Airline Distribution Panel (Vienna 2009)

Airline Distribution 2009 conference Payment and credit risk management 2 April 2009

The objective of this payments panel is to discuss payment vs. credit risk in the current environment ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

How bad is the crisis? $6 trillion in private sector debt must be eliminated (Merrill Lynch)

The financial crisis is likely to increase business failures, new payment products and regulatory intervention (among many other effects) ,[object Object],[object Object],[object Object],Macro- economic ,[object Object],[object Object],[object Object],Demand-side (consumers) Supply-side (banks) ,[object Object],[object Object],[object Object],Regulatory ,[object Object],[object Object],POTENTIAL IMPACT OF FINANCIAL CRISIS ONTO PAYMENTS MARKET

Example of business failure: First Data’s request for an increase in collateral resulted in Frontier filing for bankruptcy in April 2008 ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source: Company Website; Denver Post; BusinessWeek

[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],1. DIP financing is a special form of financing provided for companies in financial distress or under Chapter 11 bankruptcy process. Usually, this security is more senior than debt, equity, and any other securities issued by a company. Filing for bankruptcy enabled Frontier to make First Data’s increased collateral requirement void and to raise more financing Source: Company Website; Denver Post; BusinessWeek

UK: introduction of prepaid card programs In addition to these impacts, will the financial crisis support the emergence of new payment products (e.g., prepaid)?

And will debit cards carry on growing faster than credit cards? +8.9% Credit card (other countries) -11.4% Credit card USA Q4 2008 MasterCard volume ($) +18.2% Debit card (other countries) +5.8% Debit card USA

Based on a “global payment trends” survey among 320 payments professionals in the US, EU and AP: regulators will be the single greatest influence on the direction of the payments industry Thinking into the future (the next 5 years), in your opinion, what will be the single most influential participant that is likely to have the greatest impact on your market? Source: EDC’s 2008 global payment trends survey Regulators 40% Schemes / associations 12% Financial institutions 10% Merchants 5% Others 29% Service providers 4%

SEPA is focused on technical / commercial aspects vs. PSD (Payment Services Directive) that is focused on legal barriers ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],PSD SEPA

Payments panel agenda ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Questions for you, the audience! ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Other questions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Airline Distribution Panel (Vienna 2009)

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