Retail payments in the global economy (Review Report)

Publication Date	December 2006
Publisher	Datamonitor
Product Type	Report
Pages	54
ISBN Number	not applicable
Product Code	DAT03943

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Summary

Introduction

Going forward, the payments industry is going to undergo dramatic changes. As a result, players in the industry are under pressure to address their payments strategies in order to position themselves for the future.

Scope

Primarily covers the European, but also North American, payments markets
Discusses implications and industry dynamics for retail payments institutions

Highlights

Due to the lack of significant profit generation opportunities, banks are often reluctant to make any investments in their payments infrastructure. As a result, changes in the payments landscape are often driven by regulation (or the threat of it) rather than from internal necessity.

Electronic payments volumes will continue to increase, driven by the move away from traditional cash and check markets, as well as the rise in new electronic payment instruments. As other methods of payment drop off, electronic fraud will become increasingly attractive to criminals so steps must be taken to minimize the risk and tackle fraud.

As the retail banking industry continues along the path of consolidation and becomes increasingly competitive, a flexible payments infrastructure that can be operated and maintained at the minimum cost will be fundamental to supporting a responsive, customer oriented business going forward.

Reasons to Purchase

Gain visibility into the dynamics of the retail payments market
Gain market insight to assist in your strategic planning and go-to-market strategy

