Tag Archives: cards and payments

Fighting back card fraud as methods are getting trickier

Card skimming – the process of electronically copying information from a card’s magnetic stripe and putting it onto an empty card – is fast emerging as the most common form of credit card fraud globally. With the successful adoption of EMV chip and PIN credit cards and card reading devices, countries such as the UK has recorded a major decline in card fraud in recent years. 

According to a new forecast report from Timetric, credit card fraud in the UK has declined at a CAGR of 18.8 % since 2008 to value US$ 491.9 million in 2012. The main reason for this positive trend has been the introduction of EMV chip and PIN credit cards and card reading devices. Although card fraud is much higher in value terms in developed economies such as the US, the UK and France, these countries have been successful in limiting the growth of fraud by adopting advanced security measures, innovative products and strict regulations in order to prevent fraudulent activities. Emerging economies like China and Russia have lagged behind in introducing such measures and have therefore witnessed significant growth in card fraud.

Card skimming is the most common form of credit card fraud

Every year millions of dollars are lost around the world due to credit card fraud – and fraudsters are only getting more innovative and technological advanced in their hunt for credit card information. Card skimming is the most common form of credit card fraud globally, especially in countries where magnetic stripe cards are still in use. Fraudsters carry pocket skimming devices, which is a battery-operated electronic magnetic stripe reader that can be used to swipe customer’s cards to steal information encoded in it. Skimming devices can also be fitted into the swiping area of POS terminals and ATMs. Since cardholders normally feel safe in such payment situations and do not suspect any malicious activity to happen, skimming can be very difficult to trace. According to Timetric’s new report on trends and issues in managing credit risk cycle, the adoption of EMV chip and PIN credit cards has proven successful in preventing card fraud in the UK and other European countries.

China records largest growth in card fraud

Among the developed markets, the value of card fraud was highest in the US, growing at a CAGR of 2.9% to value US$3.55 billion in 2012. Among the emerging markets, the value of card fraud in China increased at a staggering CAGR of 36.3% to value US$173.3 million in 2012. China was followed by Brazil with a card fraud value of US$150.3 million in 2012 while, in terms of growth, Russia gained the second spot with a CAGR of 28.2%.

Timetric’s report, ‘2020 Foresight: Best Practices in Managing Credit Risk Cycle’ was published on the 29th April 2013 


A positive outlook for the Finnish cards and payments industry

Growth in online shopping and m-commerce leads Finland’s cards and payments industry forward.  

Despite having one of the smallest populations in the eurozone, Finland is miles ahead of the rest of Europe in terms of card awareness and usage levels. The country has the highest usage of card payments in terms of transactions per person, which is more than that of the UK and the Netherlands, reveals a new report from Timetric. The rise of smartphones and apps combined with lower prices, improved search engines and price comparison sites has resulted in the growth of m-commerce and e-commerce in recent years. E-commerce sales increased from EUR8.85 billion in 2009 to EUR10.4 billion in 2011, and according to a survey conducted by AddValue on behalf of operator DNA in 2013, 60% of Finns own a smartphone, 76% own a laptop and 18% own a tablet. The increasing market for online and mobile commerce, combined with a positive economic outlook have been the main drivers for growth in the Finnish cards and payments industry – an industry that  has been growing marginally in terms of both volume and value since 2008. Finland’s overall card industry rose from 13.7 million cards in 2008 to 15.6 million in 2012 at a CAGR of 3.86%. According to Timetric, this positive trend is set to continue. By 2017 the number of cards is expected to reach 17.1 million. Debit cards has the largest market share with 82.32% in 2012. In terms of transaction volume there was 1.3 billion transactions in 2012. It is anticipated that this number will grow at a CAGR of 0.65% to reach 1.4 billion transactions by 2017.

Contactless payments on the rise

Contactless and NFC payments are also being introduced in Finland. K-Plussa, the largest and most-diverse loyalty program launched a contactless card in February 2012. So far, the card has been used by more than 300,000 K-Plussa customers. Elisa, one of the largest mobile networks in Finland, in association with MasterCard and the student-owned benefit and discount card Lyyra, issued prepaid NFC (near field communication) stickers to students in the third quarter of 2012. These stickers were issued to more than 100,000 students and can be used in college canteens and at other stores where contactless terminals are installed.

Timetric’s report: ‘Emerging Opportunities in Finland’s Cards and Payments industry: Market Size, Trends and Drivers, Strategies, Products and Competitive Landscape’ was published on the 19th April 2013. 

