Mobile Payments in The Financial Services Industry
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Transcript of Mobile Payments in The Financial Services Industry
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 1!
Mobile Payments in The Financial Services Industry
Jeff Fleischman CEO, Blue Panda Interac9ve
New York, NY July 2012
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 2!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 3!
“The Mobile-Social Economy is the convergence of mobile and social media enabled by technology. Financial institutions stand on the threshold of a new paradigm in which payments, customer experience, and personalized offers will merge. Those firms that adapt will succeed and grow, those that don’t face an uncertain future.”!!
Jeffrey FleischmanCEO, Founder
Blue Panda Interactive!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 4!
Trends That Influence Mobile Payments (mPayments) Growth Summary ² mPayments is rapidly becoming the payment vehicle of choice for consumers
worldwide. The primary drivers that have influenced this growth include mobile banking, social media, enabling technology, “unbanked” communities, and consumer/retailer acceptance of mobile commerce.!
² Growth in mobile and tablet sales is outpacing computers and in many markets now exceeds those of computers.!
² Acceptance and usage of mobile/tablet banking, payments, money movement, and other financial transactions are growing rapidly.!
² Mobile social media’s global exponential growth has become the primary channel for people to interact with friends and brands.!
² Convergence of mobile/tablet usage combined with social media are evolving into new, dynamic interaction models and ecommerce opportunities.!
² Financial service companies, most notable Banks, are faced with disintermediation and must rethink payment models and customer centric experiences.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 5!
Drivers Of mPayment Growth
mPayments Mobile Banking
Social Media
Technology
Unbanked
Consumer & Retailer Acceptance
There are several irreversible trends that will drive mPayment adoption and usage as the primary payment vehicle.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 6!
Drivers Of mPayment Growth
mPayments Mobile Banking
Social Media
Technology
Unbanked
Consumer & Retailer Acceptance
There are several irreversible trends that will drive mPayment adoption and usage as the primary payment vehicle.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 7!
Mobile Banking The surge in mobile banking and cost dynamics are the main catalysts for the acceptance and usage of mPayments.!
² More than 40MM U.S. consumers will be using mobile banking by 2012.!
² The cost of servicing for mobile transactions is relatively small compared to all other channels and reduces overall costs for banks.!
² Banks are setting aside over one-third of their digital channel investments for mobile initiatives with a focus on alerts, remote deposit capture (RDC) and person-to-person payments.!
² Mobile applications and technology have created complete pricing transparency.!
² In the U.S., 15% of online adults were active mobile bankers in 2011, up from 5% in 2008. In Canada, 20% of online adults are active mobile bankers, up from 8% in 2010.!
Source: Forrester; The Yankee Group
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 8!
² An average teller or phone transaction costs about $2.36 each, whereas an electronic transaction costs only about $0.10 each. !
² Mobile banking and payments such as SMS text messaging can reduce the burden on customer service and IT resources. !
² Using secure and integrated messaging platforms reduces the costs and errors associated with paper-based payments.!
² Mobile banking provides the opportunity to capture greater level of detailed information on spend, payments, location for CRM activities.!
² Additionally, this new channel gives the bank ability to cross-sell up-sell their other complex banking products and services such as vehicle loans, credit cards etc. !
SOURCE: Mobile Banking News
Drivers of mPayment Growth - Mobile Banking One of the biggest advantages that mobile banking offers to banks is that it drastically cuts down the costs of providing service to the customers. !
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Mobile Banking – What Customer’s Want Mobile banking has had the highest usage rates among basic transactions and is now growing more rapidly for transfers, payments, and purchases.!
Source: Berg Insight
What transactions customers are doing:!
² Balance Inquiry: 74%!
² Notifications: 73%!
² Statements: 48% !
² Notification of account limit: 47% !
² Transfer funds between accounts: 35% !
² Pay accounts: 28% !
² Make a purchase: 21% !
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Mobile Banking – Remote Deposit The surge in U.S. mobile banking features such as online remote deposit capture (RDC) and mobile check deposit are a catalyst for the growth of mPayments.!
² RDC can dras@cally reduce the @me and cost of deposi@ng checks, many banks are now offering RDC to cater to new customers as well as to retain exis@ng ones.
² RDC has shown an impressive growth rate of 70% from 2004 to 2008.
² RDC via a mobile device launched in the U.S. in 2009 and has quickly been adopted by many large US banks with high adop@on rates.
² Mobile RDC capture will eliminate over 1.5B check deposit transac@ons from U.S. bank branches by 2014.
Source: Market Research.com; Mercatus
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Consumer Benefits!² Reduce Visits to Branches !² Reduce Calls to Contact Centers!² Change Their Spending Patterns!² Generate More Transactions!² Become more aware of their money !² Become more educated about money!!
Bank Benefits!² Realize a Reduction in Costs!² Be able to Generate More Loyalty!² Be Able to Increase Their Customer Base!² Create new mechanisms to stimulate impulse buying !² Create new sales and marketing approaches!
SOURCE: MOBILE-FINANCIAL.com
Mobile Banking The surge in mobile banking is a catalyst for the acceptance and usage of mPayments and a means to build and protect customer relationships.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 12!
Source: Tower Group Fiserv Mcom Data, 2009
Mobile Banking Is Dramatically Cheaper Than Other Channels As online and mobile continue to pick up share of volume, companies will see average cost to service decline.!
$4.00
$3.75
$1.25
$0.85
$0.17
$0.08
Call Center
Branch
IVR
ATM
Online
Mobile
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 13!
Drivers Of mPayment Growth
mPayments Mobile Banking
Social Media
Technology
Unbanked
Consumer & Retailer Acceptance
There are several irreversible trends that will drive mPayment adoption and usage as the primary payment vehicle.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 14!
² Social networking accounted for 50% of all page views on mobile phones in 2011.!
² Facebook mobile users quadrupled in 2 years from 50MM to 200MM.!
² More people access Twitter and Facebook on mobile devices than on desktop computers.!
² There are 200MM mobile video playbacks from YouTube every day.!
² There are 1.2B internet connected smartphones and 77% of individuals use mobile phones for search.!
² Nearly 30% of consumers conduct product research on mobile devices.!
² Over 300,000 apps have been developed in the past 3 years and downloaded more than 10.9B times.!
SOURCE: Mobile Banking News
Drivers of mPayment Growth - Social Media Social media’s popularity, smart phone sales, and app proliferation have combined to create an organic and seismic shift in mobile-social media.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 15!
U.S. Social Media Habits Are Similar To Other Markets
Facebook remains the premier social media platform eclipsing all other competitors combined.!