Content

Catalyst
Summary
Methodology
Executive Summary
- Introduction
- Retail Payments in the Post-SEPA Landscape (Market Focus)
- Retail Payments: Preparing for the Future (Strategy Focus)
- Retail Banking Payment Operations (Technology Focus)
- Retail Payments Databooks (Databook)
Retail Payments In The Post-Sepa Landscape (Market Focus)
- Summary
- Pressure on payment margins is forcing banks to develop new customer segments
- The payments industry continues to be a volume game
- Downwards pressure on charges increases as the industry continues to be ever more competitive
- Required spend on payments is often largely outside of the banks control...
- However, the sub-prime market offer an rare opportunity for new revenue generation in some markets
- SEPA will open up the European payments industry for players worldwide
- Banks in the Eurozone will feel the brunt of the SEPA initiative
- European banks outside of the Eurozone will not be priorities in the short term
- SEPA will open up competition with banks outside of Europe
- The impact of SEPA will drive consolidation across the payments industry
- Pan European Automated Clearing Houses (PE-ACHs) are emerging
- Domestic debit card schemes are all but certain to disappear over the long term
- Payment processor service providers are gaining market share
- As payments borders come down in Europe, so the opportunities for fraud will increase
- The benefits of the EMV directive are showing...
- ... but fraud and risk management remain major problem as the payments industry evolves under SEPA
Retail Payments: Preparing For The Future (Strategy Focus)
- Summary
- Product innovation in the payments market is critical for developing margins and markets
- Prepaid cards facilitate the conversion of previously unviable market segments to electronic payments
- Contactless functionality has significant potential to take share from cash dominated markets
- Banks are developing multi-functional products in order to improve both customer acquisition and retention
- Customer segmentation - a card for every niche
- The threat that online and mobile network payment providers pose to the incumbent industry is very real
- SEPA is driving banks to examine how to leverage spend beyond simply SEPA compliance
- Institutions' infrastructure investments in SEPA must be aligned with their wider business goals
- Banks should consider how SEPA investments will impact future product innovation potential
- Institutions must develop sourcing strategies that will support their future payments vision
- Sourcing strategies need to be aligned with both their business and cost focus
- Legacy payment instruments such as checks will start to be phased out
- The issue of payments fraud will become even more critical as the industry opens up
- Payments fraud is a moving target that institutions must continuously address
- As fraudsters become more sophisticated, the case for transaction monitoring grows
Retail Banking Payment Operations (Technology Focus)
- Summary
- Legacy payments systems are holding banks back from being flexible and adaptable
- Simplification/consolidation of payments operations will enable flexibility going forward
- Banks must get back to basics when addressing payments infrastructure investments
- The automation of payments processes will be key in improving efficiency and enabling STP
- Payments operations improvements must be implemented with the maximum efficiency and minimum risk
- A long term enterprise-wide payments strategy will prevent the duplication of investment across the business
- Upgrading payments operations will facilitate sophisticated fraud detection techniques
- Analytics will be key to fraud detection, and can be leveraged from AML investments
- However, investments in transaction origination security should filter out the majority of fraudulent attempts
Retail Payments In Europe (Databook)
- Introduction
- European payments IT spend by country, 2005 - 2009
- European payments IT spend by source, 2005 - 2009
- European payments IT spend by type, 2005 - 2009
Retail Payments In North America (Databook)
- Introduction
- North American payments IT spend by country, 2005 - 2009
- North American payments IT spend by source, 2005 - 2009
- North American payments IT spend by type, 2005 - 2009
Card Payments (Databook)
- Introduction
- Pay now card IT spend by country, 2005 - 2009
- Pay later card IT spend by source, 2005 - 2009
- Card payments IT spend by source, 2005 - 2009
Automated Clearing House Payments (Databook)
- Introduction
- European ACH payments IT spend by country, 2005 - 2009
- North American ACH payments IT spend by country, 2005 - 2009
- ACH payments IT spend by source, 2005 - 2009
Payments Fraud (Databook)
- Introduction
- European payments fraud IT spend by country, 2005 - 2009
- North American payments fraud IT spend by country, 2005 - 2009
- Payments fraud IT spend by source, 2005 - 2009
Appendix
- Definitions
Further reading
- Ask the analyst
List of Tables
- Table 1: European payments IT spend by country, 2005 - 2009
- Table 2: European payments IT spend by source, 2005 - 2009
- Table 3: European payments IT spend by type, 2005 - 2009
- Table 4: North American payments IT spend by country, 2005 - 2009
- Table 5: North American payments IT spend by source, 2005 - 2009
- Table 6: North American payments IT spend by type, 2005 - 2009
- Table 7: Pay now card IT spend by country, 2005 - 2009
- Table 8: Pay later card IT spend by country, 2005 - 2009
- Table 9: Card payments IT spend by source, 2005 - 2009
- Table 10: European ACH payments IT spend by country, 2005 - 2009
- Table 11: North American ACH payments IT spend by country, 2005 - 2009
- Table 12: ACH payments IT spend by source, 2005 - 2009
- Table 13: European payments fraud IT spend by country, 2005 - 2009
- Table 14: North American payments fraud IT spend by country, 2005 - 2009
- Table 15: Payments fraud IT spend by source, 2005 - 2009
List of Figures
- Figure 1: European retail banks regulatory spend drivers
- Figure 2: Fraud losses in the UK
- Figure 3: European retail banks' payment project priorities
- Figure 4: European retail payment players
- Figure 5: Retail banks' fraud priority areas
- Figure 6: Payments infrastructure in banks
- Figure 7: Factors of authentication
- Figure 8: European payments IT spend by country, 2005 - 2009
- Figure 9: European payments IT spend by source, 2005 - 2009
- Figure 10: European payments IT spend by type, 2005 - 2009
- Figure 11: North American payments IT spend by country, 2005 - 2009
- Figure 12: North American payments IT spend by source, 2005 - 2009
- Figure 13: North American payments IT spend by type, 2005 - 2009
- Figure 14: Pay now card IT spend by country, 2005 - 2009
- Figure 15: Pay later card IT spend by country, 2005 - 2009
- Figure 16: Card payments IT spend by source, 2005 - 2009
- Figure 17: European ACH payments IT spend by country, 2005 - 2009
- Figure 18: North American ACH payments IT spend by country, 2005 - 2009
- Figure 19: ACH payments IT spend by source, 2005 - 2009
- Figure 20: European payments fraud IT spend by country, 2005 - 2009
- Figure 21: North American payments fraud IT spend by country, 2005 - 2009
- Figure 22: Payments fraud IT spend by source, 2005 - 2009