Transcript What is Visa?

Unifying the European
Payments Landscape
Marc Temmerman
Executive Vice President, External Relations
Visa EU
VISA INTERNATIONAL CONFIDENTIAL
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”
VISA INTERNATIONAL CONFIDENTIAL
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
VISA INTERNATIONAL CONFIDENTIAL
The commercial payment opportunity
 A complete suite of products
 Cost-effective, guaranteed multi-currency
payments:
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–
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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
VISA INTERNATIONAL CONFIDENTIAL
An indicator of economic well-being
The approximate composition of M1 in selected countries
29%
48%
47%
Cash
Kr
yg
ys
ta
n
n
ai
ja
Az
er
b
yp
t
Eg
ta
n
za
kh
s
a
Ka
Ru
ss
i
es
Ph
illi
p
in
cc
o
or
o
M
rk
ey
Tu
um
Be
lg
i
an
ce
87%
19%
12%
Fr
47%
37%
35%
UK
82%
52%
53%
71%
11%
13%
81%
88%
89%
53%
63%
65%
18%
Deposits
VISA INTERNATIONAL CONFIDENTIAL
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
VISA INTERNATIONAL CONFIDENTIAL
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
VISA INTERNATIONAL CONFIDENTIAL
Economic importance of banking the unbanked
$40,000
Norway
GDP Per Capita ($US)
Switzerland
Denmark
$30,000
Ireland
UAE
$20,000
Canada
UK
Germany
France
Italy
Spain
Saudi Arabia
$10,000
Greece
Hungary
Poland
Egypt
Czech Republic
Russia
$0
0
20
40
60
80
100
Percent Banked Across Countries
VISA INTERNATIONAL CONFIDENTIAL
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
VISA INTERNATIONAL CONFIDENTIAL
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
VISA INTERNATIONAL CONFIDENTIAL
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 owneroperators of their own regional payment
system
 Retaining global influence and interoperability
 Coincides with the accession process
– Creation of an Accession Council
VISA INTERNATIONAL CONFIDENTIAL
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
VISA INTERNATIONAL CONFIDENTIAL
Thank you
VISA INTERNATIONAL CONFIDENTIAL