“International Marketing and Management”: an internship …lib.ugent.be/fulltxt/RUG01/001/414/589/RUG01-001414589_2010_0001... · “International Marketing and Management”:

Ghent University Faculty of Arts and Philosophy

“International Marketing and Management”:

an internship at MasterCard Worldwide

Supervisor: Ms. Ellen Van Praet Confidential Information

Paper (“scriptie”) submitted in partial fulfilment of the requirement for the Advanced Master Degree: Multilingual Business communication by Vanessa Vanleene

2008-2009

Acknowledgements

I would like to thank my mentor, Geert Brisart, for his speech on MasterCard back in

November 2008. It immediately motivated me to do my internship at this international

company. I want to thank him and all of my colleagues, Steven Van Sweevelt, Andrew

Slattery and Luisa Marques for their kindness, help and trust. With everything they did, they

made sure that my first experience in the world of business was a positive one.

A big thank you also to my parents for supporting me during this postgraduate master. They

are a bottomless source of creative ideas and assistance. Thanks also to my sister for not

minding me making so much noise every morning at 6.10 a.m.

Thank you to my lovely friends, the ones who literally travelled with me to Brussels and the

ones who did so mentally. All of their friendships mean the world to me.

Finally, thank you so much to my boyfriend, as encouraging and loving as ever. At the same

time also the one person whom I can talk to on financial topics, his extensive economic

knowledge and his support have been priceless.

Contents

1. Introduction....................................................................................................................1

2. MasterCard Worldwide...................................................................................................3

2.1 The payment card industry......................................................................................3

2.2 Corporate history ....................................................................................................9

2.3 Current developments in the payment market......................................................12

2.4 Competition on the payment market ....................................................................19

2.5 MasterCard SWOT analysis ...................................................................................22

3. International management and marketing....................................................................26

3.1 International management ...................................................................................26

3.2 International marketing ........................................................................................29

4. MasterCard Worldwide: internship...............................................................................36

4.1 Maestro in Europe ................................................................................................36

4.2 Market research....................................................................................................36

4.3 Marketing presentations.......................................................................................40

5. MasterCard: Conclusions ..............................................................................................46

6. Lexicon .........................................................................................................................49

7. Works cited...................................................................................................................51

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1. Introduction In May and June 2009, I was an intern at the external communications department at

MasterCard Worldwide. this particular company drew my special attention because of its

international orientation, its excellent reputation and the ‘mysterious’ product. I was eager

to find out how a payment card company worked, what exactly they sold and what my role

in the process could be. I became part of the Benelux Business Development team which

focused mainly on MasterCard’s business with the merchants and their banks in the Benelux,

a team led by Steven Van Sweevelt.

The merchants and especially their acquiring banks are very important to MasterCard

as their preferences and needs have a great impact on the payment process. It is of vital

importance that these parties are convinced of the customized solutions MasterCard has to

offer. However, MasterCard is just as important to the merchants as the merchants are to

the company. It would be very inconvenient and far too costly for the merchants to set up

their own payment card system. The present requirements of quickly accepting international

cards would make it especially hard to process payments without the existing network of an

internationally recognised brand of cards.

I will explain the intricate ways of the payment industry in the first chapter of this

paper. In that initial chapter, I will also give a short overview of MasterCard’s origins and

development in time. A third part will focus on some important developments in the

payment market and their impact on the company. The company’s competitors’ situations

will also be touched upon before concluding with a MasterCard SWOT analysis.

On my first day at MasterCard, I was immediately confronted with the international

orientation of the company when I met my colleagues. My closest co-workers were from

Great-Britain, Mexico, Portugal, Flanders and Wallonia which led to English being chosen as

the language of everyday communication. Many of my assignments, such as drafting

presentations, also required translation in three languages (English, French and Dutch) so

that they could be applied to various markets. All this made me wonder what the impact

really is when a company decides to transgress the borders of its mother country. The

second chapter of this dissertation is therefore on the topic of international management

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and marketing. This is where I set out to discover what matters most in conducting

international business. I also include examples from MasterCard to explain their way of

handling the global diversification.

In the third chapter, I elaborate my specific responsibilities and assignments. I will

indicate how the business analyses I worked at and the presentations I helped create were

all part of the implementation of Maestro in Europe and its consequences. The conclusion

will round up what I learned from this experience and how my postgraduate master helped

to find my way around MasterCard Worldwide.

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2. MasterCard Worldwide

2.1 The payment card industry

Globally there are more than 24,000 financial institutions providing payment cards, 27

million merchants accepting this kind of payment and hundreds of millions of cardholders1.

The financial institutions which provide the card acceptance services to the merchants are

called the ‘acquirers’. The consumers on the other hand have the ‘issuers’ to turn to: these

issuing banks take care of the cardholders and their accounts. The card payment industry

uses a number of arguments to convince merchants to accept payment cards in their

businesses. These cards are said to save time and money and enable merchants to attract

and retain more customers. According to the industry, payment cards offer consumers more

security, convenience, and control than any other payment method. The wide variety of

cards available—including credit, debit and prepaid—offers flexibility as well. Payment cards

enable consumers to purchase items in stores, but also on the Internet, through mail-order

catalogues and over the telephone, thus widening the (international) commercial

opportunities for customers and merchants alike.

MasterCard Worldwide is one of the most widely recognized card brands in the payment

card industry. Other brand names are, for instance, Visa and American Express. The industry

covers businesses with debit, credit, prepaid, Automated Teller Machine (ATM) and Point of

Sale (POS) cards. The role of MasterCard is to link banks, cardholders and merchants in the

four party model of electronic payments. It is of vital importance to explain what this model

consists of to clarify MasterCard’s role in the system.

The major bank card associations, such as MasterCard Worldwide and Visa, are the

connection between the four parties which are involved in each card transaction: namely the

cardholder, the cardholder’s issuing bank, the merchant and the merchant’s acquiring bank.

Even though all four parties need MasterCard’s services to complete any transaction, only

acquiring and issuing banks are MasterCard’s direct clients. When a consumer intends to

make a purchase using a payment card, he/she will ‘swipe’ or ‘dip’ the card at the terminal

1 For technical information on MasterCard and the industry, I also used MasterCard’s employee information which is only available on the company’s intranet.

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at the point of sale (POS). The terminal will transmit the information of the transaction via

the acquiring bank, via MasterCard to the issuing bank. The issuing bank will check whether

this specific cardholder has the requested credit available. In a few seconds, the transaction

is approved and the consumer’s available credit is reduced by the requested amount. In case

of a debit payment card, this reduction happens immediately, if a credit card is used, the

total amount spent in one month is only paid back at the end of that month. If only a portion

of the total amount due is paid, the remaining balance is passed on to the next month. In

this case, the sum becomes subject to finance charges depending on the credit card holder’s

agreement with the bank. MasterCard thus links acquiring banks and issuing banks to

transmit the correct information and at the end of the day, the company also settles the

scores between the various banks all over the world.

This, however, is only a small part of MasterCard’s role in the payment industry. In order

to look into the various functions of the company one had best use the three-tiered business

model it has adopted. In this business model, MasterCard presents itself as a franchisor,

processor and advisor. Since the adoption of the three-tiered business model, MasterCard

has also aimed to move towards a more transparent governance model. As mentioned

before, it is a common misconception that MasterCard issues cards to consumers and solicits

merchants to accept such payment cards.

MasterCard has only one group of clients: the financial institutions. These issuing and

acquiring financial entities deal with the needs of, respectively, consumers and merchants.

As a franchisor, MasterCard thus presents the banks with a portfolio of brands and products.

There are over 28 million acceptance locations for MasterCard, Maestro, Cirrus and

MasterCard Paypass. I will specify the differences between these financial products further

on in this chapter.

The second part of the business model focuses on MasterCard’s more technical

functionalities (processor). Thanks to the company’s electronic system and huge database,

whatever transaction -wherever on this planet- with a MasterCard branded payment card

and a terminal, is checked and approved within seconds.

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The third and final part of the business model is MasterCard’s service as an advisor,

providing industry-leading analysis and consulting services. The extensive data gathering of

MasterCard’s electronic network is put to good use as it enables the company to track

consumer behaviour and buying trends. With the results of some extensive data processing,

MasterCard can advise financial institutions and merchants to better anticipate the

consumers’ wishes and needs. I will elaborate on this when I discuss MasterCard’s products

further on in this chapter.

MasterCard Worldwide aims to present customised solutions to its international clients.

In order to do so the company has several divisions to cover the various regions of this

world: Asia Pacific, Canada, Europe, Latin America, South Asia/ Middle East/ Africa and the

United States. The global headquarters can be found at Purchase, New York. Each region

however, has its own MasterCard headquarters at one of the major cities2 of the area. The

offices of each region also offer its customers access to the payment services all over the

world and that in their own language. MasterCard’s tagline “heart of commerce” resonates

in this dedication to advance commerce globally. This dissertation will touch upon the

structure of the European region and leave out the other regions as these are similarly

structured.

MasterCard Worldwide’s business in Europe is managed at the European headquarters

at Waterloo, Belgium. The 51 European countries are organized into three areas. Given the

fact that MasterCard is the critical link in the four-party electronic payments model, the

company has installed local offices to better meet the needs of the customers. Even though

Europe, as a continent, is one of the smaller continents MasterCard Worldwide covers, the

various markets are extremely diverse not only in language but also in preferences and

character. MasterCard Worldwide on the whole provides businesses with its services in

about 210 countries all over the world. Europe’s 51 nations in only one zone indicate a very

diversified territory. Additionally, as the European region reaches all the way up to the

2 Southeast Asia/ Middle East/ Africa: Dubai, Europe: Waterloo, Asia /Pacific Region: Singapore, Latin America/ Caribbean: Miami, North America Region: New York, Canada: Toronto

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eastern border of Russia, there are both very mature markets as those in early development

in Europe.

The second chapter on international management and marketing will provide the reader

with a better understanding of the impact of the international diversification. My internship

covered the SEPA (Single European Payments Area) of Europe, and more specifically the

Benelux. I will elaborate on the SEPA and its consequences for the card payment market in

part 1.3. (Current developments in the payment market) of this first chapter. The President

of MasterCard Europe, Javier Perez, is responsible for all European countries and the 9,000

MasterCard financial institutions in the area.

In the following part, I will elaborate on MasterCard Worldwide’s product range. The

company has a very diversified range of payment programs and services. There are three

brands: MasterCard, Maestro and Cirrus and the product portfolio consists of: MasterCard

credit cards, MasterCard debit cards, Maestro online debit cards, Cirrus ATM cash access and

their related programs. First of all, there is the classic credit card whereby the cardholder

obtains a line of credit. With a credit card, the cardholder can buy goods and services with

borrowed money and retrieve cash up to the, previously agreed upon, maximum credit limit.

Once a month, the cardholder receives a statement detailing the previous month’s

transactions. The loan is interest-free if the cardholder pays the entire total due by the end

of the month. In this case, the line of credit was merely a short-term loan. If the cardholder

chooses to pay later, the sum is transferred to the next month and subject to, previously

established, interest. There are many possibilities when it comes to credit cards, mostly

differentiating according to fees paid on purchases, fees paid on balance transfers and the

additional rewards. These rewards can be fly miles, clothing discount cheques or tickets for

large sports events.

Secondly, there is the ever more popular debit card. Debit cards are swiftly replacing

credit cards as well as cash in the world of payments. Customers opt for the safety of

carrying less cash but also the control of their spending with a debit versus a credit card.

When a debit card is used to make a purchase or a withdrawal, the amount is immediately

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deducted from the cardholder’s checking account. There is no line of credit the consumer

can count upon, only the available money on the account. When it comes to debit cards,

MasterCard offers Cirrus cards and Maestro cards. Cirrus cards offer the possibility to

withdraw money at Automated Teller Machines (ATMs) everywhere in this world. Over

892000 ATMs at airport, transit stations and shopping malls offer the possibility to withdraw

the local currency. Opting for a Maestro card on the other hand means getting one card for

shopping as well as withdrawing money. The Maestro network reaches 60 different

countries and the network is spreading steadily as over 90 million Maestro cards have now

been issued. A feature of the debit cards which is greatly appreciated by the more careful

consumer of today, is the fact that these cards allow to keep track of spending. With each

transaction, a receipt is printed and every purchase is listed in detail (date, time, place and

amount) on the monthly statement.

The third kind of payment cards which also allows a great deal of control are the

‘prepaid’ cards. As the name indicates, prepaid cards need to be uploaded in advance. There

is no line of credit, and there is no link with any kind of checking account. The consumer

loads a certain amount of money onto the card. The card can then be used to withdraw

money at a different location and for purchases in the shopping street, by phone, by mail-

order and on the internet. Cash can be loaded onto the prepaid card at post offices and

convenience stores or via bank and internet accounts. Prepaid cards can be used abroad at

any location where MasterCard is accepted. As it is impossible to overdraft, there are no

interest fees but certain fees can be charged depending on the kind of card. There are

prepaid gift cards, prepaid travel cards and prepaid cards for everyday use.

A fourth and very innovatory type of payment because it does not require ‘swiping’

or ‘dipping’ the card, is PayPass. With PayPass, a simple tap to a PayPass terminal with the

PayPass card, a special PayPass keyring or a PayPass activated mobile phone, allows the

consumer to pay for items under 12 euro. This contactless payment method is speedy and

convenient as there is no need to enter a personal secret code. I will further elaborate on

PayPass in 1.3. when I will discuss ‘Smart Cards’ as one of the most recent developments in

the payment market.

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MasterCard however, has also listened to the needs of the market, especially the

merchants, when offering the ‘advisor’ products. According to Andrea McKenna in

“Payments Industry gives Retailers the Loyal Treatment”, the demand for data processing

came directly from the merchants.

As merchants seek better ways to increase customer loyalty, some payments players are well-positioned to help them collect that valuable information at the point of sale. And the demand from merchants to have these loyalty programs makes it critical for transaction processors and program operators to use their data and analyses to become more valuable to the retailer. (21)

For a merchant it is vital not only to have loyal customers, but also to have customers who

spend more and visit more frequently. In order to get such positive results however, a

merchant needs to be able to anticipate the customer’s needs. Retailers want to get this

kind of information to be able to offer special deals on specific products the customer

happens to be planning to buy. This is called ‘predictive marketing’. (McKenna 21) The

gathering and processing of these facts about the customer is where MasterCard’s advisor

services come in. MasterCard takes care of the process of managing complex amounts of

transaction data, turning it into useful information to drive customer traffic for its clients. At

the Point of Sale, MasterCard can get details on how much customers spend on which

products and at what time. Other than help with ‘predictive marketing’, the company also

analyses the results of promotional offers to see how successful they have turned out to be.

In certain areas, such as luxury goods, these special deals can often include sending a

sales person to help the customers shop. I participated in a Merchant Development Team

meeting to brainstorm on the topic of the offers MasterCard could make to high-end

retailers. This was supposed to take customer knowledge one step further, so retailers could

make the shopping experience match each individual’s different needs. The merchant’s IT

system would allow him or her to insert, store and recall information on specific customers’

preferences on the basis of their card information. However, to know which customers

prefer the help of a sales person, the payment card which identifies a customer and his/her

preferences, would need to be scanned at the entrance. These ideas may be realised in a

fairly near future since even a lot of knowledge can be gathered concerning any small group

of customers even with present-day applications. A retailer can target a certain individual

who made a certain purchase, for example buying baby diapers. On the basis of the first

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purchase, the merchant can predict that the customer will also be interested in baby food,

and later on food for toddlers. The card company who communicates with the cardholder

each month through the billing statement, can use the information to advertise the

merchant’s new, personalised, offers. As McKenna concludes, “[s]uch programs can help

merchants to develop better shoppers by communicating directly with loyalty cardholders

through card statements and e-mails. They also can target offers based on consumer

shopping behavior identified through card use.” (24)

MasterCard has chosen to adapt to the needs of the market in this way to be able to

differentiate. By helping retailers to get loyal customers, the brand hopes to get equally loyal

retail customers itself. According to T. Jack Williams, president of prepaid and debit

payment-processing company eCommLink Inc., differentiation is key. “The real effort is to

get the merchant to use your company for a variety of services so it’s painful, if not

impossible, to leave.” (McKenna 21) In June 2009, MasterCard purchased a Dublin software

company called Orbiscom Ltd. to better cater to the customers’ wishes. This was an

investment of $100 million in MasterCard’s advisor role for card-issuing banks, as the

company keeps outgrowing the initial core job of facilitating transactions. “Orbiscom’s

technology lets banks give their customers control over how their cards are used. For

instance, consumers who do not trust online merchants with their personal information can

get one-time-use account numbers.” (Terris 1) For MasterCard, the acquisition is a positive

result of the economic crisis of the past year. Initially, the vendor had only a partnership with

MasterCard but the financial crisis made acquisition prices very favourable. According to

John Williams, analyst with Macquarie Group, Orbiscom is a relatively small acquisition for

MasterCard anyway. “Any opportunity for the processors to enhance the platform that they

can offer to the banks is a good thing assuming it’s done at the right price.” (Terris 2)

2.2 Corporate history

The American born company MasterCard started out as the Interbank Card Association in

1966. It was created by a group of banks as a member-owned association as opposed to

other organizations such as BankAmericard, now known as Visa, which was dominated by a

single bank. At the ICA, elected member committees were in charge of the company’s

actions. (McKelvey 253) During the following years, the ICA developed a global network of

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banks in- and outside the USA. In 1969, the brand acquired the “Master Charge” name. The

brand quickly developed payment cards with magnetic stripes ‘magstripe’ used in the

trademarked interlocking circles. In 1979, exactly 30 years ago, the Californian Banking

Association purchased the Master Charge trademark and stressed the importance of

international growth by renaming the company: MasterCard. In the 80s, MasterCard became

a pioneer in various fields. The company was first to introduce the hologram security device

(1983), it was also the first-ever payment card issued in the People’s Republic of China

(1987), in the Soviet Union (1988) and MasterCard ended the decade as the industry’s co-

branding3 leader. (McKelvey 253) The 90s were mainly about raising brand awareness and

usage all over the world through large-scale advertising campaigns. Maestro, the world’s

first online POS debit network, was launched in order to reach as many customers as

possible in the four corners of the world. In 2001, MasterCard decided to add an extra

service to its workbook. In order to find a good use for the data gathered from all the

MasterCard transactions and the years of experience in the payment industry, the

MasterCard Advisors’ professional services was launched. This was at the time the largest

global consultancy focusing on the payment industry.

MasterCard converted into a private-share corporation called MasterCard International

after a merge with Europay International in 2002. MasterCard International reflected the

company’s ambition to become the industry leader as one worldwide company with one

management team. Merely 4 years later, the company again decided to change the

ownership structure to stress the globally integrated structure. This major transition led up

to MasterCard Inc. trading on the New York Stock Exchanger as MA from 2006 onwards.

More than ever, MasterCard stood at the forefront of global economy with its vision of

advancing commerce worldwide . MasterCard International thus changed its name to:

MasterCard Worldwide, The Heart of Commerce™.

In order to understand what the influence of these recent changes on company culture

has been, it is important to look at the impact of the move to the New York Stock Exchange.

MasterCard’s shares were listed for trading on the New York Stock Exchange in 2006. This

3 ‘co-branding’ is used to indicate a brand alliance between two or more brands of one product, in this case, a payment card. Examples are ING bank and MasterCard, 3suisses and Mastercard, etc.

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constituted a major change as it meant that the actions of the company would be directly

linked to the value of the stocks. MasterCard’s successes and failures were now to be

evaluated by an independent board. The company’s performances were to be tracked by

financial analysts and public investors would have their own specific points of interest.

Regulators and investors would get detailed information of MasterCard’s investment of their

money, which would directly lead to increased scrutiny. Today too, MasterCard employees

are able to buy in on stocks, or they receive stocks of their own company as an additional

salary. These stocks need to remain in their possession for a minimum of three years. The

stocks are used as incentives for the employees, encouraging them to deliver good work.

This listing on the stock market also allowed the company to access the public market to

raise capital. Thus, from 2006 onwards, the company culture became results-driven and high

performance-oriented, quite different from the atmosphere of the previous close-knit group

of befriended banks. The new strategy is to be customer-focused, and to employ a

commercial mindset to enhance shareholder value. All of this led to an extra investment in

marketing strategies, such as TV commercials and advertisements. MasterCard’s “Priceless”

campaigns hit the right spot with the public. Proof of this are the many alternative home-

made ‘priceless’4 movies which are being uploaded on consumers social network sites such

as YouTube and Facebook. The cultural transformation also led to a huge change in the way

MasterCard employees could and should communicate with the public. As of 2006, all

statements to the media or the investment community had to be made by the designated,

trained company spokespersons. In addition, the company has adopted a very strict ‘clean

desk’ policy, reminding employees that no MasterCard-related information should ever be

left on desks at night. Computers and documents all need to be locked away in employee

desk lockers. All presentations and PowerPoint slides need to have passed through the Legal

division of MasterCard Europe before they can be submitted. All of these measures have to

be taken in order to avoid careless inside trading or tipping and to protect company ideas

from the competitors.

