Next-Generation Cards 2022

APSCA - NGC2022 - Outlook for Payments and Identity
As the pandemic winds down after nearly 3 years, the payments and identity businesses have changed. A significant increase in customer adoption of both online and face-to-face electronic payments has accelerated the transition to digital payments. The growth of online and off-line electronic payments is driving demand for more effective digital identity solutions to protect consumers, merchants and all payments stakeholders. What will these changes mean for banks, fintechs and other issuers; merchants and customers; and the payment card business?
Greg Pote, Chairman, APSCA

Expo, Refreshments, Networking

Payment innovations in an era of payment disruptions
Global payment card spending exceeded $42 trillion in 2021. Payment card spending was up over 20% in all global regions , and Asia-Pacific saw the greatest absolute growth . In this session keynote presentations explore how the payment card business is changing; regional payment market developments; emergence of next-generation card solutions; factors driving card issuance, acceptance and usage; and the reasons behind the growth of payment card issuance and usage despite continuing development of alternative forms of payments.

Viewpoint 1: William Cheong, Digital Payments Consultant, APAC Asia Pacific, Entrust [~20min]
Viewpoint 2: Joshua Chong, Lead Consultant, Kapronasia [~20min]

What’s Next for Payment Cards
Globally, the number of payment cards in circulation at end 2021 was 25.2 billion and this is expected to rise to 30.6 billion by 2025. By 2025, the Nilson Report estimates that consumers using global branded cards issued in APAC will generate 288.01 billion purchase transactions (double the U.S. market) accounting for 44.86% of the world’s total purchases. What is driving this trend?

• Industry pundits have long predicted that we would reach “peak card” and card payments would be replaced by instant payments, open payments, account-to-account payments. Why has this not happened…. yet?
• Mobile payments continue to grow but, in most markets, they are an alternative (more convenient) way to make a card payment. So, the future is actually going to be “mobile and cards” rather than “mobile or cards”?
• Are digital cards (once considered a threat to physical cards) now becoming an indispensable part of a complete payment card product? Will they in future be issued jointly with (or ahead of) the physical card?
• The ongoing migration to 8-digit BINs is being driven by new issuers. Why are fintechs that typically launch with alternative payments, also adding payment cards to their product portfolios?
• Global card-accepting merchant outlets are forecast to reach 95.9 million at end-2025 (more than half will be in APAC). In the face of the rise of alternative payments, what is driving growth in card acceptance?

Lunch

Biometric Payment Cards
Development and industrialisation of contactless biometric payment cards has created a mature solution now being launched as premium products by financial institutions. They have passed card scheme testing, certification and approvals and costs continue to decline. This session explores the business case for biometric payment cards; biometric payment card product certification and testing; best practices from pilots and rollouts; latest developments enabling cost reductions and a volume market; recommended approaches to customer enrolment; and go-to-market strategie

Viewpoint 1: Romain Zanolo, Managing Director APAC, IDEMIA [~20min]
Viewpoint 2: Antonio D'Albore, Vice President Business Development Asia Pacific, Zwipe [~20min]

Marketing Biometric Payment Cards to Customers

A confluence of factors means that biometric payment cards are a product whose time has come. From 2022 to 2027 the global biometric card market is forecast to grow at a CAGR of 117.76% with APAC the fastest highest growth. Some industry experts believe that over time, all payment cards will transition to biometric authentication. This discussion explores how banks and other issuers should best market and promote these products to customers.