Source: comScore; Google; Statista; Nielsen
Time spent condensed to the equivalent of one hour !
Social networks/blogs grabbing a large share of consumers time online – expect mobile to become the primary channel for social media consumption.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 16!
China’s Sina Has Become Immensely Popular In China Due To Its Microblogging Platform Known As Weibo With over 513MM netizens in China, Sina’s 50MM Sina Weiboers represents rapid growth in a relatively short period of time since it’s launching in 2010.!
Source: Sina Nov, 16, 2010
Sina Sta9s9cs: ² Monthly Increasing Rate of
Registra@on: 33.8% ² Rate of Mobile Blogging: 38% ² Blogs per Day: 25MM ² Number of Users of Sina Weibo:
50MM (Oct, 20, 2010) ² Number of Partnered Sites: 10M ² Total Blogs: 200MM (Nov, 7,
2010) ² Blogs per Second: 785 ² Daily Traffic that Weibo Brings:
30MM
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Users Spend Well Over 8 Hours Per Month On Social Media Properties; Facebook Is The Predominant Leader
0:31
0:45
1:06
1:18
1:41
1:44
1:48
2:12
2:53
7:46
Amazon
Microsoft
Apple
Wikipedia
YouTube
MSN/Windows Live/Bing
Yahoo
AOL Media
Top 10 Web Brands by Time Spent Time per viewer, hh:mm, per month, August 2011 Source: The Nielsen Company
Top 10 Global Social Networks By unique visitors (000), June 2011 Source: comScore
734,240
144,441
119,467
84,356
74,821
71,526
66,073
61,035
51,754
37,600
Windows Live Profile
QQ.com microblogging
MySpace
Renren
Vkontakte
Orkut
Yahoo Pulse
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Mobile Access To Social Media Networks Has Grown Sharply Across All Age Demographics Social Network Growth, by Age, Ethnicity % change, Q3 2010 v. Q3 2011
16%
61% 68%
109%
67%
45% 41%
76%
44% 37%
70%
Source: The Nielsen Company
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Females,18-34 Year Old, Are The Most Active On Social Networks U.S. Social Network Use by Age, Demographics Base: U.S. social media users, Q3 2011
96 103
88
108 104
98 91
100 101 94
103 102 101
Source: The Nielsen Company
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 20!
Over 50% Of Online Consumers Expect Weekly or Monthly Updates Through Social Networks
3%
7% 6%
11%
26%
13%
28%
4% 2%
More than once a day
Once a day
Every other day
Twice a week
Once a week
Twice a month Once a month or less
Never Other
Marketing Contact via Social Networks % of respondents (n=2,997) June 2011
Source: ROI Research and Performics
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Mobile Is a Growing Access Point For Smartphone Owners Accounting For 51% Of Facebook And 12.5% Of Twitter Users Facebook, Twitter Reach among Smartphone Users 3-month average, ending June 2011
50.9%
31.7%
12.5%
7.4%
U.S. smartphone users European smartphone users
Facebook Twitter
Source: Experian Hitwise
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Approximately 39% Of Consumers Seek Purchase Advice For Financial Services Products
Social Networks as a Source of Purchasing Advice % of respondents who sought advice, June 2011
46%
42% 39%
34% 33% 33% 31% 30%
28% 28% 26%
25% 24% 23% 22% 21% 19%
17%
Consumer Average 29%
Source: ROI Research and Performics
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 23!
Globally, Chinese Internet Users Spend The Most Amount Of Their Leisure Time Online Displacing Traditional Media
44%
40%
38%
31%
30%
29%
29%
28%
28%
28%
23%
22%
19%
18%
15%
14%
China
Sourth Korea
Japan
Italy
US
Spain
Austraiia
Canada
France
UK
Germany
Norway
Netherlands
Sweden
Finland
Denmark
Source: TNS “Digital World, Digital Life” December 2008
² In Urban areas the Web will soon replace newspapers as the medium with the second-‐highest daily reach.
² Among individuals under the age of 30, the Internet’s penetra@on is almost as high as television’s.
² Chinese will be surfing the Web more oden at home and at work and less oden at Internet cafes. They will also be relying on their mobile phones.
² In 2011, 69% of users said they used their phones to access the Web—up 30 percentage points in just three years. The share of hours spent accessing the Internet on mobile devices is rising rapidly among all age groups.
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 24!
There Is A Growing Shift In The Consumption Of Social Media On Mobile Phones
Mobile’s Growing Influence!
² Over 50% of Facebook and Twitter traffic!
² 200MM+ daily YouTube views !
² 86% of mobile internet users use their mobile phones while watching TV!
² Americans spend an average 2.7 hours socializing on their mobile phones!
² By 2014 mobile will surpass desktop usage!
² 70% of all mobile searches result in action within 1 hour!
² One half of all local searches are performed on mobile devices!
iPhone Top Mobile Apps Android Top Mobile Apps
YouTube Google Search
Google Maps Gmail
Facebook Google Maps
Yahoo! Weather Facebook
Pandora Radio Google News and Weather
Angry Birds YouTube
Yahoo! Stocks Pandora Radio
ESPN ScoreCenter Angry Birds
The Weather Channel Adobe Reader
Google Search Words With Friends
Words With Friends Twiker
Nellix Yahoo! Messenger
Fruit Ninja Amazon Appstore
Twiker Yahoo! Mail
Movies by Flixster Google Talk
Facebook Messenger The Weather Channel Source: comScore Mobile Metrix 2.0, Beta Data, Dec-‐2011, U.S., Mobile Marketer
U.S. Top Mobile Apps for iPhone and Android by Unique Ac@ve Users (Age 18+)
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Case Study: American Express
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Case Study: American Express The Emergence Of The Social eCommerce Model American Express is arguably one of the most innovative companies to generate engagement and sales from the integration of web, mobile, and social media.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 27!
The Emergence Of Social eCommerce Model "Go Social" Tool for Small Business Merchants - Launched May 14, 2012 !
The "Go Social" offer tool is a virtual one-stop shop that allows American Express merchants to:!² Create and manage coupon-less
offers into digital channels such as Facebook and other platforms.!
² Track offer campaign results across multiple social networks and locations.!
² Help merchants to build their business and evaluate their social offer campaigns with detailed reports that they can access through their own secure dashboards.!
² The platform is built upon American Express' Smart Offer API.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 28!
The Emergence Of The Social eCommerce Model “Sync, Tweet, Save” Twitter Initiative – Launched March 2012 !
