Accueil > Blog > Heated competition

Heated competition

Week 39, 2007

Projects develop quicker, and as there are numerous pilots and technology innovations, each of the customers of the smart card industrialists want to benefit of the first mover advantage. This leads to a flood of competitive technology announcements that can blur the message to the public, generate confusion and the feeling announced technologies are not always compatible with each other.

For instance, we have recently seen the multiple payment systems announcements that took place in London earlier this month: MasterCard PayPass and Visa payWave "OnePulse" with Oyster.

More globally, we are witnessing a global competition between MasterCard PayPass and Visa payWave.  This global competition sometimes materializes in announcements such as the ones in Taiwan this week (cf. Payment section) where the two major mobile network operators ally with major banks to launch competitive projects.

Also, Europe is the theater of an intense competition for debit card schemes, compliant with the SEPA framework to be implemented shortly: MasterCard Maestro has been on the field for a while, Visa VPay is just coming, and to make the situation more complex, the European authorities are calling for a European-born technology to compete with them.

The heated competition increases the pressure on the smart card industry. All participants in the smart card value chain are under price pressure, but are sometimes obliged to take sides and if they work for one project are prohibited to work for the competition. This reflects the increasing bargaining power of issuers, the smart card industry customers, on the smart card industry itself.

Probably a way to balance this increased competition is to make the industrialists have more weight in the negotiations with their customers…. More mergers and acquisitions maybe oncoming in our industry due to market pressure or the smart card industry altogether might become a sub-branch of a wider Information Technology industry as some anticipate.

Thierry Spanjaard
Chief Editor
Smart Insights