Research & Thoughts

The European Market in 2010 and Beyond

What’s on the cards?

Credit and Debit Cards matter now more than ever. There may be economic and regulatory differences between Eurozone countries, but they all have one important factor in common: the cards market will continue to be a crucial source of revenue and profit. Yet the upheavals of the last two years have graphically illustrated the need to make good decisions today, in order to effectively exploit tomorrow’s opportunities – and avoid the pitfalls.

In 2010 and beyond, card providers will be looking for new geographies to enter, while dealing in their existing markets with the shift to debit card usage resulting from consumers’ continuing anxiety about debt. Debit cards will thus be a focus of increasing competition, with the drive for customer loyalty a pivotal issue.

The prepaid option will become increasingly attractive, especially to consumers without access to traditional debit and credit cards and those wishing to spend within their budget.

Though there is as yet no firm deadline, the SEPA framework will continue to send shockwaves through the cards landscape. The future looks “interesting”, to say the least, with the likelihood of battles between the EU Commission (through the ECB) and the card duopoly of Visa and MasterCard looming large on the horizon.

Nor are these the only issues issuers must contend with. They will be evolving strategies to embrace and profit from “Multi-Channel 2.0” – web, mobile and contactless technologies as future payment channels of choice for consumers.

And they must also meet the increasing demands of a regulatory environment that strongly advocates the rights of the consumer while continuing to combat fraud – a particular challenge in Germany, France and the UK.

With all these challenges and opportunities, there are important process and technology implications for the whole industry.

Matching the correct process approaches and technology solutions to the right business decisions will equip card organizations to leverage existing product and service portfolios more effectively. They will be able to bring innovations to market more flexibly and quickly. And they will ensure, by reducing operational costs, that hard-pressed margins are maintained or enhanced.

They will be able to focus on revenue opportunities to drive the bottom line and retention strategies to protect it.

With the right combination of commercial strategy and operational practice, growth and profit can and will be achieved.