4 Even detective “Stella Bonasera” from the popular tvseries CSI made reference to the priceless campaign in fourth episode “Hung out to dry” of season three (2006).

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2.3 Current developments in the payment market

This section of the paper will focus on a few important developments in the payment

industry which have had a huge impact on the financial industry as a whole, on the company

specifically and on the responsibilities of my internship.

First I want to consider the decisions made by governments and policymakers which

impacted on the world of payments. The creation of a single European payment zone, for

instance, can potentially improve business for MasterCard. Secondly, there are the problems

with the interchange fees which have led to court cases for both MasterCard and its

competitors. Thirdly, there is the recent Cardholders’ Bill of rights which has been signed by

President Obama. The fourth and final subject I will touch upon is the rise of the ‘Smart

Cards’ and MasterCard’s very own PayPal.

I will start out by discussing the Single European Payment Zone, SEPA. In December

2001, the European Union imposed a new law to force banks to use the same fees for cross-

border and national payments. This allowed European consumers not only to pay with the

euro currency irrespective of the country, but also to make non-cash payments against

established and reasonable tariffs. The banks however, started to lose money because the

costs for processing the cross-border payments remained very high. The European Payments

Council or EPC was created to come up with a fit solution for this problem. The result was

the SEPA project, a project to create a unified European retail payment market. In this

monetary union, from January 2008 onwards, any economic citizen should be able to make

and receive payments in euro, by cash or by card, under the same basic conditions, rights

and obligations, anywhere in the SEPA zone. As a direct result the payment market is

opening up as the regional payment schemes have to face their international rivals.

Merchants have a far greater choice of acquiring banks and cardholders can browse many

more issuing banks. An openly competitive acquiring market means wider choice and more

value for money for the merchants. Cardholders will discover a wider card acceptance and a

payment market which will be innovating to better meet the customer’s needs. Whereas

‘domestic’ payments used to indicate: within one country, in Europe it will indicate any

payment within the SEPA zone. A cardholder with an Italian card, paying a Belgian merchant

with a Dutch acquiring bank will no longer be defined a ‘cross-border’ payment.

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All of these innovations offer great possibilities to the major payment card companies

like MasterCard and Visa. Those market leaders already have the system in place to have

international interoperability with wide POS and ATM acceptance. A very sophisticated and

complex system is required to process payments from the many different European

acquiring banks, issuing banks, cardholders and merchants. On the other hand, the increased

standardisation of fees and tariffs will make it easier for new payment initiatives to compete

with the established schemes. The result of all this is that debit cards which can be used

internationally become en vogue. Belgium’s Bancontact, the Netherland’s Pin and the U.K.’s

Switch domestic debit card systems, all limited to domestic –within one country- payments,

are now gradually replaced by MasterCard’s Maestro and Visa’s V-Pay to allow for debit

payments within the entire SEPA zone. European cardholders no longer need a credit card to

conclude an electronic payment in another SEPA country. The payment industry has also

noted a strong growth in the customers’ preference of debit over credit. In 2008, the in-

store use of debit climbed to 37%5 of the payment mix, up from only 21% in 1999. In order

to further push debit cards, MasterCard adopted a marketing strategy linked to the major

sports event of the year: the euro 2008 football championship. This sponsorship raised

awareness of the Maestro and MasterCard brands amongst the European public. It is too

early yet to tell whether the underlying reason for the switch to Maestro has been

sufficiently explained to the public. Society needs to be aware that it is the decision of the

European Commission which triggered this evolution from regional to international schemes.

Naturally, these new European rules were applauded by the industry but they were not a

stunt of the international credit card companies.

The ‘interchange’ discussion between the various members of the payment card

industry and the European Commission has featured heavily in the news. Interchange is a

fee which acquiring banks need to pay to issuing banks on each transaction. This fee is

supposed to compensate issuing banks for the risks and costs of providing cardholders with a

line of credit, a card and a checking account. Issuing banks have a far greater cost than the

acquiring banks as a result of administering millions of cards and investing in secure

technology and innovation. In order to achieve a better balance, this interchange fee was

5 Hough D., Riddle M., Allen C. and Fox M. “Banking Strategies. World of Choice: Consumer Payment Preferences” January| February 2009. The 2008 Study of Consumer Payment Preferences by BAI Research and Hitachi Consulting, quoted in MasterCard’s Employee Information.

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imposed on acquiring banks, and via those banks also on the merchants. In December 2007,

the European Commission ruled MasterCard’s interchange fees to be too high and imposed

a maximum. From June 2008 onwards, MasterCard had to repeal the MasterCard and

Maestro Intra-EEA cross-border POS interchange fees and replace them by temporary

interchange fees, approved by the European Commission. MasterCard has appealed before

the Court of First Instance but until a decision is reached, the temporary fees are valid in the

27 member states of the European Union. MasterCard’s biggest competitor, Visa, tried to

stay ahead of the legislators by voluntarily lowering its fees, signing an anti-trust agreement

with the European Union’s Competition Commission in 2002 . The European Commission6

however kept investigating the case and opened proceedings against Visa in March 2008.

The E.C. sent a Statement of Objections to the company in 2009. The retail association

EuroCommerce too, with Tesco and Carrefour amongst its members, demanded in June

2009 that Visa should lower the fees a great deal more. Lawsuits against Visa7’s interchange

fees are thus pending. Most acquiring banks recuperate the interchange fee from the

merchants. The interchange fee thus becomes a component of the Merchant Discount Rate

paid by the merchants to the acquiring banks for its acquiring services. The payment card

brand does not receive any percentage of this fee. MasterCard does set the price and the

level at which the interchange fee is set is of great importance. If it is too high, merchants

will not be eager to accept MasterCard payments cards. If it is too low, the issuing banks will

not receive enough compensation for the risks run, and MasterCard cards will not be

promoted with consumers. MasterCard believed its fees to be at a perfect balance between

maximizing card issuance and card acceptance. The decision of the European Commission

has definitely hurt the issuing banks and, indirectly, MasterCard.

Several factors are considered when setting an interchange fee. All of these

requirements must be satisfied in order for a transaction to qualify for a certain rate.

Examples of defining elements are: the merchant’s MasterCard sales and transaction

volume, the product type, the merchant category8. It is obvious that the company is hoping

6 http://www.europa-nu.nl/9353000/1/j9vvh6nf08temv0/vi3zjmbkntwj?ctx=vhk5iszwtoxv (consulted 12/08/2009) 7 http://sibosonline.com/fullstory.asp?id=20134 (consulted 12/08/2009) 8 Merchants are divided into categories according to their kind of busines, for example: hotels, restaurants, clothing shops, airlines, etc. An identifying number is linked to each specific category.

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to win the appeal so they can raise the interchange fees to their previous levels. What very

few people know is that the payment card companies have simply found new ways to get

the fees from the acquiring banks to the issuing banks. They have simply renamed the taxes

on the price lists, incorporating them in other fees.

In 2009, another important decision in the field of card payments was made as a

direct result of the global financial crisis which found its origins in the United States. On 22

May 2009 U.S.’ President Obama signed a wide ranging credit card reform bill. The

Cardholders’ Bill of Rights had already passed the House of Representatives the previous

year. The result is that from February 2010 onwards, new restrictions on interest rate

increases will be imposed. In addition, a notice of 45 days before changing interest rates,

requirements for transparency and limits on chargeable fees are imposed. It will also be

more difficult for youngsters under 21 to obtain a credit card. The new legislation will have a

big negative impact on MasterCard and its competitors and colleagues in the payment

business. The bill will force banks to limit the lines of credit they extend. With limited lines of

credit, there will be less spending with payment cards, resulting in less revenue for the

payment card companies.

The credit card fees are supposed to compensate the financial institutions and credit

card companies for the risks associated with credit card use. A card holder can decide

individually when to take out a loan, without having to go through the bank. The bank

merely sets a monthly limit on the size of the loans. The biggest flaw of the system however,

is that not everyone is able to deal with loans in a responsible way. Many card holders

overcharge when they have no opportunity to pay the loan back at the end of the month,

before the amount spent is charged with interest fees. Obama’s bill thus protects

irresponsible card holders against themselves.

Certain credit card holders, such as legal commentator Horace Cooper9, believe the

law punishes the responsible credit card holders. The bonuses they usually get for

responsible credit card use, such as lower interest rates and no annual fee for their accounts,

will be dropped. As credit card companies and banks have to limit the extended lines of

credit, they will seek revenue in similar charges for all cardholders. It is also feared that

9 http://foxforum.blogs.foxnews.com/2009/05/20/cooper_horace_credit_cards/ (consulted 08/08/09)

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banks will reduce the activation period of the issued credit card from a period of several

years as now to mere months, in order to limit the risk. The new rules attempting to limit

overcharging and sky-high interest rates will put credit out of reach for a large part of the

population. At the White House meeting, President Obama addressed the invited executives

of credit card companies: “I trust that those in the industry who want to act responsibly will

engage with us in a constructive fashion, and that we’re going to get this done in short

order.”10

The final development in the current world of electronic payments is one which the

payment industry has been working hard on in the previous years. The industry has been

developing appropriate programs to counter payment card hackers, as this white-collar

crime generates a lot of-for the credit card sector- unwanted media attention. Thus Europay,

MasterCard and Visa recently developed the EMV-chip11. They created a frame with strict

international standards which applied for the chip cards, the chip cards accepting terminals

and ATMs. According to Dan Balaban “[t]he chips banks use for their EMV cards are in a

different class from the low-cost Mifare Classic12 transit and access-control cards […]” (14)

Payment-systems specialist Mike Hendry too believes that no EMV card has yet been cloned

successfully. The EMV chips are equipped with microprocessors to enable the cards to deal

with higher-level encryption keys and algorithms. U.K. researchers however did show that

card details can be stolen if someone tampers with the EMV acceptance terminals at the

Point of Sale. (Balaban 14)

The year 2008 was a year of fast development in the field of smart cards. Great

progress was booked in the field of e-IDs, e-Passports, contactless and Near Field

Communication (NFC) technology. Eurosmart released data indicating that the smart cards

industry sold 5,085 million units in 2008 and predicts to produce 5,400 million units in 2009.

The growth has to do with the growing EMV migration, the rise of contactless payment and

the global adoption of e-Passports. (“Cards industry continues to grow” Card Technology

Today (June 2009) 1-2) All of these products are gaining in popularity thanks to consumers

10 http://www.huffingtonpost.com/2009/04/23/obama-creditcard-ceos-mee_n_190473.html (consulted 09/08/09) 11 E M V stands for the inventors of the chip: Europay, MasterCard and Visa 12 The Mifare Classic card is an inexpensive, contactless, memory storage card. An example of it is the Oyster card, used at the London Metro.

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and companies working hard to get their ‘green’ credentials in order. In 2008, Virgin Money

took it one step further by even dropped the plans for a biodegradable card in favour of the

state-of-the-art mobile phone technology. Rather than further developing another card,

albeit ‘greener’ than its competitors, the financial services company decided to invest in new

opportunities. Contactless technology has been developing quickly but until recently, both

MasterCard’s PayPass and Visa’s PayWave still used conventional payment cards. (Turner 6)

The ecological factor, however, is not the only reason smart cards are so attractive.

Contactless payment adoption has been very fast, especially when compared to the

time it took to get used to ATMs and signature debit cards. To pay with a contactless card or

phone, the device has to be held near a special contactless acceptance terminal. This allows

the cardholder to pay for transactions of up to 10 pounds without inserting a PIN13. The

smart cards do have a PIN and chip to allow for normal ‘dip’ or ‘swipe’ purchases and ATM

transactions. Furthermore, with the contactless payments, occasional checks to prevent

fraud will prompt for a PIN to be entered. This innovation has been welcomed by many

businesses and institutions and is on the verge of conquering many more, says Randy

Vanderhoof, executive director of the US-based Smart Card Alliance.

With over 35 million contactless payment cards issued so far and more than 100 000 merchants accepting contactless payments, some would consider this a mature market. However, that number is still very small compared to the total market […] New merchant segments are coming on board, such as upscale multi-lane supermarkets, discount warehouse chains, unattended vending operations, and new mass transit operations in major cities [...] (“Opportunities for 2009?” Card Technology Today 21:1)14

Some European countries such as France, Germany, the United Kingdom, but also Japan and

other large Eastern countries are far ahead of the rest of the world when it comes to the

implementation of smart bank cards. Latin America’s Mexico, Brazil and Canada on the other

hand still need to migrate from ‘magstripe’ cards to chip cards. In Japan, more than 50

million cell phone users are already carrying the wallet phones. This means that half of all

cellphone users have phones which are capable of serving as a payment means. The

sophistication of the mobile technology has greatly increased the memory and enlarged the

processing power of the cell phones. This has allowed for the smart cards to be matched

13 Personal Identification Number or password: it is a personal secret code linked to a payment card 14 anonymous writer published by Elsevier Ltd. “Opportunities for 2009?” Card Technology Today 21:1 (2009)

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with the handsets. However, only one third of those 50 million smart card activated

cellphone owners actually make purchases with their phones. (“Payment Via Wallet Phone”

Communications of the ACM 52:115) There are two different reasons for this. First of all there

is the psychological barrier. Customers fear that new technology will only create new

opportunities for criminals to intercept communication between the customer and the

merchant or the merchant and the bank. Secondly, there is the major issue of how many

merchants are actually ready to accept the new technology.

Barclays16 claims that over 8,000 retailers already accept contactless payments […] including many outlets of Pret A Manger, coffee Republis, EAT, BOOKs etc, Kispy Kreme, Threshers and thousands of independent retailers with more installing the technology every week. (“Barclays to go contactless with all customer debit cards” Card Technology Today 21:1)17

The major card brands each try to win over as many big issuing and big acquiring instances.

MasterCard and Visa even contact large merchants directly to conclude tailored deals.

Whereas Visa for example concluded a good partnership with Barclays at the beginning of

2009, MasterCard got Carrefour within the same time frame. Carrefour’s financial services’

subsidiary, Société des Paiements PASS agreed to launch the PASS MasterCard card from 11

February 2009 onwards. (“MasterCard and Carrefour launch contactless card” Card

Technology Today 21:1)18 For the merchant, the innovative card can help to attract and

retain new cardholders whilst also improving customer benefits and loyalty. The frantic

game of being the first with the best deal holds the payment cards industry in a firm grip.

Several of the presentations I made during my internship, served to convince potential

customers of the new possibilities and favourable opportunities of MasterCard’s offers.

An additional problem is that the new opportunities blur the line between financial

institutions, card brands and cellphone retailers. This might require a rethinking of the

business models. In any case, by 2013, the industry expects to have approximately 700

million consumers globally in possession of the wallet phone. (“Payment Via Wallet Phone”

15 anonymous writer “Payment Via Wallet Phone” Communications of the ACM 52:1 (2009) 16 Barclays is one of the biggest British issuing banks. It was the first bank in the U.K. to issue contactless Visa debit cards, from March 2009 onwards. 17 anonymous writer published by Elsevier Ltd. “Barclays to go contactless with all customer debit cards” Card Technology Today 21:1 (2009) 1-3 18 anonymous writer published by Elsevier Ltd. (“MasterCard and Carrefour launch contactless card” Card Technology Today 21:1 (2009) 1-3

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Communications of the ACM 52:1) Smart bank cards in combination with the Maestro

implementation will make future online shopping even more secure.

2.4 Competition on the payment market

The world of payment solutions is a very competitive business. The various payment card

brands compete with each other for the loyalty of the customers, the best deals with the

financial institutions and the strongest relationship with the merchants. They stimulate one

another to develop new and better, state-of-the-art payment solutions to better cater to the

needs of the markets. There are four major fields which can have an impact on MasterCard’s

position in the payments industry. First of all, the company pays a lot of attention to the

relationships with their customers, the banks, and the reputation of the brand. Secondly, the

recognition of their payment cards globally has to be worked at constantly. Furthermore, the

company keeps track of the number of issued cards and the extent of consumer and

business spending with them. The final key element which is linked to the importance of

brand name and reputation is the success of the marketing and promotional campaigns.

MasterCard has quite a number of competitors to deal with. Not only the other major names

in the industry, such as Visa, American Express and Discover but there are also a number of

direct threats to the MasterCard products such as the innovations coming from the world of

internet commerce (‘e-commerce’) and mobile phone commerce (‘m-commerce’). The final

competitor is the bank note as consumers continue to reach back to the means of payment

they know best: cash.

MasterCard’s biggest competitor, and the industry’s market leader, is Visa. This

company is operating the largest retail credit card network. Its revenue of 6,623 million

dollars in 2008 surpassed MasterCard’s 4,992 million dollars19 from the same year by far.

Visa has a very similar way of working, linking the members of the four-party payment

model. Many financial institutions issue both MasterCard payment cards and Visa payment

cards, this is called a structure of ‘duality’. Increasing consolidation with the banking

industry, however, has in recent years led to issuing banks deciding to issue but one of these

major players. “In the case of ‘non-dual’ financial institutions, MasterCard is competing with

Visa for the entirety of a member bank’s business.” (McKelvey 254) This can lead to the

19 2008 Annual Report on http://www.mastercard.com (consulted 16/08/09)

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issuing bank getting better deals from the credit card brands, they will, however, not be able

to have cardholders pick their favourite. The company, headquartered in San Francisco, had

an operating revenue of approximately $6,000 billion in 200820. Its total transaction count

rose to 53,684 million in 2008, up from 46,893 million in 2007.

American Express21 is a major financial and network services company of charge

cards, credit cards, travellers cheques, financial services and international banking. The

company has formed arrangements with financial institutions in 90 countries all over the

world, but mainly in the United States of America. With headquarters in New York City, this

card payment company is specialised in issuing corporate credit cards. The result of this

specialisation is that its cardholders spend two to four times as much as customers of

competing card brands, allowing American Express to charge a discount rate twice as much

as its competitors. In this way, American Express earns much more each time one of its cards

is used, on the other hand, the high acceptance rates also means that smaller retail

businesses are not easily convinced to accept American Express. Businesses not aiming for

those big spenders stick to accepting only MasterCard and Visa. American Express’ portfolio

also does not include debit cards. MasterCard and Visa have been sued by American Express

in 2004 for violating the anti-trust laws in the U.S.. The two biggest players of the payment

market were charged with forming a cartel, stopping banks from cooperating with American

Express. Both MasterCard and Visa were found guilty and Visa paid a $2.8 billion settlement.

In addition, American Express obtained the right to those banks who were previously locked

into exclusive agreements with the two frontrunners of the industry. A fourth card company

Discover Financial Services has also sued Visa and MasterCard with similar charges. The

three parties settled forcing MasterCard to pay a net after-tax fine of $515.5 million22 in

2008.

The fourth major payment card brand, launched nationally in 1986, is Discover Financial

Services23. Its network also covers over 185 countries, providing not just a cash rewards

credit card, it also offers savings products, student loans and a variety of personal loans. The

20 2008 Annual Report on http://www.visa.com (consulted 06/08/09) 21 http://www.americanexpress.com (consulted 14/08/09) 22 http://www.ecommerce-journal.com/news/mastercard_has_crossed_the_ts_in_the_story_with_discover_lawsuit (consulted 16/08/09) 23 http://www.discoverfinancial.com (consulted 16/08/09)

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company promotes its payment cards stressing the 0% annual fee and the cash back bonuses

for on-time payments. Customers can also opt for a cash back discount at select retailers or

bonus air miles at airline companies. Both American Express and Discover Financial Services

operated a closed-loop network at first , as opposed to MasterCard and Visa’s open-loop

network. Closed-loop cards are limited to specific merchants such as gift cards from a

retailer or a group of non-competitive retailers. The two companies decided to switch from

closed-loop to open-loop. At that point they discovered that many banks had an exclusive

issuing or acquiring agreement with MasterCard and Visa. The 2004 anti-trust trial resulted

from this disagreement between the payment card brands and banks. Since the conviction

of the two market leaders, Discover has been quickly developing its own impressive portfolio

of payment cards for students, businesses and frequent travellers alike. For now however, if

we compare recent stock prices of the four competitors, on the New York Stock Exchange

MasterCard stands very strong. On 14 August 2009, MasterCard stock prices were at

$202.6124, Visa at $67.80, American Express at 31.72 and Discover Financial Services at

$12.48.

