SOCIAL SERVICE - VISA AND MASTERCARD LEAD THE WAY IN CUSTOMER ENGAGEMENT
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
ww w.cardsi nternati onal .com Issue 555 / may 2018
SOCIAL SERVICE
VISA AND MASTERCARD LEAD THE
WAY IN CUSTOMER ENGAGEMENT
ANALYSIS FEATURE SECURITY
Complaints rise by 2% for Revolut and its ambitions The push for an industry-
credit cards, but fall for to develop the UK as a wide standard in the
current accounts cashless society e-commerce space
CI May 2018 555.indd 1 27/04/2018 10:15:41
contents
this month
COVER STORY NEWS
05 / EDITOR’S LETTER
06 / DIGEST
• BJ’s Wholesale Club adds
Masterpass as payment option
• Billon to integrate Igoria cards with
blockchain technology
• OCBC first in Singapore to offer
instant issuance and Apple Pay
• Equinox Payments to support JCB
contactless cards in the US
• Tesco Bank divests Irish credit card
portfolio to Avantcard
• Amex and Marriott unveil co-
branded credit cards
• Ingenico launches new biometric
POS terminal
• Google Pay integrates virtual Hop
Fastpass transit card
16
• HomeStreet Bank unveils on-off
SOCIAL MEDIA cards to prevent fraud
• iZettle launches e-commerce
marketplace for small businesses
• JCB and Idemia launch biometric
Editor: Douglas Blakey Group Editorial Director: Director of Events: Ray Giddings card pilot in Japan
+44 (0)20 7406 6523 Ana Gyorkos +44 (0)20 3096 2585
• Credit card customer sues JPMorgan
douglas.blakey@verdict.co.uk +44 (0)20 7406 6707 ray.giddings@compelo.com
ana.gyorkos@globaldata.com • Mastercard to hire 175 in Dublin
Senior Reporter: Head of Subscriptions:
Patrick Brusnahan Sub-editor: Nick Midgley Alex Aubrey
+44 (0)20 7406 6526 +44 (0)161 359 5829 +44 (0)20 3096 2603
patrick.brusnahan@verdict.co.uk nick.midgley@uk.timetric.com alex.aubrey@verdict.co.uk
Junior Reporter: Briony Richter Publishing Assistant: Sales Executive: Jamie Baker
+44 (0)20 7406 6701 Joe Pickard +44 203 096 2622
briony.richter@verdict.co.uk +44 (0)20 7406 6592 jamie.baker@verdict.co.uk
joe.pickard@verdict.co.uk
08
Customer Services: +44 (0)20 3096 2603 or +44 (0)20 3096 2636, briefings@verdict.co.uk
Financial News Publishing, 2012. Registered in the UK No 6931627. ISSN 0956-5558
Unauthorised photocopying is illegal. The contents of this publication, either in whole or part, may not be
reproduced, stored in a data retrieval system or transmitted by any form or means, electronic, mechanical,
photocopying, recording or otherwise, without the prior permission of the publishers.
For more information on Verdict, visit our website at www.verdict.co.uk.
As a subscriber you are automatically entitled to online access to Cards International.
For more information, please telephone +44 (0)20 7406 6536 or email briefings@verdict.co.uk.
London Office: 71-73 Carter Lane, London, EC4V 5EQ
Asia Office: 1 Finlayson Green, #09-01, Singapore 049246
Tel: +65 6383 4688, Fax: +65 6383 5433 Email: asiapacific@sg.timetric.com
follow CI on twitter
@Payments_News
2 | May 2018 | Cards International
CI May 2018 555.indd 2 27/04/2018 10:16:04
contents
may 2018
s to talk about cracking China, disrupting
20
COUNTRY SNAPSHOTS
SWIFT, and leveraging WeCha
16 / CHILE
Payment card transactions are gradually
replacing cash in Chile, mainly as a result
of government and bank initiatives such
as a financial inclusion programme and
infrastructure modernisation
18 / NIGERIA
The use of cash for consumer payments
remains highly prevalent among Nigerians,
especially for those in rural areas. However,
the Central Bank of Nigeria has taken a
number of steps to improve this situation
20 / THE PHILIPPINES
Cash’s dominance in the Philippines
is mainly a result of the country’s high
unbanked population, inadequate banking
infrastructure, limited public awareness of
cards, and low levels of card acceptance
ANALYSIS FEATURES
10 / COMPLAINTS 12 / SOCIAL MEDIA
Credit card complaints rose by 2% in the With social media ever-present in everyday life,
second half of 2017 while current account the opportunities to engage with customers are
complaints fell. Overall, a total of 3.76 million numerous. Visa and Mastercard consistently
complaints were received in the six months to outrank banks in terms of social media
end-2017, reports Douglas Blakey outreach, but why? Patrick Brusnahan writes
11 14 / REVOLUT
Revolut believes the UK could become fully
cashless in just 10 years, and wants to be at
the forefront of the revolution. CTO and
co-founder Vlad Yatsenko tells Briony Richter
why this vision is close to becoming reality 16
SECURITY PRODUCTS INDUSTRY INSIGHT
11 / E-COMMERCE 15 / VIRGIN ATLANTIC 22 / MYPOS
Shifting from magnetic stripes to chips in Two new credit cards are the first products to From the casual dining crunch to major high
cards has been a long process; however, it was be launched from the partnership between street retailers facing financial troubles, there is
needed to improve security at the point of sale. Virgin Atlantic and Virgin Money, facilitated little doubt that we are facing a difficult retail
Now, the biggest firms want a similar shift in by Mastercard. Briony Richter takes a looks at environment. However, this also represents an
e-commerce. Patrick Brusnahan reports the cards’ primary features and benefits opportunity, writes Ambreen Khasru
www.cardsinternational.com | 3
CI May 2018 555.indd 3 27/04/2018 10:16:26
HEAR ∤ NETWORK ∤ DISCOVER ∤ CELEBRATE
LEASING LIFE CONFERENCE
& AWARDS 2018
15th November 2018 ∤ Tallinn, Estonia
For its 14th edition Leasing Life Conference and Awards 2018 moves to the Baltic Region to bring together asset
finance professionals and industry disruptors in an active discussion of the key issues facing the leasing industry.
