National Card Schemes – Still Relevant In A Global World?

In today’s globalized world, national card schemes might seem like a step backwards, but in fact they are still a useful payment platform. spoke with John Chaplin, Director at Anthemis, about the appeal of national card schemes to consumers; what it takes for them to compete in the payments market; and how Visa and MasterCard are seen as the biggest threats to national card schemes’ survival.

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National Card Schemes – Still Relevant In A Global World?

National payments schemes must adapt to stay relevant, according to John Chaplin, Director at Anthemis, a financial services investment and advisory group. Chaplin recently co-authored a survey — “The Outlook for National Payment Schemes in a Global Economy” — of 17 of the world’s most significant national schemes. Traditionally national schemes have tended to follow an incremental development approach but now many of them believe that they will have to take more risks to avoid being marginalised.

The most obvious question would be why would anyone choose a national scheme today? Chaplin said: “I think the national card schemes have a very low cost business model, they are very orientated towards debit cards.. and are no frills…that’s really relevant for a lot of people.” The schemes believe that banks value their low fees and are concerned that since their IPOs, MasterCard and Visa increasingly serve their own interests rather than their users. However, the bank owners of some national schemes insist on absolute minimum fee levels which generate little investment funding for innovation.

John Chaplin pointed out that incentive payments offered by MasterCard and Visa (mainly to card issuers) are seen by national schemes as the biggest threat to their survival. Upfront incentive payments are seen to distort the decision-making process of many banks when choosing between schemes and the Anthemis research showed real surprise at the failure of regulators globally to address this issue. Currently, MasterCard and Visa are making incentive payments totalling over US$4 billion annually.

To be able to move away from the two giants and still compete in the payments market, Chaplin said national card systems need to continue to be low cost; the decision-making process needs to be modified and be made faster; there needs to be an international strategy; and cooperation between national schemes should be encouraged.

Listen below to our full interview with Chaplin.


John Chaplin
Director, Anthemis

John Chaplin has been highly influential in the development of payment solutions for more than 20 years. He is currently a Director at Anthemis, having joined in early 2011.

John is also President of Ixaris, an innovative provider of prepaid payment applications and services. In this role, John leads the company’s strategic alliances and expansion strategy as Ixaris brings innovative payment solutions to market that enable organisations to derive greater revenue online. John is also a Board Director at InterSwitch Limited.”¨”¨Prior to his work with Anthemis, John spent 17 years with Visa and later with First Data where he was one of the driving forces of the phenomenal growth of card payments across Europe. He has a unique understanding of the market, and he is active in assisting a number of financial technology firms to expand and globalize their organizations. Since 2008, he has been a member of the Payments Market Expert Group advising the European Commission on the development of the Single European Payments Area (SEPA).

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