Other competitors can be found in the world of online and mobile phone retailers or

e-commerce and m-commerce. A now very popular payment system called PayPal was

founded in December 2008 and acquired by eBay as its own payment program in 2002.

Originally, PayPal was the first system catering to the needs of the first online shoppers. At

the time, it simply filled a gap in the payments market of an online person-to-person

payment solution. It was unleashing a lot of economic activity which would not have

happened without this application. According to Aaron McPherson, research manager at IDV

Financial Insights, PayPal has been through two major shifts in the past. First “it shifted from

a service designed to move money among personal digital assistants to one that helped

people make payments at online auctions.” (Wolfe 3) In the second shift, PayPal began

offering its services through e-commerce websites other than eBay. In 2009, PayPal is

looking to offer new services outside payment on the world wide web. The program will

open its platform to other software developers. By letting outsiders build applications that

link to PayPal’s core systems, and thus to open up its platform, the brand is hoping to tap

24 http://www.marketwatch.com/investing/stock/MA (consulted 16/08/2009) and ‘Investors relations’ at the companies’ corporate websites.

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into the rest of the payments industry’s energy. PayPal’s vice president of platform and

emerging technology, Osama Bedier, indicates that the goal is to let PayPal become “the

enabler for electronic products and services that otherwise might have no way to be

monetized.” (Wolfe 1) The brand has now also established itself in the business-to-consumer

payments, making it a definite competitor to the industry. In 2007, PayPal had $47.5 billion

in total payment volume out of a total of $113 billion in TPV for eBay. Compared to the TPV

of 2006, this was a 33% increase. In 2008, there were over 60 million active accounts in 190

countries all over the world. (MarketWatch 134) For now, PayPal is mainly a competitor to

the issuing banks. Even though PayPal is a competitor to MasterCard in the online payments

sphere, the two companies have also worked out some deals. PayPal has even been issuing

MasterCard branded debit cards in the US.

Amazon too offers its own payment service to surfing customers. E-shoppers can use the

Amazon Payment Service, paying directly from their own checking account or using an

Amazon Payment Account.

2.5 MasterCard SWOT analysis

The opportunities created by SEPA, the difficulties with the Interchange fees, the current

economic trends resulting from the financial crisis and the march from paper to electronic

retail payments give conflicting signals as to MasterCard’s future. A SWOT analysis clearly

listing the strengths, weaknesses, opportunities and threats can shed some light on

MasterCard’s position in the payment card industry.

When it comes to strengths, MasterCard as a company is widely recognised by

customers and rivals within the industry. The strong brand name is a must in this business as

the customers’ and merchants’ trust is of vital importance. A reliable brand of payment

cards pushes merchants to accept it at their shops and draws the attention of customers

inquiring about a debit or credit card. MasterCard is recognised as one of the blue-chip25

companies, meaning that is considered to be a well-established, creditworthy and large

corporation. The good financial situation of the company allows them to invest in innovation

and IT. This innovation combined with the possibilities of the IT department result in diverse

25 The term ‘blue-chip’ derives from the world of casinos. In poker games, the blue chips are the chips with the highest value. In the economic world it is used to denominate stocks of high quality which pay good dividends even if the company is down a bit. For example: Coca-Cola, Nike, MasterCard, Visa, etc.

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products such as contactless payments. A final strength are the years of experience in the

business which have helped to create the large network of customers of acquiring as well as

issuing banks.

The weaknesses of MasterCard are very much related to the fact that the wellbeing

of the payment industry is influenced by how the international economy is doing. With

consumer confidence at an all-time low and thus careful consumer spending, payments on

the whole have gone down. Transactions are both fewer and smaller. Some consumers feel

the need to control their spending by using cash. Another weakness is that, notwithstanding

the innovations in the field of security, payment cards stay susceptible to fraud. In 2008,

information and data of more than 45,00026 credit cards were stolen from hacked

computers. The recently developed EMV chips and PINs offer reliable security walls but in

some countries payments using only the credit card data and an autograph are still possible.

Randy Vanderhoof from Smart Card Alliance indicates that “[p]roperly implemented, the

chip, payment terminal, and network can interact to prevent card cloning and add other

transaction security features.” (11) This eradicates fraud as the card information becomes

useless at the Point Of Sale. In the U.S. however, criminals can still clone and use magnetic

stripe cards. It would be of great impact to all members of the four-party payment system to

put chips on the U.S. bank cards too. For now, issuers, acquirers and merchants seems to

prefer the security risks over the investments such a transition would require. If criminals

illegally use someone’s payment card information, the cardholders do not run any risk as

they can easily retrieve the money if they can prove to their banks that they did not make

the purchase. It is mainly problematic for the banks who have to deal with all these fraud

related refunds.

The opportunities for MasterCard are multiple. Continued development of new

complex security systems enable the company to put an end to payment card fraud and thus

promote themselves as the most reliable card brand. Good contacts with mobile phone

companies enable MasterCard to be first in developing new high-tech payment possibilities

for the future. These developments increase the volume of debit card business and attracts

the attention of new customers. New payment possibilities are therefore one of the biggest

26 http://www.deredactie.be/cm/vrtnieuws/binnenland/1.541658 (consulted 01/08/09)

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growth opportunities for the company. MasterCard has now also enlarged its portfolio with

Maestro SecureCode, a security system for debit payments online. The new possibilities in

Europe to pay with a debit card in any country in the SEPA zone, opens up the market for

debit cards. Payment cards are not only used abroad or used to make big payments, but

groceries and other daily shopping sprees at local retail locations are paid by card as well.

Credit cards remain ideal for short-term loans as these loans –if paid back at the end of the

month- are not charged with any fees. Consumers thus have better control over postponing

a number of large payments to the end of the month when the wages are deposited.

Moreover, cards are now considered the ‘green’ alternative to paper money, as one small

plastic card replaces piles of printed paper bills and metal coins.

The main threats for MasterCard come from their strong competitors, the volatile

economic environment, the security dangers and the European regulations. MasterCard’s

most important competitor is Visa, another well-established international payment card

brand. Competition is constantly on, whether it is in saturated markets to try and conquer

customers of the other brand or whether it is in new markets (such as Russia) where it is

important to offer the most favourable deal. Any innovation at MasterCard can be quickly

countered by Visa innovations and visa versa. Other competitors like American Express, also

push MasterCard to stay at the top of their game.

Another important threat is paper money, or cash. As mentioned before, whenever

consumer confidence is low, consumers tend to reach back to using cash. The recession has

definitely had an effect on size and number of card transactions. Doing groceries when

carrying only cash will automatically limit the consumer to spending only the cash in hand;

with a credit or debit card, there are hardly any limits. According to the BAI/Hitachi research

project, consumers say “that they would spend about $30 on a cash transaction at most. By

contrast, their maximum purchase on a debit card averages about $100”27. Merchants also

prefer cash for small amounts as there is a fee to be paid on each payment card transaction.

Merchants often believe that small transactions are not worth the cost. Some merchants

have thus imposed an extra fee on their customers if they wish to pay by card for an amount

27 Hough D., Riddle M., Allen C. and Fox M. “Banking Strategies. World of Choice: Consumer Payment Preferences” January| February 2009. The 2008 Study of Consumer Payment Preferences by BAI Research and Hitachi Consulting, quoted in MasterCard’s Employee Information.

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of five euro or less. Within the market, there is also the cannibalisation of credit cards by

debit cards. The ever-growing popularity of debit cards, and the widespread use, entail a

downfall of the credit card use. Furthermore, the tighter regulations imposed by the

European commission increase uniformity of tariffs and fees. Not only can this mean less

profitability, it also opens opportunities for new (European) initiatives on the financial

market.

A final threat is the danger of client concentration. If banks merge to become bigger

companies, they are better able to negotiate with MasterCard than smaller entities. Given

the fact that MasterCard depends heavily on the brand-licensing fees and assessment fees

on the money flow by the financial entities, the company needs to try and settle as

favourable prices as possible.

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3. International management and marketing

3.1 International management

‘Think globally, act locally’

This commonly used expression in international business indicates the importance for a

company operating globally to adapt research theories, marketing strategies and

communication policies to the needs of various sub-regions. It remains to be seen however,

which part of the sentence requires the biggest emphasis.

A company can decide to have a main global strategy and adapt it where it seems fit.

When expanding, the company can also decide not to extrapolate a single formula but to

diversify according to each new region, even changing its company name. Another problem

is to discover how a company splits up the targeted territory to develop an appropriate and

fit strategy. Once a strategy is built up, it still needs to be put into practise when the

company is confronted with different languages, different attitudes and different cultural

traditions. MasterCard Worldwide for instance offers its services to customers in 210

countries all over the world. To be able to pick up on the latest trends on the individual

markets, the company has divisions in practically every country with large MasterCard

headquarters in the biggest cities of each region. I will elaborate on MasterCard’s

multilingual websites and the company’s global sponsoring further on in this chapter.

International companies can make different choices when deciding whom to put in

charge of business at a company division outside the mother country. Very often, personnel

from the mother country is relocated to the new developing markets. This however is a

costly process as “the annual cost of an overseas assignment is rarely less than $300,000

and, in a few cases, can exceed $1 million. This may not even include training, which can be

extensive” (Gorchels 97). Companies venturing abroad make this choice if they are uncertain

that host-country managers will be able to correctly adopt the corporate culture or if there is

limited local talent. The downside of working with expatriates on the other hand is that they

still need to fit into a different culture and acclimatize to the local traditions. Especially

marketing personnel should be familiar with the local market, speak the native language and

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preferably be from the region. Expatriate managers should be multicultural in orientation

and try to adapt as effortless as possible to the new culture.

In this second chapter, I will set out to stress the importance of local knowledge and

experience in the successful international company MasterCard. The brand is globally

recognised and it maintains a very strong presence in the international business world as a

result of its international pro-activeness and its high ambitions for future growth. I will also

elaborate on problems linked to international markets which are very apparent but clearly

need to be addressed in an appropriate way. With the expansion of a firm beyond the

boundaries of a single market come distribution channels, competitor actions and customer

wants which differ greatly from those in the home market. Not only is it challenging for a

company to coordinate activities over a large geographical area, all corporate publications

also need to be translated into different languages. I will deal with the difficulties of good

translations whilst stressing the significance of addressing customers in their native

language.

In social studies, cross-cultural research is divided into two schools. There are two

approaches to applying a marketing model developed in one country, to a number of other

countries. On the one hand, the ‘etic’ school assumes that theory and constructs are

universal. This would mean that theories can be extended to whatever country without

taking the new context into consideration. Applied to marketing this means that

typically, a pseudoetic research perspective is strongly anchored in the domestic market context. The domestic market forms the dominant frame of reference. It is assumed that market and cultural context are also salient in other countries. (Douglas 200528: 3)

The ‘emic’ school opposes this view indicating that theories are not universal but need to be

developed according to the context. They believe that it is important to check whether a

construct developed within one given socioeconomic environment applies to another

environment without changes. Constructs can, for example, be expressed differently if they

are related to a contextually embedded behaviour. In her 2005 paper on international

28 This is the first article by Douglas S.P. and Craig C.S., Douglas, S.P. and Craig C.S. “On Improving the Conceptual Foundations of International Marketing Research” Journal of International Marketing 14:1 (2005) 1-22 It will be referred to as Douglas 2005.

28

marketing research, International business professor Susan Douglas gives an example of the

Chinese world of business. In China, individual trust in one specific seller or salesperson

stems from the trust in the reputation or creditworthiness of a company and not from the

seller’s individual product knowledge. Trust in a certain company is in many Eastern cultures

determinate for the trust in the salespeople of that organisation. Douglas concludes that

“trust may be expressed in different ways in different cultures” (4). To expand

internationally in a successful way, the company needs to have a thorough knowledge of the

different socioeconomic environments it will encounter.

Linda Gorchels, director of executive marketing programs at the University of

Wiconsin-Madison, and her colleagues conducted research to understand what international

executives in Germany, Japan and the U.S. valued most. Three characteristics kept returning:

knowledge of social/cultural practices, economic conditions, and trade regulations. These

key elements of regional knowledge turn out to be vital for thriving international offices. In a

new market, the company managers and the marketing division need to be aware of the

local consumer needs, the local competitors, the various possible distribution channels and

the product requirements. Cultural habits can indeed vary heavily according to geographic

area. An international marketing manager will therefore need to be aware of different

negotiating and communication uses. Gorchels provides an example of the Asian world

where “the focus is on relationships, requiring rapport building prior to (or as part of) the

negotiation process. Communication in these situations is generally indirect, and an effort is

made to avoid confrontation and maintain harmony” (104). If a U.S. business person is

unaware of this difference, the negotiation process is in danger as U.S. business people are

used to direct communication with a strong focus on the deal instead of the relationship.

As companies expand further into international markets, penetrating emerging markets, such as China, India, and Brazil, as well as markets within the former Soviet Bloc, the Middle East, and Latin America, the conduct of international marketing research is becoming increasingly important and complex. (Douglas29 2007: 30)

29 This is a second article by Douglas S.P. and Craig C.S., “Collaborative and Iterative Translation: An Alternative Approach to Back Translation” Journal of International Marketing 15:1 (2007) 30-43 It will be referred to as Douglas 2007.

29

For its international research, a company needs to decide what the unit of their analysis will

be and how much they can differentiate company management according to the different

zones. The individual country is typically considered as a unit. It can be useful however, to

examine the differences “both within and among countries because there may be

considerable intracountry heterogeneity. Within-country heterogeneity is particularly

relevant for international market segmentation because it results in segments that cross

national boundaries.” (Douglas 2005: 8) It can be rewarding to use alternative units in

international markets research given the fact that a country as a unit of analysis is often too

limited. It suffices to take a closer look at the Benelux to understand the importance of

debating what a unit of analysis consists of. An international company targeting Belgium for

instance, should take the different languages, the different zones and the different traditions

into account. Whether it is by focusing on a major city, by using a broader scope of a large

region or by combining these levels, the research will lead to a valuable understanding of the

variety of cultures. Units all over the world will differ “in terms of language, levels of literacy,

educational systems, and rules of social interaction.” (Douglas 2005: 10)

3.2 International marketing

Major companies, having acquired a thorough understanding of the domestic market need

to make sure that they spend enough on marketing abroad to correctly communicate to

their international audiences. Everything customer-related, from researching the global

market’s diversified interests to adapting product concepts, is lifted to a higher level of

complexity. The most commonly made mistakes in International Marketing can be divided

into two kinds: those related to language and those related to cultural sensitivities. If

companies want to take advantage of the opportunities of foreign markets, they need to find

a good approach to tackle these issues.

Translation mistakes are not always simply wrong translations of a specific word or

concept, it can just as well be that a literal translation of a specific word is simply not used in

a similar context. To knowledgeably communicate a brand internationally it is vital not to

simply translate an advertising copy in the target language. Messages conveyed within an

advertisement are also linked to a market’s culture. (Stewart-Allen 16) Companies of

American origin often make the mistake to take an English copy and have it translated to

30

another language. Other than language, international companies have to keep an eye out for

differences in symbolism. As symbols are related to culture, it is very common that a symbol

representing something positive in one culture is an insult in another. A ‘thumbs up’ in

America signalling that everything is ok, is a huge offence in Mexico. Again, it is best to use

local staff to avoid embarrassment or insult. In addition, using the correct local symbols can

mean a leap forward in the results of a local advertising campaign. The visual and verbal

stimuli of the local market need to be compared as well as the meaning of colours and

colour combinations. (Douglas 2005: 11)

Stewart-Allen gives an interesting example of a difference in cultural marketing

between the U.S. and Europe. Direct mailings in the U.S. typically open with a punchy

commercial offer whereas European customers prefer to be addressed in a polite and calm

manner. Simply put, the preferences of the customers make the difference between:

‘VANESSA! GET YOUR VERY OWN MASTERCARD DEBIT CARD NOW! FREE OF CHARGE

DURING THREE MONTHS’ or ‘Dear Ms. Vanleene, did you know that MasterCard offers a free

debit card to those under 25?’. Different people have different likes and dislikes, and these

are often influenced by the local environment and culture. Bill Hunt, global CEO for search

agency Global Strategies stresses again that: “to determine the best way to market a local

population, make sure you have a contact on the ground in that country, whether it’s an

agency, consultant or local office” (Bannan 18).

In the next part, I would like to concentrate on what options international players

have to obtain the best possible translation of advertisements, websites and questionnaires.

The technique for checking a certain translation which has been used most commonly over

the past years is called ‘back translation’. It requires a bilingual speaker of both target

language and source language. First the text is translated by the speaker from the target

country into the target language. The result of that translation is then translated by a

speaker from the source country into the source language. The result is compared with the

original text to track potential problems and mistakes. Douglas and Craig stress that

“Extensive checking, pretesting of the translation, and debriefing are essential to ensure a

reliable and accurate translation.” (2007: 31) Thomas Semon too indicates that “language

31

problems in multinational research are routinely resolved by the double-translation method,

but cultural differences and organizational problems remain vexing.” (9)

‘Back translation’ is perhaps too simple a procedure, as there are some definite

limitations to it. The procedure starts from the assumption that the target language has an

equivalent for each word or word pair of the source language. This only works in so far as no

idioms or expressions are used. It leaves little nuance and leads directly to a very literal

translation. Witty advertising campaigns, detailed manuals and wide-ranging websites are in

that case out of the question. It is possibly an unwise choice for a company embarking on an

international adventure, to limit itself to simplified language use on the foreign markets.

Douglas and Craig, in 2007, therefore believed that complex translations really need a team-

based approach so as to make sure all the required skills, i.e. disciplinary knowledge and

linguistic abilities, are present. The two marketing experts name two forms of collaborative-

based work: the committee and the expert team approach. The committee approach

requires all members of the team to be present and to finish the translation together. In the

expert team, the translators work independently and the finished translation is a product of

the putting-together of their individual work. In both cases, the team members have to be

familiar with the different languages as well as the different cultures. If a translation has

been finished and approved, it still requires testing and feedback from, preferably both,

monolingual and bilingual respondents, in addition to debriefing by linguistically mixed field

staff and perhaps some of the company’s foreign contacts.

During my traineeship for MasterCard, I translated the presentations –in Dutch - we

had created in English first. The French translations I did were checked by a French secretary

who had no knowledge of the project which facilitated an objective check of the translation.

I sat at the same table when the French native speaker was reading the presentation to

explain the original message when required. As the presentations were eventually approved

by the legal team, they were sent to one of the customers, mostly financial institutions, who

pretested them with their clients, the merchants. Clearly, to have an entire team dedicated

to one translation is a costly business. Economising companies can be tempted to risk errors

and save time by using the do-it-yourself approach. Thomas Semon also correctly points out

that people often find it difficult to accept help as they would rather prove their ability,

32

resourcefulness and know-how. (9) In International research and marketing however,

speaking a foreign language fairly well, will often not be sufficient for a large range of

corporate communications to a foreign public. The damages to the brand name and sales

figures cannot be underestimated as blunders tend to stick to customers’ minds.

When one considers the international marketing plan of a company, one also needs

to have a look at how the company is marketing itself. The goal in creating international

advertising is not to disguise your brand’s cultural heritage or to pose as a local brand, says

copywriter Simon Anholt in his book Another One Bites the Grass. (quoted in Stewart-Allen

16) Cultural roots have proven to create a point of differentiation. However, the company

does need to present an international orientation. It is not only important to translate

advertisements, the website which the customers consult after being drawn to the ad also

needs to be adapted. The international orientation of a company shows in the smallest of

details.

Especially in b-to-b, one of the most annoying things is when forms require information that makes no sense to someone in another country-like [sic] asking for phone numbers with 10 characters. Just changing these things can help someone think, ‘This is a company that doesn’t see the entire world is [sic] the U.S. (Danny Sullivan of Search Engine Land, quoted in Bannan 18)

One of the most important challenges of international management and marketing is

actually making sure that the brand name and all the product names are applicable to the

various languages and cultures of the target countries. An example of the need to urgently

adapt an already issued product name, happened at Toyota. Toyota had to adapt the name

of the roadster car model MR2 to the French-speaking market. (Lasswell, 68) Whereas the

use of numbers and letters to create a product name would seem a safe choice for the

international market, Toyota still encountered problems with this one. As the French

pronunciation came down to ‘est merdeux’, the 2 was immediately dropped when the car

was sold on the French market. Even if the translation of a brand name of product name is

perfect though, it is still important to check whether it does not lose all cultural resonance in

the target country. It may be challenging to control the emitted corporate message in one

language, it is even more difficult to protect brand integrity in multiple languages. (Mescan

54) This can backfire in a painful way since it is possible that “when the brand is positioned

33

at one level in one country and at a lower level in another, the entire market perception can

gravitate to the lowest positioning.” (Simmonds 54)

An extra challenge in the field of international marketing is for the designers of the

advertisements. Different languages require a different amount of text space. There are

character-based languages which could need up to twice the space and there are those

tongues which simply use more words to cover one concept. It is important to deal with it

when constructing an advertisement, especially if each additional word will mean an

additional marketing cost. Finally, there are a number of practicalities an international

company needs to take into account. First of all, a company working outside the U.S. or

Europe also has to deal with a lot of different currencies. Its systems need to be adapted to

this and so do all listings of prices on the corporate website as well as the advertisements.

