Smart Cards in Financial Services - Analyst Briefing


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In Frost & Sullivan webinar entitled “Smart Cards in the Financial Services - From Chip Bank Cards to Mobile Payments” Mario Fernandez, Research Analyst for Smart Cards group, has looked into the smart card solutions dedicated for the payment industry and discussed the major trends on the market.

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Smart Cards in Financial Services - Analyst Briefing

  1. 1. Smart Cards in the Financial Services –From Chip Bank Cards to Mobile Payments? Mario Fernandez, Research Analyst Information and Communication Technologies 2011 May 26
  2. 2. Today’s Presenter: Mario Fernandez Functional Expertise • Market research expertise, including: - Primary and Secondary Research - Smart Cards in the Payment, Mobile Communications industries - Near Field Communication (NFC) technology - Trusted Service Manager (TSM) solutions Industry Expertise Experience base covering broad range of sectors, leveraging long-standing working relationships with vendors and service providers: - Telecommunications - IT service providers - Smart Card Vendors What I bring to the Team Mario Fernandez • Results-oriented analyst Research Analyst • Full responsibility and ownership of projects assigned • Holistic industry analysis Frost & Sullivan Career Highlights Europe Expertise in corporate finance, supply chain management and risk management. Warsaw, Poland Worked before for: - Procurence Sp. zo.o, Warsaw, Poland - Continental AG, Hanover, Germany - Sparkasse-Nurnberg, Nuremberg, Germany Education • Industrial Engineer from Universidad de los Andes, Bogota, Colombia • Master in International Business at the Warsaw School of Economics, Warsaw, Poland 2
  3. 3. Focus Points• Worldwide status of EMV – special focus on the U.S.• Benefits of contactless technologies• Mobile Payments – opportunities for participants of the payment industry 3
  4. 4. More than 1 billion EMV active cards and 15 million POS terminals Russia, CIS countries EMV cards: 22 m. Europe EMV terminals: 0,5 m. EMV cards: 555 m. EMV terminals: 9,4 m. Asia Pacific EMV cards: 305 m. EMV terminals: 3,2 m.Latin America andCanadaEMV cards: 182 m.EMV terminals: 2 m. Penetration of EMV cards, EMV POS Africa and the ME and EMV ATMs is above 50% EMV cards: 17 m. EMV terminals: 0,3 m. One or more banks are migrating or have migrated to EMV Source: EMVCo, MasterCard, Frost & Sullivan No preparation for EMV migration 4
  5. 5. The U.S. hasn’t started yet - When will the U.S. Migrate toEMV? Against EMV - Low payment card fraud rates - Customer behavior - “Investment is not justified” - Isolation of the US in the payment For EMV industry - US travelers’ negative experience in Europe - Implications of the Dodd-Frank Act 5
  6. 6. What can be learned from the current paymentcontactless card deployments?Possibility of targeting an specific marketReduced time at the POS terminals Contactless payment cards have been deployedCustomers still do not fully trust No commercial offerings with contactless payment cards contactless cards Source: MasterCard, Visa Europe, Frost & SullivanFoothold for further introduction of mobile contactless payment services 6
  7. 7. We believe that a majority of challenges have been successfully addressed by NFC market participants • Secure ElementBusiness Model rental mode Smart Card Market: NFC Trials/ Commercial Rollouts (World), 2010 Trial phase Commercial phase 300 • Trusted Service 250 Number of trials/rolloutsStandardization Managers • NFC Forum 200 , EPC, GSMA, GP 150 100 •NFC handset availability 50 Customer • Customer experience (?) 0 Time •Hybrid POS Number of commercial roll-outs (trials) terminals Merchant • Low cost contactless terminals 7
  8. 8. NFC – What is the opportunity for participants of thepayment industry? Smart Card Personalization IT software Bank Vendor Bureau • Provisioning of UICC • Delivering TSM • Delivering trusted • Provisioning of NFC as Secure Element software for banks, services to banks banking services form factor MNOs and new trusted service • m-payments • Delivering trusted managers • m-banking services to mobile operators and service providers 8
  9. 9. Key Takeaways Fraud rates are likely to increase in the near future. EMV in the U.S. Market participants should reconsider their position towards EMV Contactless cards Increasing awareness of the benefits of contactless cards. NFC is a reality Mass-commercialization of NFC is expected by the end of 2012 NFC: Customer Necessity to educate customers Experience is still Capitalize on the fun interaction and entertainment value of NFC an issue 9
  10. 10. Next Steps Request a proposal for Growth Partnership Services or Growth Consulting Services to support you and your team to accelerate the growth of your company. ( Join us at our annual Growth, Innovation, and Leadership 2011: A Frost & Sullivan Global Congress on Corporate Growth ( Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities ( 10
  11. 11. Your Feedback is Important to Us What would you like to see from Frost & Sullivan?Growth Forecasts?Competitive Structure?Emerging Trends?Strategic Recommendations?Other? Please inform us by rating this presentation Frost & Sullivan’s Growth Consulting can assist with your growth strategies 11
  12. 12. Follow Frost & Sullivan onFacebook, LinkedIn, SlideShare, and Twitter 12
  13. 13. For Additional InformationJoanna Lewandowska Gustavo CuryCorporate Communications Sales ManagerICT Europe ICT Europe(0048) 22 390 41 46 (0044) 20 7343 8310 gustavo.cury@frost.comJean-Noël GeorgesResearch ManagerSmart Card - Global(0033) 4 93 00 61 13