An EMV payment card infrastructure enhanced with customer-centric features and services could not only reduce fraud but increase revenues and market share for issuing banks, according to a new white paper from the French card payment technology provider, Welcome Real-time.
The white paper, entitled 'Profiting from Enhanced EMV', is based on Welcome's experience with its client banks migrating to the EMV (Eurocard/Mastercard/Visa) smart card standard.
According to Welcome, banks throughout the world are investing in EMV migration to combat fraud but, in many cases, fraud losses are lower than the investment required in cards, terminals, and infrastructure. For example, UK banks expect to invest over 1 billion to upgrade their payment systems (an average of 26 per card) while fraud was running at less than half that amount in 2001.
Bolstered business case
While bankers are seeking ways to improve the EMV business case in order to obtain an acceptable return on investment, the white paper illustrates how some banks are already using EMV with customer-centric enhancements to boost revenues and market share without spending much more than they otherwise would on the basic EMV transition.
Double the acquisition
One particular bank was able to acquire 1 million new cardholders in 8 months - almost twice as many as anticipated - without substantially increasing its advertising and marketing budgets.
As the average cost to acquire a new cardholder is often estimated at over US$120, the savings generated on a portfolio of 1 million new cardholders could be valued in terms of tens of millions of dollars.
Welcome's white paper looks mainly at financial benefits in demonstrating how banks can:
· attract new cardholders and merchants;
· reduce cardholder acquisition costs;
· boost market share of profitable customers;
· reduce the cost of operating a loyalty programme;
· unlock the value in their EMV investment.
The full white paper has been made available for download from Welcome's web site (Acrobat PDF document - size: 206Kb).