Secondly, there are the troubles with time zones which I experienced first hand when trying

to contact the MasterCard division in New York. Fortis Investment bank has found its own

solution to the problem. The bank’s Trade Processing team which needs to be reachable 24

hours a day is divided into four teams. Two Belgian teams, one Japanese team and one in

New York make sure that the customer will get someone on the line any time of day or

night.

“As firms increasingly reach out over national borders, it is crucial for managers to

grasp how culture might influence customer perceptions of service quality and subsequent

expressions of satisfaction.” (Abu-Shalback Zid 5) If managers understand the impact of a

correctly adapted marketing, the allocating of funds will be more effective. There is much

more investing now in the understanding of different cultures in order to maximise customer

reception. With the results of that research, management and advertising techniques of the

home market can be adapted to better fit the needs of the target country. All major card

brands for example, such as MasterCard Worldwide, Visa and American Express, offer their

customers the possibility to select a corporate website adapted to the specific country of the

customers. These ‘global websites’ however, are no perfect copies of one another, smaller

countries and smaller language groups need to do with more basic information of the local

options. The internet is perfect for international marketing activities as it is “by its very

nature an international communication medium” (Bennett quoted in Moen 32). Practically

34

every single business nowadays uses the basic Internet features such as a home page and an

email address. International companies however need take it a few steps further to best use

it to communicate, conduct business, target customers and distribute products or services.

(Moen 31)

When developing its global marketing strategy30, MasterCard has decided to focus on

the sponsoring of major sports events all around the world. Given the fact that passion for

sports is an international one, MasterCard has selected a number of sports to cover just

about every continent. At these ‘memorable moments’ and ‘priceless experiences’, huge

banners of the main sponsor will certainly help to put the brand in the spotlight. When it

comes to soccer, MasterCard is the exclusive sponsor of the UEFA European Championships

and the UEFA Champions League. It is present in Latin America as well at the region’s

marquee tournaments: Copa America and the South American Qualifiers. Golf fans around

the world will notice MasterCard’s presence at the PGA TOUR/ Champions Tour as it is the

promoted method of payment at the PGA TOUR shops and Tournament Players Clubs. The

company invests in various golf events in Scotland, Florida, Hawaii and Mexico. A third major

kind of sports, baseball, is represented in the sponsoring of the Major League Baseball.

MasterCard has been sponsoring this event and 15 Major League clubs for over ten years. In

New Zealand, rugby games are sponsored and Australia has its cricket events covered.

Lately the company has also moved into the world of entertainment, seeking

association with the BRIT Awards, the Soundstage and Jazz at Lincoln Center in New York

City. In Europe, Australia and Asia Pacific, the focus is mainly on the sponsoring of major

fashion events. This kind of marketing activities are supposed to boost brand recognition,

enhance card acceptance and drive card usage globally. Another objective of course is to

secure/separate the positive emotions evoked by the sports events (enjoying watching or

participating and the winning experience) so as have the potential clients associate them

with MasterCard.

What kind of management, research or marketing each individual company ends up

focusing on varies. It is a fact however, that to compete successfully on a global scale, the 30 http://www.mastercard.com/us/company/en/whatwedo/current_sponsorships.html (consulted 09/08/09)

35

major players have to know how to answer the needs of the global population. Kenneth

Simmonds, professor of marketing and international business at the London Business School,

summed it up in his 1999 paper:

Blindness to customer motivation leads firms to use their home market formula without adjustment, perhaps by spending in an effort to change customers to fit the formula. In a global village, a single formula might work, but the real world is not a global village. Customer motivation in each country must be known, understood, and appealed to. (53)

A considerable budget for research, marketing and management is often required. This

makes expanding globally a process of many years of making progress in conquering new

territories only when the company keeps booking steady profits.

36

4. MasterCard Worldwide: internship

4.1 Maestro in Europe

During my two-month internship at MasterCard Europe in Waterloo, I was part of the

Merchant Development team. The tasks I was assigned to do fit in with the external

communications department, mostly addressing one specific part of MasterCard’s

customers: the acquiring financial institutions. I started on 27 April 2009, a time of great

change and frantic preparations at our division. With the European regulations for the SEPA

zone pressing, the introduction of Maestro in Europe had to be going as fast as possible. In

addition, the progress of our competitors needed to be closely monitored and taken into

account. My tasks all fit in this bigger frame of Maestro-related research and marketing.

4.2 Market research

MasterCard set out to convince all the parties of the four-party business model of the

urgency of implementing Maestro. Financial institutions will have to adapt their line of

products, merchants have to adapt the terminals of their businesses to the acceptance of

the new Maestro cards, and customers have to be explained where the change came from

and what it consists of. Each party wants to know why the change is happening, what the

results are going to be and what the operation is going to cost them.

During my internship I conducted various cases of research of the European market,

mainly concentrating on the Benelux. I had about four different possibilities to conduct this

research and to come up with appropriate numbers and results. The first and most

important tool to gather information was the Key Merchant’s database, secondly the world

wide web, thirdly the European committees and finally other MasterCard divisions all over

the world. I will further elaborate on what the briefing was, how I acquired the skills and

what the end result was when working with these diverse desk research tools.

The Key Merchant’s database is an electronic database system especially designed for

MasterCard Worldwide by the British ICT consultant Peter Saunders. The purpose of this

system is to provide MasterCard staff direct access to key business information. The system

allows its users to formulate their own business information requirements and it provides

37

access to data that meets the business information needs. The program keeps a good

balance between ease of use and flexibility of reporting. Both technical and non-technical

staff can easily access the system and have the majority of their information needs satisfied.

(Key Merchants User Guide. Application Version 2.0) In my first week at MasterCard, the

system had actually just been upgraded. The new 2009 version which I used for two months,

had just been launched and still in its test phase. Compared to the previous system, it

allowed for many more thorough queries31 and details. This Key Merchant’s system provided

me with information about the use of MasterCard’s products, worldwide, down to individual

sites. It contains no information which can identify individual cards or card holders. The

information categories are: merchants’ names and locations, acquirers’ names and locations,

issuer’s names and locations, data on the cardholders’ presence at the POS, brand names,

etc.

The information source for the system is MasterCard’s clearing data, these are the

transactions which passed authorization and which have been fully processed by the

acquirers’ and issuers’ systems. In the database, there are basically several billion rows of

information about MasterCard transactions. Peter Saunders’ company also ‘cleans’ the

source raw data to improve the accuracy and usefulness of the information contained within

the database. The actual physical form of the Key Merchants server is a massive and

powerful computer which is based in the basement of the MasterCard building in Waterloo.

Because of the amount of data in the database, all processes using the system are detached

from the individual database user’s Personal Computer. Once the database research job has

finished, the data is stored on the server ready for the user to download to his or her PC. I

received several hours of training (working with the Key Merchant system, Excel and Access)

by my colleague Luisa Marques. In addition, Peter Saunders came to the company to give a

training for the entire team on the new features of the updated program. The ICT consultant

could also be contacted by phone at all times. This turned out to be highly necessary as

there were quite a number of system failures at first. With this database, I have resolved

several cases of researching the present state of the market. Managers from different

MasterCard Europe divisions sent questions which I researched on the database in order to

31 A query is a task for a database which the user can draft and combine with other queries to make a certain selection of data.

38

obtain an excel file with the requested information. With the excel file I created pivot tables

to list the information according to certain parameters or certain details the manager

requested, for example a top 10 of countries with the most Maestro transactions. There

would always be a total Euro volume and a total Transactions volume. The questions I

received, depending on the division they originated at, could be divided into questions which

dealt with specific acquirers, with Maestro acceptance in Europe and with Maestro

SecureCode.

One of the first tasks was to research the acquiring bank(s) of Dutch Railways. This

question came up because a large American issuing bank had had a cardholder’s card

declined in Europe. It was declined because the card did not have a chip and PIN, as

American cards often still only have a magnetic stripe. This happened at a large dealer

namely the Dutch National Railway and it would happen again with the next customer with a

similar card if the problem was not solved. With the information I gathered, the acquirers

could be contacted and the origins of the problem detected and solved.

Another focus of the marketing division was e-commerce, the online card payments.

MasterCard Marketing was looking to start a project offering MasterCard cardholders

incentives when purchasing their products online at a MasterCard merchant. I analysed the

Euro volume processed in one year for a number of online merchants. The best selling

merchants would thereupon be offered to take part in the MasterCard incentives program.

These are just two examples of the research I did, listing countries according to Euro

volume, listing merchants (e-commerce as well as brick-and-mortar32) according to

transactions volume, researching which markets were already booking actual Maestro

transactions. Most of the research I was responsible for served to either discover new

opportunities on the market or to obtain information to avoid and resolve certain problems.

An example of this kind of data report33 can be found in the appendix to this paper.

32 Brick-and-mortar companies are merchants which have an actual building where they sell their products, as opposed to certain, strictly e-commerce companies such as eBay. Some brands are both brick-and-mortar and e-commerce companies, for example Nike. 33 Appendix: Doc 1. Database research: Maestro

39

Some of my tasks, namely browsing the internet and contacting the appropriate

governmental instances, were done in answer to a business analysis request. I was asked to

analyse MasterCard’s opportunities on the market of privately owned parking businesses in

Europe. The parking business is a large business with a huge Euro volume per year. Yet a

great deal of the parking industry’s revenues is lost to payment card companies as parking

customers mostly pay using cash (coins) or parking cards. With the introduction of Maestro

branded debit cards, the market could be opened up for MasterCard as customers would

much sooner pay by debit card rather than credit card for the parking service. With extra

promotion by the parking companies, customers could also learn to prefer debit cards over

cash. It was my main aim to discover who the main parking companies in Europe are and

what their Gross Euro Volume (GEV) is. Once I obtained this information, it seemed

interesting to compare it to the MasterCard and Maestro volume processed. The basis and

the checking point for my research became the European Parking Association (EPA). Their

publications allowed me to unveil the total parking market turnover: 40 billion euro in 2007.

Via telephone, the EPA headquarters in Germany willingly provided me with information on

the biggest players of the industry. On the basis of that, I came up with the top 5: APCOA,

Vinci Group, Q-Park, Interparking Group and Saba. For each of these companies, I researched

the main countries they were operating at, their revenues and the payment possibilities they

offered. I did so mainly using their corporate websites and their annual reviews. The parking

companies often turned out to have a wide range of payment cards, gifts cards and

corporate cards of their own, opening up new co-branding opportunities for MasterCard. I

discovered that the top 5 privately owned companies turned out to only generate about 2

billion euro of the 40 billion euro total. Via the Key Merchant database, I investigated what

the MasterCard and Maestro volume was each of them processed. The value of all

MasterCard transactions at these companies , from February 2008 to January 2009, added

up to 467.5 million euro. Once I had all the results, I could draft a document for the Benelux

managers which they could use to determine a strategy. With this information they could

determine which companies to address with the Maestro story and what numbers to use in

price negotiations. The result of this business analysis34 can be found in the appendix.

34 Appendix: Doc.2. Business Analysis: Parking Industry

40

A final way of obtaining information within such a huge international company as

MasterCard Worldwide is consulting other teams within MasterCard Europe or even other

divisions all over the world. Sometimes questions came up which could not be looked up in

the Key Merchant database because the database could not select on that specific basis. To

find the latest figures of SecureCode e-Merchants worldwide, I had to phone and email

around. I eventually got most answers from the headquarters in New York which could only

be reached after 3 p.m. Brussels time because of the time difference. I also relied heavily on

my colleagues to find out who, from what division, could get me the appropriate

information. MasterCard Worldwide is split up into many different teams and divisions of

which the members then sometimes work independently or with yet another team. To find

the (top secret) answers to the SecureCode question I had to go from people in the Debit

Planning35 group and the Secure Code group in Waterloo, to the Senior Business Leader36 of

the Debit Channel Management team, the Vice President37 of eCommerce and the Vice

President38 of the Payment System Integrity team in New York.

4.3 Marketing presentations

As I explained in Chapter two of this dissertation, the importance of various languages within

large international companies is not to be underestimated. The marketing work I did during

the internship can basically be divided into creating presentations for the Merchant

Development Team and helping creating websites with the Marketing Division. Most of

these were targeting the Benelux market. As they were mostly composed in English in

cooperation with my British colleague Andrew Slattery, they needed to be translated in

Dutch and French afterwards. The original English version was also sent out, as the managers

of several large businesses in the Benelux are English natives. My information sources were

mostly other MasterCard sources, such as foreign websites for more developed markets

such as Germany, the United Kingdom and the United States. This resulted in a lot of

translating from German and English to Dutch and French with a number of dictionaries at

hand. All presentations and websites needed to be checked by MasterCard’s Legal Division

before they were sent out. They apply very strict rules on copyright and on disclosing

35 Desmond Boyle 36 Marcelo Tangioni 37 Carl Stefanelli 38 Paul Baker

41

classified information to the public. These rules are clearly a direct result of MasterCard’s

listing on the New York Stock Exchange which I discussed in the first chapter of this

dissertation. It is also important to protect the new MasterCard products from the

competitors until they are fully developed and on the market. As soon as information is sent

to acquirers and issuers, it is very possible that they pass it on to MasterCard’s competitors

to use in price and product negotiations.

MasterCard also required a number of presentations pre-made for its customers, the

financial institutions. Some of the presentations were meant to help the banks inform the

merchants about the advantages of the use of Maestro and about the Maestro SecureCode.

The banks needed a blueprint with the most important facts which they could then adapt

according to the various merchants they would address. It is a smart move to adapt the

challenges a MasterCard product offers a solution to, to the challenges a certain merchant

faces.

The presentation which Andrew Slattery, MasterCard’s co-branding manager, and I

worked on for several weeks was the ‘Maestro SecureCode Merchant Value Proposition’.

This proposition was supposed to serve as a help for the acquiring banks and financial

entities who have to address e-merchants to explain the European Maestro implementation

and the possibilities for their businesses. We started with a table of contents and a rough

version of what the presentation could look like. My colleague and I decided to start out by

giving a short overview of the booming e-commerce industry. I researched some graphs on

the internet and we were allowed to use some of MasterCard’s own researches which had

already been made public on a previous occasion. We then listed some of the advantages of

the use of debit cards for consumers as well as merchants. Again some percentages could

prove the preferences of the customers of debit over credit. A second part focused on the

needs of the e-merchant which is: “E-commerce merchants want a payment guarantee with

convenience for consumers at a cost effective price.” The answer to their problem would

then be the Maestro SecureCode system which allows for a near perfect, authentification of

the cardholders. Listings of top e-Tail merchants who had already started using Maestro

SecureCode could serve as an extra conviction. An overview of the Maestro roll-out in

Europe presented the changes which are taking place within the SEPA. At the end of the

42

presentation, we listed the benefits for the e-merchant and the benefits for the e-customers.

With the Maestro SecureCode system, the e-merchant could get a guaranteed online

transaction thus reducing fraud and disputes with customers. Furthermore the 28 million

cardholders with one single payment means would definitely constitute an improvement for

any merchant. The appendix with additional information on extra features and system

technicalities could serve as a source of extra convincing details for the acquiring bank if they

felt this could be useful for a particular merchant. The purpose of this presentation was to

provide acquiring banks with a blueprint of a Maestro SecureCode presentation. To see

whether we had reached the scope with the end result, I sent the presentation to Ogone, a

payment service provider for shopping online and by phone. It was of course only sent out

after going through MasterCard’s Legal Department/Division. With Ogone’s feedback we

drafted the final version which I translated into Dutch and French, which I included in the

appendix39. Along the process, various MasterCard managers provided us with a great deal

of feedback and help.

At the beginning of June, one of my managers, Steven Van Sweevelt asked me to help

create a presentation and PowerPoint for a lecture in Oslo, Norway on 18 June 2009. This

lecture was part of the Teller Seminar with an audience of banking people and merchants.

The presentation had to be on the latest economic trends in European merchant markets

and touch upon some of MasterCard’s payment solutions, introducing Maestro’s European

implementation. The other topics of the seminar were: “Card usage and activation, customer

marketing and MasterCard offers and sponsorship” and “The impact of Interchange for the

merchants”. For my presentation, I started out with some general world wide web browsing

to find some recent articles on altered consumer spending as a result of the financial crisis. I

also asked around to obtain other presentations on Maestro, EMV chips, SEPA, SecureCode

from which I could use graphs and core information. Steven gave me a brief overview of the

everything he wanted to see mentioned, he came up with a table of contents and gave me

regular feedback throughout the process of creating the presentation. Working together

closely was necessary as he was the one to go abroad and actually present it. I began the

presentation with an overview of the post 2008 changes in the world economy. The global

economical trends of seemingly unstoppable growth, wealth and internationalisation in the 39 Appendix. Doc.3. French Presentation: Value Proposition Maestro SecureCode

43

21st century showed the flip side of the medal in 2008: the economy had to face inflation,

ecological poverty and crisis on a global scale. This has seriously damaged consumer

confidence which is up until now at an all-time low. I discovered that four factors could be

seen as shaping the new European consumer: unemployment, ecological pressure, the rise

of the commodity prices and the disappearance of personal wealth. I inserted a lot of

numbers and statistics to give a clear view on how low that consumer confidence really is. To

draw the audience in, I also researched some consumer trend numbers specifically for

Norway. The new consumer turned out to now better manage the budget and to make more

informed choices when shopping, so as to save money. Consumers prove to be very time

conscious, e.g. they are no longer willing to lose time driving to shops or queuing at

checkouts.

The next part focused on the impact of this new consumer profile on retailers and

banks. As it turns out, more consumers are now buying at discount and low price stores with

small excesses in the luxury business. The middle price stores are therefore almost

completely pushed out of the market. Consumers are also downscaling, buying smaller cars

and smaller houses. This serves two purposes, not only is it cheaper to purchase, it is also

more eco-friendly. Another important change for retailers is the huge popularity of internet

shopping. With all the new possibilities, customers are even less likely to stay loyal to one

retailer than before. For the banks, the most important project is to win back consumers’

confidence and trust. My conclusion to the presentation showed some of MasterCard’s

payment systems which could offer good solutions to each and every one of the named

problematic economic trends. There is the Maestro SecureCode program which helps to

make shopping online easy and secure thanks to the use of the debit card. Interesting for

retailers are also the new contactless payment systems which will limit the lost time at

checkout and keep impatient customers happy. Here is where MasterCard’s advisor role and

loyalty programs come in as well. The result of the Norwegian presentation40 can be

consulted in the appendix as the fourth document.

40 Appendix: Doc. 4. English Presentation: Norway, consumer trends

44

The websites to which I contributed were the Dutch and French versions of a new

Maestro website for the Belgian market and a separate Dutch one for the Netherlands41.

These websites needed to go on air in July to explain to cardholders what the possibilities of

the Maestro branded debit card are. I received a flow chart from the marketing division with

a very basic structure of the website. Our Merchant Development team had to provide them

with the explanation of what Maestro is, the information for Merchants and Acceptance

institutions, the Frequent Asked Questions (FAQ), some tips and tricks, the way to use a

Maestro card and some security explanations. I looked at German and French Maestro and

MasterCard websites to find the correct vocabulary and to copy some appropriate content.

Luckily, at that point, I had also worked on several presentations on Maestro for merchants

and banks. This allowed me to correctly select the most important information.

When a test version of the Maestro website for the Netherlands was pre-aired. I was

asked to provide some feedback. I noticed some spelling mistakes, some typos and also the

mixed use of the formal second person pronoun “u” and the informal pronoun “je”. This,

however, was something the marketing group was aware of and had decided to leave that

way. Consistency is usually preferred but in this case the company made an exception They

wanted to use the informal pronoun for everything concerning the campaign to address the

customers in a direct way which would call for action. The first idea was to use that informal

tone consistently throughout the website. However, the strong links with the financial sector

which always uses formal speech for the corporate websites, required MasterCard to use the

formal pronoun for the rest of the Maestro website.

