MARKETING OF PAYMENT CARDS
Ing. Kateřina Matušínská, Ph.D.
MARKETING OF FINANCIAL SERVICES/NAMAF
OUTLINE OF THE LECTURE
1. Selected basic terms
2. Payment cards definition
3. Trends in payment cards area
4. Biometric identification methods
MARKETING OF PAYMENT CARDS
1. SELECTED BASIC TERMS
• ATM - (automated teller machine) - it enables to withdraw from
or deposit cash using a credit card, it also provides non-cash
functions (account statements, change of PIN, payment order,
…)
• Cash Advance - cash payment at your bank or exchange office
after submitting of the payment card (identity card, a high fee)
• CashBack - cash withdrawal at the point of sale
• POS terminal - a terminal at the point of sale
• PIN - (personal identification number) - security code is used as
a protective element for communicating with the bank
• SBK - Bank Card Association (www.bankovnikarty.cz,
www.cardmag.cz)
MARKETING OF PAYMENT CARDS
2. PAYMENT CARDS DEFINITION
• Electronic means of payment  "plastic money"
• Small plastic card provided with identification data of its owner.
MARKETING OF PAYMENT CARDS
TYPES OF PAYMENT CARDS ACCORDING TO:
• issuing association (Eurocard / Mastercard, Maestro, VISA,
American Express, Japan Credit Bureau, Diners Club
International),
• the way of charging (debit, credit, charge, prepaid),
• location of application (domestic, international),
• the way of mechanisms (electronic, embossed),,
• technology (virtual, contact, contactless ).
MARKETING OF PAYMENT CARDS
3. ACTUAL SITUATION IN PAYMENT CARDS AREA
• The popularity of credit cards (popularity of supplementary
services).
• Contactless payments – necessity during pandemic!
• The mobile phone/wearables as "Bank in your pocket!"
(Scanning bills, search for ATM, branch, discounts, QR
payments, travel insurance, credit cards image, pay Now,
search for the lowest prices, the possibility of payment ...).
• Card customization - more attractive designs and a variety of
payment cards (such as payment cards with your own images,
pictures, shapes, illuminating cards, with the smell).
MARKETING OF PAYMENT CARDS
• Use of business payment cards - for the purpose of
companies operating costs covering.
• The increase of prestigious cards and extension of
additional services so called „concierge“.
• The increase of so called co-branded payment cards cards
in connection with loyalty program.
• Prepaid payment cards.
ACTUAL SITUATION IN PAYMENT CARDS AREA
MARKETING OF PAYMENT CARDS
TRENDS IN AREA OF PAYMENT CARDS
• Comfortable ways of using the ATM – Drive-Thru (the first in the
US in 1946), VTM.
• Development of other financial services provided to a payment
card – travel insurance, assistance services, discount programs ...
• Supporting the growth of payments via the Internet - a virtual
payment card – strict legislation – EU, two-factor authentication
• Integrated payment card (ID card, ticket, sports facilities, cultural
events, health insurance, electronic wallet, ….).
• Ecological point of view – CSR in the financial services.
MARKETING OF PAYMENT CARDS
ACTUAL SITUATION IN PAYMENT CARDS AREA
• The pressure on better security against misuse (introduction
of biometric methods - biometric signature, voice, fingerprints,
iris, hand geometry, face, heart rate ...).
• Misuse of electronic distribution (skimming, SMShing,
phishing, cash trapping, ...).
• More services in the ATM - a payment order, mini statement
print, charging of phones, cash recycling (possibility to deposit
cash into the ATM), loans offering, the choice of form of
banknotes etc. ⇒ the future belongs to the multi-function ATM!
MARKETING OF PAYMENT CARDS
ATM
• Recycling ATM (money back into circulation).
• Mobile ATM (summer festivals), marketing presentations of
banks.
• USA - drive-in ATM (the principle of fast-food chains).
• VTM (Virtual Teller Machine, China, Huawei) - a multi-purpose
self-service virtual office. The virtual bank branch with lower
costs, video technology, biometrics, electronic signature
technology, advanced printing (credit card), …
MARKETING OF PAYMENT CARDS
VTM
MARKETING OF PAYMENT CARDS
CREDIT CARDS
• Today dynamically growing instrument.