American Express turns twitter #hashtags into couponless national merchant offers and Cardmember savings using its smart offer APIs. API enable Amex to provide valuable merchant reporting about customers’ spending behaviors. Cardmembers can now sync their cards with Twitter, tweet, and save at national merchant partners including Best Buy®, McDonald’s, Whole Foods Market, Zappos.Com, and more. The campaign generated over US $12.8MM in it’s first two months.!
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The Emergence Of The Social eCommerce Model “Link, Like, Love” Facebook Initiative Launched July 2011!
² On the American Express Facebook page, cardmembers can link their cards to the program and choose their favorite deals. !
² American Express will send statement credits to cardmembers' accounts as they shop online or in stores, without the need to pre-purchase anything, print out or show a coupon at the point of sale. !
² Delivers deals and offers based on cardmember Facebook activity, pages they like and share, as well as the activities of Facebook friends. !
² When the related transaction is made with the American Express card within a specific time period, the discount is credited to cardmember account. !
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 30!
American Express Has Spent Years Developing The OPEN Small Business Network Community
² OPEN is American Express’ strategy to create market leadership and engagement beyond its customer base!
² The OPEN Forum is a central location for the small business community!
² OPEN Forum includes pertinent articles, blogs, and contributors!
² Articles and content throughout OPEN Forum can be shared through Twitter, Facebook, Linkedin, emai, RSS, etc. !
!² Mobile and tablet applications are being
introduced as additional distribution points!
OPEN is American Express’ strategy is to drive higher sales and share of wallet.
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 31!
Drivers Of mPayment Growth
mPayments Mobile Banking
Social Media
Technology
Unbanked
Consumer & Retailer Acceptance
There are several underlying trends that will drive mPayment adoption and usage as the primary payment vehicle.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 32!
² 3G networks have seen dramatic growth and we expect to see the same trajectory for next generation systems (e.g. 4G).!
² Mobile subscriptions surpassed the number of landlines in 2002 and is now is 3 times larger globally.!
² Smartphone sales were up over 63% in 2011 from 2010 (488.5MM) and approximately 5.9B people use mobile phones globally!
² iPad/tablets have the fastest adoption rate in history – outstripping iPhone adoption by over 3 times.!
² Android-based devices continue to outpace iPhone sales and is the dominant mobile platform. The Google based system lags behind Apple app development but it is expected to narrow over the next 3 years.!
² There are a number of disparate mobile platforms that companies must build their mPayment capabilities for as standards vary by region. !
SOURCE: Mobile Banking News
Drivers of mPayment Growth - Technology As carriers and telecomm companies have upgraded their infrastructure it has led to a corresponding increase in adoption and usage. This trend will bolster mPayments globally.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 33!
Source: Informa WCIS+.
Q411 3G Subscribers
(MM)
3G Penetra@on
3G Subscribers YoY Growth
Q411 3G Subscribers
(MM)
3G Penetra@on
3G Subscribers YoY Growth
1 USA 208 64% 31% 16 Canada 16 62% 34% 2 Japan 122 95% 9% 17 T aiwan 14 48% 17% 3 China 57 6% 115% 18 South Africa 13 21% 49% 4 Korea 45 85% 10% 19 Turkey 13 20% 62% 5 Italy 44 51% 25% 20 Portugal 13 78% 19% 6 UK 42 53% 25% 21 Vietnam 12 11% 358%
7 Brazil 41 27% 99% 22 Mexico 11 11% 55% 8 India 39 4% 841% 23 Malaysia 10 27% 7%
9 Germany 38 36% 23% 24 Sweden 10 73% 25% 10 Spain 33 57% 21% 25 Philippines 10 11% 45% 11 France 30 45% 35% 26 Saudi Arabia 10 19% 17% 12 Indonesia 29 11% 27% 27 Netherlands 9 44% 34% 13 Poland 28 57% 17% 28 Egypt 8 10% 60% 14 Australia 22 76% 21% 29 Austria 7 58% 24% 15 Russia 17 8% 45% 30 Nigeria 6 6% 51%
Global 3G Stats: Subscribers = 1,098MM Penetra@on = 18% Growth = 37%
In Q411 There Were 1.1B Global Mobile 3G Subscribers, Up 37% YoY With A 18% Share Of All Mobile Subscribers
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In 2002 A Global Milestone Was Reached As Mobile Subscription Surpassed Landlines Mobile subscriber growth continues to grow rapidly while landlines are in a slow rate of decline!
Source: International Telecommunications Union
Global Install Base MMs
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Apple Has Achieved Exponential Growth With Each Successive Product Launch
Source: KPCB; Apple
First 8 Quarters Cumulative Unit Shipments!
iPhone vs. iPod = 20x
iPad vs. iPhone = 3x iPad vs. iPod = 60x
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The iPhone Sales Rate Has Been Eclipsed By The Android Platform And Continues To Outpace Apple
First 13 Quarters of Cumulative Unit Shipments!
Source: KPCB; Gartner; Morgan Stanely
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Tablets And eReaders Are Growing Rapidly And Have Become A Third Screen For Consumers Tablets will play an increasingly integral role for digital consumers – banks and retailers will need to adjust their strategy and experiences specifically for them.!
*Estimate Source: Pew Research; Independent Research
0%
10%
20%
30%
40%
50%
60%
2% 3% 4% 5% 6%
14% 16% 18%
29%
55%*
% Ownership US Adults With A Tablet or eReader
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 38!
Source: KPCB; internetworldstats.com
In 2011 There Were 2.3B Global Internet Users, Representing A 8% CAGR From 2008 Rank Country 2008-‐2011 New
Internet Users (MMs) 2011 Internet Users (MMs)
YoY Growth
Popula9on Penetra9on
1 China 215 513 12% 38%
2 India 69 121 38% 10%
3 Indonesia 37 55 22% 23%
4 Philippines 28 34 44% 35%
5 Nigeria 21 45 N/A 28%
6 Mexico 19 42 19% 37%
7 Russia 16 61 3% 43%
8 USA 15 245 1% 79%
9 Iran 14 37 N/A 48%
10 Turkey 11 36 26% 49%
Top 10 444 1189 12% 32%
World 663 2250 8% 32%
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 39!
Drivers Of mPayment Growth
mPayments Mobile Banking
Social Media
Technology
Unbanked
Consumer & Retailer Acceptance
There are several irreversible trends that will drive mPayment adoption and usage as the primary payment vehicle.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 40!
² There are over 2.5B unbanked people globally, many of which are in Africa, Asia, and Latin America.!