This year’s Leasing Life conference explores how Europe’s leasing industry is responding to the value chain
opportunity - the operational, and strategic, implications of the paradigm shift, and the role that technology
must play in transforming the industry so that it thrives in the digital age.
.
Event highlights:
∤ Re-defining asset ownership for a digital
generation
· The Baltic Approach: Regulatory arbitrage
in the digital era
· GDPR and its implications for reporting,
asset management and marketing
· Funding strategies for a lean world
· Re-defining sales and distribution channels
for the digital era
· Harnessing the power of agile: Assessing the
transformative potential of digital
· Embracing the circular value chain approach
to lease delivery & design
· Taking the right risks for the rewards:
Strategic implications of the era of asset
ownership
· Using data and analytics to drive
performance, deliver value
Headline Sponsor: Gold Sponsor: Silver Sponsors:
Brand Sponsor: Exhibitor: Badge and Lanyard Sponsor: Table Hosts:
For more details please contact:
Page 1 Vicki Greenwood on vicki.greenwood@compelo.com or call +44 (0) 20 30W96 2580
editor’s letter
Tinkoff remains the Russian
cards player to watch
Douglas Blakey, Editor
L
aunched only 11 years ago by serial entrepreneur Sberbank, with more than 3.5 million customers. But debit card
Oleg Tinkov, Russia’s number one direct bank can customer numbers are catching up fast, as Tinkoff ended 2017
already claim to be the world’s largest fully online with more than three million customers.
bank by customer base. Hughes tells me Tinkoff is now attracting 120,000 new debit
It is generally regarded as punching above its weight in terms card customers every month; he says that the day is not far
of credit cards, but is now repeating the trick with a successful away when current account customers will exceed credit card
range of debit cards. customer numbers.
The list of growing Tinkoff innovations is impressive: Hill, whom I have known and admired since his Commerce
• The first organisation in Russia to roll out facial Bank days in the US, is fond of asking banking journalists just
biometric recognition to identify and verify customers how many online-only banks have really made a success of
in 2016; their business with sustained profitability. Tinkoff can claim
• The first in Russia to implement real-time voice- such a success: in fiscal 2017 Tinkoff posted net income of
authentication technology in 2014; RUB19bn ($300m).
• With around 4,600 operators, Tinkoff has the largest Hughes says Tinkoff is on track to report a net profit for
cloud-based Home Call Centre powered by proprietary fiscal 2018 of at least RUB24bn, and will hit its target of a net
software in Russia; income increase for the next two years of 20-40% per annum.
• 20% of all incoming electronic messages are The upcoming launch by Tinkoff of a premium Tinkoff
automatically handled by bots, and Black product line and associated concierge service to target
• Tinkoff was among the first to launch Apple Pay, the mass affluent segment and the lower end of the private
Android and Samsung Pay services in 2016. banking sector makes perfect business sense. It is just one of
a number of new product lines in the Tinkoff pipeline likely to
Tinkoff is now transitioning to become an online financial ensure that Tinkoff will hit its next business targets. <
marketplace: Tinkoff.ru offers a full range of both own-brand
and partner retail financial services via mobile and desktop.
By chance, as CI was preparing to go to press, I spoke with
market shares
Oliver Hughes, president and CEO of Tinkoff just minutes after Russia: leading credit card issuers, 2017
speaking with Metro Bank chair and founder Vernon Hill as
Metro Bank released its first-quarter earnings.
There are shades of Hill’s background, success and charisma
in the background of Tinkoff’s founder. While Hill made his
Others
first fortune in fast food as part-owner of a group of Burger 27.7%
Kings, Tinkoff has, in his time, owned a network of restaurants,
frozen food factories and brewing firms before concentrating Sberbank
on financial services.
45.5%
There the similarities end, as while Hill and his UK and US VTB
banks, Metro and Republic respectively, are focused on the 6.9%
store, Tinkoff has no branches and has acquired and services Alfa
8.3% Tinkoff
all of its seven million-plus and growing customers via online
channels and its call centre.
11.6%
Tinkoff’s share of the credit card market has almost doubled
in the past five years to more than 11.5%, second only behind Source: Tinkoff
Get in touch with the editor at: douglas.blakey@verdict.co.uk
www.cardsinternational.com | 5
CI May 2018 555.indd 5 27/04/2018 10:16:35
News | Digest
news digest
BJ’s Wholesale Club adds OCBC first in singapore
Masterpass as payment option to offer instant digital
issuance and Apple Pay
be entered. It can be used with various devic-
es and channels. OCBC has become the first bank in
Mastercard’s executive VP for US mer- Singapore to enable customers to transact
chants and acceptance, Linda Kirkpatrick, at merchants that accept Apple Pay within
said: “We are thrilled to partner with BJ’s minutes of applying for a Visa credit or
Wholesale Club to enhance its one-stop debit card.
shopping experience with our latest and OCBC customers no longer need to wait
US-based warehouse chain BJ’s Wholesale safest digital technology. for a physical card to arrive – they can now
Club has added Masterpass, Mastercard’s “With Masterpass as a payment option, add a digital card to Apple Pay instantly via
digital contactless payment service, as a BJ’s members are just a click away from a the OCBC Mobile Banking app.
payment option for its customers. seamless and secure checkout.” According to OCBC, Visa cards make up
The integration will enable BJ customers BJ’s Wholesale Club CFO Bob Eddy said: almost 80% of OCBC Bank cards currently
to pay for purchases without taking out cards “As we continue to grow our Omnichannel linked to Apple Pay. Instant provisioning
or sharing credentials. capabilities, we’re focused on delivering a of cards for use with Apple Pay has been
Masterpass securely stores sensitive pay- seamless experience for our members. Add- enabled for OCBC Bank Visa credit
ment information such as card and shipping ing Masterpass as a payment option on BJs. cards – including the 365, Frank, Voyage,
details, and payment preferences, and does com offers our members another convenient Robinsons Group, Plus! Visa and NTUC
not require all of a customer’s credentials to way to shop with us.” < Plus! cards and the Yes! debit card.
Aditya Gupta, OCBC Bank’s head of
Billon to integrate Igoria cards e-business Singapore, said: “This is the new
digital – instant, embedded and frictionless
with blockchain technology
access to banking products and services.
