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Central Europe payments behavior is changing

By Albrecht Kiel, Regional Managing Director Central Europe • Visa Europe

February 08, 2016

Paying by card is becoming a habit in Germany, and elsewhere. This is a real breakthrough for Visa. It is driven by improving acceptance, convenience of payments and consumer uptake. Central Europe payments culture is changing.

First of all, German consumers can now also pay with their Visa card at Media Markt, Saturn, Aldi Nord, Aldi Süd, Lidl and Kaufland. That’s nine of the top ten retailers in Germany accepting debit and credit cards.

This then leads to the behaviour change on the consumer side. We saw a significant increase in the use of Visa cards during 2015. And, consumers also started to use their credit cards to pay for smaller amounts.

Also on the move is contactless payment. More and more retailers have started to invest in contactless infrastructure. Amongst them are Aldi Nord, Aldi Süd, Netto, Kaufland and Lidl. Contactless appeals to them as most of their average receipts are below the German contactless limit of 25 Euros. Furthermore, many retailers are making contactless payments appealing to shoppers. For example, using targeted marketing activities or by turning the payment terminal to face the customer rather than the checkout staff. All this development means such payments have quadrupled in Germany since last year.

And there is strong potential for further growth in contactless payments in Germany. Approximately 350,000 terminals, which are already equipped with contactless technology, will be able to accept contactless payments within the next year or so, as software updates make them operative. And by 2020, retailers in Europe who accept Visa will have to have replaced all terminals with NFC-ready terminals.

The increase of contactless payments is not only a German trend. Significant expansion is occurring in other central European countries.

In Austria and Switzerland, contactless payments are already well established with Visa cards. Luxembourg has also decided to launch contactless. Last year, contactless payments debuted in Belgium, too. The Carrefour Group was the first retailer to launch its own prepaid contactless debit card. Called Flex, it is a rechargeable card linked to an account with a multifunction home banking solution that includes all advantages of the Carrefour bonus programme. Beyond that, contactless payments are also possible at 120,000 terminals in the Netherlands – representing around a third of all terminals. Vodafone and Wirecard are actively issuing contactless cards there too.

These positive acceptance developments benefit our partners. Higher transactions volumes can help issuing banks compensate the decrease in interchange fees resulting from the EU regulation. Retailers can reach new target groups and achieve more revenue from additional card payments. Not forgetting benefiting from visitors from other countries where cards are already used on a daily basis. With contactless payments they can offer an even easier and quicker payment option to consumers and benefit from direct access to Visa innovations.

Overall, with comprehensive acceptance of Visa and V PAY occurring in Central Europe, we are well prepared and positioned in each market for the rollout of upcoming innovations such as mobile payments and tokenisation.

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