Smart Card Talk : February 2011 : SCALA Associate Director’s Letter

SCALA Associate Director’s Letter

Dear Smart Card Alliance Latin America (SCALA) members and friends,

Our industry is unique in that we impact different vertical markets and allow organizations to become versatile in providing value-added solutions to solve real world problems. Our industry leaders must be creative in finding new applications for our technology and in developing partnerships and unity among organizations with few natural relationships. It is our nature to develop bridges, establish partnerships, and solidify relationships; we all have a strong sense of accomplishment when we meet these goals as a team.

One example of this teamwork is the massive migration toward EMV smart cards in the Latin America financial sectors. These implementations have solidified the relationships between customers/citizens and financial institutions. The connection that the customer/citizen has with a financial institution is based on trust, something that some financial institutions may have taken for granted in the past. The customer/citizen deposits money in a bank, trusting that the money will be safer in a financial institution than in a home. In the case of investment banks, trust is based on the unique belief that institutions can manage the money better than individuals. Once a relationship of trust is broken, the market, customers, and citizens will lose confidence and the industry will lose credibility.

The implementation of EMV in Latin America is at the heart of re-establishing the financial sector’s credibility and customer/citizen confidence in the market, by reducing fraud through implementing smart cards. Since fraud losses can be measured, financial institutions originally focused only on fraud reduction as the motivation for EMV implementation. Institutions are now offering other applications on the same cards–such as offline processing, loyalty programs, and transit payments–expanding their benefits for customers. Some of these findings are reported in the “EMV Migration & Market Analysis study for Mexico and Brazil,” that is available at no charge for SCALA members.

The introduction of new applications on financial cards strengthens the customer/citizen relationship with the institution that provides financial services. It personalizes the cardholder relationship with merchants, service providers, and government institutions. The technology, like SCALA, brings together different organizations in the common objective of improving the quality of life and services in relationships with citizens/customers.

EMV migration in Latin American has been expanding dramatically, with Mexico and Brazil leading the way. Other countries such as Colombia, Ecuador, Peru, and Panama are following these successful examples. The multi-country migration has created the demand for an impartial EMV roadmap white paper for Latin America. SCALA, with the help of Visa Inc., MasterCard Worldwide, and other members, is modifying the recently-published Smart Card Alliance white paper, “Card Payments Roadmap in the U.S.: How Will EMV Impact the Future Payments Infrastructure?,” to focus the content on the needs of the Latin American region in migrating to EMV. The SCALA financial council, led by Marcelo Oliveira, has estimated that the document will be ready by the end of March and will be published in Spanish and Portuguese at the end of May.

In conclusion, we would like to congratulate SCALA’s newest members: Assenda S.A., First Data, Latinus, Banred S.A., and Valid. It is our desire to work with members of the industry to develop a sense of community, establish market best practices, and provide education about smart cards for all. We invite all of your organizations to become members of SCALA and realize the value of working with your peers to improve the industry.

On behalf of SCALA, I wish you all a wonderful month!

Edgar Betts
Associate Director, Smart Card Alliance Latin America (SCALA)