Club Meeting 030309

Copyright 2008, First Data Corporation. All Rights Reserved.

An invitation to play cards

John Chaplin, First Data Corporation

Copyright 2008, First Data Corporation. All Rights Reserved.

“Payment cards: still a good deal or the next busted flush?”

An invitation to play cards

Copyright 2008, First Data Corporation. All Rights Reserved.

First Data - global leader in card payments processing

US$8 billion annual revenues (2007)

Handling more than 30 billion transactions per year

27,000 employees speaking 75 languages

Operating in all continents – business in 24 EU markets

Active in all elements of card payments value chain

Copyright 2008, First Data Corporation. All Rights Reserved.

Cards on the table

4

Copyright 2008, First Data Corporation. All Rights Reserved.

Industry trends as a health indicator

5

• Business

volumes

• Debit vs credit

vs ATM

• Fraud losses

• Credit losses

Copyright 2008, First Data Corporation. All Rights Reserved.

Changing industry economics

6

• Interchange

• Scheme

assessments

• Surcharging

• Credit/debit

migration

Copyright 2008, First Data Corporation. All Rights Reserved.

Demutualisation of card schemes

7

• MasterCard• Visa and

Visa Europe• Short-term

moves• Long-term

effects

Copyright 2008, First Data Corporation. All Rights Reserved.

Where is the innovation?

8

• Contactless

• Pre-paid

• Virtual

• Mobile

Copyright 2008, First Data Corporation. All Rights Reserved.

Political impacts

9

• SEPA whither or wither?

• Consumer protection

• Central Bank oversight

• Impacts of bank bailouts

Copyright 2008, First Data Corporation. All Rights Reserved.

How good is the hand in future?

10

5 key conclusions

• Debit card much more important

than credit

• Economics rapidly moving to

utility model

• Scheme sell-offs to have

profound impact

• Innovation patchy and too brand

related

• Political factors weighing heavily

but unclear agenda

Copyright 2008, First Data Corporation. All Rights Reserved.

Jokers in the pack

11

Copyright 2008, First Data Corporation. All Rights Reserved.

• Enforced scheme and processor separation

• Major card issuer failure

• Regulated monopoly status for card schemes

Jokers in the pack

Copyright 2008, First Data Corporation. All Rights Reserved.

13

Game over!

Thank you