MasterCard: Con­tact­less pay­ments key trend in SEE

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What pay­ment so­lu­tions does MasterCard of­fer for the dif­fer­ent client seg­ments?

We of­fer pay­ment so­lu­tions that pro­vide is­suers, mer­chants and cor­po­ra­tions with bet­ter choices and chan­nels to grow their busi­nesses. For more than 40 years, MasterCard has been ad­vanc­ing the way con­sumer and busi­ness card­hold­ers around the world shop, dine, travel and man­age their money, en­abling trans­ac­tions that drive global com­merce and im­prove peo­ples' lives.

Our wide va­ri­ety of cus­tom­ized pay­ment card types in­clude credit, debit, pre­paid, com­mer­cial, chip and con­tact­less, all of which fea­ture state-of-the-art se­cu­rity and con­ve­nience. With in­no­va­tive loy­alty and re­ward so­lu­tions and com­pre­hen­sive card­holder ben­e­fits and ser­vices, our card prod­ucts pro­vide fi­nan­cial in­sti­tu­tions, mer­chants, and busi­nesses with in­ven­tive ways to de­crease costs and in­crease cus­tomer sat­is­fac­tion.

Each market has dif­fer­ent needs. For that mat­ter, we reg­u­larly run re­search pro­grams on the mar­kets in which we op­er­ate to get in­sight into card­hold­ers' needs, habits, at­ti­tudes, as well as per­cep­tion of their own fi­nan­cial sit­u­a­tion. At the same time, the feed­back we re­ceive from our part­ners in terms of the market de­mands and their spe­cific client group needs is in­valu­able for of­fer­ing them suit­able prod­ucts that best cater to their cus­tomers' needs.

How are in­no­va­tive pay­ment so­lu­tions chang­ing the card in­dus­try and how is MasterCard po­si­tioned to pace these trends?

Pay­ment card in­dus­try is shaped by chang­ing con­sumer needs and life­style, and in­no­va­tive pay­ment so­lu­tions are de­signed to cater to those needs, and im­prove com­mer­cial ac­tiv­i­ties.

As a lead­ing tech­nol­ogy com­pany in the fi­nan­cial ser­vices in­dus­try, we are pas­sion­ate about in­no­va­tion and we are con­stantly seek­ing to de­velop and test new pay­ment so­lu­tions that make ev­ery­day com­merce ac­tiv­i­ties eas­ier, more se­cure and more ef­fi­cient for ev­ery­one.

MasterCard was re­cently listed in the Forbes Most In­no­va­tive Com­pa­nies list. At num­ber 32, our com­pany sits along­side the world's top 100 in­no­va­tive com­pa­nies based on a method­ol­ogy that re­flects firms which are in­no­va­tive now, and are ex­pect to be so in the fu­ture. All of these global brands are work­ing daily to evolve their busi­ness and con­tinue to do new and ex­cit­ing things in their re­spec­tive fields.

What are the lat­est trends in the card pay­ment in­dus­try?

The most prom­i­nent trend in the pay­ment in­dus­try is mak­ing pay­ments avail­able any­where, any­time. Con­sumers world­wide ap­pre­ci­ate con­ve­nient and safe prod­ucts that also save their time, and as their lives are be­com­ing in­creas­ingly dig­i­tal, they read­ily em­brace con­tact­less pay­ments via cards, mo­bile phones or any other gad­get that they have with them all the time.

With all of that in mind, we launched our dig­i­tal pay­ment plat­form called MasterPass to en­able con­sumers to make pay­ments which are pro­tected by multi-layer se­cu­rity with just a click, tap or touch wher­ever they are – in-store or on­line. MasterPass is an open-wal­let plat­form, which means that users are able to store cards from all card brands, as well as ID, health and loy­alty cards and ship­ping in­for­ma­tion, all of which data is con­stantly avail­able to them. With this dig­i­tal pay­ments so­lu­tion, the check­out process is a safe and sim­ple ex­pe­ri­ence, cus­tom­ized to end users' needs.

How are the lat­est market trends af­fect­ing card pay­ment pat­terns in SEE?

Con­tact­less is one of the most prom­i­nent pay­ment trends in Cen­tral and Eastern Europe (CEE), par­tic­u­larly in the Balkans.

MasterCard con­tact­less tech­nol­ogy, bet­ter known as PayPass, is al­ready present on most of these mar­kets. A sin­gle tap of a con­tact­less card against a spe­cial reader at a Point of Sale (POS) ter­mi­nal is all it takes to make a pay­ment. In ad­di­tion to be­ing fast and con­ve­nient to use, it is safe, as it is based on the chip tech­nol­ogy. Ad­di­tion­ally, the card never leaves the card­holder's hands dur­ing the pay­ment, pro­vid­ing a greater sense of con­trol and se­cu­rity.

When in mass us­age, which is our ul­ti­mate goal when it comes to this type of a prod­uct, mer­chants be­gin to note a huge dif­fer­ence, as con­tact­less trans­ac­tions speed up the pay­ment process and help mer­chants pre­vent long lines and serve more cus­tomers, who at the same time en­joy fast, con­ve­nient and safe shop­ping.