For a project of co-branding with issuing bank ING, MasterCard had also come up with a

new project to attract new potential customers’ attention. As I explained in the second

chapter of this dissertation, MasterCard has a longstanding tradition of sponsoring sports

events. In Europe, the main football event is the Champions League. I was asked to translate

the advertisement which offered the customers the possibility of winning two tickets for the

UEFA Champions League. Interested customers had to request a MasterCard Gold ING

subscription or ING payment card. To be able to participate to the lottery of the tickets the

41 The Dutch website can be found at http://www.maestrocard.com/nl/nieuws.html (consulted 05/08/09) The Belgian Maestro websites required more time (or more funds).

45

customers had to be new to the ING cards or MasterCard Gold cards. They received an

additional reduction for the subscription, a sum which is about the value of what MasterCard

usually charges for the use of the card during one year. To get this reduction, customers had

to print an ING card voucher or MasterCard gold card voucher from the ING website. I have

included the original French version and my English translation in the appendix.42

42 Appendix: Doc.5. Marketing Project: Champions League

46

5. MasterCard: Conclusions

My two-month experience of being part of a major, widely renowned enterprise has been a

very positive one. A close-knit team of colleagues at MasterCard introduced me kindly but

resolutely to the world of business. The uncertainties preceding the start of my internship

quickly evaporated when I realised that people did not really take my inexperience in

account. I was given ‘real’ tasks and became an active and productive member of the

Merchant Development team. In addition, I noticed that I did have a lot to offer in return for

their time investment in me. The very first day, I was already taken to two serious meetings

with one of MasterCard’s customers, Atos Wordline. This was a very convincing way of being

introduced to the entire electronic card payments system. It made all the theoretical facts I

had been briefed on in the morning less abstract. Even though I could not really participate

in the meeting, one of the representatives of Atos turned out to be Italian and we exchanged

some words in her native tongue. I also immediately noticed the multilingualism of my

managers as one of the meetings was entirely in English and the next one in a mix of French

and Dutch.

A most interesting characteristic of the company was the freedom you experienced as

an employee. As everyone was expected to be doing their jobs and finishing their work

before the next deadline, there was no need for any kind of extra checks. I thought this

contributed greatly to the atmosphere in the workspace. A scheduled meeting naturally did

require very strict time management but the exact timing of lunch breaks, starting hours and

finishing hours was, up to a certain point, left to the choice of the employee. At MasterCard,

I discovered very soon that experience and a general readiness to share that experience

with junior colleagues is of the greatest importance. I received quite a number of training

sessions, one-on-one time and extra explanations by a variety of colleagues. This allowed me

to quickly understand the products we were working with and grow aware of the most

pressing projects and the deadlines which were approaching.

I also noticed that this inter-collegiality was not limited to teaching me, the intern,

about the payments market and MasterCard. The colleagues all sought help and advice from

47

one another thus improving the quality of their work and speeding up the output. Managers

from different levels within the team exchanged information with one another and seemed

very open to input from anyone, including me. I very much liked the team meeting I was

invited to on my last day at the company too. At this team meeting, I discovered several

members of my team which I had actually never met before. This showed the complexity of

the mechanism of the large-scale company. Although working within the same group, direct

contact between all members was very rare. At this meeting, all team members explained

their projects, clarified financial MasterCard figures or led a brainstorm session. This allowed

team members to be well informed of their colleagues’ work which was often parallel to

their own, sometimes even on one and the same subject.

To complete the tasks I had been assigned, I used several experiences and competences

I had acquired during my multilingual business communication year. First of all, there was

the urgency of mastering the appropriate English and French lexicon. Because we had been

reading articles on economy and we had discussed some of the topical issues I was quite

well informed about the current developments of the economy. From the beginning of the

year onwards, we had been very much encouraged to read newspapers and focus on the

latest financial and political news. I continued to keep my knowledge up to date by reading

both the Dutch and the French ‘Metro’ newspaper each morning during my long train trip to

Waterloo. I used the vocabulary on payment cards from the French language classes for my

translations of websites and presentations. One of my major assignments at MasterCard also

included creating and designing PowerPoint presentations or websites, for the structure and

lay-out of which I often used the feedback we had received in the context of our class

assignments. Thus I had especially grown aware of the importance of (1) thoroughly and

clearly informing the audience , (2) using short and clear titles and (3) limiting the number of

words on the PowerPoint slides. Not everyone I worked with agreed with my views on short

titles on slides, however, so for one project I had to give in to a superior’s veto.

The financial knowledge which I obtained during various Master classes was useful to help

me interpret annual reports of companies I was researching. I would also like to believe that

the IT course on data processing I opted for at university, helped me to master the Key

Merchant Database faster. I had learned to work with “queries” in Access 2007 so when

“queries” reappeared in the MasterCard database, it became easy enough to grasp.

48

As mentioned before , the training I received from my colleagues was generous and

very much appreciated. Luisa Marques spent many hours with me working on projects with

the Key Merchant Database, Excel 2007 and Access 2007. Andrew Slattery gave me highly

interesting (and very funny) short presentations on various payment card related subjects.

Steven Van Sweevelt went through several presentations with me, providing me with his

feedback and explaining the underlying structure. All in all, I believe that the combination of

this team of colleagues and the background I got from Multilingual Business Communication,

helped me to obtain the best possible results when delivering my work.

For me, the internship at the multinational MasterCard confirmed that this is the kind

of surroundings I would want to make a career in. I have also had the chance to prove that

that is a possibility with the diplomas I have obtained. What was very clear from this

experience was the fact that there is, in professional life also, never really a limit to your

intellectual growth. Large companies will ensure that employees keep abreast of

developments. At MasterCard, the device was called MasterCard University. This informed

employees of lectures, workshops and classes in several fields of business life which they

could attend. However, informal conversations with colleagues, and paying attention to your

own and others’ mistakes, can be equally productive sources of growth and progress.

In the final analysis, I believe I was very well prepared for this internship. However,

an additional lecture on international companies, blue-chip companies or the payment

industry would be useful. Furthermore, students might benefit from an overview of the

intercultural differences in the marketing division of practically any major company. All too

often the impact of the various cultural and linguistic identities on the international world of

business is being underestimated.

49

6. Lexicon Acquirers: ATM: Cross-border payment: Dip: Domestic payment: e-commerce: e-tail: EMV chip: EPA: EPC: GEV: Interchange fee: Issuers: m-commerce: magstripe: Merchant: PIN: POS:

The financial institutions who accept card transactions from the merchants. Automated Teller Machine, a cash dispenser or cash machine A payment with a card from one country at another country (↔ domestic) ‘dipping’ a card is putting the card in the terminal to make a payment (↔ ‘swipe’) A payment with a card from one country within that country (↔cross-border) Online commerce Retail merchants operating online A computer chip for payment cards developed by Europay, MasterCard and Visa European Parking Association European Payments Council Gross Euro Volume A fee the acquiring banks pay to the issuing banks via the card brand The financial institutions who provide customers with payment cards. Mobile phone commerce The magnetic stripe on the payment card The trader or shop owner Personal Identification Number, a secret code linked to a payment card Point Of Sale, example: a shop

50

SEPA: Swipe: Terminal: TPV:

Single European Payment Area ‘swiping’ a card is quickly moving the card through the terminal to make a payment (↔ ‘dip’) The electronic device the merchant uses to pass cardholder information to acquiring and issuing bank Total Payment Volume

51

7. Works cited Abu-Shalback Zid, L. “The concept of culture” Marketing Management 13:6 (2004) 5 anonymous writer “Payment Via Wallet Phone” Communications of the ACM 52:1 (2009) 13 anonymous writer published by Elsevier Ltd. “Barclays to go contactless with all customer

debit cards” Card Technology Today 21:1 (2009) 1-3 anonymous writer published by Elsevier Ltd. “MasterCard and Carrefour launch contactless

card” Card Technology Today 21:1 (2009) 1-3 anonymous writer published by Elsevier Ltd. “Opportunities for 2009?” Card Technology

Today 21:1 (2009) Balaban, B. “Staying Ahead Of Hackers: Are New Chips Worth It For Banks?” Cards &

Payments 22:01 (2009) 14-15 Bannan, K.J. “Global Sem.” B to B 92:17 (2007) 17-19 Chmielnicki, J. “Lost in translation” Sales & Marketing Management 156:10 (2004) 20 Douglas, S.P. and Craig C.S. “Collaborative and Iterative Translation: An Alternative Approach

to Back Translation” Journal of International Marketing 15:1 (2007) 30-43 Douglas, S.P. and Craig C.S. “On Improving the Conceptual Foundations of International

Marketing Research” Journal of International Marketing 14:1 (2006) 1-22 Gorchels, L. Jambulingam T. and Aurand T.W. “Executive Insights: International Marketing

Managers: A Comparison of Japanese, German, and U.S. Perceptions” Journal of International Marketing 7:1 (1999) 97-105

Green, J. “A Time To Reflect” Cards & Payments 22:1 (2009) 6 Lasswell, M. “Lost in Translation” Business 2.0 5:7 (2004) 68-70 MarketWatch “Paypal: 10 years of successful operation highlight the potential threat to card

issuers” Global Round-up 7:8 (2008) 134 McKelvey, S., McDonald, M. and Cramer R. “MasterCard and Major League Baseball: Metrics

for Evaluating a Most ‘Memorable’ Promotion” Sport Marketing Quarterly 14:4 (2005) 253-261

McKenna, A. “Payments Industry Gives Retailers the Loyal Treatment” Cards & Payments

20:7 (2007) 21-24

52

Mescan, S. “Why Content Management Should Be Part of Every Organization’s Global Strategy” Information Management Journal 38:4 (2004) 54-57

Moen Ø. “The internet and international marketing” Quarterly Journal of Electronic

Commerce 3:1 (2002) 31-41 Semon, T.T. “Cutting corners in language risky business” Marketing News 35:9 (2001) 9 Simmonds, K. “Executive Insights: International Marketing – Avoiding the Seven Deadly

Traps” Journal of International Marketing 7:2 (1999) 51-62 Stewart-Allen, A. L. “Don’t lose advertising in the translation” Marketing News, 34:13 (2000)

16

Terris, H. “MasterCard Buy a Sign of Networks’ New Imperative” American Banker 174:3

(2009) 1-9

Turner, C. “Virgin Money drops green card for mobile payments” Marketing Week 31:24

(2008) 6 Vanderhoof, R. “A Lack of Chips Making U.S. Card Data Vulnerable” American Banker 174:13

(2009) 11 Wolfe, D. “PayPal looks Past Web to Find Its Future” American Banker 174:42 (2009) 1-11 Consulted Websites http://foxforum.blogs.foxnews.com/2009/05/20/cooper_horace_credit_cards/ (consulted 08/08/09) http://sibosonline.com/fullstory.asp?id=20134 (consulted 12/08/09) http://www.americanexpress.com (consulted 16/08/09) http://www.deredactie.be/cm/vrtnieuws/binnenland/1.541658 (consulted 01/08/09) http://www.discoverfinancial.com (consulted 16/08/09) http://www.ecommerce-journal.com/news/mastercard_has_crossed_the_ts_in_the_story_with_discover_lawsuit (consulted 16/08/09)

53

http://www.europa-nu.nl/9353000/1/j9vvh6nf08temv0/vi3zjmbkntwj?ctx=vhk5iszwtoxv (consulted 12/08/09) http://www.marketwatch.com/investing/stock/MA (consulted 16/08/2009) http://www.maestrocard.com/nl/nieuws.html (consulted 05/08/09) http://www.mastercard.com (consulted 16/08/09) http://www.mastercard.com/us/company/en/whatwedo/current_sponsorships.html (consulted 09/08/2009) http://www.huffingtonpost.com/2009/04/23/obama-creditcard-ceos-mee_n_190473.html (consulted 09/08/09) http://www.visa.com (consulted 06/08/09)

Ghent University Faculty of Arts and Philosophy

Appendix

Doc.1. Database Research: Maestro

Doc.2. Business Analysis: Parking Industry

Doc.3. French Presentation: Value Proposition Maestro

Doc.4. English Presentation: Norway, consumer trends

Doc.5. Marketing Project: Champions League

Bedrijf

Stagebegeleider Afdeling Taken Talen tijdens de stage stageperiode

MasterCard WorldWide

Chaussée de Tervuren 198A

1410 Waterloo

+32 2 352 51 11

Geert Brisart External Communications:

Merchant Development

- Marktonderzoek

(werken met database,

Excel, Access)

- Powerpoints opstellen

- Vertalingen naar Engels,

Frans en Nederlands

- Presentaties maken

- Website opstellen

- Business Analysis Request

voor de parking sector

Nederlands

Engels

Frans

(in mindere mate

ook Italiaans

en Duits)

27 April ‘09

Tot

30 Juni ‘09

Period: Jan Feb March 09

Merchant Country: in Europee-Commerce merchants with Maestro SecureCode

9575 e-Merchants accepting SecureCode for a total of 5 144 636 EURO8285 also used it in transactions for a total of 4 175 995 EURO1290 support it but didn't use it for a total of 968 941 EURO

Merchants/Merchant Country EuroVolume

Cardholder Authentication FRANCE Count of Merchant_Name_Description7084e-Merchant supports Securecode Sum of Total_Euro_Currency_Volume1749240,17AND it was used in these transactions UNITED KINGDOM Count of Merchant_Name_Description195

Sum of Total_Euro_Currency_Volume731691,6PORTUGAL Count of Merchant_Name_Description236

Sum of Total_Euro_Currency_Volume615282,83ROMANIA Count of Merchant_Name_Description27

Sum of Total_Euro_Currency_Volume43177,45SPAIN Count of Merchant_Name_Description265

Sum of Total_Euro_Currency_Volume196550,87MALTA Count of Merchant_Name_Description6

Sum of Total_Euro_Currency_Volume172852,01NETHERLANDS Count of Merchant_Name_Description44

Sum of Total_Euro_Currency_Volume142049,16LATVIA Count of Merchant_Name_Description32

Sum of Total_Euro_Currency_Volume141866,59POLAND Count of Merchant_Name_Description147

Sum of Total_Euro_Currency_Volume112099,08SWEDEN Count of Merchant_Name_Description27

Sum of Total_Euro_Currency_Volume44816,49IRELAND Count of Merchant_Name_Description7

Sum of Total_Euro_Currency_Volume45586,34CZECH REPUBLIC Count of Merchant_Name_Description108

Sum of Total_Euro_Currency_Volume43301,24CYPRUS Count of Merchant_Name_Description13

Sum of Total_Euro_Currency_Volume37936,21GERMANY FEDERAL REPUBLIC OFCount of Merchant_Name_Description16

Sum of Total_Euro_Currency_Volume26579,86BELGIUM Count of Merchant_Name_Description5

Sum of Total_Euro_Currency_Volume24061,43LIECHTENSTEIN Count of Merchant_Name_Description2

Sum of Total_Euro_Currency_Volume20799,01ITALY Count of Merchant_Name_Description18

Sum of Total_Euro_Currency_Volume9507,68SLOVENIA Count of Merchant_Name_Description9

Sum of Total_Euro_Currency_Volume4908,02ANDORRA Count of Merchant_Name_Description14

Sum of Total_Euro_Currency_Volume7840,98SLOVAKIA Count of Merchant_Name_Description10

Sum of Total_Euro_Currency_Volume2548,71AUSTRIA Count of Merchant_Name_Description8

Sum of Total_Euro_Currency_Volume1921DENMARK Count of Merchant_Name_Description9

Sum of Total_Euro_Currency_Volume624,91BULGARIA Count of Merchant_Name_Description1

Sum of Total_Euro_Currency_Volume605,86LUXEMBOURG Count of Merchant_Name_Description1

Sum of Total_Euro_Currency_Volume88,57MONACO Count of Merchant_Name_Description1

Sum of Total_Euro_Currency_Volume59,29Cardholder Authentication Count of Merchant_Name_Description 8285Cardholder Authentication Sum of Total_Euro_Currency_Volume 4175995,36Security Protocol FRANCE Count of Merchant_Name_Description138e-Merchant supports Securecode Sum of Total_Euro_Currency_Volume46816,67but it was NOT used in these transactionsUNITED KINGDOM Count of Merchant_Name_Description895

Sum of Total_Euro_Currency_Volume383423,27PORTUGAL Count of Merchant_Name_Description6

Sum of Total_Euro_Currency_Volume34257,09ROMANIA Count of Merchant_Name_Description70

Sum of Total_Euro_Currency_Volume436524SPAIN Count of Merchant_Name_Description2

Sum of Total_Euro_Currency_Volume103,23MALTA Count of Merchant_Name_Description4

Sum of Total_Euro_Currency_Volume3446,38NETHERLANDS Count of Merchant_Name_Description15

Sum of Total_Euro_Currency_Volume9666,13POLAND Count of Merchant_Name_Description54

Sum of Total_Euro_Currency_Volume12364,72SWEDEN Count of Merchant_Name_Description18

Sum of Total_Euro_Currency_Volume19531,59IRELAND Count of Merchant_Name_Description17

Sum of Total_Euro_Currency_Volume911,09CZECH REPUBLIC Count of Merchant_Name_Description21

Sum of Total_Euro_Currency_Volume2417,26CYPRUS Count of Merchant_Name_Description7

Sum of Total_Euro_Currency_Volume2397,09GERMANY FEDERAL REPUBLIC OFCount of Merchant_Name_Description2

Sum of Total_Euro_Currency_Volume134,56BELGIUM Count of Merchant_Name_Description4

Sum of Total_Euro_Currency_Volume2309,96LIECHTENSTEIN Count of Merchant_Name_Description1

Sum of Total_Euro_Currency_Volume124,81ITALY Count of Merchant_Name_Description6

Sum of Total_Euro_Currency_Volume4221,13SLOVENIA Count of Merchant_Name_Description20

Sum of Total_Euro_Currency_Volume4695,26SLOVAKIA Count of Merchant_Name_Description6

Sum of Total_Euro_Currency_Volume4964,68DENMARK Count of Merchant_Name_Description2

Sum of Total_Euro_Currency_Volume227,2BULGARIA Count of Merchant_Name_Description1

Sum of Total_Euro_Currency_Volume62,37LUXEMBOURG Count of Merchant_Name_Description1

Sum of Total_Euro_Currency_Volume42,52Security Protocol Count of Merchant_Name_Description 1290Security Protocol Sum of Total_Euro_Currency_Volume 968641,01Total Count of Merchant_Name_Description 9575Total Sum of Total_Euro_Currency_Volume 5144636,37

1

Europe’s Parking Business

A. Executive Summary (p.2)

B. Inleiding (EPA) (p.3)

a) European parking market: Size b) European parking market: Trends c) Private cars in Europe

C. MasterCard’s processed Volume in European Parking Business (p.6)

D. Top 5 Players (p.7)

I. APCOA (p.8)

a) APCOA Key Figures b) APCOA Payment Systems c) APCOA MasterCard Numbers

II. VINCI PARK (the Vinci Group) (p.11)

a) VINCI Key Figures b) VINCI Payment Systems c) VINCI MasterCard Numbers

III. Q-PARK (p.15)

a) Q-PARK Key Figures b) Q-PARK Payment Systems c) Q-PARK MasterCard Numbers

IV. THE INTERPARKING GROUP (p.19)

a) INTERPARKING Key Figures b) INTERPARKING Payment Systems c) INTERPARKING MasterCard Numbers

V. SABA (the Abertis Group) (p.23)

a) SABA Key Figures b) SABA Payment Systems c) SABA MasterCard Numbers

E. MasterCard’s processed Volume in European Parking Business (separate countries)

(p.28)

2

A. Executive Summary

TOP 5 Parking Business

Turnover 20071

1. APCOA 589 000 000

2. VINCI GROUP 562 000 000

3. Q-Park 419 400 000

4. Interparking Group 240 000 000

5. Saba 131 000 000

TOTAL 1 941 400 000

2007 total parking market turnover: 40 billion EURO (estimated2) Top 10 market turnover: 2.8 billion EURO (estimated) Top 5 market turnover: 2.3 billion EURO (estimated) -> 1.9 billion EURO The top 10 privately owned parking companies generate “only a 7% share of this turnover, equating to 2.8 billion euro”. (> 1.94 billion euro sum 2007 turnovers ) MasterCard: 467.5 million EURO (Febr08/Jan09: MasterCard)

AUTOMOBILE PARKING LOTS (75233) Maestro

Sum of Total_Euro_Currency_Volume 5869676.43

Sum of Total_Transaction_Count 322272

MasterCard Credit

Sum of Total_Euro_Currency_Volume 441587324.2

Sum of Total_Transaction_Count 22819695

MasterCard Debit

Sum of Total_Euro_Currency_Volume 5587235.49

Sum of Total_Transaction_Count 825142

Proprietary Sum of Total_Euro_Currency_Volume 666.04

Sum of Total_Transaction_Count 27

SOL Sum of Total_Euro_Currency_Volume 103012.35

Sum of Total_Transaction_Count 9624

SWI Sum of Total_Euro_Currency_Volume 14369950.58

Sum of Total_Transaction_Count 1403219 AUTOMOBILE PARKING LOTS AND GA Sum of Total_Euro_Currency_Volume 467517865.1 AUTOMOBILE PARKING LOTS AND GA Sum of Total_Transaction_Count 25379979

1 Numbers listed on companies’ websites. 2 Estimated at EPA conference by Q-Park Director 3 All names queried only on 7523. Transactions listed erroneously under 8675 (automobile associations), 5999 (miscellaneous and specialty retail stores), 4722 (Travel Agencies and tour operators), 4789 (transportation services not elsewhere classified), 4816 (computer network – information services) will thus not show.

