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Money Talks - Retailers are waking up to the benefits and opportunities of electronic payments.

MasterCard this year sponsored the British Retail Consortium (BRC) Annual Retail Conference for the first time - a testament to our growing relationship with the retail industry. I used the opportunity to highlight the fact that cards are an integral part of the UK retail economy and the importance of recognizing the value they can bring in terms of ‘knowing your customer’. By Hany Fam


Money Talks - Retailers are waking up to the benefits and opportunities of electronic payments.

Each time a consumer uses a credit or debit card, that information is an opportunity for the retailer to understand them better, provide more value and keep them coming back to you, rather than your competitors.

Let me give you an example - nearly a quarter (22 per cent) of UK consu

mers has a retail co-branded card and these are also often designated the primary card, meaning the cardholder will put more than 80% of his or her spending on it. For example, the results of MasterCard's Comparative Cardholder Dynamics 2008 study indicate that 70 per cent of Tesco's cardholders identify the Tesco Personal Finance (TPF) credit card as their primary card and those people put 87 per cent of their credit card spend on the TPF card.

So what does this top of wallet position that Tesco holds tell us about what today's consumer wants? The highest performing credit card programmes in the UK today have two things in common: a high value customer proposition and a high degree of trust.

Data from the UK Cards Association shows that MasterCard has nearly 90 per cent of the UK market in these high-performing co-branded card programmes. We already work with Tesco, Marks & Spencer, John Lewis, Sainsbury's, Asda and Argos, among others. From this position of leadership I can tell you that cards are a huge opportunity for the retail industry to build consumer loyalty, maintain brand visibility and drive profitability as it navigates its way out of the downturn.

In the next few years, we'll see the face of retail payments in the UK changed by innovative new payment methods, such as contactless. New channels, such as mobile, will come to the forefront of the retail economy and cash will no longer be king, with non-cash payment volumes projected to overtake cash by 2015. Last year, two thirds of the UK population purchased goods and services on the internet and that trend continues to grow. Without payment cards, e-commerce simply wouldn't exist.

Put simply, the right card programme is a powerful tool to influence consumer spending behaviour in a downturn and we are working more closely with retailers everyday to help them navigate this new world of opportunities.

Hany Fam, group general manager of MasterCard UK & Ireland

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