Our customers can now receive their new
card digitally and provision it to their Apple
and provide a digital system to manage Wallet to start paying with it straight away
limits and payment histories, and facilitate – all from within our mobile banking app
currency exchange. and within a few minutes.
Igoria cards will be stored in electronic “We believe this is a huge level-up in
form on Billon’s blockchain platform. customer experience, and will accelerate
Payments made using the cards will be our digital card applications and cashless
funded through e-money present on the payments market leadership drive.”
platform. One in every two Visa contactless
Billon CEO and founder Andrzej transactions in Singapore, including Apple
Horoszczak said: “The partnership with Pay, are made with an OCBC Bank card.
Igoria is the start of a relationship that Monthly mobile wallet payments have
could see us fully commercialise our doubled since 2016, while the number of
UK-based blockchain services provider distributed ledger technology and move credit cards provisioned to mobile wallets
Billon has partnered with Polish business from existing individual deployments to a has increased sevenfold.
Igoria Trade to allow digital use of the much broader transformation of payments Around 60% of OCBC Bank cards linked
multi-currency IgoriaCard in 150 countries and the banking system.” to mobile wallets are on Apple Pay. Mobile
through blockchain technology. Igoria Trade CEO Wojciech Kuliński wallets are particularly popular for lifestyle
Billon uses a blockchain ledger to store added: “The move to integrate Billon’s transactions including groceries, hire cars,
and transfer real, regulated currencies and distributed ledger technology with food deliveries and fast food.
smart data. The collaboration will allow IgoriaCard is truly exciting. Vincent Tan, OCBC Bank’s head of
Billon customers to use Igoria cards for “We’re committed to staying at the credit cards, said: “With our instant digital
transactions in physical stores as well as cutting edge of technology and believe card issuance, customers can immediately
online purchases at low exchange rates. the partnership with Billon is the perfect provision their new cards to Apple Pay via
Available in plastic and virtual forms, opportunity for us to take the next leap our mobile banking app, and start to enjoy
the cards run on the Mastercard network, forward.” < our cards’ rewards and rebates.” <
6 | May 2018 | Cards International
CI May 2018 555.indd 6 27/04/2018 10:17:02
News | digest
Equinox Payments to support JCB AmEx and Marriott
contactless cards in the US unveil co-branded
Payment terminals provider Equinox
Payments is set to upgrade its terminal lines
JCB EMV liability shift that takes effect next
year. Once completed, all Equinox payment credit cards
to support contactless transactions on JCB terminals will be automatically enabled to
cards in the US. support JCB Contactless at the factory prior
Equinox plans to integrate its Apollo, to release.”
L5000 and Luxe terminal lines with contact- Equinox also added JCB support to its
less chip technology. The business said an L5300 terminal, which is used at various
upgrade path will be provided for mer- high-volume retailers, and the Apollo stand-
chants with these terminals over the coming alone terminal.
months, enabling acceptance of contactless JCB’s VP of emerging technologies, Linda
payments through JCB cards and Apple Pay. Horwath, said: “This relationship under- American Express and Marriott
Commenting on the move, Equinox scores the partner-friendly approach that International have unveiled new the
Payments VP Rob Hayhow said: “Merchants Equinox brings to the table. Marriott Rewards Premier Plus credit
that adopt these solutions can improve the “We are excited to extend the speed and card and the Starwood Preferred Guest
checkout experience for JCB card members, convenience of contactless payments to our American Express Luxury card, along with
and make sure their business is ready for the valuable card members visiting the US.” < the refreshed Starwood Preferred Guest
Consumer and Business credit cards.
Tesco Bank divests Irish credit Set to be available from May this year,
the Rewards Premier Plus credit card is
card portfolio to Avantcard
part of Marriott’s loyalty programme and
will feature a new 100,000-point limited-
time offer for new card members, with a
variety of other benefits such as reward
points on purchases.
Both the new and refreshed cards
under the Starwood Preferred Guest
programme will be available from August
this year. They will provide travel benefits
and rewards that can be access at around
6,500 hotels in 127 countries.
The American Express Luxury card is
designed for premium customers and
features complimentary Gold Elite Status,
additional cards at no charge, and a chance
to earn Platinum Elite Status, among
others. The Consumer and Business cards
will offer new benefits such as points on
purchases at select SPG and Marriott
Rewards hotels, Annual Night Award and
automatic Silver Elite Status.
The UK’s Tesco Bank has agreed to sell its Fee card does not charge a fee for balance
The Business cards will also offer
Irish credit card portfolio to Spain-based transfers, the Premium card focuses on
additional ways for small merchants to
consumer finance company Avantcard. reward points, and the Foundation card earn points when they make common
As a result, around 27,000 credit card allows its holders to improve their credit purchases, including dining, gas, wireless
accounts are set to be transferred from ratings. bills and shipping.
Tesco Bank to Avantcard. The deal follows Tesco Bank’s decision to American Express’s senior VP of US
Cardholders will be able to continue cease accepting applications for its credit commercial cards, Courtney Kelso, said:
using existing cards until they receive card services from Irish customers in May “We know our card members love to stay
a new card, which also applies to Tesco last year. at Marriott hotels when they travel the
Clubcard reward points, The Irish Times Avantcard MD Chris Paul said: globe. With our expanded card offerings,
reported. “Avantcard’s strategy is to be a leading soon they will get access to even more
Tesco offers a variety of credit cards, consumer finance provider in Ireland by benefits to enhance their hotel stays and
each with different features. Its Purchases 2020, and this will be achieved through their entire travel experience – all while
card offers interest-free payments for 28 ongoing product innovation, continuing giving them more ways to earn the points
months, while the No Balance Transfer investment and strategic partnerships.” < we know they love.” <
www.cardsinternational.com | 7
CI May 2018 555.indd 7 27/04/2018 10:17:12
News | Digest
Ingenico launches new HomeStreet Bank
biometric POS terminal unveils on-off cards
Payment solutions provider Ingenico Group VP of Ingenico’s marketing of banks and
to prevent fraud
has launched a new portable mobile point- acquirers business unit, Frédéric Lepeintre,
of-sale terminal, the Move/2500 B, with said: “We are pleased to introduce the
biometric capability. Move/2500 B, our third-generation
The new product is intended to meet biometric POS, designed to support
standard financial inclusion requirements financial inclusion scenarios as well as
for the unbanked population and innovative payment schemes in mature
government schemes. According to the markets.
