Wednesday, February 9, 2011

Docomo and KT Partner to on NFC Mobile Payment Initiative

 - To develop international services building on partnerships with key players -
Tokyo, Japan, February 9, 2011 -- NTT DOCOMO, INC. announced today an agreement with South Korea's leading telecom operator, KT Corporation, to use near field communication (NFC) technologies to develop cross-border services for mobile payments, mass-transit ticketing, promotional coupons, etc., which they will launch in their respective markets of Japan and South Korea from around the end of 2012.

Through their joint Business & Technology Cooperation Committee, the two companies are developing NFC common specifications that will be incorporated in devices, networks and billing platforms for seamlessly connected mobile NFC services. Customers travelling between South Korea and Japan will access the services using compatible Android handsets embedded with contactless IC chips.
DOCOMO also plans to submit an outline of the common specifications to global industry associations and standardization bodies, such as the GSM Association.
With the ultimate goal of building an international environment for compatible NFC services, DOCOMO has formed strategic tie-ups with payment technology company brand Visa Inc., NFC chip and mobile handset manufacturer Samsung Electronics Co., Ltd. and SIM card vendor Gemalto N.V. In addition, DOCOMO will collaborate with Sumitomo Mitsui Card Co., Ltd. and bitWallet, Inc. for enhanced cross-border services.
To prepare for the services, DOCOMO and KT will accelerate development of their existing infrastructures, as well as solicit the participation of NFC-based service providers in various industries. DOCOMO has been providing NFC-based Osaifu-Keitai(TM) mobile-wallet services in Japan since 2004. KT has been operating a post-paid mass transit service in South Korea since 2002.
DOCOMO will demonstrate the envisioned international NFC services at its exhibition booth during Mobile World Congress 2011 in Barcelona, Spain from February 14-17.
Hyunmi Yang, Executive Vice President of KT, said, "Based on our long commercial experience in various financial-convergence services, the NFC collaboration between KT & DOCOMO will contribute to building a sustainable global ecosystem."
Bill Gajda, Head of Visa Mobile, Visa Inc., said, "Visa has been instrumental in developing the global standard for mobile payments based on NFC technology. We welcome this project and see great value in extending the security, convenience and global interoperability of NFC-based mobile payments to consumers in Japan and Korea."
"We are delighted to work with NTT DOCOMO by providing competitive NFC IC technology to develop an NFC ecosystem that offers retail and commercial customers a very high degree of convenience, services, interactivity and security on their mobile devices. Thus, we believe this business collaboration will lead to a market-leading solution, new innovation and broad commercial acceptance around the globe," said Dr. Dojun Rhee, Vice President of the Marketing Team, System LSI Division, Samsung Electronics Co. Ltd.
"Gemalto is delighted to contribute its world-leading NFC expertise for DOCOMO's deployment of cross-border mobile contactless services," commented Tan Teck-Lee, President, Gemalto Asia.
Hideo Otsuka, General Manager of the IT Business Dept. of Sumitomo Mitsui Card Co., Ltd., said, "We'll aggressively collaborate more with DOCOMO so that we could develop new, fascinating cross-border payment services based on NFC technologies."
Kazumasa Miyazawa, Chief Strategy Officer, Head of the International Business Dept. of bitWallet, Inc., said, "The specifications announced today are an ideal solution for the development of NFC services worldwide. Through their adoption, we aim to introduce seamless Edy services worldwide."
(press release)
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MasterCard's Pact with China's UnionPay Should Spark Revenue Growth

From Trefix on NASDAQ

MasterCard has entered into an agreement with China UnionPay Data Co., expanding its presence in China and likely raising revenues for both companies by adding locations where their cards are accepted. Mastercard is the second largest global payment solutions company in the world and provides a variety of services to support credit, debit and related card payments globally. Its main competitors are Visa ( V ), American Express ( AXP ),Discover Financial ( DFS ), Diners Club and JCB.
We have a price estimate of $214 for MasterCard's stock, which stands below market price.

