers and/or closed sales is two to three times that of the payments transaction fee.”
“Data shows merchants will pay 7-9% for delivery of a sale vs. 2% for merely processing the payment.”
FREE PAYMENT PROCESSING !
“For every $1 you spend on AdWords each month, you can process $10 in sales the following month for free.”
+
Copyright 2008 © Welcome Real-time
All rights reserved. Material in this presentation can be copied on condition that
“Source : Welcome Real-time” is included in a clearly visible fashion next to the copied material.
Thank you
Aneace Haddad
Chairman & Founder, Welcome Real-time
http://aneace.blogspot.com
www.welcome-rt.com