1 / 19

Making global commerce happen

Making global commerce happen. Unlocking value in European Payments Charles Goldfinger EMEA CLIENT CONFERENCE Hertfordshire, September 15 th 2004. Making global commerce happen. Unlocking value in European payments. Presentation plan Payment parado xes Our view of the future

spike
Download Presentation

Making global commerce happen

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Making global commerce happen Unlocking value inEuropean Payments Charles Goldfinger EMEA CLIENT CONFERENCEHertfordshire, September 15th 2004

  2. Making global commerce happen Unlocking value in European payments • Presentation plan • Payment paradoxes • Our view of the future • Relevant comparison: European securities processing • Factors of change • Unavoidable consolidation • Heightened co-opetition • Watchful eye of regulators

  3. Making global commerce happen Payment paradoxes • False paradoxes • E-commerce bottleneck • Slow change • Survival of the cheque • E-payment graveyard • DigiCash • CyberCash • SET • CyberComm • EBPP – eternal product of the future? Source: Kellog School of Management, 2000

  4. Making global commerce happen Payment paradoxes • True paradox • Perception of immobility • Paper, paper, paper • Fragmentation and complexity • Reality of change • Wholesale payments • RTGS • SWIFTNET • Retail payments • Triumph of the card • Truncation progress

  5. Making global commerce happen Payment paradoxes • E-commerce • Tremendous growth • Card payment dominated • Security issues • Market development deterrent • …or red herring

  6. Making global commerce happen Key issue • The evolution of payment systems over next 10 years • Its speed • Slowdown or acceleration? • Its breadth and scope • Its competitive impact • Usual suspects or new entrants? Evolution or revolution?

  7. Making global commerce happen Our view • Massive change in • Industry structure • Core technology and architecture • …Yet controlled pace • Under the watchful eye of regulators • No disruption • Significant regional differences • US and Europe will evolve differently Source: BIS

  8. Value transfer Transaction settlement Supplier bottleneck Payment Customer contact Making global commerce happen Payment systems: Critical features • Core banking business • Significant costs • Critical value chain determinant • Network economics • High set-up costs • Strong economies of scale • Membership externalities • These features will not change

  9. Few years ago Fragmentation Mainly national systems No interoperability Co-operative ownership Value hidden Today Consolidation Two major crossborder poles Euroclear and Clearstream Strong interoperability pressures IP/XML framework Corporate ownership Value visible Making global commerce happen Relevant comparison: European securities processing business

  10. Making global commerce happen European securities processing business: Factors of change • Prospect of a single European financial market space • Major EU objective • Crossborder securities markets consolidation • Unlocking of value • Securities processing is the most valuable part of securities business

  11. Making global commerce happen Going back to the payment systems: Factors of change • Prospects of a Single European Payment Area • Euro is a reality in 12 countries • Crossborder banking consolidation • Very slow and mainly regional • Most advanced in Scandinavia and Benelux • Major countries off-limits • National champion approach • Credit Lyonnais – Credit Agricole • …for how long? • UK • Germany

  12. Making global commerce happen Going back to the payment systems: Factors of change • Value unlocking • Value yardsticks • GSIT and FDC • Internet technology • New system architecture • BACSTEL-IP application

  13. Making global commerce happen Payment systems evolution: Unavoidable consolidation • National systems no longer pertinent • Various possibilities and scenarios • Bottom-up regional consolidation • Banksys - Interpay ? • IPOs pf banking PSPs followed by aggressive acquisition • European exchanges model • Co-operative mergers • Germany? • Acquisition by non-banking PSPs Those scenarios not mutually exclusive

  14. Making global commerce happen Heightened co-opetition • Among banks • ATM Interchange fees • Among banks and PSPs • Bank-owned and independent • Among banks and retailers • EMV example • Wal-Mart contagion

  15. Simpay Mobey Mobilpay ? Making global commerce happen Heightened co-opetition • New entrants? • No wild card • No room for start-ups • Big unknown • Telecom companies • Traditional payments not a core business • …but what about mobile payments? • Mobile as a payment initiation device • …and?

  16. Making global commerce happen Watchful eye of the regulators • Ever closer oversight of central banks • Core payment systems • Operational risk • Continuous expansion of scope • Non-banking PSPs • BIS Outsourcing guidelines • E-money issuers • E-money directive • Global money transfer systems • Formal and informal

  17. Making global commerce happen System security - an overriding factor • Old and new risks • Virtualisation of payment systems • No free-for-all deregulation • No asymetrical regulation • Incumbents will be protected • Compliance cost • And who will pay for them • Internet security conundrum

  18. Making global commerce happen In summary • Massive change • Consolidation • Value unlocking • Uneven pace • Stop and go • Regional differences • Evolution not a revolution • But do not forget X-factor • Events never unfold as expected

  19. Making global commerce happen Thank you Charles Goldfinger Managing Director Global Electronic Finance www.gefma.com Charles_gold@brutele.be

More Related