Growth in China's Credit Card Market

As China is predicted to overtake the U.S. as the largest market for credit cards by 2020 with about 900 million cards in circulation, payment service providers like Visa and MasterCard are looking for an entry point in the Chinese market to grab a piece of this growing market. Total cards in China is expected to increase 11% annually and transaction value is expected to climb 14% annually until 2025.

China UnionPay is the sole bank card transaction processing company in the region and the biggest card company globally in terms of card issuance and the second largest brand in the Asia-Pacific region in terms of transaction volume. Foreign credit card companies are barred from transactions in the Chinese market and international cards are not accepted in China. The partnership between MasterCard and UnionPay would help both companies reach a wider base of customers.

Visa Inc. clashed with UnionPay in June last year and complained that China is violating trade rules by denying international payment processing companies an entry into its market. The U.S. Trade Representative, Ron Kirk, was looking to file a complaint at the World Trade Organization over the rules which block companies such as MasterCard, Visa, American Express Co. and Discover Financial Services from processing credit and debit card transactions in China.

Upside to MasterCard

Penetration of electronic payment is still low in China. Of China's $3 trillion personal consumption market, China UnionPay accounts for about a third of the payment processing. The remaining two-third of the market is settled through cash. Thus, there is ample scope for MasterCard to increase its number of transactions processed by partnering with China UnionPay. We currently estimate that the number of transactions processed by MasterCard will increase from 23 billion in 2010 to about 57 billion by 2017, at an annual growth rate of roughly 14%.

Drag the trend line in the modifiable chart above to see how various trends in the number of transactions processed affect MasterCard's stock value.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

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MasterCard Reports Strong Growth across the Latin America and Caribbean Region in 2010

• Number of MasterCard-branded cards up 11.3%
• MasterCard®-branded cards gross dollar volume (GDV) up 7.0%
Miami, FL, August 05, 2009 - MasterCard’s Latin America and Caribbean region announced its operating results for the second quarter 2009, posting growth in both MasterCard® and Maestro® programs.
During the second quarter of 2009, MasterCard cardholders in the Latin America and Caribbean region used their MasterCard® branded cards (excluding Cirrus® and Maestro®) for 603 million purchase and cash transactions, generating gross dollar volume (GDV) of US $41 billion, up 7.0% on a local currency basis, over the same period in 2008. Additionally, purchase volume in Latin America and the Caribbean region reached US $22 billion in the second quarter of 2009, increasing 11.2% on a local currency basis, compared to the same period in 2008. GDV represents purchase volume, plus cash volume and includes the impact of balance transfers and convenience checks.

The number of MasterCard-branded cards in the region increased 11.3% in the second quarter of 2009, to 118 million cards, and MasterCard cardholders could use their cards at 29.4 million acceptance locations worldwide.

MasterCard’s global PIN-based debit program, which includes both Maestro, and MasterCard’s ATM-only brand Cirrus, also demonstrated positive results in the second quarter of 2009. In the Latin America and the Caribbean region, the Maestro brand mark appeared on 131 million cards, up 10.4% compared to the second quarter of 2008.

"Despite being faced with ongoing economic uncertainty, we were able to achieve solid growth in the region in the second-quarter of 2009. These results are an indication that consumers, while prudently managing their personal finances, continue to utilize MasterCard payment cards due to their convenience, safety and ease of use,” said Richard Hartzell, president, MasterCard Latin America and Caribbean Region. “Our results reflect the value we continue to provide our customer financial institutions in the region."

About MasterCard Incorporated
MasterCard Incorporated advances global commerce by providing a critical economic link among financial institutions, businesses, cardholders and merchants worldwide. As a franchisor, processor and advisor, MasterCard develops and markets payment solutions, processes approximately 21 billion transactions each year, and provides industry-leading analysis and consulting services to financial-institution customers and merchants. Powered by the MasterCard Worldwide Network and through its family of brands, including MasterCard®, Maestro® and Cirrus®, MasterCard serves consumers and businesses in more than 210 countries and territories. For more information go to