3

B. Inleiding (EPA)

a) European parking market: Size

(source = presentation given by director of Q-Park group for EPA conference)

The economic value of the industry: 5 billion EURO (approx.) The current market turnover: 40 billion EURO (approx.) Expectations market turnover 2011: 50 billion EURO (in response to general economic growth and the growth in mobility) National car usage has increased from 84.7 to 84.8 % in Western Europe EU 15. EPA= 18 European countries 19 associations 3000 member operations

2.7 million parking spaces (8.500 car parks / millions on-street spaces) EU 15= Total number of public parking spaces is 300 million parking spaces These generate a turnover of 40 billion euro The top 10 privately owned parking companies generate only a 7% share of the total turnover, equating to 2.8 billion euro, of which 15% or 419.4 billion euro by Q-Park. The top 5 privately owned parking companies generate only a 6% share of the total turnover, equating to 2.3 billion euro. They operate approximately 2.7 million parking spaces, less than 1% of the total supply and approximately one quarter of the available ‘paid parking’ spaces.

b) European parking market: trends A trend towards consolidation among parking companies as the parking sector offers favourable opportunities for geographical risk spreading strategies and for long-term investors.

- NCP’s lease contracts have been sold to Maxquarie and NCP services (management & street parking) has been retained as a separate division by 3i.

- APCOA has been sold to EURAZEO (one of Europe’s major investment companies.) - Interparking and Vinci have been discussing a merger and a collaboration has been

announced to the market

4

EPA COUNTRIES

1. AUSTRIA Wirtschaftskammer Österreich Fachverband d. Garagen-, Tank- stellen u. Servicestationsunt. Wiedner Hauptstr. 63 A- 1045 Wien

2. BELGIUM Federation des Parkings de Belgique a.s.b.l. Mr J.M. Cordier Rue de l'Evêque 1 B- 1000 Bruxelles

3. CROATIA Croation Parking Association Mate Kraljevic Ilica 45 HR- 10000 Zagreb www.cpa.hr

4. CYPRUS Vert & Blanc Car Parks 199 Chr. Haggipavlou Ave. CY- 3302 Limassol/Cyprus www.vertetblanc.com.cy

5. FRANCE Federation Nationale des Metiers du Stationnement 18, avenue des Champs Elysees F- 75008 Paris

6. FINLAND Finnish Parking Association Mr. Boris Koreneff Simonkatu 2 A (Forum) FIN- 100 Helsinki www.bk-group.com

7. GERMANY Bundesverband Parken e. V. Richartzstraße 10 D- 50667 Köln www.parken.de

8. GREAT BRITAIN British Parking Association Stuart House, 41-43 Perrymount Road GB- Haywards Heath RH16 3BN West Sussex www.britishparking.co.uk

9. HUNGARIA H U N G A R O P A R K Laszlo Bubb P.O.B. 1766 H- 1465 Budapest www.fkpt.hu

10. IRELAND The Irish Parking Association Unit 3, Borrowside Business Park Sleaty Road Carlow Ireland www.parkingireland.ie

11. ITALY A I P A R K Corso Giuseppe Garibaldi, 7 I- 00039 Zagarolo (RM) www.aipark.org

12. LUXEMBOURG VINCI PARK 83 rue de Strasbourg L- 2651 Luxembourg www.vincipark.lu

13. THE NETHERLANDS VEXPAN Postal address: Postbus 5135 NL- 1410 AC Naarden the Netherlands Visitors address: Gooimeer 4-15 1411 DC Naarden www.vexpan.nl

14. NORWAY N O R P A R K

Mr Egil Ostvik Nedre Slottsgate 8 N- 157 Oslo www.norpark.no 15. POLAND Polish Parking Association ul. Polna 52/1 PL- 60-533 Poznan Poland www.polishparking.org 16. PORTUGAL A N E P E Rua S. José no 35 D P- 1150-321 Lisboa www.anepe.pt

17. SLOVAK REPUBLIK Slovak Parking Association Kosická 2 SK- 01001 Zilina www.spa-parking.sk

18. SLOVENIJA Parking Association Slovenija GIZ MP Contact: Boris Selih

19. SPAIN ASESGA Plaza de Santo Domingo 1, 1A ES- 28013 Madrid www.asesga.org

20. SWEDEN Svepark Service AB Östergatan 39 S- 21122 Malmö www.svepark.se

21. SWITZERLAND ParkingSwiss c/o AGVS, Autogewerbeverband der Schweiz Mittelstr. 32 Postfach 5232 CH- 3001 Bern www.parkingswiss.ch

5

c) Private cars in Europe (estat figures)

In Europe in 2004: 216 million passenger cars

On average 472 cars per 1000 inhabitants (US: 759/1000)

1. Luxembourg (659/1000)

2. Italy (581)

3. Portugal (572)

4. Germany (546)

5. Malta (525)

6. Austria (501)

7. France (491)

8. Belgium (467)

9. United Kingdom (463)

10. Slovenia (456)

11. Sweden (456)

12. Spain (454)

13. Cyprus (448)

14. Finland (448)

15. Netherlands (429)

16. Ireland (385)

17. Lithuania (384)

18. Czech Republic (373)

19. Denmark (354)

20. Poland (314)

21. Latvia (297)

22. Hungary (280)

23. Slovakia (222)

6

C. MasterCard’s Processed Volume in Parking Business in Europe

period: 12 months: February08/January09

7523 AUTOMOBILE PARKING LOTS AND GA Maestro

Sum of Total_Euro_Currency_Volume 5869676.43

Sum of Total_Transaction_Count 322272

MasterCard Credit

Sum of Total_Euro_Currency_Volume 441587324.2

Sum of Total_Transaction_Count 22819695

MasterCard Debit

Sum of Total_Euro_Currency_Volume 5587235.49

Sum of Total_Transaction_Count 825142

Proprietary Sum of Total_Euro_Currency_Volume 666.04

Sum of Total_Transaction_Count 27

SOL Sum of Total_Euro_Currency_Volume 103012.35

Sum of Total_Transaction_Count 9624

SWI Sum of Total_Euro_Currency_Volume 14369950.58

Sum of Total_Transaction_Count 1403219 AUTOMOBILE PARKING LOTS AND GA Sum of Total_Euro_Currency_Volume 467517865.1 AUTOMOBILE PARKING LOTS AND GA Sum of Total_Transaction_Count 25379979 7523 Sum of Total_Euro_Currency_Volume 467517865.1 7523 Sum of Total_Transaction_Count 25379979 Total Sum of Total_Euro_Currency_Volume 467517865.1 Total Sum of Total_Transaction_Count 25379979 MasterCard Data Analysis MasterCard/Maestro Volume processed in Europe in Parking Business Febr08/Jan09 (12 months)

7

D. Top 5: Main Players

TOP 5

Players

Parking

Business

Parking Spaces

(source: companies’

websites)

Countries

(source: companies’

websites)

Turnover

(source: companies’

websites)

1. APCOA 1 240 000 18 589 000 000

2. Vinci Group 1 035 200 12 (10europe) 562 000 000

3. Q-Park 792 482 10 419 400 000

4. Interparking

Group

250 000 7 240 000 000

5. Saba 104 513 6 (3europe) 131 000 000

TOTAL 3 422 195 1 941 400 000

Western Europe: 300 million parking spaces

Total market turnover 40 billion EURO

8

I. APCOA

(http://www.apcoa-europe.com /)

Airport Parking Corporation of America runs 1.24 million parking spaces in 18 European

countries.

a) APCOA Key Figures

9

b) APCOA Payment systems

Chip and Pin

Our team was the first in the parking industry to introduce ‘chip and pin’ into our operations. As technology innovators, we constantly push ourselves and our partners to deliver up to the minute technology.

RingGo and Verrus Payment Systems

In 2006, APCOA launched a cashless payment system using mobile phones. This enables customers to pay for their parking without the need to queue at a machine.

Cashless payment is based on the use of mobile phones and is very simple. Customers register their credit card details and vehicle registration numbers with the system. Then, when they arrive at the station car park, all they have to do is find a space and park. When they have a moment, they can then use their mobile phones to purchase their parking for the day. Payment is entirely secure, and the system can even send out VAT receipts online.

Suppose customers find that their cars will be parked for longer than planned? They can use the new system remotely, to top up their parking from wherever they happen to be.

Paying Options:

1. Pre- Pay - Customers pre-select the time that they wish to park for and they can also opt (at additional cost) to receive an SMS text message notifying them that their pre-paid time is due to expire and that they must either return to their vehicle or else make a top-up payment.

2. Time Used - Customers activate their parking sessions via a mobile phone call (which effectively starts the clock). When they then want to end their parking session they must remember to make another phone call. Using this system, some operators have implemented per minute or even per second billing for parking, rather than just an hourly tariff, which allows customers to pay for the exact amount of time they have parked.

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c) APCOA MasterCard Numbers

MasterCard Data Analysis APCOA Feb08-Jan09 Total Euro and Total Transactions in 12 months

GERMANY FEDERAL REPUBLIC OF Sum of Total_Euro_Currency_Volume 24908059

Sum of Total_Transaction_Count 749686

UNITED KINGDOM Sum of Total_Euro_Currency_Volume 10888587

Sum of Total_Transaction_Count 436422

AUSTRIA Sum of Total_Euro_Currency_Volume 1849343

Sum of Total_Transaction_Count 270360

NETHERLANDS Sum of Total_Euro_Currency_Volume 880894.9

Sum of Total_Transaction_Count 57504

IRELAND Sum of Total_Euro_Currency_Volume 64374.88

Sum of Total_Transaction_Count 686

BELGIUM Sum of Total_Euro_Currency_Volume 47833.25

Sum of Total_Transaction_Count 5572 Total Sum of Total_Euro_Currency_Volume 38639092 Total Sum of Total_Transaction_Count 1520230

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II. Vinci Park

(www.vincipark.com)

The Vinci Group

Share price 13/05/2009: 33.09 euros

a) VINCI Key Figures Pro forma key figures at 31 December 2007 (in € millions)

Breakdown of parking spaces

Breakdown of parking spaces at 31 December 2007

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Vinci Park, de grootste europese en een van de grootste wereldwijd opererende

parkeerplaatsbedrijven, beschikt over 1,2 Miljoen voertuigstelplaatsen in Europa en

Noordamerika.

Amérique

CANADA

ETATS-UNIS

Europe

ALLEMAGNE

BELGIQUE

ESPAGNE

FRANCE

LUXEMBOURG

REPUBLIQUE TCHEQUE

ROYAUME-UNI

RUSSIE

SLOVAQUIE

SUISSE

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b) VINCI Payment systems

1. Liber-t tag:

The first car park operator to accept payment by Liber-t tag. In over 200 facilities, drivers can pay their parking fees by Liber-t tag. Already used for motorway tolls and some service stations, Liber-t generates a considerable time saving by enabling account holders to pay their total tolls and parking fees once a month.

2. Total GR card:

1,500,000 professional road users in France have a Total GR card. Use your Total GR card to pay your parking fees. Monthly invoice (no more detailed expense claims).

3. Moneo:

To make parking easier, since 2002 meters equipped with a card reader so that you can pay using your electronic purse, Moneo. An on-street parking payment method that does not require municipalities to collect money from meters. And useable for other small day-to-day purchases too.

4. Bank Card:

Paying becomes even simpler! Take a ticket when you drive into the car park. When it’s time to leave, don’t join the queue for manual payment. Drive your car directly to the exit barrier and pay at the terminal using your bank card. This payment method is safer and easier! We install the latest payment methods and the most flexible technical solutions in our facilities: Liber-t tag, Total GR card, city card, Moneo electronic purse, parking cheque, bank card, etc.

We monitor advanced technologies and study best practices all over the world so that we can pioneer the installation of high-performance payment methods.

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c) VINCI MasterCard Numbers

MasterCard Data Analysis Vinci Feb08-Jan09 Total Euro and Total Transactions in 12 months

FRANCE Sum of Total_Euro_Currency_Volume 1273268.6

Sum of Total_Transaction_Count 78724 GERMANY FEDERAL REPUBLIC OF

Sum of Total_Euro_Currency_Volume 411188.25

Sum of Total_Transaction_Count 96026

UNITED KINGDOM Sum of Total_Euro_Currency_Volume 147362.64

Sum of Total_Transaction_Count 7791

BELGIUM Sum of Total_Euro_Currency_Volume 55681.06

Sum of Total_Transaction_Count 6888

SPAIN Sum of Total_Euro_Currency_Volume 21411.22

Sum of Total_Transaction_Count 1204

SLOVAKIA Sum of Total_Euro_Currency_Volume 1264.45

Sum of Total_Transaction_Count 49

AUSTRIA Sum of Total_Euro_Currency_Volume 135.12

Sum of Total_Transaction_Count 40 Total Sum of Total_Euro_Currency_Volume 1910311.34 Total Sum of Total_Transaction_Count 190722

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III. Q-Park

(www.q-park.com)

a) Q-PARK Key Figures

In nine out of the 10 countries where Q-Park operates, Q-Park is ranked in the top 3. Q-Park

is market leader in the Netherlands, Belgium, Ireland, Sweden and Finland. Overall, Q-Park is

among the top 3 European parking companies.

2007:

Dividend: 43.70eur/share (2006: 33.90eur) Return 13.5%

Net profit 108.6 million; balance sheet total 3.9 billion euro

16

17

b) Q-PARK Payment Systems

Near Field Communication. (sinds 30/01/08)

Dankzij de samenwerking tussen Payter, SKIDATA en Q-Park hoeven bezoekers met een mobiel niet meer langs de betaalautomaat. Payter voegt hiermee een nieuwe mogelijkheid aan de mobiele portemonnee toe: parkeren. Bij het in- en uitrijden van de parkeergarage halen Payter bezoekers hun mobiele telefoon gewoon langs de in- en uitrijdterminal. Met de 'Mastercard Over-the-Air Provisioning Service' kunnen banken eenvoudiger en sneller dan voorheen een mobiele betaaldienst voor hun klanten opzetten, op basis van het reeds bestaande RFID betaalsysteem van Mastercard, PayPass.

Q-Park Key De Q-Park Key is een handige afstandsbediening met sleutelhanger. Met één druk op de knop, dus zonder uw raampje te openen, opent u 24 uur per dag de slagboom. Voor de Q-Park Key betaalt u éénmalig € 34,95 en per maand € 1,50 abonnementskosten. Geen betaalautomaat

Abbonnementen

Voor diegenen die vaak in dezelfde parkeergarage parkeren. Daarmee bent u altijd verzekerd van een vrije plek in uw vaste parkeergarage tegen een aantrekkelijke prijs. Uw abonnement stelt u zelf samen op basis van de uren waarop u het meeste in uw vaste abonnementslocatie parkeert. U heeft daarbij de keuze uit zes standaard tijdsperioden.

P+R terreinen

Betalen doet u elektronisch vanuit uw eigen auto. U ontvangt geen parkeerkaartje en u hoeft dus niet langs een betaalautomaat. Bij het inrijden steekt u uw creditcard in de kaartlezer. Het systeem registreert het tijdstip van inrijden. Bij het uitrijden steekt u vervolgens uw creditcard, NS-Business Card of Mobility Mixx waarmee u bent ingereden in de kaartlezer. Het systeem registreert het tijdstip van uitrijden.

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c) Q-PARK MasterCard Numbers

MasterCard Data Analysis Q-Park Feb08-Jan09 Total Euro and Total Transactions in 12 months

NETHERLANDS Sum of Total_Euro_Currency_Volume 5865609

Sum of Total_Transaction_Count 838001

BELGIUM Sum of Total_Euro_Currency_Volume 575417.4

Sum of Total_Transaction_Count 33958

UNITED KINGDOM Sum of Total_Euro_Currency_Volume 379447.5

Sum of Total_Transaction_Count 31380

GERMANY FEDERAL REPUBLIC OF Sum of Total_Euro_Currency_Volume 4811.52

Sum of Total_Transaction_Count 1279 Total Sum of Total_Euro_Currency_Volume 6825285 Total Sum of Total_Transaction_Count 904618

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IV. The Interparking Group

(http://www.interparking.com/Public/)

a) INTERPARKING Key Figures

50 million customers a year, approximatively 350 towns, 481 car parks totaling some

250.000 parking spaces (76,000 on-street parking spaces) in Germany, Austria, Belgium,

Spain, France, Italy and the Netherlands that generate a turnover of over 240 million euros.

This puts Interparking among the top three in the European market in this sector.

7 countries, international: (60% of turnover) and the undisputed leader in Belgium

In Germany: Interparking is now number one on the German market. Joint venture with

Deutsche Bahn. In Austria, Salzburg, Vienna and Lintz; in Spain: presence in Madrid,

Barcelona and Bilbao; in France (formerly Uniparc and Codeparc); in the Netherlands; in

Italy, 62,000 on-street parking spaces in 150 towns in Tuscany, Sicily, Umbria and Apulia.

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b) INTERPARKING Payment Systems (http://www.servipark.com/ )

Our cards - Welcome to the world of simplicity and liberty!

Whether you are a tradesman, a private person, self employed or work in a company; a wide range of products has been developed to make parking easy. From card to parking cheque, parking becomes a pleasure.

P CARD SHOPPING - For carefree shopping and parking without queues en ticket.

The P Card Shopping®, for private users, gives access to all car parks of the Servipark network nearby the most important commercial areas of Belgium. No longer necessary to take a ticket or go to a ticket machine. Simply insert the P card in the slot on the way in and

21

out of the car park. The P Card Shopping® is revolutionary. She is linked to a Visa, Mastercard or American Express credit card. You can do your shopping with peace of mind. No more queuing at the ticket machine and as icing on the cake you can obtain free parking time from the shops. Ask for the P Card Shopping®, free of charge!

P CARD CORPORATE – The Business Card

You use your car all the time and you lose precious time looking for a place to park. Problems: car park receipts that you shouldn’t loose and the weight of the petty cash. The Corporate® is the solution for all professionals. Insert the card at the entrance and the exit of a Servipark car park and the deal is done. At the end of the month, an invoice with automatic payment by your bank, will list all your transactions, which you can also follow on the Internet. An ally for your business

For tradesmen and companies – The Park and Vouchers

PARK and SHOP® - The charming gift from the tradesmen.

Offering free parking with the Park & Shop® ticket is a gift which will be appreciated by your customers. With this cheque they can park one hour free of charge in any car park of the Servipark network. At the end of the month, an invoice with automatic payment by your bank, will list all the tickets which have been used and you can also verify their use on the Internet.

PARK and GUEST® - The business world’s ally!

All you and your customers and coworkers need to do is park in one of the associated car parks. Thanks to the Park & Guest® ticket, you offer them a place to park and they can recover their vehicle without risking a fine and in all security. With this cheque one can park up to 12 hours free of charge and it is valid in the entire Servipark network. At the end of the month, an invoice with automatic payment by your bank, will list all the tickets which have been used and you can also verify their use on the Internet. An easy way to park with which your business associates and your personnel will be delighted.

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c) INTERPARKING MasterCard Numbers

MasterCard Data Analysis Interparking Feb08-Jan09 Total Euro and Total Transactions in 12 months

ITALY Sum of Total_Euro_Currency_Volume 416342.58

Sum of Total_Transaction_Count 11638

NETHERLANDS Sum of Total_Euro_Currency_Volume 300817.43

Sum of Total_Transaction_Count 36526

BELGIUM Sum of Total_Euro_Currency_Volume 100983.52

Sum of Total_Transaction_Count 12301

FRANCE Sum of Total_Euro_Currency_Volume 2944.94

Sum of Total_Transaction_Count 27 Total Sum of Total_Euro_Currency_Volume 821088.47 Total Sum of Total_Transaction_Count 60492

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V. SABA

(www.saba.es)

a) SABA Key Figures

saba has been operating in all areas of the parking business since 1966.