² Because most of the unbanked currently own a mobile phone they are readily adopting mPayment based options.!
² Mobile payments are bringing disparate players together in collaboration to provide new payment options to the unbanked.!
² The majority of mobile payments are focused on retail and person-to-person (P2P) payments.!
² The ability to enhance the unbanked regions will vastly improve the flow of funds and ultimately spur economic growth that would otherwise be difficult to obtain.!
Source: Mobile Banking News
Drivers of mPayment Growth - Unbanked The worlds unbanked are rapidly adopting mPayments without the need for a bank. Banks will face stiff competition to win marketshare.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 41!
SOURCE: Demirguc-Kunt and Klapper 2012
Many Parts Of The World Have A Large Percentage Of Unbanked Consumers mPayments will provide access to a more efficient and lower cost payment system fueling new economic prosperity for the world’s unbanked.!
89%
55% 45% 39% 33% 24% 18%
11%
45% 55% 61% 67% 76% 82%
High Income Economies
East Asia & Pacific
Europe & Central Asia
La@n America & Caribbean
South Asia Sub-‐Saharan Africa
Middle East & North Africa
Unbanked Banked
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 42!
Emerging Partnerships and Platforms In China – UMPay
² According to UMPay, e-‐ and mPayment users will exceed 500MM people and currently has 100MM mPayment users. Most of these users are the unbanked.
² The greatest growth will be from rural farmers. This is the strategy of UMPay today -‐ to saturate the rural loca@ons with UMPay access growing to half a billion in the very near future according to UMPay CEO Bin Zhang.
Launched in 2003 It provides China Mobile users with a comprehensive mobile payment plalorm and mPayment system that provides mobile wallets, financial message services, top-‐ups and mobile @cke@ng.
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India Is The World’s Second Most Populous Nation And Has Over 450MM Unbanked People In a country where cash is used in 65% of retail transactions and mobile phones are common, mPayments are poised to grow.!
India Facts & Figures!² Mobile phone connections outnumber bank
accounts by more than a factor of three: 893MM mobile phone subscribers and 250MM bank accounts. !
² The National Payment Council of India (NPCI) launched the Interbank Mobile Payment Service (IMPS). IMPS allows a person to pay/remit money to a merchant or an individual in real-time using a mobile phone number and a mobile phone identifier. !
² M-commerce been gaining traction. India's leading m-commerce player, ngpay, has over 1.5 million registered users who can purchase products through their mobile phones. Their mobile mall has a daily volume of 40,000-50,000 unique users, with about 15% of those making purchases with an average transaction size of about Rs 700.!
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Payments Using SMS And USSD Has Grown Exponentially in Certain Regions Will Expand Globally ² Consumers in Africa, the Middle East, and India rely on telecoms including
Vodafone and MTN to provide mobile money options.!² Western Union has partnered with MTN in Uganda to launch a mobile-transfer
service. WU has agreements with 11 mobile operators and an additional 17 is in the works.!
Kenya
M-Pesa Facts & Figures!² M-Pesa, Swahili for money!² SMS based mobile money mPayment
launched in 2007!² By 2011 68% of adults use mobile money!² Average transaction size is $30!² Users give cash to agent, money is loaded
onto account, payment made via SMS, confirm given to merchant via SMS!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 45!
Drivers Of mPayment Growth
mPayments Mobile Banking
Social Media
Technology
Unbanked
Consumer & Retailer Acceptance
There are several irreversible trends that will drive mPayment adoption and usage as the primary payment vehicle.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 46!
² Purchases from mobile devices is on the rise with consumers - 24% bought on a mobile website and 18% on a mobile app.!
² Mobile technology enables retailers to push local mobile offers, discounts, and rewards to incent in-store traffic. !
² Retailers have seen a substantial increase in online traffic and sales coming from tablets. !
² In the 2012 Shop.org/Forrester Research State of Retailing Online survey, 49% of retailers reported that the average order value via a tablet device is now higher than a smartphone or desktop. !
² Retailers with both tablets and smartphone apps, 45% of their total mobile web traffic for smartphones occur on the Web and 17% on apps. For tablets, 28% occur on the Web and 11% on apps.!
Source: Mobile Banking News
mPayments – Consumer & Retailer Acceptance The proliferation of digital technology and the rise of social media have contributed to a growing adoption and usage of mPayment services.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 47!
The Emergence Of The Mobile Web As The Dominant Channel Of Choice – It’s Become Mainstream
Social networking accounted for of all page views on mobile phones in 2011!
Facebook mobile users have!
from 50MM in 2009 to 200MM in 2011!
There are mobile video playbacks from YouTube every day!
Over 300k apps have been developed in the
past 3 years and downloaded more than 10.9Btimes!
Nearly 30% of consumers conduct product research on mobile devices !
Twitter has over active users
sending over tweets a day!
86% of mobile internet users use their mobile phone while watching TV !
90% of the largest retailers have a mobile site or smartphone app!
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Globally, Mobile Devices Are Increasing The Device Of Choice For A Variety Of Activities
Mobile’s Growing Influence!² Overall Text messaging is highest with
Europeans preferring it the most at 84.4%. Japanese are much less likely in comparison at 44.4%!
² Mobile social media and blogging are relatively new and North Americans have the highest rates above 30%. Expect these numbers to jump globally.!
² Photos, and email rank consistently among the highest activities across all regions.!
² Gaming is bigger in the US and Canada than other regions that may be influenced by popularity of the iPhone.!
² Japanese are more likely to do email and, in general, access and search for content.!
² Watching video from YouTube and proprietary content providers will continue to grow as smartphone ownership increases and content becomes available.!
US EU5 Canada Japan
Sent text message 74.3% 84.4% 69.2% 44.4%
Took photos 60.3% 59.8% 55.1% 63.9%
Used email 40.8% 30.0% 35.9% 57.3%
Accessed Social networks/blog
35.3% 25.7% 31.2% 19.6%
Accessed weather 35.2% 23.2% 29.8% 35.1%
Played games 31.4% 27.5% 30.8% 15.3%
Accessed search 29.5% 20.4% 25.6% 30.8%
Accessed maps 26.5% 18.2% 21.65% 19.4%
Accessed news 25.5% 20.0% 20.1% 24.3%
Listened to music 23.8% 27.4% 23.0% 13.3%
Accessed sports info 21.8% 16.5% 16.0% 19.7%
Accessed financial news or stock quotes
15.1% 11.3% 11.4% 17.9%
Accessed online retail 12.2% 8.2% 6.1% 10.0%
Source: comScore Mobile Metrix 2.0, Beta Data, Dec-‐2011, U.S.