Forward-Looking Statements>
Statements in this press release which are not historical facts, including statements about MasterCard’s plans, strategies, beliefs and expectations, are forward-looking and subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements speak only as of the date they are made. Accordingly, except for the company’s ongoing obligations under the U.S. federal securities laws, the company does not intend to update or otherwise revise the forward-looking information to reflect actual results of operations, changes in financial condition, changes in estimates, expectations or assumptions, changes in general economic or industry conditions or other circumstances arising and/or existing since the preparation of this press release or to reflect the occurrence of any unanticipated events. Such forward-looking statements include, without limitation:
  • Consumers continuing to utilize MasterCard payment cards; and
  • MasterCard’s ability to continue to provide value to its customer financial institutions in the region.
Actual results may differ materially from such forward-looking statements for a number of reasons, including those set forth in the company’s filings with the Securities and Exchange Commission (SEC), including the company’s Annual Report on Form 10-K for the year ended December 31, 2008, the company’s Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that have been filed with the SEC during 2009, as well as reasons including difficulties, delays or the inability of the company to achieve its strategic initiatives set forth above. Factors other than those listed above could also cause the company’s results to differ materially from expected results.
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Banks Must Retool Their Payments Businesses in Wake of Financial Crisis and Regulatory Changes, Says New Report by The Boston Consulting Group

Feb 08, 2011 00:01 ET

Government Regulation, Tighter Competition, and Shifting Customer Demands Have Taken a Toll on Revenues and Profits; Forging Optimal Business and Operating Models Is Key to Success, BCG Says
BOSTON, MA--(Marketwire - February 8, 2011) - Major banks must adapt to sweeping changes in the payments industry in order to reverse revenue and profit declines and chart a course to sustainable growth, according to a new report by The Boston Consulting Group (BCG). The report, "Global Payments 2011: Winning After the Storm," is being released today.

