CEE Cards 2013: War of wallets and perspective of mobile payments

Fri, 26 Apr 2013

On April 24-25 in Bucharest, Romania the annual conference CEE Cards 2013 was held by the SMI Group, which specializes on the development of the payment cards market and card technologies in Central and Eastern Europe. This year, the main focus of the conference was on the innovative technologies of mobile and contactless payments, on their interaction with the "plastic", possible war and forecasts of winners.

This year CEE Cards brought together speakers from leading players in the payment markets of Europe (Visa Europe, MasterCard, PBZ Card, Austria Card, many banks), and the participants of the conference were representatives of more than 30 companies.

On the first day at the center of considerable discussion was the question of the legislative and regulatory framework of the payment market in Europe. The report on regulation of the payment ecosystem was presented by Thaer Sabri, CEO of Electronic Money Association (EMA), which consists of about 40 payment and technology providers. According to Mr. Sabri, "the purpose of the Association is to create a common currency area in Europe." Standardization, according to Thayer, as well as following a single regulatory standards positively affect not only the company and the business, opening new prospects for their activities and new markets, but also the users, increasing their level of trust in the service providers and the level of satisfaction.

A similar topic, namely, the transition to the single payment area SEPA and the changes in this regard in the market of both Western and Eastern Europe, was examined in the report of De Nederlandsche Bank representatives.

The presentation of Thaer Sabri also covered the issue of present / future of payment cards that initiated the beginning of the active discussion, that was not rarely transforming into debates on the topic of mobile and contactless payment technologies and the probability of ousting payment cards off the market. How actively will mobile payments develop? How long will NFC technology stay actual? Can innovations replace the old "plastic"? These were the topics raised not only in the reports, but also in conversations over a cup of coffee. "Cards are becoming the biggest method of electronic retail payments," - determined his position in this regard Thaer Sabri from EMA.

"Cards will not lose their market share. This is the future, and we need to go there, "- said Bianca Ionita, Head of the department of the card products management at Credit Europe Bank (Romania). A representative of the payment organization Austria Card Robert Kajic assured PaySpaceMagazine in an interview: "Mobile technology NFC is just one of the many innovative solutions that appear every day, not only in Europe but throughout the world. I do not know what will happen next, and who will win this race, but I'm sure - we live now the best of times."

Also the representatives of many European banks presented their reports: Credit Europe Bank, De Nederlandsche Bank, Garanti Bank, Comercni Banka, Banka Comerciala. They provided a general overview of the situation and trends in the payment market of Central and Eastern Europe, presented new card products, described the main trends and prospects in the market. For example, Bianca Ionita (Credit Europe Bank) highlighted new technologies that are being introduced by European banks:

  • Chip cards
  • Credit Cards
  • Contactless cards
  • Loyalty programs
  • Dual card (Visa / MasterCard + American Express)
  • Mobile applications

On the last topic (mobile payments) a separate report was presented by Paul Stephen, an expert of the National Bank of Romania. According to Mr. Stephen, "the market of mobile payments will grow rapidly in the next five years. During the period from 2012 to 2017 the number of new connections will reach 3 billion, with an annual growth rate of 6.7%." A representative of the National Bank of Romania has provided attendees with the following statistics:

Out of the 40 banks in Romania:

  • 38 offer internet banking
  • 7 offer home banking
  • 9 - mobile banking
  • 4 - telephone banking
  • 34 offer cards solutions (data at the end of 2012).

Among the new solutions presented at the CEE Cards conference, we should highlight the social cards from Garanti Bank Romania, a debit card with a display from Credit Europe Bank, a new debit card from PBZ Card etc. Representatives of these organizations believe that the positions of payment cards on the market are strong enough, and "banks and payment organizations will not concede their place ever," told the representative of PBZ Card.

We should definitely pay attention to the reports from leading players in the market - MasterCard and Visa Europe. Both companies focused on innovative mobile payment solutions. Business development manager for MasterCard Gabriel Ghita spoke about the latest mobile payment technology mobilPay, presented a few weeks ago in Romania in partnership with Netopia Sistem. The solution is very promising, is part of a global program MasterCard Mobile and will soon be introduced in other European countries.

Mr. Gita also admitted that despite the fact that "the cards are the best banking instrument", yet «MasterCard expects mobile technologies will become the main tools for conducting payments." In addition, the manager of MasterCard has identified the current market situation in this way: "The current development [of payments] achieves such speed that we are now live a "war of purses". At the end of the report, Mr. Gita added that nowadays "Poland is now one of the most promising, innovative and fast-growing markets of Europe."

No less exciting was the report of the regional manager of Visa Europe Catalin Cretu at the second day of the conference. As Mr. Cretu said, "Now is the time for a new generation of payment products and services." In this regard, the representative of Visa Europe reported on innovative solutions by Visa, including Visa payWave contactless payments and electronic wallet V.me by Visa. The focus of the report was on Visa contactless payments, which began to gain momentum during last year's Olympic Games in London (then 6 times more than in 2011 contactless transactions were conducted), and continued its rapid development in Poland. The number of contactless transactions on the Polish market in the first quarter of this year has reached 2 billion a week.

In addition, Visa Europe spokesman Catalin Cretu presented forecasts for the European countries in 2013. First of all, contactless transactions volume will grow four times per year. About 70 million contactless Visa cards will be emitted and 650,000 contactless terminals will be installed across Europe. And as Mr. Cretu noted: "The physical and the virtual world will disappear, there will be just an e-commerce."

So, to sum up the annual conference CEE Cards 2013, organized by the SMI Group, it should be noted that in the countries of Central and Eastern Europe, like many other countries of the world, at this stage, is clearly seen strong growth in contactless and mobile payment solutions. This forces the leading players in the payments market to develop and implement innovative solutions, relying on the success of the established trend. Will this lead to a crowding out of more traditional tools, such as cards and banking, will it lead to conflicts between the players or to a more coherent and coordinated their work – we'll see soon. However, the start has already been made. As one of the participants in the conference, Andrei Orlov from Russian acquiring company Inpas, said: «Mobile payment technologies are a global trend. Now we only see the emergence of the market, in the next 3-5 years wie'll see its development. The potential here is quite high. Mobile payments – this is the future."