• The debit card is linked to bank account X the credit card is not
linked to bank account and this is the type of loan!
• Revolving credit is a line of credit where the customer pays a
commitment fee and is then allowed to use the funds when they
are needed. It is usually used for operating purposes and can
fluctuate each month depending on the customer's current cash
flow needs. Revolving lines of credit can be taken out by
corporations or individuals.
• Used to support the payments at retailers X withdrawal of cash
(expensive).
• Additional services, marketing potential.
MARKETING OF PAYMENT CARDS
PREPAID PAYMENT CARDS
• It is a credit card that is not linked to a bank
account or credit limit.
• Disposable, rechargeable.
• Replacement of cash, spending under control.
• In the Czech republic is not implemented now.
MARKETING OF PAYMENT CARDS
PREPAID PAYMENT CARDS
• Comfortable cards - perfect for those who want to divide or
split their payments with card.
• Cards for young people - especially designed for people at a
younger age, when parents can control and monitor their
spending.
• Gift cards - a safe, convenient and fun way to give money to
your friends or family members.
• Travel Card - a prepaid card for payments abroad, which allows
to allocate a certain amount of payments during the holiday.
• Virtual Card - prepaid card account specifically designed for
Internet payments.
• Payment of targeted social benefits (only for clothes, food,
etc.).
• For clients without current bank account.
MARKETING OF PAYMENT CARDS
COBRANDED PAYMENT CARDS
• Co-branded cards are issued by most banks together with a business
partner (retail chains, travel agencies, pension funds, insurance
companies, etc.).
• In the 80s of the last century, there was strong competition environment
in financial market. Therefore banks began to look for new marketing.
The first co-branded card was issued in 1986 by the US Marine Midland
Bank together with Continental Airlines - this type of card has been
issued under the MasterCard brand.
• Using of co-branded cards clients normally obtain certain benefits in the
form of discounts, loyalty benefits, preferential procurement and so on.
Some co-branded cards offer the advantage of a refund of a percentage
of each purchase (so-called CashReturn) to the account - for example, a
pension fund or insurance company.
• The Bank may attract new clients and nonbank partner expands its
participation in sales volume, increasing fame of its brand, ...
MARKETING OF PAYMENT CARDS
COBRANDED PAYMENT CARDS - EXAMPLES
MARKETING OF PAYMENT CARDS
BUSINESS PAYMENT CARDS
• The company needs a payment card to cover expenditure
mainly for small goods and services - company chooses a debit
business card.
• The company wants to use the card to obtain favourable shortterm
loan, respectively to provide the card to its employees company
chooses a credit business card.
• For larger companies: possibility to gain advantages when
paying with card for higher volume of goods and services.
Possibility to use business payment cards with the own design
of the company.
• 90 % of large companies use the business payment card.
MARKETING OF PAYMENT CARDS
BUSINESS PAYMENT CARDS
• Optimizing of cash flow, because the company can use
both private as well as short-term interest-free credit
financial sources.
• Simplification of the administrative associated with
employees´ expenditures.
• Increased safety because employees do not have to
handle with cash (usage for business trips).
• Control under financial flows because the expenditures
paid with business cards are easily traceable and
verifiable.
• The business card can have its own financial limit.
• The possibility to obtain additional services (insurance,
roadside assistance, loyalty programs, …).
MARKETING OF PAYMENT CARDS
PRESTIGIOUS PAYMENT CARDS
• Mainly used to pay for goods or services and for cash
withdrawals from ATMs, more frequent use for payments
abroad (especially for payments at petrol stations and for
accommodation) and also for online purchases of airline tickets.
• Extensive security service (continuous customer service, where
clients can report the loss or theft of credit cards, but they can
also apply for the issue of a replacement card within 48 hours, if
necessary, they can obtain additional cash within 24 hours).
• Quality travel insurance, other types of insurance, extensive
assistance services.
• Different types of discounts, benefits, extra services.
• Own requirements for making cards.