company, India will soon require these “The launch of the Move/2500 B
systems for fingerprint authentication, and illustrates Ingenico Group’s commitment
Mexican banks can use them to verify a towards reaching the two billion people
loan recipient’s identity. Ingenico noted excluded from financial services.
that the EMVco certification of fingerprint “It also demonstrates our ability to
authentication may initiate new global adapt to new regulatory frameworks
schemes. and consumer demand for fingerprint
Promoted as secure and cost-efficient, authentication.”
the Move/2500 B supports all types The company plans to introduce its new
of payment methods, and can match biometric POS in India in June this year,
fingerprints in a fraction of a second. and subsequently into the Middle East. <
US-based HomeStreet Bank has
Google Pay integrates virtual
introduced a new mobile security feature,
Card Controls, to give clients greater
Hop Fastpass transit card
control over their debit cards.
The new feature aims to prevent fraud
and improve the security of debit cards.
Available through the bank’s mobile app,
the new capability allows customers to
turn cards on and off, and enable usage
alerts. It also enables cardholders to track
spending, and manage expense limits,
merchant types and geographic locations.
HomeStreet Bank CEO and president
Mark Mason said: “Protecting our
customers from fraud is one of our top
priorities, which is why we continue to roll
out security features like Card Controls.
“Through Card Controls, customers have
total control over their debit card right at
Init, TriMet and moovel have collaborated beginning of a new era in the fare-collection
their fingertips, giving them peace of mind
to integrate the virtual Hop Fastpass card for world.
that their banking information is secure.
Google Pay users in the Portland, Oregon “The vision of a secure transit payment
Mason added: “We’re committed to
region. solution without carrying a card has now our customers, and we’re looking forward
Cardholders using TriMet, C-Tran and finally been realised.” to rolling out more features that make
Portland Streetcar rides in the Portland-Van- When the virtual card is used by riders, a their banking experience safer and more
couver region will now be able to use a back-office management tool, Mobile-var- convenient.”
virtual smart card to pay transit fares. io by Init, will estimate the fare, verify the The Card Controls feature follows a
The card can be loaded through the Hop transaction and provide the fare-validation series of digital upgrades such as Cardless
Fastpass mobile app available at the Google result in real time. Cash, Apple, Samsung and Android Pay
Play store. It is said to be the first regional TriMet general manager Doug Kelsey said: launched by the bank over the past
account-based virtual transit fare card, and “The combination of Hop and Google Pay few months to enhance the customer
can be used at any of the 1,200 Init fare puts transit riders in the Portland-Vancouver experience.
validators. region on the cutting edge of technology, The bank also plans to roll out the Zelle
Init project engineer Thomas Schaich said: while truly getting the best value with daily person-to-person payment network in the
“The use of virtual transit cards marks the and monthly fare caps as they ride.” < near future. <
8 | May 2018 | Cards International
CI May 2018 555.indd 8 27/04/2018 10:17:40
News | Digest
iZettle launches e-commerce JCB and Idemia launch
marketplace for small businesses biometric card pilot
Japanese card issuer JCB has partnered
with Idemia, an augmented identity
business, to trial its first biometric chip
card aimed at enabling faster checkouts.
The payment card integrates Idemia’s
F.Code technology designed to replace PIN
with fingerprint authentication to allow
easy and secure transactions. Customers
can use a smartphone or tablet app to
initially record their fingerprints, which will
be stored in the card.
At the time of purchase, they can make
a payment by simply touching a fingerprint
sensor embedded on the card. An Idemia
Jacob de Geer, iZettle algorithm then validates the identification
by cross-checking with the stored data.
iZettle, the Swedish fintech business that to maximise sales and improve the customer
The pilot is set to be conducted in
serves small businesses in Europe and Latin experience.
alliance with card-personalisation partner
America, has launched a new e-commerce iZettle CEO and co-founder Jacob de
Toppan Printing, and will see issuance of
platform that allows merchants to sell in- Geer stated: “This is iZettle’s biggest product
cards to JCB employees in Japan.
store, online and on mobile devices. launch since 2011, and it is a huge moment
Executive VP of JCB’s brand
The platform will enable small busi- for us.
infrastructure and technologies
ness owners to set up and customise new “Today’s consumers expect businesses
department, Tac Watanabe, said: “This
webshops and start selling products through to be present both offline and online. Half
pilot programme, through our strong
multiple online channels, including social of iZettle’s users currently don’t have an
partnership with Idemia, is to demonstrate
media, blogs and existing websites. online shop, and the other half struggle with
a use case of how JCB intends to provide
The iZettle E-commerce platform is different complex online systems. iZettle
customers with a secure and smooth way
available in the UK as part of the iZettle E-commerce solves these problems, helping
of making payments in the future.”
Go Plus full-feature package that costs £29 small businesses find new customers and sell
Executive VP of Idemia’s financial
($42) per month. Small businesses that take more – all from one place.”
institutions business unit, Pierre Barrial,
up the offer will benefit from a full overview The online platform processes all major
added: “F.Code is a unique technology that
of in-store and online sales in one place. credit cards and online payments, and sup-
provides highly secured authentication and
Inventories are automatically updated after ports PayPal. The launch is part of iZettle’s
we are eager to implement it for the first
each sale. strategy to extend its commerce platform by
time in Japan.” <
The platform will also enhance data pro- offering a wider range of affordable tools to
ductivity, enabling merchants to harness data small businesses. <
Mastercard to hire 175
Credit card customer sues JPMorgan to drive innovation
Mastercard has announced plans to
JPMorgan Chase has been sued by a credit The bank reportedly charged $143.30
bolster its footprint in Ireland by hiring
card customer in Idaho over high interest in fees and $20.61 in interest for five
175 new technical staff at its facility in
rates and fees for buying cryptocurrency cryptocurrency transactions made between
Leopardstown, Dublin.
using a credit card. 27 January and 2 February, and refused a
The company will hire software
According to reports, Brady Tucker has request for their removal. Tucker, who is
engineers, blockchain and cloud
filed a lawsuit against the banking giant in now seeking actual and statutory damages
infrastructure specialists, data scientists,
the federal court in Manhattan, claiming of $1m, said he used a credit card because
analysts, project managers, information
JPMorgan considered the cryptocurrency it was the only means to make an instant security experts and product designers.