Mobile Ac@vi@es by Share of Total Mobile Audience
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 49!
98% 89%
79% 74% 64%
At Home On The Go Shopping At Work Commu@ng
Mobile Consumer Behavior Mobile devices have become an indispensible part of our lives……!
Over 300k apps have been developed in the past 3
years and downloaded more than 10.9B times!
…… And are used universally by consumers throughout the day
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Mobile Web Traffic Will Surpass Desktop Web Traffic By 2015 Tablet access to the web will gain a large foot hold as it’s growth is eclipsing desktop sales and growing at a faster rate than mobile.!
27%
43%
52%
73%
57%
48%
0%
20%
40%
60%
80%
100%
2007 2011 2015E
Web Surfing By Device
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Mobile Web Traffic Growth Global mobile traffic as a % of total web traffic has grown by a factor of 20 over the past 4 years. !
2011 Year in Review and Outlook for 2012 ² Mobile data traffic more than doubled
in 2011. Global mobile data traffic more than doubled growing 133% in 2011, for the fourth year in a row.
² Mobile data traffic will double again in 2012
² Cisco es@mates that traffic in 2012 will grow 110%, reflec@ng a con@nua@on in the tapering of growth rates.
² The evolving device mix and the migra@on of traffic from the fixed to mobile network has the poten@al to bring the growth rate higher.
Mobile data traffic as a percent of total web traffic
166% CAGR
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China Has The Largest Online Population And By 2015 It Is Expected To Become The World’s Largest Online Retail Market
² By 2015, China will add nearly 200MM users, reaching an Internet population of more than 700MM users—double the combined number of Japan and the U.S. !
² In 2011, consumers spent 1.9B hours a day online— an increase of 60% from two years earlier. !
² Online buying and selling, including group purchasing, is the second fastest growing activity after micro blogging. !
² Chinese consumers are quickly adopting mobile usage that will be used as a primary access point and payment choice for the internet.!
² Users have not only adopted real-time mobile social networking at a growing rate they are also doing so with increasing frequency.!
Source: Bain, Nielsen
China has become a major Internet market with increasingly sophisticated consumers. !
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Internet Sales Have Taken Off As Online Retailers Gain Share, Mobile Will Become A Key Component Of This Growth
² Between 2011 and 2015, online retail sales will increase 300% to more than $360 billion. !
² China’s consumer behavior continues to evolve as they rapidly adopt a digital lifestyle. !² Half of Internet users say that the Internet is
their most trusted source of information, fol lowed by television at 30% and newspapers at 15%. !
² Between 2008 and 2011, the online share of consumer spending increased from 11.8% to 14.3%. Between 2011 and 2015, per capita online spending will likely rise by 15% annually. !
² Consumers research products online that they eventually buy in physical stores and 25% of consumers research online before buying offline – a trend consistent in other markets.!
Source: The Boston Consul9ng Group, China’s Digital Genera9ons 3.0
In 2010, more products were purchased on Taobao than at China’s top five brick-‐and-‐mortar retailers combined.
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Adoption Of Mobile Payments Has Accelerated in 2010 And Is Expected To Continue On An Upward Trajectory
31 Copyright 2011. All rights reserved.
Mobile Commerce = We Have Lift Off!
$0
$1
$2
$3
$4
$5
2009 2010 2011
Gro
ss M
obile
Sal
es o
r P
aym
ent
Volu
me
($B
)
eBay
PayPal
Target
Amazon.com
Square
Mobile Sales or Payment Volume – eBay / PayPal / Amazon.com / Target / Square, 2009-2011E
Note: Amazon.com disclosed 2010 mobile gross sale, 2009 / 2011 data are KPCB estimates. Source: eBay, Amazon.com, Target, Square.
Source: KPCB
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Mobile Queries Are Growing Rapidly As Consumers Are Using Them Increasingly For Information and Transactions
19 Copyright 2011. All rights reserved.
Mobile Search – Growing Rapidly
19
Google US Mobile Queries (Indexed), 2007 – 2011
120
100
80
60
40
20
0
2007 2008 2009 2010 2011
4x Growth in past years
Source: Google.
Source: comScore, KPCB
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 56!
Source: comScore, KPCB
As US eCommerce Grows The Percent Of Mobile eCommerce Is Climbing, Reaching 8% in Q1 2012
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Social Sites Are A Source For Information, Comparisons, And Ratings That Influences Buying Behavior Community, Social Tools that Impact Buying % of respondents, June 2011
59%
42%
26%
15%
13%
13%
9%
9%
User-generated product reviews
Online customer Q&A on product website
Community forums (conversations between
customers)
User-generated videos
Facebook company fan pages
Facebook newsfeed (friends talking about
products)
Mobile (iPhone app, text alerts)
Twitter (monitor, respond to, and post tweets)
Source: e-‐tailing group, PowerReviews
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 58!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 59!
“Give people more control over their banking and you’ll win their loyalty. That’s because mobile is not a channel so much as a way consumers live their lives and consequently, the way banks have to conduct their business.”! !
Douglas Brown!Senior VP Mobile Product Development!
Bank of America!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 60!
mPayments Summary
² The Financial services industry has undergone a broad and rapid transformation over the past decade driven largely by technology and web based services!
² Mobile phone proliferation, development of mobile platforms, and capabilities have created a new dynamic paradigm in the payments industry!
² Convenience and ease of use of mobile capabilities has created a seismic shift in the consumer mindset and acceptance of mPayments !
² Social media coupled with mobile phones have been the catalyst to a growing opportunity to engage consumers and win share for companies!
² mPayments will grow rapidly as a percentage of total payments, however, banks risk disintermediation by non-bank competitors!
² A big driver of mPayments will be the nearly 2.5B unbanked people in developing markets turning to non-bank mPayment options!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 61!
mPayment Roadmap For Banks – Creating Frictionless Finance Networks
² Success will come from continued focus on building new distribution models and capabilities to enable mPayments.!
² In order for the mobile wallet and payments to grow in adoption, it has to be simple, ubiquitous and have a compelling value to consumers.!
² Prolific growth of smartphones and consumer acceptance is driving growth in mPayments.!
² Banks must invest in several mPayment technologies as standardized platforms have yet to emerge and will likely vary across geographies.!
² Banks must rethink their relationships with telecommunications companies and retailers to build and maintain market share and protect their payment marketshare form new competitors.!
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History of Payments From Barter to Frictionless Finance There has been more transformation in the payments space in the past 5 years than the prior 2,500 years.!