The firm currently operates controlled parking zones in Spain, Italy, Portugal and Morocco

Since it was set up, saba has followed a rising course. By 31st December 2007, its revenue

had reached 131 million euros, a 10.6% increase on 2006.

24

25

The Abertis Group: saba forms part of abertis, an international group that manages mobility

and telecommunications infrastructures across five business areas. As a result of the

activities undertaken in the fields of toll roads, telecommunications infrastructures, airports,

car parks and logistic parks, abertis is present in 17 countries in three continents.

Car parks. abertis, through its saba branch, manages more than 100,000 car parking spaces,

in 180 car parks in more than 70 cities in Spain, Italy, Portugal, Chile, Morocco and Andorra.

31 December 2007: 104,513 spaces (a 12% increase on the previous year). The volume of vehicles using one or other of the Group's car parks: 51,648,000 vehicles. Growth in the period 2003-2007 because of the Group's international expansion. In 2007, the number of rotation vehicles using one or other Saba parking facility smashed through the 50 million barrier, to total 51.6 million, implying a 6% year-on-year increase. Overall, the increase amounted to some 3 million individual vehicles, of which 1.4 million stemmed from the business in Italy. With 7.9 million vehicles, the year-on-year increase in Italy was 22%.

b) SABA payment systems State-of-the-art technology that can directly benefit customers is implemented in the company's car parks, so as to offer a swifter, more convenient and more personalized service; this includes the electronic vehicle guiding system to identify vacant or occupied spaces, or the VIA T payment system.

a wide variety of passes: they are designed to suit your particular needs.

saba tempo

With the DISCOUNT and LONG STAY passes, we offer a parking service during the hours you

need.

For permanent stays of up to 6 hours, 8 hours, 10 hours, 12 hours. These vouchers are sold

in packs of 10 units.

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saba multi-day card

Validity: You can use the saba multi-day card during a minimum of 7 days and a maximum of one month. 24 hours parking: 24 hours during your chosen weekly period in one of our car parks. Reduced cost: Save on the normal tariffs.

saba complement card

Park more hours. When you need it. We offer our subscribers the possibility to add more

hours to their stay with the saba complement card. If you are a part-time subscriber and you

need to use the 24 hours service in specific days, we offer you the saba complement card.

For a minimum of 4 days and up to 92 days.

Servisaba card

Would you like to offer your clients 24 hour car-park?

With the servisaba card, you can offer your clients a 24 hour car-park service during the

days you need. You can contract a fixed quantity of cards a month, a fixed quantity of cards

to charge for use or a fixed and a variable for use quantity number of cards.

Shopkeepers special

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c) SABA MasterCard Numbers

MasterCard Data Analysis saba Feb08-Jan09 Total Euro and Total Transactions in 12 months

SPAIN Sum of Total_Euro_Currency_Volume 524256.9

Sum of Total_Transaction_Count 47408 Total Sum of Total_Euro_Currency_Volume 524256.9 Total Sum of Total_Transaction_Count 47408

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E. MasterCard’s Processed Volume in Parking Business in Europe (information on separated European countries)

period: 12months: Febr08/Jan09

7523 UNITED KINGDOM Maestro

Sum of Total_Euro_Currency_Volume 46859.7

Sum of Total_Transaction_Count 2578

MasterCard Credit

Sum of Total_Euro_Currency_Volume 206082029.8

Sum of Total_Transaction_Count 9787734

MasterCard Debit

Sum of Total_Euro_Currency_Volume 173664.18

Sum of Total_Transaction_Count 7880

SOL Sum of Total_Euro_Currency_Volume 103012.35

Sum of Total_Transaction_Count 9624

SWI Sum of Total_Euro_Currency_Volume 14369950.58

Sum of Total_Transaction_Count 1403219 UNITED KINGDOM Sum of Total_Euro_Currency_Volume 220775516.6 UNITED KINGDOM Sum of Total_Transaction_Count 11211035

GERMANY Maestro Sum of Total_Euro_Currency_Volume 54671.25

Sum of Total_Transaction_Count 948

MasterCard Credit

Sum of Total_Euro_Currency_Volume 88897036.45

Sum of Total_Transaction_Count 3153434

MasterCard Debit

Sum of Total_Euro_Currency_Volume 172122.54

Sum of Total_Transaction_Count 6763 GERMANY Sum of Total_Euro_Currency_Volume 89123830.24 GERMANY Sum of Total_Transaction_Count 3161145

NETHERLANDS Maestro Sum of Total_Euro_Currency_Volume 173680.61

Sum of Total_Transaction_Count 9847

MasterCard Credit

Sum of Total_Euro_Currency_Volume 45096572.54

Sum of Total_Transaction_Count 3312895

MasterCard Debit

Sum of Total_Euro_Currency_Volume 38280.47

Sum of Total_Transaction_Count 2417 NETHERLANDS Sum of Total_Euro_Currency_Volume 45308533.62 NETHERLANDS Sum of Total_Transaction_Count 3325159

SWEDEN Maestro Sum of Total_Euro_Currency_Volume 75429.81

Sum of Total_Transaction_Count 7027

MasterCard Credit

Sum of Total_Euro_Currency_Volume 32308135.51

Sum of Total_Transaction_Count 3606337

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MasterCard Debit

Sum of Total_Euro_Currency_Volume 4491825.46

Sum of Total_Transaction_Count 772157

Proprietary Sum of Total_Euro_Currency_Volume 666.04

Sum of Total_Transaction_Count 27 SWEDEN Sum of Total_Euro_Currency_Volume 36876056.82 SWEDEN Sum of Total_Transaction_Count 4385548

DENMARK Maestro Sum of Total_Euro_Currency_Volume 147767.73

Sum of Total_Transaction_Count 5932

MasterCard Credit

Sum of Total_Euro_Currency_Volume 17023313.75

Sum of Total_Transaction_Count 622243

MasterCard Debit

Sum of Total_Euro_Currency_Volume 487870.03

Sum of Total_Transaction_Count 19077 DENMARK Sum of Total_Euro_Currency_Volume 17658951.51 DENMARK Sum of Total_Transaction_Count 647252

ITALY Maestro Sum of Total_Euro_Currency_Volume 1868622.74

Sum of Total_Transaction_Count 25469

MasterCard Credit

Sum of Total_Euro_Currency_Volume 11512626.69

Sum of Total_Transaction_Count 359060

MasterCard Debit

Sum of Total_Euro_Currency_Volume 25021.28

Sum of Total_Transaction_Count 891 ITALY Sum of Total_Euro_Currency_Volume 13406270.71 ITALY Sum of Total_Transaction_Count 385420

IRELAND Maestro Sum of Total_Euro_Currency_Volume 292417.79

Sum of Total_Transaction_Count 7031

MasterCard Credit

Sum of Total_Euro_Currency_Volume 12283231.97

Sum of Total_Transaction_Count 463352

MasterCard Debit

Sum of Total_Euro_Currency_Volume 15146.33

Sum of Total_Transaction_Count 799 IRELAND Sum of Total_Euro_Currency_Volume 12590796.09 IRELAND Sum of Total_Transaction_Count 471182

BELGIUM Maestro Sum of Total_Euro_Currency_Volume 285707.83

Sum of Total_Transaction_Count 3647

MasterCard Credit

Sum of Total_Euro_Currency_Volume 9874893.08

Sum of Total_Transaction_Count 475205

MasterCard Debit

Sum of Total_Euro_Currency_Volume 24636.54

Sum of Total_Transaction_Count 1517 BELGIUM Sum of Total_Euro_Currency_Volume 10185237.45

30

BELGIUM Sum of Total_Transaction_Count 480369

SPAIN Maestro Sum of Total_Euro_Currency_Volume 300265.98

Sum of Total_Transaction_Count 2794

MasterCard Credit

Sum of Total_Euro_Currency_Volume 6816478.33

Sum of Total_Transaction_Count 307906

MasterCard Debit

Sum of Total_Euro_Currency_Volume 60440.06

Sum of Total_Transaction_Count 4426 SPAIN Sum of Total_Euro_Currency_Volume 7177184.37 SPAIN Sum of Total_Transaction_Count 315126

AUSTRIA Maestro Sum of Total_Euro_Currency_Volume 1598491.07

Sum of Total_Transaction_Count 214427

MasterCard Credit

Sum of Total_Euro_Currency_Volume 3584505.97

Sum of Total_Transaction_Count 274032

MasterCard Debit

Sum of Total_Euro_Currency_Volume 10115.09

Sum of Total_Transaction_Count 781 AUSTRIA Sum of Total_Euro_Currency_Volume 5193112.13 AUSTRIA Sum of Total_Transaction_Count 489240

FINLAND Maestro Sum of Total_Euro_Currency_Volume 984.31

Sum of Total_Transaction_Count 29

MasterCard Credit

Sum of Total_Euro_Currency_Volume 3168487.59

Sum of Total_Transaction_Count 214928

MasterCard Debit

Sum of Total_Euro_Currency_Volume 33118.41

Sum of Total_Transaction_Count 2919 FINLAND Sum of Total_Euro_Currency_Volume 3202590.31 FINLAND Sum of Total_Transaction_Count 217876

FRANCE Maestro Sum of Total_Euro_Currency_Volume 321047.32

Sum of Total_Transaction_Count 18427

MasterCard Credit

Sum of Total_Euro_Currency_Volume 2123919.33

Sum of Total_Transaction_Count 114306

MasterCard Debit

Sum of Total_Euro_Currency_Volume 31892.8

Sum of Total_Transaction_Count 1684 FRANCE Sum of Total_Euro_Currency_Volume 2476859.45 FRANCE Sum of Total_Transaction_Count 134417

CZECH REPUBLIC Maestro Sum of Total_Euro_Currency_Volume 202742.63

Sum of Total_Transaction_Count 8042

MasterCard Credit

Sum of Total_Euro_Currency_Volume 710718.43

Sum of Total_Transaction_Count 24542

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MasterCard Debit

Sum of Total_Euro_Currency_Volume 2329.07

Sum of Total_Transaction_Count 91 CZECH REPUBLIC Sum of Total_Euro_Currency_Volume 915790.13 CZECH REPUBLIC Sum of Total_Transaction_Count 32675

LUXEMBOURG Maestro Sum of Total_Euro_Currency_Volume 26186.06

Sum of Total_Transaction_Count 411

MasterCard Credit

Sum of Total_Euro_Currency_Volume 763035.43

Sum of Total_Transaction_Count 37004

MasterCard Debit

Sum of Total_Euro_Currency_Volume 13985.71

Sum of Total_Transaction_Count 3479 LUXEMBOURG Sum of Total_Euro_Currency_Volume 803207.2 LUXEMBOURG Sum of Total_Transaction_Count 40894

POLAND Maestro Sum of Total_Euro_Currency_Volume 277732.27

Sum of Total_Transaction_Count 9472

MasterCard Credit

Sum of Total_Euro_Currency_Volume 456382.25

Sum of Total_Transaction_Count 18262

MasterCard Debit

Sum of Total_Euro_Currency_Volume 1699.76

Sum of Total_Transaction_Count 90 POLAND Sum of Total_Euro_Currency_Volume 735814.28 POLAND Sum of Total_Transaction_Count 27824

GREECE Maestro Sum of Total_Euro_Currency_Volume 2023.54

Sum of Total_Transaction_Count 9

MasterCard Credit

Sum of Total_Euro_Currency_Volume 262746.55

Sum of Total_Transaction_Count 8039

MasterCard Debit

Sum of Total_Euro_Currency_Volume 1191.86

Sum of Total_Transaction_Count 66 GREECE Sum of Total_Euro_Currency_Volume 265961.95 GREECE Sum of Total_Transaction_Count 8114

SLOVENIA Maestro Sum of Total_Euro_Currency_Volume 100929.5

Sum of Total_Transaction_Count 2736

MasterCard Credit

Sum of Total_Euro_Currency_Volume 120186.76

Sum of Total_Transaction_Count 9647

MasterCard Debit

Sum of Total_Euro_Currency_Volume 148.3

Sum of Total_Transaction_Count 11 SLOVENIA Sum of Total_Euro_Currency_Volume 221264.56 SLOVENIA Sum of Total_Transaction_Count 12394

SLOVAKIA Maestro Sum of Total_Euro_Currency_Volume 40170.67

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Sum of Total_Transaction_Count 1642

MasterCard Credit

Sum of Total_Euro_Currency_Volume 160398.49

Sum of Total_Transaction_Count 5458

MasterCard Debit

Sum of Total_Euro_Currency_Volume 1939.3

Sum of Total_Transaction_Count 22 SLOVAKIA Sum of Total_Euro_Currency_Volume 202508.46 SLOVAKIA Sum of Total_Transaction_Count 7122

ANDORRA Maestro Sum of Total_Euro_Currency_Volume 255.58

Sum of Total_Transaction_Count 44

MasterCard Credit

Sum of Total_Euro_Currency_Volume 168068.43

Sum of Total_Transaction_Count 18147

MasterCard Debit

Sum of Total_Euro_Currency_Volume 141.64

Sum of Total_Transaction_Count 25 ANDORRA Sum of Total_Euro_Currency_Volume 168465.65 ANDORRA Sum of Total_Transaction_Count 18216

ROMANIA Maestro Sum of Total_Euro_Currency_Volume 36732.47

Sum of Total_Transaction_Count 710

MasterCard Credit

Sum of Total_Euro_Currency_Volume 43430.84

Sum of Total_Transaction_Count 750

MasterCard Debit

Sum of Total_Euro_Currency_Volume 89.36

Sum of Total_Transaction_Count 1 ROMANIA Sum of Total_Euro_Currency_Volume 80252.67 ROMANIA Sum of Total_Transaction_Count 1461

LATVIA Maestro Sum of Total_Euro_Currency_Volume 13499.88

Sum of Total_Transaction_Count 808

MasterCard Credit

Sum of Total_Euro_Currency_Volume 60991.27

Sum of Total_Transaction_Count 2842

MasterCard Debit

Sum of Total_Euro_Currency_Volume 570.6

Sum of Total_Transaction_Count 20 LATVIA Sum of Total_Euro_Currency_Volume 75061.75 LATVIA Sum of Total_Transaction_Count 3670

ESTONIA Maestro Sum of Total_Euro_Currency_Volume 2551.96

Sum of Total_Transaction_Count 219

MasterCard Credit

Sum of Total_Euro_Currency_Volume 50162.98

Sum of Total_Transaction_Count 2937

MasterCard Debit

Sum of Total_Euro_Currency_Volume 208.13

Sum of Total_Transaction_Count 22

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ESTONIA Sum of Total_Euro_Currency_Volume 52923.07 ESTONIA Sum of Total_Transaction_Count 3178

CYPRUS Maestro Sum of Total_Euro_Currency_Volume 470.57

Sum of Total_Transaction_Count 8

MasterCard Credit

Sum of Total_Euro_Currency_Volume 14849.09

Sum of Total_Transaction_Count 448

MasterCard Debit

Sum of Total_Euro_Currency_Volume 798.57

Sum of Total_Transaction_Count 4 CYPRUS Sum of Total_Euro_Currency_Volume 16118.23 CYPRUS Sum of Total_Transaction_Count 460

MALTA Maestro Sum of Total_Euro_Currency_Volume 376.64

Sum of Total_Transaction_Count 13

MasterCard Credit

Sum of Total_Euro_Currency_Volume 5042.84

Sum of Total_Transaction_Count 184 MALTA Sum of Total_Euro_Currency_Volume 5419.48 MALTA Sum of Total_Transaction_Count 197

BULGARIA Maestro Sum of Total_Euro_Currency_Volume 58.52

Sum of Total_Transaction_Count 2

MasterCard Credit

Sum of Total_Euro_Currency_Volume 79.88

Sum of Total_Transaction_Count 3 BULGARIA Sum of Total_Euro_Currency_Volume 138.4 BULGARIA Sum of Total_Transaction_Count 5 Total Sum of Total_Euro_Currency_Volume 467517865.1 Total Sum of Total_Transaction_Count 25379979

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TOP 10 EUROPEAN COUNTRIES SORTED ACCORDING TO EURO VOLUME

7523 UNITED KINGDOM

Sum of Total_Euro_Currency_Volume 220775516.6

Sum of Total_Transaction_Count 11211035

GERMANY Sum of Total_Euro_Currency_Volume 89123830.24

Sum of Total_Transaction_Count 3161145

NETHERLANDS Sum of Total_Euro_Currency_Volume 45308533.62

Sum of Total_Transaction_Count 3325159

SWEDEN Sum of Total_Euro_Currency_Volume 36876056.82

Sum of Total_Transaction_Count 4385548

DENMARK Sum of Total_Euro_Currency_Volume 17658951.51

Sum of Total_Transaction_Count 647252

ITALY Sum of Total_Euro_Currency_Volume 13406270.71

Sum of Total_Transaction_Count 385420

IRELAND Sum of Total_Euro_Currency_Volume 12590796.09

Sum of Total_Transaction_Count 471182

BELGIUM Sum of Total_Euro_Currency_Volume 10185237.45

Sum of Total_Transaction_Count 480369

SPAIN Sum of Total_Euro_Currency_Volume 7177184.37

Sum of Total_Transaction_Count 315126

AUSTRIA Sum of Total_Euro_Currency_Volume 5193112.13

Sum of Total_Transaction_Count 489240 Total Sum of Total_Euro_Currency_Volume 458295489.5 Total Sum of Total_Transaction_Count 24871476

1

August 15, 2009

Maestro SecureCodeLe commerce électronique en toute sécurité en Europe

August 15, 2009 2

Agenda

1. Les opportunités et les défis de l’e-Commerce

2. Une solution pour les e-Commerçants: Maestro SecureCode

3. Les avantages pour les e-Commerçants et leurs clients

2

August 15, 2009 3

1. Les opportunités et les défis de l’e-Commerce

August 15, 2009 4

L’e-Commerce au niveau mondial: opportunités

• Partant du constat que l’e-Commerce ne cesse d’augmenter au cours des années en nombre de transactions mais aussi en CA, cette croissance pourrait être accélérée en

renforçant la confiance des consommateurs

élargissant les moyens de paiement aux cartes de débit

Source: KRC MasterCard SEPA Sondage Consommateurs, la GB, la France, l’Allemagne, les Pays Bas, la Belgique et la Pologne, Mars07

3

August 15, 2009 5

• Actuellement, les Cartes de Crédit sont le moyen de paiementen ligne le plus apprécié.

– 59 % des achats en ligne sont faits par Carte de Crédit– 23 % par transfert bancaire

• Le paiement cash-à-la-livraison occupe également une place prépondérante dans certains pays européens: au Portugal (35%), en Grèce (31%), en Espagne (29%) et en Italie (28%),

• En GB, +/- la moitié des clients en ligne utilise la Carte de Débit.

Credit Card

Bank Transfer

Other

L’e-Commerce au niveau européen: opportunités du Débit

Source: KRC MasterCard SEPA SondageConsommateurs, la GB, la France, l’Allemagne, les Pays Bas, la Belgique et la Pologne, Mars07

August 15, 2009 6

• Mode de paiement en ligne principal: la Carte de Crédit• Quel mode de paiement les titulaires de cartes utilisent en général pour les

transactions en ligne, en GB, aux Pays-Bas et en Belgique?

1712Cash à la livraison

0211Chèque

3133Autres

BelPays-BasGBTOTAL%

4

11

35

42

538

33172Virement bancaire

393Débit Direct

142345Carte de Débit

423544Carte de Crédit

11894326n =

L’e-Commerce au niveau européen: Opportunités du Débit

Source: KRC MasterCard SEPA Sondage Consommateurs, la GB, la France, l’Allemagne, les Pays Bas, la Belgique et la Pologne, Mars07

4

August 15, 2009 7

• Mode de paiement en ligne préféré: la carte de Débit• Quel mode de paiement les titulaires de cartes préfèrent-ils pour les transactions en

ligne, enGB, aux Pays-Bas et en Belgique? Crédit ou Débit?