purchases as cash advances and levied cryptocurrency purchase on Coinbase. Mastercard said the new employees will
higher charges than usual. Reuters quoted Chase spokesperson primarily focus on expanding innovation in
JPMorgan banned the use of its credit Mary Jane Rogers as saying the payments and security solutions.
cards for buying cryptcurrencies in bank ceased processing credit card Mastercard Ireland country manager
February this year, but Tucker’s lawsuit cryptocurrency purchases in February Sonya Geelon said: “At our Dublin office,
claims the bank did not issue any notice because of the credit risk involved, but we’re working on innovations that will
that the purchases will be treated as cash that customers can use debit cards without shape the future of payments not just in
advances. incurring cash-advance charges. < Ireland, but all around the world.” <
www.cardsinternational.com | 9
CI May 2018 555.indd 9 27/04/2018 10:17:52
ANALYSIS | COMPLAINTS
in the six months to the end of March, and
CREDIT CARD
expected to receive another 110,000 by the
complaints deadline set for August 2019.
Excluding PPI, the number of complaints
COMPLAINTS
received by firms was 2.21 million – around
13,000 fewer than the previous six months.
After PPI, the next most complained-about
products are current accounts with 509,047
INCH UP IN UK
complaints, and credit cards with 314,586
complaints. These products have a higher
proportion of complaints closed within three
days (see table).
The amount of redress paid out in total
Credit card complaints rose by 2% in the second half during the second half of 2017 was £2.36bn,
up 19% year on year. This was driven by
of 2017 while current account complaints fell. Overall, an increase in redress payments for PPI
a total of 3.76 million complaints were received in the complaints, which rose by 26% to £2.05bn.
six months to end-2017, up 13% year on year, as PPI Redress per upheld complaint fell in the
second half of 2017 for all product groups (see
continues to haunt UK banks, reports Douglas Blakey chart), with the average banking and credit
card payment falling from £270 to £253.
F CLAIMS HANDLING
irst off: the positives. Take a bow, Christopher Woolard, executive director
Nationwide. Of the major UK banks of strategy and competition at the FCA, said:
and building societies, Nationwide The latest FCA complaints data suggests that “Having set a deadline for PPI complaints, we
attracted the least complaints in the second banks’ internal complaints-handling processes are encouraging consumers to decide whether
half of 2017, with only 1.44 complaints per remain a work in progress. they want to claim, and if they do, to make
100,000 accounts for banking and credit A whopping seven in ten (70.1%) of their complaint as soon as possible, as many
cards. banking and card customer complaints against already have.
Skipton Building Society and Yorkshire Lloyds were upheld by the FCA. Sister brand “We are continuing to monitor and
also scored well with only 1.57 and 1.92 Bank of Scotland (60.2%) also scored poorly challenge all firms to ensure they maintain the
complaints per 100,000 accounts respectively. by this measure. By contrast, less than one- expected standards and are delivering on their
At the other end of the scale, HSBC is the half of all complaints against Bank of Ireland commitments to make it easy for people to
most complained-about major retail banking UK (43.0%), Allied Irish Banks UK (43.4%), complain about PPI,” Woolard added.
brand with 6.88 complaints per 100,000 Santander (43.5%), Tesco (49.0%) and Metro “When PPI is taken out of the mix, the
banking and credit card accounts, just ahead Bank (49.3%) were upheld. numbers of complaints firms are receiving has
of RBS with 6.69 and Barclays with 6.51. Complaints about PPI rose by 40% to remained stable. Firms should be doing all
Of the other major brands, Santander 1.55 million in the second half of 2017, the they can to reduce complaints and ensure they
(5.26) and Lloyds (5.23) continue to attract highest level of complaints about PPI for more are treating customers fairly.” <
more complaints per 100,000 accounts than four years. In January, firms paid out
than challenger brands such as TSB (4.35) £416m ($581m) in PPI compensation, the
and Metro Bank (4.18). Co-operative Bank highest figure since March 2016. The total for
compensation
and Virgin Money, on only 3.09 and 2.68 compensation payments since January 2011 is Redress per upheld complaint, 2017
respectively, performed strongly. now £30bn.
RBS’s private banking brand, Coutts, is £
Banks continue to add to their PPI 3,000 H1 2017 H2 2017
among the worst overall performers (10.22); provisions, with Clydesdale Bank setting
sister RBS brands NatWest and Ulster Bank, aside a further £350m for PPI claims in April. 2,500
on 5.48 and 4.25 respectively, fared better. Clydesdale said it received 59,000 claims
2,000
UK – MOST COMPLAINED-ABOUT PRODUCTS, 2017 1,500
% closed within 1,000
H1 2017 H2 2017 change % 3 days, H2 2017
PPI 1,112,043 1,551,897 40 9 500
Current accounts 518,608 509,047 -2 70
0
ts ce ) e ns I
Credit cards 309,875 314,586 2 70 en nd s PP
an PI Homnce nsio g aard
st
m s ur l. P n a e i n c
Motor and transport 241,319 230,146 -5 56 ve In exc fi P nk it
In ( Bacred
Packaged accounts 203,509 206,089 1 25
Source: FCA Source: FCA
10 | May 2018 | Cards International
CI May 2018 555.indd 10 27/04/2018 10:17:54security | e-commerce
will a new standard
revolutionise
e-commerce?
Shifting from magnetic stripes to chips in cards has been a long, almost everlasting,
process; however, it was needed to improve security for consumers at the point of sale.
Now, the biggest firms want a similar shift in e-commerce. Patrick Brusnahan reports
S
tandardisation is not a new thing in common checkout button.” As a result, the where we have the more traditional players. In
payments. Europay, Mastercard and checkout experience would be more consistent the e-commerce world, we also have gateways,
Visa combined their efforts to create for consumers. In addition, it would reduce shopping cart providers, people who build
the EMV standard, now run by EMVCo. the amount of steps consumers need to take part of the user experience.