• Biometric payment card launches to date have focused on the benefits of offering increased security in a premium product. How successful is this strategy and what customer marketing/education is required?
• Raised contactless payment limits have increased customer concerns about lost and stolen card fraud. Is a contactless payment card that can only be used by the cardholder a valuable customer proposition?
• The pandemic accelerated adoption of contactless payment cards and even drove customers to prefer touch-free transactions. Is avoidance of extra steps, such as signature or PIN input, useful in marketing to customers?
• Most contactless payment card transactions have no CVM. Cardholder verification takes place with every biometric payment card transaction. But is it practical for issuers to point this out to their customers?
• Biometric payment cards provide multi-factor authentication, ensuring compliance with Europe’s regulatory requirement, Strong Customer Authentication (SCA). How relevant is this for issuers in Asian markets?
• Cardholder confusion about whether their contactless payment threshold is too low, how much they can spend using contactless, and when a PIN is required, are all solved with biometric contactless payment cards.
• Customers embraced biometric authentication on smartphones. Biometric payment cards are a natural extension. How can high-tech cool factor be leveraged to promote innovative issuers?
• Biometric payment cards offer a high-tech “cool factor”, they offer increased convenience, and they offer increased security. Will biometric payment card marketing depend on customer demographics?

Expo, Refreshments, Networking

Targeting Card-Not-Present Fraud
Most card payment fraud today originates from Card Not Present (CNP) transactions. According to the European Central Bank, CNP fraud now makes up almost 80% of the total volume of fraudulent card transactions in Europe. The pandemic has significantly boosted e-commerce transactions and CNP fraud is likely to continue to increase. This session explores solutions available to card issuers and merchants for targeting the reduction of CNP fraud including new card technologies, mobile-based solutions and software solutions for banks and or merchants.

Viewpoint 1: Bhavana Ravindran, Head of Visa Developer Platform, Asia Pacific, Visa [~20min]
Viewpoint 2: Gautam Pande, Vice President, Product Management, Mastercard [~20min]
Viewpoint 3: Cyril Lalo, Founder, Ellipse [~20min]

Solving Customer Authentication for Online Transactions
EMV chip cards significantly reduced fraud in card-present environments, driving fraudsters online. But the success of reducing fraud in card-present environments has driven fraudsters online, where the capabilities of EMV chip cards cannot offer the same benefits. This discussion explores latest ideas about reducing CNP fraud.

• Most information about CNP fraud, and solutions that can be used to address it, are aimed at merchants. Is CNP fraud a merchant problem, or a card issuer problem, or a scheme problem?
• dCVV2 (Dynamic CVV2) is a solution to help reduce CNP fraud using display cards or mobile devices. Based on its proven success and ease of implementation, why is dCVV2 still not widely deployed by card issuers?
• In Europe, PSD2 has mandated Strong Customer Authentication (SCA) - two-factor authentication on payment card transactions? Is SCA likely to become part of regulatory requirements in Asian markets?
• If SCA, or some elements of SCA, were required by regulators in Asia, what would be the likely impact on the payment card business? How might this impact merchants, card issuers, and payment services providers?
• 3D Secure (3DS) was designed to secure online card payments. 3DS1 was not a success but 3DS2 is a significant improvement - is it the solution to customer authentication for online payment card transactions?
• In September, UK Finance reported that authorized push payment (APP) fraud accounted for 44% of U.K. fraud losses last year compared with 40% for payment cards. Are fraudsters shifting their focus away from cards?

Recap of day one and introduction to day two of Next Generation Cards 2022.
Greg Pote, Chairman, APSCA

Next-Generation Cards - the State of Play
Payment cards are not typically a fast-changing product but over the last 5 years the market is increasingly seeing new and innovative payment card products. Some of these have additional electronic components while some of them use new substrates and materials. None of them require changes to existing EMV acceptance infrastructures. This session is an overview of these “next-generation” card products including biometric, dCVx, metal, eco-friendly, light-cards, current state of development of these new payment card solutions and how they are being deployed.

Thomas Decker, Vice President, Product Marketing Finance, Linxens

Refreshments, Networking, Expo

New Payment Card Products for Asian Markets
Asia is the world’s fastest-growing payment card market with the most issuers and issued cards. This session explores new payment card products, from premium to classic cards, for cardholders of different demographics across Asian markets: metal cards, eco-friendly and sustainable cards, cards with carbon offset programs, digital-first card programs, cards-as-a-service (CaaS) products, card products targeting Gen Z and Millennials.

