Tuesday, November 17, 2009

Notes from Cartes 2009 kick-off sesssion

Notes from Cartes 2009 kick-off session held on Tuesday Nov 17, 2009 (lacks editorial polishing as this was captured as the session was in progress)

Session participants included senior executives from Gemalto, Oberthur, Sagem Orga, G&D, Infineon, NXP, Hypercom, Ingenico, Visa Inc. and MasterCard

Market macro trends
Credit is down, and will stay down
- Debit and prepaid is still growing
- Electronic payments will grow even though overall economic growth slows
- Price pressure is converting volume growth to reduced top-line (near-term)
- Reduced innovation dollars available
- Customers are downgrading the card capabilities (e.g., 64kb to 32kb)

Growth areas
- South Africa & Latin America showing growth

Government e-ID initiatives:
  • An important distributor of cards
  • Competition among government to be a 'model govt', thereby helping create frameworks around privacy, data protn, post-issuance downloads
  • Govt is helping smart card industry as they engender high-level of trust among citizens/consumers. They are also helping educate consumers to bring about behavioral change
  • In some cases, they are also loading other apps (for their own services) after the cards have been issued
  • Early adopters are countries which have about 20-50 million citizens, which include Estonia, Singapore, Taiwan, Columbia, countries in the Middle-East...
Use of smart cards by government to distribute subsidies
  • Brings about efficiency in the delivery of services by the government, as well as, increase in convenience and productivity for the citizens.
  • Examples including US government issuing Visa prepaid cards in 38 states to distribute subsidies, Pakistan and Dominican Republic using prepaid cards to get subsidies to their citizens
  • Adds another demographics group as smart card users: the Unbanked
Opportunities in addressing the needs of the unbanked:
  • Nearly 30% of Kenya and Uganda are smart card users
  • Meeting needs of the unbanked is adding nearly 1% to the GDPs of the above countries

Growth areas in the smart card industry:
  • Government initiatives
  • Move to EMV
  • Unbanked initiatives in Africa, LatAm...
  • Authentication
  • Contactless deployments
  • Migration away from mag-stripe cards (4 billion market opportunity)
Please share your feedback, and any questions that you have for me to follow-up on while at Cartes.

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