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Stuck in the Mud:
Why Face to Face Acquirers are still struggling with CNP
eCommerce is Growing - +15% to Sept-2011
Confidential
One Pound in Ten or One in Four?
• No competition from
cash online
• Data from Visa
suggests ecommerce
>25% of their volume
today
Confidential
Source: ONS
Confidential
Confidential
Overwhelmingly SMEs are the Laggards
Source: UK Government
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1000+ 250 - 999 50 - 249 10 - 49
Businesses selling over the internet
2008
2009
Acquiring Margin Greatest for SME
Confidential
6 14
29
48
69
91
182
0
20
40
60
80
100
120
140
160
180
200
$500M+ $50M-$500M $10M-$50M $1M-$10M $500k-$1M $100k-$500k $0-$100k
Acquiring Margin by Merchant Turnover (bp)
Source: Anapolis Consulting
Confidential
Wet Signature
• Merchants want:
– The instant gratification
of immediate signup
• Acquirers require
– Pen and ink
e-signature?
Confidential
Know Your Customer
• Merchants want:
– To trade immediately
• Acquirers require
– Photo-id
– Utility Bill
Electronic ID, exemption
limits
Confidential
Application Form
• Merchants want:
– Simple online process
• Acquirers require
– Paper…
– … and lots of it
Electronic application
Confidential
Website Inspection
• Merchants want:
– To trade immediately
• Acquirers require
– To see the site before
granting a MID
Compliance check after
1st transaction
Confidential
Acquirers are Slow
Confidential
PayPal
• Instant Signup
• Electronic
Signature
• Accept before
disbursement
Confidential
The New Paradigm is ecommerce
• All of the growth in retail is ecommerce
– One pound in four and increasing
– Sooner rather than later the majority of card
volume will be CNP, mostly ecommerce
• but…
Acquirers are still stuck in the mud of paper
Confidential
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