Viewpoint 1: Atul Jain, Head of Business Development - Asia, Composecure [~20min]
Viewpoint 2: Mona El Baz, Group Marketing & Communications Director, Toppan Gravity [~20min]
Viewpoint 3: Farouk Musthafa, Director Business Line, Financial Services, Giesecke+Devrient, Smart Payment Association [~20min]

What Customers in Asia want with Payment Cards
Most of the “new ways to pay” (super-apps, digital wallets, instant payments, account-to-account payments, … more) originated in Asia, and yet the number of new and innovative payment card products (and issuers) in Asia continues to grow. What are the hot new payment card products for the Asian market?

• A report found 24-31% of consumers in several Asian markets would prefer a metal card to a plastic card, and 80-90% would accept a metal card offer - what do issuers need to know about launching metal card products?
• Sustainable cards are now considered a "must have" in card portfolios and are being issued in the millions. How should issuers navigate the sustainability issue, avoid green-washing, and connect positively with customers?
• Metal cards meet customer demand for premium luxury card products. Can they be recycled so that they also meet the increasingly important consumer demands for sustainability and environmental awareness?
• Selecting an eco-friendly card substrate for a new product can be confusing. rPVC, rPET, HDPE, PLA are just a few sustainable card materials. What are the factors that issuers need to consider?
• Legacy FI's are ramping up digital card programs to push back against challenger banks and fintechs. Digital cards offer customer ease, convenience and lower costs but how do you mitigate the reduction in brand recognition?
• Mastercard reports issuers seeing 20-25% reductions in fraud and up to 50% reductions in chargebacks with digital card programs. Will the future of all card programs be physical + digital issuance?
• CaaS providers offer ready-made issuing, processing and card management solutions for any company to easily launch new payment card products. What are the long-term implications for the payment card market?

Lunch

Will Card Payments Survive in a Digital World?
For years, the industry has questioned whether legacy payment cards could survive in the face of mobile super-apps, digital wallets and other alternative payment technologies. Despite recent innovation in payment card technologies, the question is less about cards themselves, and more about the rails over which payment cards transact, and the systems and processes that support them. This brief introduction to the following discussion explores some of the reasons behind the success and longevity of the payment card business.

Greg Pote, Chairman, APSCA

Payment Cards Versus the Rest
Cards were the first convenient1 alternative to cash payments at the point-of-sale, and the first consumer electronic retail payments. Now they face competition from new entrants to “alternative payments”. Ignoring those digital payments products that run over the same EMV payment card rails, what are the consumer payments products that compete with payment cards today - and how those products doing in comparison with payment cards?

• Despite complaints from merchants (and sometimes regulators) about costs, the four-party model is still successful after 70 years. Why is it so difficult to break the card scheme monopoly at the point-of-sale?
• CNP fraud is a global problem attracting the attention of regulators, schemes, banks and merchants. What are the fraud levels of other payment methods such as account-to-account payments and instant payments?
• In the UK, why have losses to authorised push payment (APP) fraud, where the victim is tricked into making bank transfers to an account posing as a legitimate payee, overtaken card fraud for the first time in H1 2021?
• Apart from the payment card ecosystem, which other alternative payment systems have well-defined processes for handling customer disputes and chargeback systems that can return payments to customers?
• In a world with instant messaging, merchants regularly complain about the length of card payment clearing and settlement processes. How are some alternative payment systems able to settle with merchants immediately?
• The introduction of new payments solutions usually creates market fragmentation. Mobile wallets are a good example. How have the card schemes and the payment card ecosystem successfully managed this problem?
• In most markets card payments (including card payments on mobile) are much greater than instant payments, A2A payments (except India and possibly China) but alternative payments are growing much faster?
• Why are so many fintechs that launched with alternative payment systems now moving to become card issuers? Might it have something to do with the millions of card acceptance points around the world?

What we learned, takeaways, issues to be addressed at NGC2023.

Refreshments, Meetings, Expo