Traditionally strong payments businesses have shown severe weakness in recent years, the report says. Although many of these businesses are beginning to recover, banks must determine whether current business models (target customer segments, product portfolios, regions, and channels) and operating models (target processes, IT, sourcing, and organization) are well suited for shifting industry dynamics. Winning strategies will vary, depending partly on whether target markets are mature in terms of overall payments infrastructure and sophistication, or still developing, because the two types of markets will evolve differently going forward. In either case, banks seeking to expand their payments businesses must strive to minimize organizational complexity.
"The size of the prize is too large not to take action," said Niclas Storz, a BCG partner and a coauthor of the report. "We estimate that by 2020, the global payments market will be worth $782 trillion in noncash transaction values and $492 billion in transaction revenues."
Global payments revenues, which typically constitute one-third to one-half of most banks' total revenues, fell at a compound annual rate of 7 percent from the end of 2008 through 2010, according to the report. BCG defines payments revenues as direct and indirect income generated by any payment service, including transaction-specific revenues as well as card and account maintenance fees and spread income generated from current accounts (also known as checking or ). Fees for overdrafts and nonsufficient funds are considered transaction-specific revenue.
The report examines global retail-payments markets on a regional basis, while exploring the wholesale transaction-banking market through a single, global lens.
Retail Payments in Europe
European retail-payments revenues fell from $173 billion in 2008 to $136 billion in 2010, according to the report. To help foster a rebound, banks must exploit the structural differences in payments markets throughout Europe. In Western Europe, given its highly evolved payments infrastructure, the focus will be on refining operating models. By contrast, in Central and Eastern Europe, the key will be forging winning business models.
Retail Payments in the Americas
In the United States, the payments industry has undergone considerable disruption, the report says. From the end of 2008 through 2010, total payments revenues fell at a compound annual rate of 4 percent, despite steady payments values and a 3 percent annual rise in volumes. Total revenues are expected to grow in 2011 but will remain about 6 percent below the 2007 peak level of $162 billion -- a level not likely to be surpassed for another few years given the adverse effect of regulatory changes on payments revenues (such as debit card revenues).
Moreover, new financial regulations such as the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009, modifications to Regulation E, and the Durbin Amendment (within the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010) will have a dramatic effect on U.S. payments businesses for years to come. Banks in the U.S. will have to rethink their business models and develop new value propositions, the report says.
"As much as $25 billion in annual retail-transaction revenues will be regulated away from U.S. financial institutions as the new guidelines take effect," said Carl Rutstein, a BCG senior partner and a coauthor of the report. "To get back on track, banks in the U.S. need to transform their credit-card businesses, move beyond the checking account to deepen client relationships, and make sure they stay smart and nimble in the digital financial-services game."
Retail Payments in Asia-Pacific
In Asia-Pacific, retail payments are primed for growth, the report says. But banks will have to tailor their business and operating models in order to balance growth aspirations with efficiency goals. In the mature Asia-Pacific countries, growth discussions must focus on existing customers and opportunities to increase share of wallet by improving the convenience of payment solutions for consumers and merchants. Yet the picture is different in emerging markets.
"Growth in emerging Asia-Pacific markets will be generated by the gradual financial inclusion of unbanked consumers and the rapidly expanding footprint of the electronic-payments infrastructure," said Stefan Mohr, a BCG partner and a coauthor of the report. "Shifts in spending behavior and payment preferences, especially on the part of the emerging digital generation and those consumers moving from rural to urban areas, will also be a prime factor."
Global Wholesale Transaction Banking
In the postcrisis era, transaction banking will remain a significant opportunity for financial institutions, according to the report. Wholesale payments volume is expected to grow at a compound annual rate of 9 percent globally from year-end 2010 through 2020, and total wholesale transaction revenues are expected to increase from $64 billion to $119 billion. But despite the strengths of transaction-banking businesses, there are hurdles to overcome. Getting different silos within the bank -- such as the corporate-banking sales force, cash-management and trade-service specialists, and operations and IT groups -- to align around making transaction banking a top priority can be a tall order. Banks need to better define their core target markets (from both a segment and a regional perspective) and smooth out uneven customer experiences across channels and regions.
To receive a copy of the report or arrange an interview with one of the authors, please contact Eric Gregoire at +1 617 850 3783 or
About The Boston Consulting Group
The Boston Consulting Group (BCG) is a global management consulting firm and the world's leading advisor on business strategy. We partner with clients in all sectors and regions to identify their highest-value opportunities, address their most critical challenges, and transform their businesses. Our customized approach combines deep insight into the dynamics of companies and markets with close collaboration at all levels of the client organization. This ensures that our clients achieve sustainable competitive advantage, build more capable organizations, and secure lasting results. Founded in 1963, BCG is a private company with 71 offices in 41 countries. For more information, please visit
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Visa Program Encourages Merchant Adoption of EMV Chip as Path Toward Dynamic Authentication