48665355Deb30202927CreMe permet de budgétiser mes dépenses plus

efficacementDeb

Cre

DebCre

Deb

Cre

Deb

Cre

37173230Est le mode de paiement dans lequel j’ai confiance

37183531Est le mode de paiement de mon choix

36284639Réduit mon risque personnel ou la responsabilité

58435352Est plus flexible

57646161

55716062

BelPaysBGBTOTAL%

42

35

1000

414542

284136

250250500n =

L’e-Commerce au niveau européen: Opportunités du Débit

Source: KRC MasterCard SEPA Sondage Consommateurs, la GB, la France, l’Allemagne, les Pays Bas, la Belgique et la Pologne, Mars07

August 15, 2009 8

Les avantages d’activer les Cartes de Débit dans l’e-Commerce:

Les Cartes de Débit peuvent remplacer des modes de paiement inconfortables comme cash-à-la-livraison et les virements de banque.

Les Cartes de Débit fournissent les commerçants avec un mode de paiement plus efficient, plus rapide et plus sûre.

Les e-Commerçants comme les consommateurs vont profiter de l’activation et de l’adoption des Cartes de Débit:

– Garantie de paiement– Synchronisation d’achat & de paiement – Une expérience de paiement aisée en toute sécurité

Les e-Commerçants: avantages du Débit

5

August 15, 2009 9

La Sécurité

• Les cartes de débit sont directement liées aux comptes bancaires des consommateurs

• Manque de garantie de sécurité du data en ligne

– mène à des consommateurs inquiets

– mène à un manque de confiance des consommateurs

– mène à une perte de vente

e-Commerce: le défi de securité

August 15, 2009 10

• Presque la moitié des adultes U.S. en ligne, ou 46% de plus de 155 millions, signalent des inquiétudes sur

– le vol d’information– un abus de data – une attaque lancée sur l’Internet

Et limitent par conséquent leurs achats

38%: ont dépensé moins d’argent en ligne qu’avant29%: ont réduit les dépenses de 75% ou plus26%: ont réduit les dépenses de 50% à 74%28%: ont réduit les dépenses de 25% à 49%

Source: Gartner Inc. report

L’e-Commerce: le défi de securité

6

August 15, 2009 11

• Les consommateurs exigent de leurs banquesdes garanties de protection pour leurscomptes courants

• Pour cette garantie, les banques ont besoin d’un processus de vérification du titulaire de carte et une autorisation de paiementsans faille

• Les banques veulent éviter des charges liées à la fraude, en particulier liées àl’authentification en ligne

L’e-Commerce: la securité du Débit

August 15, 2009 12

Points d’attention pour les e-Commerçants

• Les commerçants e-Commerce veulent une garantie de paiement– éviter les plaintes, les chargebacks et la perte de revenus– se prémunir contre la fraude

• Souhaitent de la commodité pour les consommateurs– ventes en ligne faciles et rapides

– paiement en ligne aisé et agréable

• Souhaitent minimiser le coût du paiement

7

August 15, 2009 13

Conclusion

Deux problèmes prioritaires de l’e-Commerce:

la sécuritédu shopping en ligne

pour le consommateur

garantie de paiementpour l’ e-Commerçant

la solution

Authentification du titulaire de carte

du commerçant

August 15, 2009 14

Conclusion

MasterCard a identifié les prochains besoins principaux pour l’authentification du titulaire de carte dans le monde virtuel:

b. Cohérence; Chaque service, chaque voie de livraison

c. Prix économique; Pour la solution “mass-market”

a. Haute Sécurité; Pour le problème de l’e-Fraude

d. Commodité; Importance de l’adoption du consommateur

* Source: OneSmart Authentication product presentation

8

August 15, 2009 15

2. La solution pour les e-Commerçants: Maestro SecureCode

August 15, 2009 16

Qu’est-ce que Maestro?

• Le système carte de Débit le plus répandu au monde

• Maestro est une marque de paiement reconnue mondialement

• 650 millions de cartes dans le monde entier et 295 millions de cartes en Europe ont accès aux systèmes

• Ces cartes sont déjà acceptées en 10.8 millions de points de vente et en 1.2 millions d’ ATMspartout dans le monde

• L’usage facile partout au monde incite les titulaires de carte à utiliser leur carte de débit plus couramment et à faire augmenter la quantité et la valeur de leurs transactions de débit.

9

August 15, 2009 17

Qu’est-ce que Maestro SecureCode?

• SecureCode est une solution pour “authentifier”les titulaires de carte sur Internet.

• L’acceptation Maestro en ligne exige le SecureCode.

• Les titulaires de carte doivent entrer leur SecureCode dans un nouveau browser windowpour que leur transaction en ligne puisse être autorisée.

• La banque émettrice confirme le titulaire de carte et exécute la transaction.

• Les titulaires de carte s’identifient chez leurs banques en utilisant le code personnalisé.

August 15, 2009 18

SecureCodeSecureCode en Actionen Action

10

August 15, 2009 19

August 15, 2009 20

11

August 15, 2009 21

Tom JMaxwell

675412346786745 November 2012Maestro

August 15, 2009 22

********

12

August 15, 2009 23

August 15, 2009 24

Top e-Commerçants avec SecureCode (1)

13

August 15, 2009 25

Top e-Commerçants avec SecureCode (2)

August 15, 2009 26

Les cartes Maestro SecureCode en Europe

• Il y a plus de 28 millions de Maestro SecureCode cartes émises en Europe et plus encore vont suivre

• Développement en GB et Espagne • Une émission dans 6 autres pays:

– Belgique – Allemagne– Italie– Pologne– Portugal– Russie

Pas de Plan

Mise en oeuvre

En cours d’émission

Discussion de la mise en oeuvre

14

August 15, 2009 27

3. Les avantages pour les e-Commerçants et leurs clients

August 15, 2009 28

Les avantages pour les e-Commerçants

SecureCode• Fourni la preuve explicite d’un achat en ligne garanti• Réduit la fraude et les plaintes• Élimine la de-synchronisation entre le moment de la

vente et le paiement• Une solution mondiale de débit qui vous permet de

toucher des millions de titulaires de carte avec une activation Maestro SecureCode

• Réduit le nombre de modes de paiement dans les differents pays d’opération

• Règlement électronique des plaintes et opposition plus facile à traiter

15

August 15, 2009 29

Les avantages pour les clients

• Les consommateurs ont le choixde payer directement ou de façon différée pour leurs courses en ligne*

• Les consommateurs veulent sesentir en sécurité et protégéscontre des transactions non-authorisées.*

* KRC MasterCard SEPA Sondage des Consommateurs, UK, la France, l’Allemagne, les Pays Bas, la Belgique et la Pologne,Mars 2007

Maestro en ligne ouvre la carte de débit aux achats sur Internet dans la vie quotidienne:- C‘est pratique parce que je peux utiliser la même carte - Je peux contrôler ce que je dépense- Je suis protégé contre la fraude

August 15, 2009 30

Comment démarrer?

• Contacter votre banque d’Acquisition pour obtenir des informations vous permettant d’accepter Maestro SecureCodedans votre business en ligne

16

August 15, 2009 31

Appendix

August 15, 2009 32

MasterCard introduit le Maestro Advance Registration Program™ (MARP):

• Permettant aux consommateurs Maestro de faire des courses en ligne utilisant une plate-forme sécurisée

• Tout en maintenant l’expérience check-out du commerçant très efficace et pratique

Associer la sécurité de consommateur et la commoditéde check-out en ligne

Sécurité en ligne et commodité grâce au Maestro Advanced Registration Program

17

August 15, 2009 33August 15, 2009 3333

• MasterCard a introduit un nouveau programme pour améliorer la commodité de la carte Maestro en maximisant le nombre de commerçants qui l’acceptent

• La Maestro Advance Registration Program permet aux commerçants qualifiés d’accepter Maestro pour les transactions e-commerce sans devoir utiliser MasterCard SecureCode pour authentifier chaque transaction

• Les commerçants qui y prennent part peuvent balancer leurs objectifs de l’expérience de check-out avec leur préférence pour une transaction garantie ??????????

Sécurité en ligne et commodité avec Maestro Advanced Registration Program

August 15, 2009 34August 15, 2009 3434

Maestro Advance Registration ProgramRésumé

• Conçu pour les commerçants, permet aux consommateurs d’enregistrer une carte de paiement pour l’emploi dans les transactions de l’avenir

• Le commerçant doit demander le SecureCodeauthentification quand le consommateur fait sa première transaction Maestro

• Les transactions Maestro dans l’avenir ne devront pas être SecureCode authentifiées. Toutefois, la banque émettrice aura droit de chargeback en cas de fraude

• MasterCard va répartir un Account Authentification Value (AAV) statique aux commerçants pour qu’ils puissent identifier les transactions pas authentifiées.

18

August 15, 2009 35August 15, 2009 3535

Maestro Advance Registration Program Critères de qualification des commerçants

• Exige pièces d’identitéd’authentification comme username et mot de passe pour enregistrer le consommateur pour le check-out

• CB ratio de 30 bps ou moins

• PCI DSS compliant

• CVC2 & AVS (ou disponible)

• Système de gestion de risque du dernier cri

• SecureCode doit être complètement opérationnel pour authentifier les transactions initiales.

1

June 18, 2009 1

The Dawn of a New European Economy

Understanding the newest trends and their consequences in the European Card Payments Business

Steven Van SweeveltCommerce Development

June 18, 2009 2

1. A New European Economy

The beginning of the 21st century was marked by an ever-growing Globalization of the Economy.

• Growth

• Wealth

• Internationalisation& Harmonisation

• Inflation

• Ecological Poverty

• Crisis on a Global Scale

-> 2008 2008 ->

2

June 18, 2009 333333

SEPA: Harmonization –

Any Card….• Virtually all debit cards now bear an International SEPA compliant brand• Limited Exceptions: Finland, Italy, Netherlands, France

…Any Terminal• Approximately 90% of all national use only

debit card terminals now accept Maestro®

in the EU 31

1 1. A New European Economy: SEPA

June 18, 2009 444

SEPA: Transparency -Cards Framework:

Opening national markets = allowing multiple scheme and service providers / market= options for retailers and issuing banks

SEPA: Opportunity –Increased choice of schemes under SEPA Schemes to deliver more features / functionalities on unique needs.

SEPA: Conclusion –FEWER BARRIERS = MORE OPPORTUNITIES

2 1. A New European Economy: SEPA

3

June 18, 2009 55

‘Economic Zones’signalling the creation of a true single market for both payments and shopping

Top Maestro European cross-border debit card usage cities by country Sept 07-Aug 08

In spite of economic downturn, this trend continues and is enhanced by consumers actively looking for lowest cost/greatest value, regardless of country

1. A New European Economy: SEPA

June 18, 2009 66666

• Competition for retailer card payment services

• Evolution of number of available debit card acquirers by country from 2007 to 2009

• Maestro and MC now domestic brands and volumes migrating to

international schemes on co-brand cards from local schemes

BELGIUMFrom 1 to 8

IRELANDFrom 3 to 6

AUSTRIAFrom 2 to 9

LUXEMBURGFrom 1 to 3

NETHERLANDSFrom 1 to 8

SWITZERLANDFrom 1 to 3

PORTUGALFrom 1 to 3

3

1. A New European Economy: SEPA

4

June 18, 2009 777715 August 2009

7

“We are centralizing all of our card processing businessfor our petrol stations across Europe for debit and credit under one format, terminal and provider”

“ I want to offer acceptance of debit cards at my parking garages and meters”

“We want to accept debit cards on our tollway network from both Italy and abroad in the same way.”

“We want to begin accepting debit cards in Italy on our website”

“We need to offer an electronic refund in new ‘cash free’ shops and the local scheme doesn’t offer”

“We like the ability to approve cards even if our terminal is not working at the moment”

“We like the Purchase with Cash Back Solution as an added customer service.”

‘We want to accept German debit cards on our website in the same way as everywhere else”

4

1. A New European Economy: SEPA

June 18, 2009 888

2. The New Consumer’s Response

5

June 18, 2009 99

• Consumer Confidence is at an all-time low due to the events of 2008.

• 4 factors have shaped the New European Consumer.

Rise of commodity prices

Disappearance of Personal wealth

With housingBanking and

Stock markets collapse

Unemployment &Business outlook

2. The New Consumer’s Response

Ecological Pressure

June 18, 2009 1010

Source: TNS dimarso - March 2009

– 60% believes there will be a global depression– 73% expects to cut back their spending the coming year– Consumers expect to increase their savings, from 42% to 65%.

BUT 55% will not be able to save any money.– 10% expects to lose their home the coming year– 27% will have to postpone their retirement– 30% expects their job will be at risk– 60% has to sacrifice free time to cope with higher work pressure /

handle more tasks themselves

2. The New Consumer’s Expectations

6

June 18, 2009 1111

2. The New Consumer’s Expectations: Norway

June 18, 2009 1212

The New European consumer is

• BETTER MANAGING its BUDGET

• Shopping BETTER INFORMED: Smart Spending

• SAVING MONEY or trying to

• TIME CONSCIOUS

2. The New Consumer’s Habits: Conclusions

7

June 18, 2009

3. Impact on Retailers and Banks3. Impact on Retailers and Banks

June 18, 2009 14

•Luxury/•premium

•Middle-price

•Discount/•low price

•Luxury/•premium

•Discount/•low price

80s 90s-2008 2008 <

3. Impact on Retailers

Move to lower segments

8

June 18, 2009 15

3. Impact on Retailers

Downscaling• In the consumer market, the ‘go small’ trend is replacing the

‘big-is-better’ thinking.

• Anticipation of future inflation. • Characteristics:

– Minimal architecture: streamlined eco prefab housing

– Micro products: Miniline by BMW

• Reason to buy:– Ecofriendly

– Smarter

June 18, 2009 16

3. Impact on Retailers

Source: a media consumption study by Mediascope Europe. EIAA Online Shoppers 2008

e-Commerce• 2004 40% has ever bought

on-line

• 2008 80% bought on-line

• UK (486 MIO) and Germany (342 MIO) made most purchases

• Norway (€1203) and UK (€1203)are the biggest on line spenders per capita

1%3%

5%

2%

5%

9%

6%7%

15%

2002 2007 2012 E

Rest of the w orld US and Canada Europe

Online spend as % of total retail spend

9

June 18, 2009 17

3. Impact on Retailers

Source: a media consumption study by Mediascope Europe. EIAA Online Shoppers 2008

e-Commerce: On-line research On-line purchase

June 18, 2009 18

3. Impact on Retailers

Disloyal BehaviourIn an information-rich society, the patience-poor customer seeks out more alternatives and demands more.

Short Term increased promotional pressure leads to Longer Term brand erosion and trains shoppers to buy on promotion.

• Companies can increase revenues by nearly 50% by retaining only 5% of their customer base.

Source: Frederick Reichheid “The Loyalty Effect”

• 47% of European consumers in 2008 indicated they were not brand-loyal.Source: Consumer Behaviour survey 2008 Deloitte

10

June 18, 2009 19

3. Impact on Retailers

Unpredictable “the zapping society”– 60% of women (BE) claim they cannot do what needs to be done.

– Short-term mindset

– Disappearance of traditional weekly bulk shopping trip

– Multi dimensionnel clusters / life stage and life style.

Difficult to target

Winning store concepts – best target / best satisfy

June 18, 2009 20

11

June 18, 2009 21

3. Impact on Banks

Lost of Trust

2007

1. Firefighters 96%2. Doctors 89%3. Teachers 88%4. Police 81%5. Judges 78%6. Bankers 72%7. Church repres. 64%8. Journalists 49%

2009

1. Firefighters 93%2. Doctors 89%3. Teachers 76%4. Police 65%5. Judges 56%6. Church repres. 48%7. Journalists 34%8. Bankers 18%

Source: European Trusted Brands 2009 by Reader’s Digest

Evolution: Most trusted Jobs

June 18, 2009 22

3. Impact on Banks

Less Savings

Increase in defaults

Credit Losses

Lower economicgrowth

Weakening of banks’ balance sheets

Lower credit growth

12

June 18, 2009 23

4. MasterCard4. MasterCard’’s s European Payment SolutionsEuropean Payment Solutions

June 18, 2009 24

4. MasterCard’s European Payment Solutions

0

1000

2000

29 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 1

Account balance

Days

Average balance

0

1000

2000

29 1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 1

Account balance

Average balance

Heavy ATM user, low POS user Heavy POS user, Low ATM user

Consumers’ natural choice Best choice for • the bank• the consumer• the economy

Drive acceptance at POS:

13

June 18, 2009 25

Secure & Fast Internet – also on debit cards

– Easy and Secure Shopping On-line

– Activation of Debit Cards: – opening up e-Commerce

– 28 million European Maestro SecureCode cards

4. MasterCard’s European Payment Solutions

June 18, 2009 26

Speed at Check Out

FranceUK Germany

4. MasterCard’s European Payment Solutions

14

June 18, 2009 27

Increased Budget Control

4. MasterCard’s European Payment Solutions

June 18, 2009 28

Rewards on your payment card

• Unique identifier

• Always on hand• Data Rich

• 1-1 marketing at Check Out

CUSTOMER GROUPS MARKETING BUDGET

DEAL SEEKERS

LOYALS

4. MasterCard’s European Payment Solutions

15

June 18, 2009 29

Conclusions

1.Crisis – is temporary

But some trends are there to last

2.Fundamentally – way of doing business will not change

But anticipation on trends will put you in pole position

Short Term: cards business hasdeveloped some solutions

Long Term: win will come from an industry wide collaboration

Gagnez 2 tickets pour un match de

l’UEFA Champions League*!

* Réduction de 25 € pour toute souscription d’une ING Card ou de 34,70 € pour toute souscription d’une MasterCard Gold ING (soit le montant actuel de la redevance annuelle due respectivement pour l’une ou l’autre carte; variable moyennant information préalable), et ce pour une durée d’un an et pour autant que la demande d’offre soit introduite auprès d’ING entre le 06/07/2009 et le 14/08/2009 inclus (sous réserve d’acceptation de votre dossier par ING et d’accord mutuel). Offre valable uniquement contre remise du bon de va-leur ING Card ou MasterCard Gold (disponible sur www.ing.be) à votre agence ING au moment de la demande. Offre réservée aux personnes qui ne sont pas encore titulaires d’une ING Card ou d’une MasterCard Gold au moment de la demande d’offre et limitée à une réduction par personne. Pour l’ING Card, vous ne payez, grâce au bon de valeur, que les frais d’utilisation de votre carte (p. ex. en cas de retrait) et, en cas d’utilisation de l’ouverture de crédit, les intérêts débiteurs sur le montant prélevé (taux d’intérêt annuel effectif global – T.A.E.G. = 10,95%; taux en vigueur au 1/6/2009, variable moyennant information préalable). La MasterCard Gold ING est une carte de crédit destinée aux particuliers agissant à des fins privées. L’ING Card est une MasterCard assortie d’une ouverture de crédit facultative, destinée aux personnes physiques majeures. Si vous souhaitez une MasterCard sans ouverture de crédit, veuillez vous adresser à une agence ING. Les conditions générales de l’ING Card et de la MasterCard Gold sont disponibles dans toutes les agences ING et sur ww.ingcard.be.

** La participation à la tombola est soumise à la souscription d’une ING Card ou d’une MasterCard pour une durée d’un an dont la demande d’offre est introduite auprès d’ING entre le 06/07/2009 et le 14/08/2009 inclus (sous réserve d’acceptation de votre dossier par ING et d’accord mutuel). Votre participation à la tombola (via le formulaire disponible, après introduction de votre demande de carte, via la messagerie Home’Bank d’ING) implique votre adhésion au règlement de la présente tombola, disponible sur demande auprès d’ING. La tombola est organisée par Child Focus (avenue Houba de Strooper 292, 1020 Bruxelles) en collaboration avec ING Belgique (tombola autorisée par A.R. III/42/CD.585.13-366). Date du tirage au sort: le 01/09/2009. Autres conditions et règlement de la tombola disponibles auprès des agences ING et sur www.ing.be.

ING Belgique SA – Banque / Prêteur – Avenue Marnix 24, B-1000 Bruxelles – RPM Bruxelles – TVA BE 0403.200.393 – BIC (SWIFT): BBRUBEBB – Compte: 310-9156027-89 (IBAN: BE45 3109 1560 2789). Éditeur responsable: Philippe Wallez – Avenue Marnix 24, B-1000 Bruxelles – Z24162F.

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ING Belgium SA – Bank / Loaner – Avenue Marnix 24, B-1000 Brussels – RPM Brussels – TVA BE 0403.200.393 – BIC (SWIFT): BBRUBEBB – Account: 310-9156027-89 (IBAN: BE45 3109 1560 2789). Responsible publisher: Philippe Wallez – Avenue Marnix 24, B-1000 Brussels – Z24162F.