• Prestige, the image of the card owner.
• „Concierge services“.
MARKETING OF PAYMENT CARDS
20
Conctactless chip (NFC)
Contactless payment
cards
Contactless stickers
Mobile Payments
(NFC chip)
Source:
Near Field Communication
CONTACTLESS PAYMENT CARDS
MARKETING OF PAYMENT CARDS
Wearables
CONTACTLESS PAYMENT CARDS
• Quick, easy, convenient, safe (up to CZK 500 without PIN).
• ATMs and payment terminals for higher amounts = contact chip
or magnetic strip.
MARKETING OF PAYMENT CARDS
MULTIFUNCTIONAL PAYMENT CARDS
• Combination of payment cards, short-term credit, tickets,
identity card, rewards program and discounts, etc.
• OPUSCARD (Liberec Region) - 10% discount on the fare
within subscription, library card, boarding card at schools,
credit card (Citibank), Benefit program (discounts on leisure
activities).
• OCTOPUS CARD (Hong Kong) - contactless payment card
for fare payment, prepaid payment card.
• BRATISLAVA CARD - contactless payment card, public
transportation card, library card, loyalty and discount card
• OYSTER CARD (London)
• ….
MARKETING OF PAYMENT CARDS
ECO-FRIENDLY PAYMENT CARD
• 2020: An eco-friendly recycled PVC payment card is one of the most
recent innovations produced and supplied by IDEMIA, whose goals,
like ČSOB, include environmental protection. To achieve this goal,
IDEMIA has used sustainable resources and applied measures to
reduce plastic waste and single-use plastics, etc.
• According to the current statistics of the Bank Cards Association,
banks in the Czech Republic issue more than 3.5 million cards every
year, each card using approximately 7 g of plastic. This is over 24
tons of plastic produced annually for this single-use plastic.
• ČSOB is the first bank in the Czech Republic to make such a
significant step towards reducing this ecological burden to save nonrenewable
resources, reduce the carbon footprint, and re-use plastic
waste to issue new cards.
MARKETING OF PAYMENT CARDS
4. BIOMETRIC IDENTIFICATION METHODS
• Biometrics is a set of scientific knowledge, based primarily on
statistical and analytical approach. The measurable
characteristics of living organisms are the subject of
investigation with the aim of their subsequent identification or
verification.
• Identification/verification of people according to the unique
physiological characteristics of humans.
MARKETING OF PAYMENT CARDS
THE USE OF BIOMETRICS IN FIANCIAL SERVICES
• Verifying of actually present owner of the financial services
(payment card) – it is non-transferable.
• High speed and accuracy of identification.
• Very easy and fast to use.
• It is not possible to forget or lose.
• It is variable - different body parts can be used for
identification (eyes, finger, palm ...).
• Object of verification cannot be stolen or imitated.
• Identification may be faster than using a PIN.
• The part of multifactor verification.
BIOMETRICS = SECURITY + HIGHER COMFORT OF FINANCIAL SERVICES
USE
MARKETING OF PAYMENT CARDS
THE USE OF BIOMETRICS IN FIANCIAL SERVICES
• Fingerprints
• Iris scan
• Retina scan
• Facial recognition
• Voice recognition
• DNA
• Next: identifying a human by the smell, verification of the
correctness of signature, bloodstream of finger, palm geometry,
according to the dynamics of keystrokes on a keyboard, ear pinna
shape, the distribution of blood vessels on the hands or face,
charcoal of thighs and calves while walking etc.
MARKETING OF PAYMENT CARDS
THE USE OF BIOMETRICS IN FIANCIAL SERVICES
Japan, 70 % ATMs in Poland
Images of the bloodstream
MARKETING OF PAYMENT CARDS
Payment card with sensor for fingerprint
28
• MasterCard and Zwipe announced the introduction of the first biometric
contactless payment cards in the world.
• Zwipe MasterCard card can be used for contactless payments after
activation by reading the fingerprint. Biometric authentication replaces the
PIN code.
• It works in Poland.
THE USE OF BIOMETRICS IN FIANCIAL SERVICES
MARKETING OF PAYMENT CARDS