U.S. Excluded from International Program Due to Uncertainty Surrounding New Debit Card Regulations
SAN FRANCISCOFeb. 9, 2011 /PRNewswire/ -- Visa announced today a new Payment Card Industry Data Security Standard (PCI DSS) compliance program that will fuel dynamic data authentication through the continued merchant deployment of EMV-compatible chip terminals capable of processing either contact or both contact and contactless payments.
An industry first, Visa's Technology Innovation Program (TIP), will eliminate the requirement that eligible merchants annually validate their compliance with the PCI DSS for any year in which at least 75 percent of the merchant's Visa transactions originate from chip-enabled terminals. To qualify, terminals must be enabled for contact or dual contact and contactless interface chip acceptance. All merchants outside of the United States are eligible and may begin qualifying for the new program from March 31, 2011. Visa Europehas announced a similar program.
"Visa has repeatedly underscored the need for authentication solutions to move to dynamic data technologies such as EMV chip," said Ellen Richey, Chief Enterprise Risk Officer, Visa Inc. "Although Visa's global fraud rate remains at an all-time low of less than 6 pennies out of every $100 transacted, we believe the future of security lies in dynamic data. Our experience suggests that as markets move to chip they become less vulnerable to counterfeit fraud and, ultimately, to mass data compromise attacks."
Despite industry interest in chip and dynamic data authentication, the program is not currently available in the United States because recent debit card regulation has cast uncertainty in the marketplace.
"With the United States facing government price controls on debit and restrictive routing and exclusivity rules, it is not feasible or appropriate to drive the market toward major infrastructure investments, especially in an environment where financial institutions could lose billions in revenue as a result of the regulation," said Bill Sheedy, Group Executive for the Americas, Visa Inc.(1) "With such a dramatic potential for revenue loss, financial institutions will likely curtail investments in future innovations."
International merchants may qualify for the program if they have either previously validated PCI DSS compliance, or provided a plan to come into compliance, and if they have not been involved in a recent material breach of cardholder data. Merchants involved in a compromise will be eligible for participation subject to subsequent PCI DSS compliance validation. Merchants that do not meet the program's EMV terminalization requirements, including merchants whose transaction volume is primarily from eCommerce and MO/TO acceptance channels, are still required to validate their PCI DSS compliance annually in accordance with Visa compliance programs. Qualifying merchants must continue to protect any sensitive data that remains in their care by ensuring their systems do not store track data, security codes or Personal Identification Numbers (PINs), and that they continue to adhere to the PCI DSS standards as applicable. More details about the program, including a full list of eligibility requirements, are available at
"EMV chip is a proven technology platform that can offer the industry the ability to facilitate dynamic data as well as enable payment innovations," said Jim McCarthy, global head of product, Visa Inc. "In addition, merchant adoption of dual interface contact/contactless terminals will support the emergence of near field communication (NFC) payment form factors, including mobile devices."
As a result of increased focus on data security, the commercialization of new security technologies such as encryption and tokenization, and growing global EMV chip adoption, many merchants are seeking guidance to ensure they are investing for the future when they upgrade their acceptance environments. Because Visa recognizes the security benefits of dynamic authentication, enabled by chip, it is offering tangible benefits to merchants who shift or expand their POS infrastructure to become chip enabled. As part of the terminal refresh cycle or when incorporating new security technology like encryption or tokenization, Visa encourages all merchants to move toward dynamic data through the adoption of dual contact/contactless terminals.
Globally, Visa continues to support a range of cardholder verification methods (CVMs) including signature, PIN and no-signature for low-value, low-risk transactions, maintaining interoperability across those methods with technical standards, business rules and compliance programs. PIN usage will continue to depend on merchant terminal adoption, issuer activation and cardholder choice at the point of sale.
Layered Approach to Data Security
Visa has taken a comprehensive and layered approach to payments security with a dual focus: protecting card data wherever it is found in the payment eco-system, and making strategic investments in technologies that enable stakeholders to respond to compromises and prevent fraud. Examples include:  
  • Data Protection
    • Drive global PCI DSS compliance. More than 76 percent of the world's largest retailers have validated compliance with the security standard.  
    • Execute an effort to ensure that merchants do not store prohibited data elements, including card security codes and PIN data. Today, almost all Level 1 and 2 merchants globally have conformed to this practice.
    • Support the adoption of contact EMV chip to introduce dynamic data used for authentication, thereby reducing data available for fraudulent use.
    • Publish best practices on PAN elimination/truncation, tokenization and encryption, which are available at
  • Technology Investments
    • Develop the 3D-Secure payment infrastructure that is the backbone of Verified by Visa and is now used by American Express, JCB and MasterCard to facilitate dynamic authentication.  
    • Innovate network technology such as Visa Advanced Authorization, which uses transactional data to provide an instant risk-score to card issuers – right in the authorization message.
    • Invest in CyberSource to deliver best-in-class fraud management services globally. CyberSource's suite of products provides online retailers with tools to better manage and stop fraud before it happens.