This introduced the ‘smart’ payment card, at different sites, as well as making it easier for “Many of these parties will have to make
or the chip card, to increase security at the merchants to implement. changes in order for these new standards to be
POS. Now, companies are coming together Cowen says: “The security side is very adopted.”
again to re-enact this process for online important but it’s also about trying to
purchases. standardise the user experience as much as HOW LONG?
possible. It’s about making it simple and
SUCCESSFUL TRANSITION consistent for consumers. Mastercard is not the only firm pushing for
“There is a proliferation of different ways to standardisation. Visa and American Express
Mike Cowen, VP of digital payments at pay online, and even when you’re paying the have also displayed their support, and more
Mastercard UK, tells CI: “It’s about trying to same way, there are proliferations of different are set to follow. With the amount of large
achieve something similar in the online world user experiences that enable card transactions companies backing the move, how long will it
to what has been achieved in the physical to happen. This is potentially confusing take to implement?
world at the point of sale. for people. It certainly reduces confidence, Cowen says: “This is not something that
“We’ve all seen the very successful transition because if you’re asked to do something Mastercard is trying to do on its own. It is
from magnetic stripe as a technology for different every time, that ability to build up very much a call to the industry to adopt
payments being increasingly replaced by chip. familiarity and comfort is reduced.” this new standard. It’s intended to be for the
One of the key benefits is driving security, and benefit of everyone. A better and more secure
reducing fraud, at the point of sale. Now we THREE MAIN AREAS payment experience should help everybody.”
want to do something similar in the online “In terms of timing, it’s not going to be
world.” Cowen continues: “These are the three main overnight,” Cowen warns. “This is the start
This comes in the form of the EMVCo areas where we see this development helping: of a journey and that is the right way to talk
Secure Remote Commerce (SRC) framework, security, standardisation and simplicity.” about this.
which aims to give consumers the same One solution is tokenisation. Utilising “We’re talking months or maybe even one
simple, secure and convenient payment tokens to protect sensitive data can aid or two years. It’s not going to take anything
experience across every browser and device. security as well as bring a standard to all as long as the journey from magnetic stripe to
“We now feel it’s the right time to increase payment processes. chip, which is not yet complete and it started
security in the online world,” Cowen explains. “Our ecosystem is a massively distributed 20 years ago.”
“We want to do it in a similar way to what one,” Cowen explains. “We’re talking billions Cowen concludes: “The improvement in
we did with POS, and that is standardisation. of consumers, tens or hundreds of thousands security should attract everybody, and that
That’s where the SRC standard comes in. This of banks and tonnes of players in between.” is an area we will push. We want to get to a
defines a secure framework in which online He adds: “The ecosystem is highly point where every online or remote payment
transactions can take place.” fragmented and people have different roles is at least as secure as a payment at POS. That
In a blog post from Mastercard, the firm within the ecosystem and the value chain. This means using the secure technologies we have
states: “SRC can be implemented as one, doesn’t take into account the physical world, available to us.” <
www.cardsinternational.com | 11
CI May 2018 555.indd 11 27/04/2018 10:17:54Feature | social media
mastercard and visa:
the experts in
social media
Financial companies strive to relate to their customers, and vice
versa. Branding can be crucial in this objective, and with social media
being ever-present in day-to-day life, there are many opportunities to
achieve it. Visa and Mastercard consistently outrank banks in their
social media outreach, but why? Patrick Brusnahan writes
F
or the last four years, Visa and Mastercard have outranked “We would use social media as one of the many channels that form
banks in terms of social media, and placed in the top two. our marketing campaigns across the year. I think we find it quite a
According to CI’s rankings, Visa has 22,378,077 Facebook useful channel to have a dialogue with cardholders and consumers in
likes, an increase of 4% from 21,420,012 in 2017. Mastercard also the space of their everyday life. It’s a mutual channel where we are able
saw a rise in the same time frame, from 14,950,982 to 15,974,241, to talk to them about their passions, their interests, and hopefully take
a growth of 6%. State Bank of India is the closest bank in terms of them on a journey of understanding on how Mastercard can help them
Facebook likes, but it still falls behind Mastercard by more than four enable that.”
million at 10,615,876. Farina adds: “Social media has become part of our DNA over the
Clearly, ‘fans’ are engaging with both Visa and Mastercard’s brands past five years and, from a marketing perspective, ever-more important
on social media, but what are they doing to create this interaction?
facebook likes
INTEGRAL TO OPERATIONS
millions
Adrian Farina, senior VP, marketing, at Visa Europe, tells CI: “Visa uses 25.0 Visa Mastercard
social media in a variety of ways, and it has became integral to many 20.0
of our team’s operations – be it marketing, corporate communications,
15.0
customer services or recruitment.
10.0
“We see digital and social media as great tool to help us achieve our
corporate vision of being the best way to pay and be paid, for everyone, 5.0
everywhere.” 0
Kirsty Redfearn, head of consumer and digital marketing, UK and 15 16 17 18
20 20 20 20
Ireland at Mastercard, has a similar opinion. Speaking to CI, she says:
“Social media forms part of our integrated marketing mix. Source: Cards International
12 | May 2018 | Cards International
CI May 2018 555.indd 12 27/04/2018 10:17:56Feature | social media
as part of our media mix. Social media is extremely versatile and
provides us with the means to position our brand with our clients,
engage consumers around the benefits of Visa products, highlight
recent distinctive campaigns
elements of our corporate narrative, such as our focus on innovation Kirsty Redfearn, Mastercard:
and security, and operate promotions and competitions.”
“We’ve been sponsoring the Brit Awards for 20 years, and
Of course, the days where there were a handful of social media
channels are long gone; Facebook, Twitter, Instagram, Pinterest, this year was quite an occasion. We’ve been trying hard
Snapchat – the list goes on. this year to build an integrated campaign that connected
Redfearn continues: “We use the majority of channels in some form some of the dots in the Brits ecosystem, such as the Brit
or another, depending on the objective of the campaign. Don’t get school and the charities that the Brits works with. We
me wrong, we would probably prioritise Facebook and Twitter as our
worked with David Arnold, a famous composer, who
main core channels. Most brands will tell you that the majority of their
composed a track for us which we could then illustrate and
audience is in that space, so it makes sense for us to understand those
channels and use them appropriately.” create an experience where music brings people together.
