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#RIC16 Payment Update: Gaining New ROI From Chip Cards Erica Shea, Partner, Kurt Salmon Vibhav Prasad, SVP, Innovation, Global Acceptance & Merchant Products, Mastercard Moderator: Adam Blair, Executive Editor, Retail TouchPoints

Payment Disruption

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Page 1: Payment Disruption

#RIC16

Payment  Update:  Gaining  New  ROI  From  Chip  Cards

Erica  Shea,  Partner,  Kurt  SalmonVibhav Prasad,  SVP,  Innovation,  Global  Acceptance  &  Merchant  

Products,  Mastercard

Moderator:  Adam  Blair,  Executive  Editor,  Retail  TouchPoints

Page 2: Payment Disruption

#RIC16

§ 1.2  million  U.S.  merchant  locations  now  allow  the  useof  chip  cards

§ 67%  of  branded  MasterCards now  have  chips,  a  51%  increase  since  the  Oct.  1,  2015  liability  shift

§ 2  billion  smart  payment  cards  shipped  in  2015,  a  34%  increase over  2014

§ In  the  U.S.,  570  million  smart  cards  shipped  in  2015,  a  two-­‐fold  increase over  2014

EMV  Shift:  The  Best  of  Times?

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§ As  EMV  has  tightened  up  POS  security,  online  fraud  hasrisen  by  11%

§ In  other  markets,  online  fraud  increased  by  80%  to  100%in  the  first  3  years following  EMV  adoption

§ Confusion,  miscommunication  and  slower  checkouts  at  physical  points  of  sale,  souring  merchants  and  consumers  on  EMV’s  benefits.

EMV  Shift:  The  Worst  of  Times?

Page 4: Payment Disruption

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Payment  Update:  Gaining  New  ROI  From  Chip  Cards

Vib Prasad,  SVP,  Innovation,  Global  Acceptance  &  Merchant  Products,  Mastercard

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Key  Trends  around  Retail  Payments

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§ Internet  Usage1

§ 3.2  Bn Internet  users  in  2015§ 7  fold  increase  from  2000  to  

2015:  from  6.5%  to  43%  of  the  global   population

§ Proliferation  of  Devices2

§ From  15  Bn connected  devices  today  to  50  Bn by  2020

Consumer  connectivity  is  on  the  rise

1. International  Telecommunications  Union,  May  20152. Cisco  &  DHL  -­‐ Internet  of  Things  in  Logistics,  2015

Source:  Cisco  Visual  Networking  Index:  Global  Mobile  Data  Traffic  Forecast  Update,  2015–2020  One  Exabyte  =  one  billion  gigabytes

Global  Mobile  Data  Traffic2015  to  2020

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6.5

2014

12.5

11.4

1.1

16.0

2020

Traditional

Digital

22.5

Global  (ex-­‐China)  Card-­‐based  consumer  spend  (PV),  ($  Trillions)

Digital  payments  could  represent  20-­‐30%  of  consumer  payments  by  2020

2

In-­‐app

Browser

Contactless

Source:  BCG

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