PRESSURE IS MOUNTING on the US to shift to EMV chip and PIN technology in accordance with other markets around the world. As EMV defences are built in other countries, fraud – with its tendency to attack the most vulnerable point – is likely to be attracted to the US market, which still relies on the magnetic stripe.
Letter from the editor
It is ironic that while banks are being urged to capitalise on the growing usage of debit cards worldwide, increased regulation challenges current debit business models and threatens to increase the cost of debit programmes. With the threat of regulation ever present, it is little wonder that banks and networks are eagerly waiting to determine the impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act that was signed into law by President Obama in July 2010. A provision in the final bill states that card issuers cannot limit the routing of debit transactions to a single network or multiple networks by the same owner.
Pioneering payments in Kenya
Formal consumer finance facilities in Kenya are at a nascent stage, although the country is more advanced than many other African countries. The Kenyan consumer finance market can be characterised by a large unbanked population, low bank branch penetration levels, the prevalence of micro-lenders, and the phenomenal success of the mobile payments system M-PESA – operated by telecoms company Safaricom. Ronan McCaughey reports.
E-Money gains traction
Yandex.Money provides consumers in Russia with an easy and safe option when paying for goods and services via the internet. Once consumers have registered on the Yandex.Money website, the next step is to add funds to their newly-created ‘E-Wallet’ accounts. Funds can be added using prepaid cards, ‘cash-in’ terminals and ATMs, as well as credit cards, debit cards or internet banking. Jane Zavalishina, CEO of Yandex.Money, speaks to Ronan McCaughey about the challenge of providing an E-Money service in an economy where cash is king
Finding the revolver trigger
The majority of cards in circulation in Italy are classified as deferred debit cards, while only 10 percent are revolving credit cards. A challenge for issuers in boosting their profitability is therefore to shift the proportion of revolving credit cards to a figure much higher than the current 10 percent level. Italy’s consumer finance market is also far from fully developed when compared with the rest of Western Europe, as is the penetration of financial products in general
Debit card profitability best practice
Scant evidence exists that banks are using the best practices developed in support of credit cards to drive debit growth and performance. The challenge for many banks is that they suffer from a siloed structure where different management teams have responsibility for the credit and debit businesses. Ronan McCaughey examines how banks can capitalise on the growth of debit card usage around the world and improve the profitability of their debit programmes
Databank
Western Europe credit card metrics
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