“That is not to say we don’t use other channels. We have an
“We’ve had some wonderful responses, and it even had
Instagram channel; we have also been on Tumblr, where we saw some
around 99% sentiment response; for most brands, that’s an
amazing creativity in our [music award show] Brits campaign. We have
been on Snapchat as well. It’s not been haphazard; it’s all decision- unheard-of space.”
based,” Redfearn explains.
adrian farina, visa:
24/7 “Generally we use our sponsorships as a backdrop for the
benefits that Visa brings to consumers – an approach that
Social media is not static. There is content posted constantly, so it can we took during our recent contactless campaign around
be hard to stand out in an ever-changing field.
the Winter Olympics.
“Interaction rates have changed a lot recently, particularly on
Facebook as they changed their algorithm again,” Redfearn notes. “This “This global campaign was fully integrated across our
year, the organic reach is dropping considerably. This means we are social and digital channels and saw us working closely
more careful and more thoughtful on how we bring messages to life.
with our Team Visa athletes [individual Visa-sponsored
We need to make them effective and enter a dialogue with consumers.”
“We put in a great deal of effort into ensuring that we are up to athletes from a range of national teams] who were able to
speed with the latest developments in how social media platforms amplify our campaign through their personal social media
prioritise content and reach consumers through their advertising channels.
formats,” Farina explains.
“This means working closely with our partners – either agencies or “Our cross-border campaign last summer consisted of a
the platforms themselves – to ensure that our marketing investments series of short videos designed to encourage travellers to
are allocated appropriately and that the right content reaches the right consider the benefits of using their card abroad instead
people at the right time. of cash. We were able to use our social media channels
“As we shift our marketing investments from traditional to digital to deliver these videos to travellers journeying between
media, we aim to be at the cutting edge of creativity and targeting best
Europe and America, serving the right message to the right
practices. Ultimately, it comes down to reaching people wherever they
choose to spend their time, whether online or offline.” traveller when he or she was most receptive.” <
Redfearn adds: “We have an always-on team, a wonderful agency
network and a wonderful agency team. It’s an always running thing.”
Banks are regulated and constantly monitored; they cannot post
whatever they want. Companies such as Mastercard are similar, but the
KEY STATISTICS, 2018
restrictions they face are not as strenuous.
“We have slightly different positioning as we are able to be a B2B2C
visa mastercard
company rather than a bank,” Redfearn says. “That gives us the position
Twitter followers 368,464 473,058
where we can utilise the channels as part of our brand, rather than
just being a customer care portal – not that we don’t open ourselves
up to answer queries. Our average response time is 24 hours, so we’re Facebook likes 22,378,077 15,974,241
pretty real-time in getting back to our consumers. That’s high up in
our priorities, but at the same, [we aim] to make sure it’s part of our Instagram followers 27,141 91,655
integrated marketing mix, whatever channel it is.
Redfearn continues: “I think we’ve gone from the days where social Youtube subscribers 39,751 31,958
media was a separate channel on its own. It’s very much at the centre
of our thinking as we plan campaigns. It’s become quite integral to us
Youtube views 334,538 62,580,808
understanding our consumers and their passions. We spend a lot of
time and energy making sure that we’re relevant and adding value.” < Source: Cards International
www.cardsinternational.com | 13
CI May 2018 555.indd 13 27/04/2018 10:17:56Feature | revolut
Cashless technology can be tricky to
cashless society:
integrate into places in the UK that are rural
and more difficult to reach. Many worry that
a cashless society could further marginalise the
leading the
elderly and lower-income citizens.
Whether you are for or against increased
surveillance, a cashless society will significantly
increase the level of insight governments and
revolut-ion
banks have into individuals’ lives. In a world
without cash, every payment is traceable.
Today, Facebook profiles reveal a public
persona that an individual can tweak and
control, but in payments, consumers put their
money where their mouth is.
Revolut believes the UK could become fully cashless in just Many argue, correctly, that digitising all
10 years, and wants to be at the forefront of the revolution. payments will reduce levels of financial crime,
such as extortion, corruption and burglary.
CTO and co-founder Vlad Yatsenko explains to Briony That said, it also opens the doors to different
Richter why this vision is close to becoming reality types of financial crime. Companies and
consumers will still be vulnerable to security
risks such as online fraud and cyberattacks.
R
evolut has been breaking down If all transactions are digital, a well-executed
barriers in the banking industry cyberattack could lead to massive losses.
since its launch. Furthermore, by adding more financial details
According to GlobalData research, the online, along with the personal data that is
number of Revolut users sat at around 1.5 already accessible, crimes like identity theft
million in 32 countries, as of April 2018. will increase.
There is no denying that the vast majority Revolut believes that, overall, a cashless
of consumers enjoy and benefit from a range society has more positives than negatives, and
of digital payment methods. The simplicity of wants to lead the way in creating a thriving
conducting banking tasks is one of the biggest and secure one. Yatsenko states: “Revolut is
motivators to go digital. Carrying wallets and enhancing the accessibility and ease of cashless
numerous cards has become an annoyance. societies with its mobile and contactless
Vlad Yatsenko, Revolut
Speaking to EPI, CTO and co-founder, payments services.
Vlad Yatsenko details what the UK needs to “Unfortunately, UK infrastructure lags behind “Revolut’s latest feature, disposable virtual
do to become cashless: “If the UK aspires to countries like Sweden, and our relatively large cards, includes card details that automatically
be fully cashless within the next 10 years, we population isn’t an ideal test-bed for cashless change after every transaction, protecting
need to continue to innovate and encourage innovation. customers against account fraud, cybersecurity
the use of financial technology. Britons still “We’ve still got a long way to go until threats and runaway subscription fees.
have a very strong emotional connection to lumbering traditional banks fully adopt “We believe that digital-only banks are
cash, even if they aren’t using it as much, so cashless technology, and even then not all beginning to be recognised by the majority
it’s best to slowly make the transition into consumers tend to trust the big banks or of the public, driving significant numbers
becoming a fully cashless society.” institutions with their information.” of customers to change banks, and building
Across the world, cash transactions awareness and trust,” Yatsenko notes.