BEFORE 600 BC
CHECKS PAPER MONEY
COINS CREDIT CARDS
mPAYMENTS
600BC – PRESENT
BARTER/ TRADE
806 – PRESENT
321BC – PRESENT
1800s – PRESENT
Source: SapientNitro
PRESENT – FUTURE
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Late 1970’s – Mid 1980’s 1994 1997 Today
Evolution of Electronic Payments
Fric@onless Finance – device, currency agnos@c
Coinciding with the evolution of payments has been the development of technological advances that have created a frictionless, global ability to move money anywhere anytime.!
Rudimentary Home Banking system based on landlines
Online Banking and Bill Pay. Ability to access accounts any@me
First Mobile Banking service
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 64!
Mobile Users By % of Population
A f r i c a 5 3 %
A r a b S t a t e s 9 6 . 7 %
A m e r i c a s 1 0 3 . 3 % E u r o p e
1 1 9 . 5 % A s i a 7 3 . 9 %
Source: KPCB Internet Trends, Mary Meeker May 30, 2012
C I S 1 4 . 3 %
30% of the world’s mobile users live in China and India
87% of the world’s popula@on have a mobile phone
Smartphone sales increased 63.1% from 2010 to 2011
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 65!
Growth In mPayment Users 2010 – 2011: Use of mobile phone as payment device that is pre-loaded with funds.
9% 21% 6% 8% 9% 20% 10% 13% 1% 7% 16% 17% 10% 25% USA CHILE BRAZIL KENYA SINGAPORE HONG KONG CHINA
Emerging markets have higher penetration and growth rates for mobile payments. !
Source: NitroSapient
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 66!
The Growth Rate For mPayment Users By Region Mobile payment users had double digit growth across all markets from 2009 to 2010. !
Source: Javelin Strategy 2009
Region 2009 2010 % Change
Asia Pacific 41,865 62, 828 50.0%
EMEA 16,823 27,091 61.0%
La@n America 5,131 8,010 56.1%
Western Europe 4,519 7,127 57.7%
North America 1,905 3,502 83.8%
Total 70,243 108,558 54.5%
Mobile Payment Users By Region (000)
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 67!
Global mPayment Transaction Growth By Regions mPayments across all regions have experienced substantial growth from 2008 to 2012; rates will slow as markets reach saturation.!
Source: Arthur D. Likle
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 68!
Electronic Payments In The US Grew By Over 82% In 2011 Mobile usage is growing rapidly for retail and payments creating an opportunity to gain share of wallet for ecommerce.!
134%
87% 80% 82%
77% 74% 74% 72% 70% 69%
0%
20%
40%
60%
80%
100%
120%
140%
160%
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Audien
ce (0
00)
Dec-‐10 Dec-‐11
comScore MobiLens, 3 month average ending Dec. 2011 vs. Dec. 2010, US
US Top Mobile Categories By Growth In Audience (000)
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 69!
mPayments In China 2010 - 2013
Payment growth will be fueled by:!
² The share of hours of internet access on mobile devices is rising rapidly among all age groups. !
² Growing usage of mobile apps.!
² Technology that increases the utility of mobile devices as a payment option.!
² Proliferation of mobile devices and mobile infrastructure.!
² Greater access to the web through mobile devices.!
² Convenience in researching product information and pricing transparency.!
19 48
121
219
102
191
308
481
2010 2011E 2012E 2013E
Mobile Payments (Billion Yuan) Mobile Payment Users (MM)
Source: China Internet Watch
² mPayments are expected to grow by 1132% and mobile payment users will increase by 472%. !
² In 2011, 69% of users said they used their phones to access the Web—up 30 percentage points in just three years.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 70!
The Players: Several Industry Groups Are Working On One or More mPayment Options The digital wallet is “owned” by several industry segments that each provide key components for mPayments and digital wallets.!
Financial Ins@tu@ons
Telecommunica@on Companies (1)
Retailers
(1)Telecommunica@on companies include carriers, handset makers, chip makers, OEMs
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 71!
The Players: Each Industry Group Has A Unique Role Within The mPayment Process Collectively mPayment players each provide key components for mPayments and digital wallets. They must work together to create end-to-end experiences.!
Financial Ins@tu@ons
Telecommunica@on Companies(1)
Retailers
Banking services Loans
Payment Processing Credit Card services
Security Infrastructure
Wireless Networks Handsets
Mobile Apps Mobile Payment Services Mobile Coupon Services Security Infrastructure
Loyalty Programs Merchandise
Shopping Experience Consumer Data Point of Sale
Security Infrastructure
(1)Telecommunica@on companies include carriers, handset makers, chip makers, OEMs
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 72!
The Players: Who Owns The Customer Relationship? The mPayment customer relationship is fragmented with each player having a unique role that will vary by market.!
Financial Ins@tu@ons
Financial Rela@onship
Telecommunica@on Companies(1)
Reliability
Retailers
Shopping Experience
(1)Telecommunica@on companies include carriers, handset makers, chip makers, OEMs
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 73!
Financial Ins@tu@ons
Telecommunica@on Companies (1)
Retailers ² Financial Institutions, Telecommunication Companies,
and Retailers need to collaborate and structure a revenue share model.!
² How businesses will get enough consumers to use the digital wallet and enough merchants to accept mobile payments.!
² Ensure that the end-to-end user experience is easy to use, intuitive, and seamless.!
² Focus on establishing global standards that can facilitate the growth of mPayments.!
To Establish A Mature mPayments Environment Key Issues Need To Be Addressed
(1)Telecommunica@on companies include carriers, handset makers, chip makers, OEMs
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 74!
KPMG 2011 mPayments Global Survey Highlights
² Survey focused on projected success of the current and emerging mPayment methods, which were described in the survey as: !
Ø M-wallet (mobile wallet): account and transaction info is stored on a SIM card; !
Ø M-banking (mobile banking): direct access to the subscriber’s bank services and information via the mobile device; !
Ø Contactless card systems: a short-range high frequency wireless communication technology which enables the exchange of data between devices; !
Ø Specialist online payment systems: for example, Google checkout or PayPal; !
Ø Carrier billing: for example, purchases are billed on the subscriber’s mobile phone bill. !
² Opinions across geographies were remarkably consistent, while variation across industries was in some cases more pronounced. !
² Only mBanking and online payment systems are seen as gaining traction in the short term. However, most respondents believe the mPayments will grow dramatically over the next 4 years. !
² For the remaining solutions, respondents were most likely to say that it was still too early to predict whether or not the solution would be adopted widely. !
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 75!