Paying with your phone – a positive outlook for MPOS technology

Paying with our phone could soon be the new reality for shoppers. According to new research from Timetric, things are looking bright for the global mobile-point-of-sale industry (MPOS).

From 2011 – 2012 the number of MPOS terminals registered an annual growth of 111%. This trend is set to continue, as the volume of terminals is expected to increase from 4.5 million in 2011 to 38 million in 2017, at a projected CAGR of 42.7%. The positive market outlook is driven by growth in the retail sector, increased online trade, a rise in smartphone usage and card penetration. Even though traditional POS systems are still far more common – with MPOS terminals owning 17% of the total POS terminal market in 2012 – this number is expected to increase substantially and reach 46% by 2017.

Embracing MPOS technology

MPOS technology has a strong presence in countries such as the US, Canada, the UK, Germany and France fronted by brands such as Square, iZettle, SumUp, Payleven, PayPal Here and Intuit. Many of these are currently running a number of trials and pilot programs in partnership with businesses such as Perry Ellis, Gucci, Saks Fifth Avenue and Aurora Fashions. Restaurants, pubs and hotels such as Horney Goat Brewing Company and The Gaylord Hotels have successfully adopted the technology. Another area which has embraced the technology is transit systems and taxi services. Initially MPOS technology was targeted at small enterprises who could not afford the conventional point of sale (POS) system. However, demands have been driven by new technology benefits such as improved customer service and the ability to process payments at anytime in any location. Moreover, the use of smartphones and tablets as base-devices has enabled developers to expand their market share. The positive growth potential offered by the technology has attracted a number of competitors, and according to the Timetric report, further innovations are expected to take place in the future.

MPOS solutions not free from challenges

The advantages of using MPOS solutions are compelling, yet there are several operational, technical and regulatory challenges. One of them is the reliability of the service. Consumer smartphones and tablets are not yet built with strong security features and paying with these can therefore leave the customer vulnerable to fraudulent activity. Furthermore, processing payments over a volatile wireless network can also prove to be problematic.

Timetric’s report; ‘2020 Foresight: Mobile Point of Sale Technology’ was published on the 17th April 2013.

Notes to the editor:


Mobile-point-of-sale technology (MPOS): MPOS technology brings wireless technology to conventional POS systems. This technology doesn’t change the payment structure, but facilitates transactions to be processed through a mobile terminal which uses the same logic and codes as any fixed POS terminal. Innovations have enabled smartphones and tablets to be modified into mobile POS systems.

Norway introduces visa cards to children

Norwegian banks spot new opportunities in age-based segmentation for credit cards. 

A group of Norwegian banks have discovered new opportunities in the card and payments industry. Driven by a large young generation and high online usage, tapping into the younger generation can be a profitable business.

The young generation in Norway is a considerable and growing target group in terms of card spending. In 2013 25.7% of Norway’s population was between the ages of 10-29 (1.2 million people). Banks in Norway have segmented the country’s young population into various age brackets such as 13 to 17 and 18 to 25, and offer a range of card products to tap into this significant population base.

One of the banks that have used new age-based segmentation is the Norwegian SpareBank 1. This bank offers Visa cards for children under 13 years old. The amount in the account can be controlled by parents; there is no insurance fee; and the card is free to use in stores and at SpareBank’s ATMs. The bank also offers a Visa Electron credit card for the population aged between 13 and 18 years old. This card has zero annual fees and is free to use for retail payments in Norway and abroad.

Norway has the highest number of internet users in Europe today. The growth in number of internet users has been driven by the demands of the country’s growing economy and the younger population. Growth in e-commerce, supported by an increased internet penetration, is expected to increase the use of debit, credit and charge cards for online shopping.

Norway’s overall cards and payments industry has seen nominal growth in recent years, increasing at a CAGR of 3.97%, from 15.34 million cards in 2008 to 17.9 million cards in 2012. According to a new report from Timetric, the industry is forecast to register further growth rising to 19.3 million cards by 2017.

Online Trade Boosts Kuwaiti Card Sector

Despite only moderate growth in Kuwait’s cards and payments industry, the rising popularity of online trade has fuelled expansion of the market.

The global economic crisis has precipitated slow growth in Kuwait’s cards industry between 2008 and 2012, which recorded a CAGR of 3.59%. However, the growing market for online trade in Kuwait is driving growth in the cards sector, along with the growing number of domestic and international tourists that have increased demand for travel cards.