are continually and significantly falling. WIPING OUT CASH “Digital-only banks are offering powerfully
According to the 2017 World Payments Report attractive alternatives and improvements
(WPR), non-cash transactions will increase at Sweden is wiping out cash at a rapid on how people handle their finances, and
a CAGR of 10.9% between 2015 and 2020. rate. According to the WPR, 36% of the increasingly convincing consumers they can
So should the UK accelerate its cashless population in Sweden claim they never use be trusted by delivering on their promises for
efforts? Yatsenko certainly thinks so: “The cash, compared with 17% of Brits. security, reliability and privacy.”
advantages of a cashless society are an increase SEB, one of Sweden’s largest banks, only Technological innovation is pushing
in ease, convenience and security. Cashless handles cash in seven of a total of 118 countries towards a cashless environment.
transactions speed up services and reduce the branches, and the bank has stated in the Looking at London in particular, where
risk of crime – specifically robberies. Digital past that its new focus will be on providing contactless technology was successfully rolled
transactions are easier to track.” digital tools in branches that are designed to out by Transport for London, it is clear there
The idea of a cashless economy can appear encourage customers to complete banking is scope for such innovation to thrive in the
utopian, and yet in Sweden, it is within tasks on their own. ‘No cash accepted’ signs UK. Whether it takes 10 years or longer,
touching distance. Yatsenko explains that are increasingly becoming a common sight Revolut is set to make breakthroughs in
the UK is behind due to infrastructure. across Sweden. developing more cashless initiatives. <
14 | May 2018 | Cards International
CI May 2018 555.indd 14 27/04/2018 10:18:01products | virgin atlantic
• Free access to over 1 million global
hotspots via Boingo Wi-Fi, and
virgin atlantic: • An annual fee of £160.
flying higher with
Both cards offer double miles when
bookings are made directly with Virgin
Atlantic Virgin Holidays as well as access to
Virgin Money lounges across the country.
new credit cards
Simon Hall, senior public relations
manager at Virgin Money, tells CI:
“Successful partnerships are a key part of
Virgin Money’s strategy and we’re delighted
to be working with Virgin Atlantic to offer
customers exciting products supported by
Two new credit cards are the first products to be launched excellent customer service.
from the partnership between Virgin Atlantic and Virgin “Choice in the airline rewards credit card
market has reduced significantly compared
Money, facilitated by Mastercard. Briony Richter takes a with recent years, so we’re delighted to offer
looks at the cards’ primary features and benefits new and attractive options for customers
looking to earn miles.
“The Reward and Reward+ cards give
T
he Virgin Atlantic Reward and • If £20,000 is spent in a year, customers customers an easy way to earn Virgin
Virgin Atlantic Reward+ credit can choose a credit card reward, and Atlantic Flying Club miles when they use
cards will enable customers to earn • No annual fee attached. their card for everyday spending, which can
Flying Club miles when using their card. be redeemed for flights and ticket upgrades,
Their bold and eye-catching designs, The features of the Virgin Atlantic Reward+ and customers can also receive companion
created by Virgin, reinforce the Virgin card differ slightly: seats and Clubhouse access.”
Atlantic ethos of standing out from the • Earn 1.5 Flying Club miles for every £1 However, users must be careful to play
crowd with strong statements. spent; by the rules with these credit cards, or
Miles earned on the cards can be • Earn 15,000 bonus Flying Club miles they could face some hefty penalties. For
exchanged for the full range of Flying with the first card purchase – within the example, the representative APR on the
Club rewards including flights and cabin first 90 days of the account opening; Reward Plus card is 63.9% and on the
upgrades. Customers will also have free • If £10,000 is spent on this credit card a Reward card 22.9%.
access to Virgin Money lounges and several year, customers can choose from a range Furthermore, the purchase rate is 22.9%
offers from the Virgin Group. of credit card rewards; and while there is a 0% balance transfer
Depending on spend, customers using the offer for the first six months, it comes with
Reward and Reward+ credit cards can access a 3% fee. These charges are high and can eat
a range of credit card rewards. into any potential rewards offered.
Red Flying Club members can choose Oliver Byers, senior VP of sales and
a free premium upgrade when flying customer loyalty at Virgin Atlantic,
economy, or an economy reward companion concludes: “We are incredibly excited to
seat which enables them to take a launch our new credit cards. With our
companion for no additional miles. cards, customers can earn miles on their
Silver members have access to the same everyday spend to redeem for flights and
options, as well as a premium reward upgrades and more. On top of that, we’re
companion seat or a pass for a Virgin offering our most valuable customers even
Atlantic Clubhouse. Gold members can more choice of rewards so that they can
choose two Clubhouse passes, an economy, create the Virgin Atlantic experience that
premium or upper-class reward companion suits them best.’’
seat. They can also choose a free premium Customers have access to Virgin Money
upgrade. lounges, as well as free refreshments, use
Key features of the Virgin Atlantic of iPads and Wi-Fi. Offers from the Virgin
Reward card include: Group include discounts on train tickets,
• Earn 5,000 bonus Flying Club miles holidays and experience days.
with the first card purchase – this only Virgin Money believes the new credit
applies within the first 90 days of the cards meet the demands of travel-hungry
account opening; consumers, and will allow them to accrue
• Earn 0.75 Flying Club miles for every £1 holiday benefits no matter where they are in
($1.50) spent; the world. <
www.cardsinternational.com | 15
CI May 2018 555.indd 15 27/04/2018 10:18:02country snapshot | chile
E
CHIL
country snapshot:
chile
Changing lifestyles and new facilities boost card uptake and use
C
ash remains the preferred method However, payment card transactions inclusion programme and infrastructure
of consumer payment in Chile, are gradually replacing cash in Chile, modernisation.
accounting for 73% of the total mainly as a result account of government Furthermore, government efforts
payment transaction volume in 2017. and bank initiatives such as a financial to provide basic banking and financial
value of credit tRanSfers value of cheque payments value of payment cards
$bn $bn $bn
10,000 600 80
70
500
8,000
60
400
6,000 50
300 40
4,000
30
200
20
2,000
100
10
0 0 0
f
13 16 7e 21 13 16 7e 1f 13 16 e
21
f
20 20 1
20 20 20 1 2
20 20 17
20 20 20 20 20
Source: SBIF, CCA, GlobalData Source: SBIF, CCA, GlobalData Source: SBIF, CCA, GlobalData
16 | May 2018 | Cards International
CI May 2018 555.indd 16 27/04/2018 10:18:20You can also read