KPMG 2011 Mobile Payments Global Survey Highlights
ASPAC EMEA
Americas
5% 6%
5%
39% 37%
37%
39% 39% 40%
14% 15%
5%
2% 3%
4%
Mainstream Today
1-‐2 Years
3-‐4 Years
5-‐10 Years
10+ Years
When asked respondents over 75% of those asked believe mobile payments will become mainstream in the next 4 years.!
Source: KPMG 2011 Mobile Payments Global Survey
Global Sentiment Indicates Significant Growth In Mobile Payments Across All Regions.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 76!
All Retail
Telecom Fin. Services
Technology
9% 9%
7% 10%
6%
37% 40% 41%
36%
41% 37%
34%
39%
37% 39%
13% 14%
10% 13% 12% 4%
3%
2% 3%
2%
Mainstream Today
1-‐2 Years
3-‐4 Years
5-‐10 Years
10+ Years
KPMG 2011 Mobile Payments Global Survey Highlights
Source: KPMG 2011 Mobile Payments Global Survey
75% of respondents believe mobile payments will become mainstream within the next 4 years.!
Global Sentiment Indicates Significant Growth In Mobile Payments Across All Industries.!
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60% Of Companies Have A mPayments Strategy But Only 50% Offer A Service The number of companies that implement a mPayments service is expected to grow as equipment reaches the market and consumers continue to adopt mPayments.!
2011 KPMG Mobile Payments Global Survey
26%
29%
27%
32%
38%
38%
24%
29%
30%
33%
32%
31%
33%
36%
34%
29%
31%
29%
27%
26%
21%
15%
30%
29%
13%
10%
14%
13%
8%
10%
11%
13%
Americas
EMEA
ASPAC
Technology
Financial Services
Telecom
Retail
All
It has a strategy and a current service It has a strategy but no service
It has no service and no plans for one at present Don't know
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 78!
71%
57%
38%
33%
32%
29%
26%
21%
6%
Security
Technology/Adop@on
Privacy
Regula@on/Legisla@on
Cost
Reliability
Complexlty
Availability
Other
Companies overwhelmingly believe that security concerns must be overcome to be successful in mobile payments
“What in your opinion are the main challenges companies face as they develop mobile payment strategies?”!
Source: KPMG 2011 Mobile Payment Global Survey
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 79!
Attitudes Towards Mobile Payments Are Consistent Across Asia And The West
0%
20%
40%
60%
80%
Privacy Issues ID Thed & Fraud Concerns
More Convienent Prefer Most Payments are Mobile
Asia Europe/US
Source: SapientNitro
Respondents have concerns regarding privacy and ID theft although they are offset by consumer preference and convenience.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 80!
Flexibility, Price Transparency, and Convenience Are The Main Drivers Consumers In China Shop Online !
² Online shops run business with a much cheaper cost and product prices are lower and a major factor for shopping online. !
² Faster and easier than going to retail stores rank the 3rd and the 4th respectively. !
² Convenience at anytime, anywhere is important to Chinese consumers.!
28%
25%
18%
11%
7%
4%
2%
1%
1%
1%
Shopping Any@me
Low Price
Faster Than Going To Store
Easier Than Going To Store
Easier To Compare Prices
More Choices
Ability To Find Products
Delivery Service
Detailed Product Info
Easier To Find Favorite Brand
Source: DCCI, China’s Internet Watch
Reasons Why Consumers Choose To Shop Online
The primary reasons why consumers shop online are consistent across markets. !
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 81!
Drivers That Will Shape Mobile Payments (UK Survey)
87%
67%
67%
37%
35%
29%
17%
14%
4%
3%
Conveninece to pay
Speed of paying
Easier to pay
Good for environment
No personal info on receipt
Track spending easily
Fraud less likely
Latest technology
Don't know
Other
² Respondents sited convenience and speed as the main drivers to adopt mPayments. These views are consistent across global markets and outweigh concerns about security. !
² Security perception is improving because payment providers protect consumers against fraud and the implementation of authorization/verification processes.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 82!
Barriers To Shopping on Smart Phones (UK Survey)
49%
36%
31%
26%
23%
20%
18%
13%
Awkward shopping experience
Credit card security
Slow connec@on
Screen readability
Not easy to view product info
Takes too long
Limited product info
Full products not offered
The largest barriers to conduct shopping on their mobile devices are ease of use, security, and performance concerns.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 83!
Interest Among US Consumers In Using Mobile Wallet Technology To Pay For Merchandise In-Store Mobile wallets have uphill climb for consumer acceptance – this will occur as mobile payment systems gain traction and retailers integrate in-store terminals.!
Completely Disinterested,
41%
Very Interested,
15%
Somewhat Interested,
10%
Neutral, 17%
Not Very Interested,
17%
Source: eMarketer; Catapult, Shopper Lab,” April 1, 2012
² 25% of respondents expressed an interest in using mobile wallets.
² 17% of respondents were not very interested and 41% stated they had no interest at all in using mobile wallets.
² While the numbers of those not interested were high part of this can be explained by the wide spread acceptance and usage of cards.
² Looking forward these opinions will change as retailers offer incen@ves and make it a faster and more convenient payment method.
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The Emergence Of The mPayment Ecosystem ² Mobile phones have become an indispensible tool for real time research and
purchasing behavior globally. !² An increasing amount of purchases online and in-store are being driven from
mobile devices – regardless of mobile payment method.!
16%
18%
21%
24%
26%
29%
In-‐Store Price Comparison
Purchased With A Mobile App
Researched on Mobile and Bought Online
Purchased On A Mobile Website
Researched on Mobile and Bought In-‐Store
Researched Product on Mobile
Javelin Strategy 2009
² Mobile applica@ons and technology have created complete pricing transparency.
² Nearly 30% of consumers conduct product research on mobile devices.
² Over 20% that do research on a mobile device will buy products either in-‐store (26%) or online (21%).
² Purchases from mobile devices is on the rise with consumers -‐ 24% bought on a mobile website and 18% on a mobile app.
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 85!
Retailer-Based Loyalty/Rewards Mobile Applications
Currently Have
Within 12 Months
12-‐24 Months
19% 29% 22%
7% 41% 20%
7% 25% 22%
1% 16% 19%
3% 7% 19%
3%` 6% 10%
The majority of North American retailers plans to use mobile barcode or coupon scanning within the next two years. NFC based loyalty functionality and payments will ramp up at an increasing rate as enabled phones and retailers install the needed hardware. !