Con­tact­less prod­ucts are multi-pur­pose and can come with bonus fea­tures based on the pref­er­ences of the is­su­ing in­sti­tu­tion. The con­tact­less pay­ment in­fra­struc­ture sets an ex­cel­lent foun­da­tion for re­lated tech­nolo­gies, such as mo­bile pay­ments.

We are aware that ac­quir­ing new tech­nolo­gies is a step-by-step process and that wide im­ple­men­ta­tion of con­tact­less, mo­bile and on­line pay­ments needs to pre­cede the im­ple­men­ta­tion of so­lu­tions such as MasterPass, as only then both mer­chants and con­sumers would be able to get the most out of the ben­e­fits this ser­vice of­fers. We are steadily mov­ing in that di­rec­tion.

What is the pace of pen­e­tra­tion of con­tact­less pay­ments in SEE? What can be done to speed up the process?

We are very pleased with the grad­ual de­vel­op­ments of our con­tact­less pay­ments in the Balkans and the way con­sumers em­brace the so­lu­tions we of­fer. Out of six Balkan mar­kets al­most all have im­ple­mented MasterCard Con­tact­less pay­ment tech­nol­ogy – Bul­garia, Mace­do­nia, Mon­tene­gro, Ser­bia, and most re­cently, Bos­nia and Herze­gov­ina, as well as some other CEE coun­tries, in­clud­ing Croa­tia,

Hun­gary and Ro­ma­nia, to name a few.

We are work­ing on es­tab­lish­ing MasterCard con­tact­less ac­cep­tance as stan­dard by 2020 for mer­chants ac­cept­ing MasterCard and Mae­stro in Europe, en­sur­ing that, con­sumers will be able to pay with their con­tact­less cards and NFC en­abled de­vices at all POS ter­mi­nals in Europe by 2020.

In view of the high level of readi­ness of the Bul­gar­ian and Ser­bian mar­kets, we have set shorter com­pli­ance dates for the coun­tries – start­ing with July 1, 2015 all newly-in­tro­duced POS ter­mi­nals in Bul­garia and Ser­bia will have to ad­here to the new stan­dard, and start­ing with July 1, 2018, it will be nec­es­sary for all ex­ist­ing POS ter­mi­nals to sup­port the con­tact­less func­tion­al­ity.

This is a stim­u­lus for us to con­tinue work­ing on en­abling card­hold­ers to pay with our in­no­va­tive method, when­ever and wher­ever they like.

Also, it is im­por­tant to high­light that un­der­stand­ing the tech­nol­ogy and the ben­e­fits it of­fers to the key par­tic­i­pants in the pay­ment process is what de­ter­mines the speed of the im­ple­men­ta­tion. For this very rea­son, we have been work­ing closely with our part­ners in the bank­ing and re­tail sec­tor, to help ed­u­cate card­hold­ers about the ad­van­tages con­tact­less pay­ments of­fer.

What are the im­pli­ca­tions for the in­dus­try from the lat­est EU reg­u­la­tions on in­ter­bank trans­ac­tions?

The neg­a­tive rul­ing by the Euro­pean Court of Jus­tice in re­la­tion to cross border in­ter­change fees is dis­ap­point­ing. When MasterCard brought this ac­tion in 2007 we did so be­cause we be­lieved then, as we do now, that market-based so­lu­tions are the best way to en­sure a fair and com­pet­i­tive pay­ments land­scape in Europe – one that makes con­sumers' lives eas­ier, and brings in­creased busi­ness for mer­chants. The neg­a­tive judg­ment will have lit­tle or no im­pact on how MasterCard op­er­ates; we will con­tinue to com­ply with the de­ci­sion as we have been do­ing for a num­ber of years. This means we would main­tain our Euro­pean (in­tra-EAA) cross-border con­sumer in­ter­change fees at a weighted av­er­age of 0.2% for debit and 0.3% for credit. To­gether with our part­ners, we are com­mit­ted to con­struc­tive co­op­er­a­tion and di­a­logue with EU de­ci­sion-mak­ers to en­sure that any fu­ture pay­ments leg­is­la­tion al­lows us to pro­vide the most in­no­va­tive and af­ford­able pay­ment so­lu­tions to our cus­tomers, card­hold­ers and re­tail­ers, and does not have the un­in­tended con­se­quence of shift­ing costs on to con­sumers.

The most prom­i­nent trend in the pay­ment in­dus­try is mak­ing pay­ments avail­able any­where, any­time.

Ar­tur Turemka, Gen­eral Man­ager, Balkans, MasterCard

MasterCard op­er­ates the world’s fastest pay­ments pro­cess­ing net­work, con­nect­ing con­sumers, fi­nan­cial in­sti­tu­tions, mer­chants, gov­ern­ments and busi­nesses in more than 210 coun­tries and ter­ri­to­ries. MasterCard’s prod­ucts and so­lu­tions make ev­ery­day...

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