The cards business is highly eventful in Europe currently, thanks to new regulation, economic sanctions, liquidity shortfalls, regional conflicts, debt restructuring and related events.
Visa Europe is thriving amid the turmoil, however, and its experiences illustrate a variety of interesting points to ponder.
Visas primary success is coming from huge wins with its debit product, the move to digital and other e channels, as well as working with issuers individually to make up for the forthcoming reduction in Credit Interchange to 0.3%.
It has experienced an 8.8% increase in annual transaction volume and what appears to be a 70% market share among debit card providers. MasterCard International is stronger on the credit card side because of the higher Interchange rates on the premium card products Visa has steered clear of, and once Interchange is capped across Europe in the third quarter of this year, MCI will be impacted more negatively than Visa.
Visa Europes most effective strategies are those surrounding the digital and e channel services and its ongoing projects across Europe to displace cash and ATM transactions with credit card charges. Its contactless cards are gaining traction, with over 100 million issued in the EU, and an increase of 263% in transaction volume through 1.8 million contactless Visa terminals.
Visa Europes V.me digital wallet solution was introduced in five countries and expects to roll out in eight more this year. Clearly, Visa has to make certain their digital products are up to the task of competing effectively with Apple, PayPal and others looking to carve out their own slices of the European market.
Visa Europe is also looking very closely at ways to add value for its members and is working diligently to achieve a complete understanding of their diverse European markets.
Throughout Europe, Visa seems to be making an effort to devolve decision making so that local offices will provide localized, market-specific services. In those that are primarily transacting markets where the income model is predominantly Interchange fee-driven, locally empowered decision making would encourage offices to emphasize new products, such as current accounts with debit cards.
Other markets will have different dynamics and Visa will be flexible in order to cater to them individually rather than adhering to a single overarching strategy. Visa Europe tries to be lean, adaptable and nimble, speeding up technology and following the digital agenda that is serving them well.
George White is the London-based president of EMEAR for Profit Insight.