We have a strong stakeholder and operate as a universal and independent processor. We were processing 150 million transactions a year using our systems when GPE took over MUZO. Now we process the same amount of transactions within about a month.

How does Global Payments Europe perceive developments on the Czech card market? What does the company consider to be milestones and where are the opportunities? These are some of the questions we asked Miroslav Crha, Global Payments Europe (GPE) CEO.

Since 1991 GPE and its predecessor MUZO have implemented a number of innovations on the Czech market. Which of them do you consider the most significant?

In the first decade we contributed considerably to establishing the payment card ecosystem in the Czech Republic. We have built a system for authorization of transactions from ATMs and from POS Terminals at merchants, own card management system, payment transactions clearing at card associations and their following settlement, robust data centers, operations of payment cards personalization, and we have assisted banks in setting up ATM and payment terminal network. This modern infrastructure has laid basis for the whole industry development in the Czech Republic as well as subsequent innovations, which we have been providing since 2000.

A turning point for the whole industry was introduction of microchip payment cards with EMV standard. We launched this project in the Czech Republic as early as in 2003 being among the first both in Europe and worldwide. Thus we laid strong groundwork for further key innovation, which was contactless payment cards introduction (2010), and the first contactless payment performed with a mobile phone (2011). Contactless payment has become tremendously popular in our country, and in 2017-2019 the Czech Republic came first in the world in terms of contactless payment share in the total card payments. Using payment cards has expanded into low amount transactions and into sectors where it was not popular previously (services, transportation, cultural events, etc.).

I also see e-commerce growth as a significant trend in card payments. We processed the first online card payment as early as in 1996, and in 2005 we introduced our up-to-date payment gate – GP webpay, which is continuously developed and enhanced and retains a strong position on the market.

In the third decade of our existence we built a robust and innovative solution for acquirer. The system is currently handling merchants in the Czech Republic, as well as in Slovakia, Hungary, Romania, and Austria.

Among recent innovations I would like to mention GooglePay and ApplePay support on our systems, software development for POS terminals on the Android platform, and project for replacing payment terminals with mobile phones. This innovation is so recent that no name has been established for it yet – SoftPOS and Tap on Phone are the most commonly used ones. In the wake of the currently effective European payment directive requirements, so called PSD 2, we provide our customers with a state-of-the-art solution for strong transaction authentication both on the acquiring side (so called 3DES solution) and on the issuing side (so called ACS solution).

How do you assess the Czech and Slovak card markets compared to other EU countries where GPE provides its services?

Both markets are mature, modern, and highly competitive. Which is definitely good for their development and services provided to customers.

Payment card development began here relatively late, after 1990, but it was built from the start as a modern digital payment system. The Czech and Slovak Republics often worked as innovation laboratories supported by card associations in the past decades. This has facilitated us to achieve what I have mentioned before – to be the first or among the first worldwide in introducing certain payment innovations and technologies. Thanks to that in terms of technological advancement we have overtaken even some countries where card payments have a longer history and bigger penetration.

A specific feature of the Czech and Slovak markets is that we do not have own local payment scheme. Also using so called alternative payment methods in our countries is, in comparison with surrounding countries, very low. That is where I see a major opportunity, which we, our partners and customers are going to focus on in the future.

MUZO operated domestic payment cards clearing for Czech and Slovak banks until 2003. This is now performed by global schemes. Isn't there room for reintroducing the service?

I do not think this is a realistic ambition. Domestic clearing in the form in which it was operated in the last decade of the past century cannot be brought back for a number of regulatory, commercial, political, and technological reasons. I am one of those who believe that the current role of global schemes on our market is too dominant, and in the end unfavorable for end users. There is definitely room for building a strong local domestic scheme that will be based on new technologies for payment initiation and acceptance, and on so called open banking. Being a strong and experienced processor GPE is prepared to engage in this area and offer its know-how and technology. I believe this initiative would make good sense, among other reasons because the Czech Republic is not going to become part of the European currency union in the near future.

Last year an important project was launched at European level – European Payment Initiative (EPI), whose objective is to create a strong European alternative to global payment schemes. In my opinion, its completion into a real payment system will take more than 5 years and is likely to be based on processing transactions in the common European currency, at least at the beginning. I believe that in the Czech Republic we are able to build a domestic payment scheme sooner. And we can prepare it in a way that will enable it to integrate with EPI one day..

"We have a strong stakeholder and operate as a universal and independent processor."
Miroslav Crha, CEO, Global Payments Europe

Payments Sector is undergoing a period of the most significant changes in its history. What are the biggest opportunities and threats you can foresee for your customers?

I see more opportunities than threats. Customers want to pay as comfortably, safely and fast as possible. Merchants want the costs to be as low as possible. Technologies seem to be advanced enough to allow to align these two interests effectively. I see the future in using mobile devices on both sides of the payment world – payments initiating and accepting – and also in using open banking principles, and Instant Payment technology. If both are set up appropriately, realization costs of digital retail payment can be decreased considerably, thus resulting in further growth in their usage. Although I do not believe that cash payments will cease to exist in the foreseeable future, as some visionaries are predicting, a major growth in digital payments is more than realistic. And threats? I see risks mainly in potential bad handling of this opportunity.

How did MUZO benefit from its integration into the Global Payments worldwide corporation?

I would like to start by mentioning the new name – Global Payments Europe we have been using since 2005 and the GPE abbreviation. Obtaining a strategic investor from the industry mainly enabled us to offer our services abroad and share costs of developing new technologies. Our key business – payment transactions processing – is a typical example of services that are driven by economy of scale. And also thanks to our affiliation with a multinational corporation, our scale keeps growing all the time.

Currently our customers are using GPE services and products in 15 countries in total – in Europe, but also in Asia and last year we first “planted our flag“ in Africa. When Global Payments acquired MUZO from Komerční banka and other local banks, we were processing apr. 150 million transactions a year. These days this is the amount of transactions we process within about a month. Last year we processed over 1.6 billion transactions. And without covid and related restrictions, we would probably be nearing 2 billion processed transactions.

GPE is a major payment processor, and a payment institution licensed by the Czech National Bank with a passport to all the EU countries. Within Global Payments we have established such a position that we were put in charge of the major pan-European e-commerce business.

And there is another thing I must point out. Global Payments consider the Czech Republic to be an important location for European expansion. They acquired MUZO in order to develop it. That enabled GPE to remain a processor which offers a complex service portfolio both on the Issuing and then Acquiring sides. We have a strong stakeholder and we operate as a universal and independent processor. We are here for those who are looking for reliable innovative services at a fair price.

In 2019 Global Payments announced a merger with T-SYS. How have your customers benefited from that?

In one word substantially. Thanks to the fact that T-SYS became one of the Global Payments companies we have a chance to offer our customers one of the best solutions for Issuing (payment cards issuing and related services and products) in the world. The name of the solution is PRIME. Its integration with GPE local support gives our customers the opportunity to develop their services and retain the leading innovative position in payment cards sector in Europe and the whole world.


The article was published in Bankovnictvi magazine