MasterCard President Touts New Ventures

O nline billing and smart cards both are starting to catch on in the United States, Ruth Ann Marshall, President, North America, MasterCard International, declared in her keynote speech at the recent Card Forum and Expo in Washington, D.C.

Marshall said more than 3.6 million U.S. households are logging on to pay their bills. While this number represents less than one percent of monthly bill paying, "the potential for billers and processors is huge," said Marshall.

U.S. consumers receive 18 billion statements every year. "With traditional payment methods, billers must lay out more than $1 per invoice. When paid electronically, the cost drops to $.40, saving processors approximately $8 billion," Marshall added.

The Gartner Group expects that by 2004, more than 4 billion smart cards will have been distributed worldwide, and the strongest regional growth will be in the U.S. as consumers discover the convenience of a single card for credit, cash, debit, e-cash and digital ID.

As with smart cards today, e-commerce was touted as the next big thing a few years ago. "We envisioned a world where virtually all our purchases, including clothing, books, music, toys and groceries, could be ordered from home with a click of the mouse," noted Marshall. "This prediction may have sounded far-fetched at the time, but today e-commerce is accepted as routine. It is a vital and growing part of the global economy, for both consumers and the business-to-business segment."

According to Marshall, "Debit is a growing segment of the payments industry with cash and checks rapidly losing ground. Of those who don't have debit cards, 25 percent say they would take one if offered one."

Another emerging payment option is the payroll card, a prepaid card that serves the "unbanked" customer. Increasingly, these consumers are finding it difficult to afford the fees associated with maintaining checking/savings account balances or in check-cashing establishments. With a payroll card, customers receive their net pay on a prepaid card, allowing them to easily retrieve their funds from an ATM or anywhere MasterCard is accepted.