Card Shares

Between 2008 and 2012, prepaid cards occupied the largest share in the overall cards and payments industry, and in volume terms recorded a CAGR of 37.83%. Charge cards grew at a CAGR of 4.02% over the same period, whilst debit cards posted a CAGR of 2.58%.

Between 2013 and 2017, the overall card industry is expected to grow at a CAGR of 4.44%, again driven primarily by the prepaid cards category, which is expected to grow at a CAGR of 19.94%. Over the same period, credit cards are expected to grow at a CAGR of 3.2%, debit cards are expected to record a CAGR of 2.76%, and charge cards a CAGR of 3.59%. In terms of value, the industry is set to grow at a CAGR of 10.91% between 2013 and 2017, rising from LWD17.2 billion (US$61.4 billion) to KWD26 billion (US$93 billion).

Prepaid pays in Spain

‘Closed-loop prepaid cards are expected to grow CAGR of 9.79%, following the growth in online retail’ .

LONDON – While the financial crisis and conservative consumer spending has hindered growth across all card categories, the cards and payments industry in Spain is expected to recover by 2017, with prepaid cards expected to show the highest growth CAGR of 9.79%. The decline in both transaction value and card circulation volumes is likely to be eased by improved economic forecast indicators and stimulus injections from banks.

Online retail boom and tightened budgets drives movement towards closed-loop prepaid cards

Online retail sales in Spain increased from EUR6.07 million in (US$4.1 million) 2008 to EUR12.5 million (US$9.0 million) in 2012, at a CAGR of 20.01%, with 51% of shoppers preferring credit cards. Conversely, as unemployment rises and shoppers attempt to tighten household spending, customers will substitute cards with payment and dormancy fees with closed-looped prepaid (store-specific) cards. As a result closed-loop transaction value is expected to grow at a CAGR of 11.93%.

Decline in growth to be mitigated with fresh funds and improved economic indicators

Economic indicators such as inflation, total investments and GDP are expected to improve by 2017, easing the decline in card circulation. Banks’ attempts to inject fresh funds to stimulate growth are also expected to improve credit availability in the economy, improving the transaction value on cards. Consumers’ preference for limited spending and added rewards will be reflected in an increased demand for prepaid cards.

Interchange fee reduction to encourage competition and portfolio expansion

Spain’s interchange environment is characterized by year-on-year reductions in interchange levels for both credit and debit cards. In 2005, the Spanish ministry of industry’s intervention to reduce maximum interchange fees resulted in them falling from 1.75% in 2005 to 0.88% in 2009. This has encouraged many bank issuers to expand their product portfolios and target new customers to offset lost revenues. This is expected to improve the number of cards in circulation from 2013 – 2017.

Mobile payments to expected to grow rapidly

Mobile payments are expected to provide enormous scope of growth for card-based payments in the country, and mobile payments grew at a CAGR of 17.23% during 2008 – 2012.The proliferation of smartphones has led to double-digit growth in mobile payments. As a result, mobile point-of-sale (mPOS) providers including Research In Motion, iZettle and Telefónica Digital have entered the market. The further entry of new operators is expected to result in positive growth for mobile payments over the forecast period, increasing demand for payment cards.

Online Trade Drives Growth In UAE’s Cards & Payments Sector

The cards and payments industry in the UAE grew at a CAGR of 7.18% between 2008 and 2012.

The UAE’s card industry enjoyed healthy growth between 2008 and 2012, with a CAGR of 7.18%. According to recently released research by Timetric, this growth is set to continue, at a CAGR of 5.55% between now and 2013.

The most significant single factor in the expansion of the UAE’s cards and payments sector is the growing market for online trade. Additionally, as banking customers become increasingly sophisticated, banks have sought to differentiate their product offerings, with card customisation options gaining increasing prevalence, and driving growth in the sector. Furthermore, contactless and NFC payments are gaining more traction in the UAE, with extensive support for these forward thinking payment solutions across the country.

More generally, the UAE’s economy benefits from the government’s conscious efforts to promulgate an environment conducive to business growth; these efforts have seen the UAE rapidly emerge as an important hub for international trade, finance and tourism. This has subsequently attracted large inflows of foreign direct investment and expatriate workers, and this has all contributed to the expansion of the UAE’s cards and payments sector.