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Unifying the European Payments Landscape

Unifying the European Payments Landscape. Marc Temmerman. Executive Vice President, External Relations Visa EU. What is Visa?. A global non-profit making association Owned by 20,000 banks worldwide 5,000 European banks 230 million cards: credit, debit, charge and pre-paid

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Unifying the European Payments Landscape

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  1. Unifying the European Payments Landscape Marc Temmerman Executive Vice President, External Relations Visa EU

  2. What is Visa? • A global non-profit making association • Owned by 20,000 banks worldwide • 5,000 European banks • 230 million cards: credit, debit, charge and pre-paid • €824 billion annual sales volume • Visa’s role • Managing the brand • Providing the processing infrastructure • Agreeing and enforcing the “regulations”

  3. Europe: a defining contribution • Cards as – primarily – a payment mechanism • A co-operative democratic constitution • The first to move to chip technology • Effective governance and control is a priority

  4. The commercial payment opportunity • A complete suite of products • Cost-effective, guaranteed multi-currency payments: • Tangible benefits: • Cash flow management • Access to funds • Reduced administration costs • Expenditure tracking • Compliance monitoring • Competitive buying policies • An indication of the potential: the UK Government Purchasing Card programme

  5. An indicator of economic well-being

  6. Macroeconomics of Cashless Payments • An electronic payment system is ⅓ to ½ the cost of an equivalent cash/paper-based system • Liberates aggregate cost savings of at least 1% of GDP • Equates to $58 billion in savings for the “Big 5” European economies alone

  7. Banking the unbanked • Electronic payments draw people – en mass – into the banking system • Promote financial inclusion and institutional trust • Immense economic benefits: • Harnesses low cost, lendable deposits – which fuel economic growth • Minimises shadow economies • Maximises tax revenues

  8. $40,000 Norway Switzerland Denmark $30,000 Ireland UK Germany UAE Canada GDP Per Capita ($US) France $20,000 Italy Spain Saudi Arabia Greece $10,000 Czech Republic Hungary Poland Egypt Russia $0 0 20 40 60 80 100 Percent Banked Across Countries Economic importance of banking the unbanked

  9. The global effect • A 10% shift in electronic payments typically creates a direct 0.5% increase in consumer spending • In Europe, a 2% increase in the proportion of electronic payments would liberate $26 billion in incremental consumer spending

  10. Our raison d’être • To increase the proportion of cashless payments • 16% of PCE by 2007 • Enable banks to derive more value from VisaNet • Capable of processing any electronic payments • Working with accession countries to liberate the benefits

  11. A big change to our constitution • The creation of Visa Europe • A separately incorporated company • A co-owner of Visa International • Europe’s banks become the exclusive owner-operators of their own regional payment system • Retaining global influence and interoperability • Coincides with the accession process • Creation of an Accession Council

  12. A defining moment • Creation of external relations function • Working in partnership with regulators and industry bodies • Promoting the benefits of Visa Direct – a low cost, high speed funds transfer solution • Leveraging the investment in chip

  13. Thank you

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