Visa will provide technical guidance over the coming months to further support merchants, acquirers, processors and issuers as they consider adopting EMV chip technology.  
About Visa Inc.: Visa Inc. is a global payments technology company that connects consumers, businesses, financial institutions and governments in more than 200 countries and territories to fast, secure and reliable digital currency. Underpinning digital currency is one of the world's most advanced processing networks—VisaNet—that is capable of handling more than 20,000 transaction messages a second, with fraud protection for consumers and guaranteed payment for merchants. Visa is not a bank and does not issue cards, extend credit or set rates and fees for consumers. Visa's innovations, however, enable its financial institution customers to offer consumers more choices: pay now with debit, ahead of time with prepaid or later with credit products. For more information, visit
(1) "The US debit market and the Durbin Amendment: Worse than the worst case scenario," report by Oliver Wyman Financial Services, December 22, 2010.
SOURCE Visa Inc.
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VeriFone Integrates Card Payment & Media for UK Taxis

In-Vehicle Payment Card Acceptance and Digital Content System Available to London’s Licensed Taxis

SAN JOSE, Calif.--(BUSINESS WIRE)--VeriFone Systems, Inc. (NYSE: PAY), today announced that its taxi card payment and digital media solutions are now available in the UK. VeriFone is offering the system free to London’s licensed black cabs to modernize the taxi payments infrastructure and improve passenger journeys.
“We know what it takes to make card payments succeed in challenging environments. Uniquely, we can also deliver dynamic and interactive taxi-based media campaigns to advertisers seeking targeted, high-value alternatives to traditional outdoor and venue-based media channels.”
The VeriFone system has been approved for TX model taxis by Transport for London’s Taxi and Private Hire - the taxi licensing authority - and recruitment for drivers to use the system is underway. The system, which was initially available in a pilot program beginning in December and is now available for a wider release, integrates with taxi meters and allows drivers to easily accept credit, debit and contactless cards, while also streaming digital content to passengers.
VeriFone is also launching its VeriFone Entertainment Network to deliver compelling onboard media from leading broadcasters and advertisers. With the ability to deliver real-time media, the VeriFone system provides a new, highly targeted channel for advertisers.
VeriFone’s unique card payment system comprises a driver-side payment device with receipt printer, a fixed passenger-facing secure PIN entry device and a full color display screen for safety information, advertisements and streaming media. Card transactions are routed through VeriFone’s secure PAYware payment gateway and are settled to the driver’s account promptly three times per week.
“This is a total payment and media solution that enables black cab operators to enhance the customer experience with card payment options and access to a choice of multimedia content during their trips,” said Shaun Burger, VeriFone vice president & general manager, Northern Europe, Middle East and Africa. “We know what it takes to make card payments succeed in challenging environments. Uniquely, we can also deliver dynamic and interactive taxi-based media campaigns to advertisers seeking targeted, high-value alternatives to traditional outdoor and venue-based media channels.”
VeriFone has deployed transportation systems all around the world, from Istanbul to South Africa to New York City. In New York City, VeriFone’s taxi payment system is now deployed in 50% of taxis and VeriFone Media Solutions provide content to more than 90%.
Additional Resources:
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 for VeriFone Systems, Inc.
This press release includes certain forward-looking statements related to VeriFone Systems, Inc. within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on VeriFone management’s current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the forward-looking statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and other risks and uncertainties affecting the operation of the business of VeriFone Systems, Inc. These risks and uncertainties include: the successful rollout of VeriFone’s card payment and digital media solutions in the United Kingdom, our ability to protect against fraud, the status of our relationship with and condition of third parties upon whom we rely in the conduct of our business, our dependence on a limited number of customers, uncertainties related to the conduct of our business internationally, our dependence on a limited number of key employees, short product cycles, rapidly changing technologies and maintaining competitive leadership position with respect to our payment solution offerings. For a further list and description of such risks and uncertainties, see our filings with the Securities and Exchange Commission, including our annual report on Form 10-K and our quarterly reports on Form 10-Q. VeriFone is under no obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise.
About VeriFone Systems, Inc. (
VeriFone Systems, Inc. (“VeriFone”) (NYSE: PAY) is the global leader in secure electronic payment solutions. VeriFone provides expertise, solutions and services that add value to the point of sale with merchant-operated, consumer-facing and self-service payment systems for the financial, retail, hospitality, petroleum, government and healthcare vertical markets. VeriFone solutions are designed to meet the needs of merchants, processors and acquirers in developed and emerging economies worldwide.


VeriFone Media Relations
Pete Bartolik, +1-508-283-4112
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