Maximizing cardholder value using Smart Card Technology - VISA
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Maximizing Cardholder ValueUsing Smart Card Technology
Rajiv Kapoor
EVP Marketing and Product Sales
Visa Asia Pacific
14 March 2002
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Challenges Facing the Card Business
Diminishing returns on profitability
Saturation of credit cards in mature markets
Need for more competitive product offerings
Role for new technologies such as smart cards
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Key Profitability Drivers
How can smart cards improve these factors?
LoyaltyRevolving credit
Mass transitAcquisition/reduced attrition
ID, Medical insuranceRetention
Loyalty, AuthenticationUsage/spend
Value-added applicationsDrivers
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Visa’s Chip Card Vision
Over the next 10 years, all payment cards will contain a chip and carry multiple applications.
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Chip cards are already used in many sectors
Chip Cards Today
Credit/debit cards
Healthcare cards
Security ID cards
Mass transit cards
E-purse cards
Loyalty cards
Telco SIMs in mobile
communications
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Costs Have Fallen Dramatically
EMV chip card costs now <US$1
EMV terminal costs now <US$50 incremental
Demand
exploding
Costs
declining
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Increasing Global Demand for Chip Cards
Source: Frost & Sullivan, DataMonitor, Visa
2000
Nu
mb
er
of G
lob
al C
hip
Ca
rds
Telco - 75%
Other - 25%
2 billion
(20% of all cards)
2004
Telco - 40%
Govt./Health/ID - 30%
Financial - 15%
Transport - 7%
Other - 8%
4 billion
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Major Drivers for Card Migration
Fraud
Value add
Significant reduction through chip
Multiple applications on one card
Strong consumer demand
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Initiatives to Accelerate Chip Migration
New policiesIncentives and
penalties
US$25 million regional investment
Country fundsframework
90% migration by end 2008
Overcome country barriers in Japan,
Korea, Taiwan
Acceleratevendor and member
readiness
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Multi-application Chip Cards and U-Commerce
HealthAccess
ElectronicCommerce
Electronic Purse
Security / ID
Transit Mobile
Loyalty
VisaDebit and Credit
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Open Platform Will Enhance Multi-application
Credit
Phase 1
Loyalty - Petrol
Credit
Phase 2
Healthcare, ID
Credit
Loyalty - Airline
Phase 3