ECOSYSTEM Change, Disruption & Innovation in the Industry Amy - PowerPoint PPT Presentation

NEW PLAYERS IN THE PAYMENTS ECOSYSTEM Change, Disruption & Innovation in the Industry Amy Zirkle VP Industry Affairs, ETA electran.org

DEFINING NEW ROLES IN AN EVOLVING INDUSTRY ▪ Industry Evolution ▪ Transformation of the Payments Ecosystem ▪ Industry Initiatives for Emerging Players

Industry Evolution

PAYMENTS THEN …

… AND PAYMENTS NOW

ELECTRONIC PAYMENTS MODEL The basis of the electronic payments system is the 5-party model Payments Buyer Merchant Acquirer Network Issuer

Card volume grew 8% $6.62 year over year from 2009 to 2017 $5.14 ($trillions) $4.53 $4.44 $4.05 $3.78 $3.60 $3.26 $2.97 2009 2010 2011 2012 2013 2014 2015 2016 2017 Data from the Federal Reserve and Nilson Report

DEBIT CARDS ARE US CONSUMERS’ PREFERRED WAY TO PAY Purchase transactions (billions) 70.6 2016 2017 67.9 49.4 48.6 37.7 34.6 10.4 8.7 7.0 6.8 Debit Cards Cash Credit Cards Checks Prepaid Cards Data from The Nilson Report

eCommerce Sales in the U.S. $140 14% $Billions $120 12% $100 10% $80 8% % of all Retail Sales $60 6% $40 4% $20 2% 2010 2011 2012 2013 2014 2015 2016 2017 2018 $0 0% Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Data from the US Census Bureau and US Department of Commerce

Transformation of the Payments Ecosystem

TODAY’S ELECTRONIC PAYMENTS MODEL ISO/MSP Merchant Gateway Issuing Acquiring Payments Processor Processor Buyer Acquirer Network Issuer Sub-Merchant Payment Facilitator Sub-Merchant

THE EVOLVING SALES CHANNEL

DRIVERS FOR TRANSFORMATION ▪ Technology ▪ New companies ▪ New products and services ▪ Mergers and Acquisitions

CONTINUING INDUSTRY CHANGE ▪ Expansion of ecommerce ▪ Companies serving multiple roles ▪ Technology drivers ▪ New players

PARTNERING WITH NEW PLAYERS

INDUSTRY EVOLUTION

FURTHER INDUSTRY EVOLUTION ▪ New Technologies ▪ New Players ▪ New Business Models ▪ New Merchants ▪ New Approaches

CONSIDERATION OF A CHANGING ECOSYSTEM ▪ Things to watch for in the payments industry – Seamless and frictionless payments – Emergence of more “Payments in the Cloud” options – Increasing merchant insistence on streamlining the payments process – Continued blurring of functions and roles • In payments • In banking

Industry Initiatives

TECHNOLOGY BUSINESS Education for a rapidly changing market SECURITY

PROMOTING PROFESSIONAL EXCELLENCE

THANK YOU