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Press
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At the General Shareholders Meeting, the CEO promised the efforts and strategy needed to maintain market leadership
ServiRed Chairman forecasts radical changes in Europe's payments industry
"There is some likelihood that, as a result of the European Commission's decision on interchange rates, the European payments scene in two years will be radically different from the current one," ServiRed Chairman José Manuel Gabeiras told shareholders attending the company's general shareholders meeting in Madrid today.
In his letter to the shareholders in the annual report for 2008, ServiRed CEO Luis Furnells wrote of last year's launch of a new strategic plan "based on growth that assures us of sufficient size to be competitive with our offer of products and services in the new environment that is taking shape as a consequence of the implementation of the dictates of the SEPA."
It was ServiRed's second GSM since it became a limited liability company with its 102 financial institution members-shareholders. Speakers at the meeting reviewed the impact on last year's performance of the decline in consumption, although noting that ServiRed still posted positive growth in its business. It ended the year with 40.5 million cards issued, which were used to make 1,257 million purchases worth a total of 65,916 million euros, for a 4.1% increase over the previous year.
However, this trend was reversed in the early months of the current year. Purchases made with cards issued by ServiRed members in the first quarter of 2009 amounted to 14,306 millions de euros, 8.1% below the figure for the same quarter of last year. This behaviour by cardholders slows progress towards the ultimate goal of all card payments schemes, which is to substitute the use of cash for purchases. The path to that goal remains long, since last year ServiRed card purchases represented only 10.02% of final household spending, while card purchases as a whole in Spain accounted for just 16.26% of such spending. This is far below the European average.
Discussing this decline and after analysing Spain's current economic situation, Gabeiras said he was concerned by this halt in progress toward the substitution of cash, saying it indicated that the underground economy is larger than had been thought. "If we are to judge our country in terms of modernity, by the use of bank card instead of cash, I am afraid that we are the most underdeveloped country in Europe".
CEO Luis Furnells noted how the sharp reduction of interchange rates on card transactions was not matched by the expected increase in the number of such transactions, which instead had plummeted to unprecedented levels. Furnells said "the central government, merchants, consumers, and payments systems must all strive to place our country where it deserves to be on the basis of size, population, GDP, and investment effort by financial institutions to endow the country with modern and secure payments systems."
The ServiRed Annual Report for 2008 –which is available on its web site– explains how the advent of the Single Euro Payment Area (SEPA), opens up a wide range of possibilities allowing domestic bank card schemes to begin to provide services in other European markets, and how ServiRed's excellent reputation helps position it to accompany its member institutions in their European expansion.
About ServiRed
ServiRed, Sociedad Española de Medios de Pago, SA. is a bank card scheme with 40.5 million debit and credit cards, 696,827 merchants, and 32,739 ATMs. It is a limited liability company, 100% Spanish-owned, whose equity is shared by 102 financial institutions. Its chief aim is to assist its 102 members in the substitution of cash with innovative and efficient electronic payments options in order to reduce the huge cost to society at large of handling cash. In addition to meeting the needs of the Spanish market, ServiRed supplies international interoperability to its members via co-branding with the major international card schemes.
For more information, visit
http://www.servired.es
or contact
Rosa Ovejero,
Director for Relations with the Press
+34 913465335
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