SUPPORT FOR REGULAR BARCODE SCANNING
COUPONS ON MOBILE SCREEN
SUPPORT FOR 2-‐D BARCODE
COUPONS BY NFC/RFID LOYALTY
SUPPORT BY NFC/RFID FOR PAYMENT
CONSUMER SELF-‐CHECKOUT
Source: SapientNitro
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Current Providers Are Predicted To Remain The Dominant Players in Mobile Payments….
82%
77%
72%
68%
67%
63%
62%
46%
8%
12%
18%
23%
23%
26%
25%
36%
11%
11%
10%
9%
10%
11%
13%
22%
Banks
Credit Card Companies
Telcos
Specialist Web Payment Companies
Online Service Provider Giants
Retailers/Merchants
Technology Companies
Others
1-‐4 5-‐7 8-‐10
Source: KPMG 2011 Mobile Payments Global Survey
10 point scale, 1-Most Important and 10 Least Important
“What categories of players are going to have the most important roles in mobile payments?” !
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 87!
….However, Opinions Vary When It Comes to Predicting Success of Specific Payment Types
15%
8%
39%
24%
41%
32%
28%
29%
51%
40%
51%
26%
51%
15%
3%
10%
7%
20%
mWallet
mBanking
Contactless Card Systems
Specialist Online Systems
Carrier Billing
Already mainstream Will get major trac@on in my market
Early days, uncertain Ulikely to do well
n=688!
n=690!
Source: KPMG 2011 Mobile Payments Global Survey
n=709!
n=696!
n=687!
“What are the prospects for this mobile payment method in your country/region?”!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 88!
Core Mobile Financial Services 1. Monetizing mobile!
2. How banks are preserving their place in the payment value chain!
3. July 2011!
4. kpmg.com!
Basic Mobile Banking Enhanced Mobile Banking And Remote Mobile Payments
Mobile Payments At The In-‐store POS
Overview The basic mobile banking market consists of financial ins@tu@ons that are focused on developing and refining their mobile banking plalorm
The enhanced mobile banking and remote payments market consists of players with mature mobile offerings, healthy adop@on rates, and basic remote payment services
The physical POS mobile payments marketplace is composed of tradi@onal and non-‐tradi@onal players vying for early market share of mobile payment revenues
Key Features Typically includes core service offerings such as account access, balance informa@on and internal transfers and are usually on 1-‐2 technology plalorms serviced by a vendor
Typically consists of market leading mobile banking features such as mobile deposit capture, mobile capture and bill pay, enhanced enrollment features, and some remote payment offerings such as person to person (P2P) payments
Features and func@onality widely vary depending on the players involved and geography where the solu@on is being launched
Benefits • Enhanced reputa@on and customer service • Reduced cost to serve (and therefore more flexible capital) • Can be straighlorward to deploy • Easily integrated into exis@ng internet banking services • Demonstrates innova@on • Creates a base comfort level for consumers using mobile devices • Builds in-‐house experience and skills
• Reduces cost to serve and increases available capital • Streamlines processes and reduces manual interven@on • Builds in-‐house experience and skills • Capitalizes on ‘first-‐to-‐market’ opportuni@es • Provides new revenue streams
• Protects exis@ng payments revenues • Creates new revenue opportuni@es • Responds to customer demands
Customer Impact
• Unfekered access to banking informa@on and basic transac@ons • Convenience and ease of use • Integrated view of banking informa@on and accounts • Higher customer loyalty and ‘s@ckiness’
• Reduces branch and ATM visits • Delivers increased flexibility to customers • Builds comfort and acceptance of mobile payment solu@ons • Acts as a stepping stone to contactless and proximity payments
• Convenience and ease of use, par@cularly for low-‐value payments • Tighter security and privacy • Replaces tradi@onal wallet or exis@ng stored value accounts and electronic purse cards
Key Considera@ons
• What is our mobile channel strategy? • What is our mobile commerce strategy? • What is our posi@on on mobile payments? • What are our current mobile banking capabili@es?
• Who is our mobile service vendor and are their capabili@es sufficient? • What are leading prac@ces in mobile commerce? • What should our mobile payments product look like? •What should our revenue sharing model look like?
• How should we plan for enhancements to our mobile plalorm? • How should we rollout our mobile payments pilot? • What are the es@mated costs of the mobile payments ini@a@ve?
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 89!
Emerging Mobile Payment Categories
Source: KPMG, Monetizing mobile How banks are preserving their place in the payment value chain July 2011!
Mobile bill capture and pay
P2P/Interna9onal remifance
Mobile shopping POS/Proximity payments
Overview: Consumers download a mobile payments applica@on that enables users to pay bills simply by snapping a photo of a paper bill or invoice with their smart phone camera without wri@ng a check or se�ng up a template. FI Offerings: Most major banks offer a mobile version of their basic online bill pay. Chase has recently partnered with Mitek to offer mobile bill capture & pay func@onality.
Overview: P2P fund transfers allow consumers to transfer funds to each other using an email address or phone number (no account details required). In order to claim funds, users must register and verify their iden@fy with the service provider. FI Offerings: Many of the jumbo banks have already entered the P2P market with solu@ons @ed to their mobile banking plalorm.
Overview: Consumer uses mobile web or applica@on to search for and purchase goods online; similar experience to online shopping FI Offerings: Many major e-‐retailers offer mobile versions of their online sites. While no such solu@on is has been launched to date, FIs may be able to leverage this channel to enable credit card rewards redemp@on via mobile.
Overview: “Wave and Pay” or “Tap and Go” technology, where phones are embedded with NFC technology or enabled with NFC capabili@es via a companion device and waved in front of an NFC-‐compa@ble terminal for payment. FI Offerings: Visa has partnered with DeviceFidelity to offer microSD payment technology to its issuing bank partners. The microSD cards can be inserted into the phone’s memory slot to enable the device for payment. Contactless s@ckers and NFC-‐enabled phone covers are also widely available and being tested by FIS.
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 90!
Three Core Types Of mPayments Have Emerged
mCommerce Mobile Web Browser (online wallets, web ecommerce)
mPayments Uses contactless, mobile
capabili@es
mWallets Virtual Wallet
How It Works
Types
1. Add items to Cart 2. Fill out informa@on 3. Purchase and
confirma@on
1. Add items to Cart 2. Click to buy 3. Purchase and
confirma@on
1. Funds loaded on device e.g. mobile phone
2. Scan barcode 3. Purchase made, new
account balance displayed
1. Credit card info stored on phone
2. Enter PIN to purchase 3. Tap your phone to POS ,
authen@ca@on, approval Or
1. Money loaded into account 2. Purchase made via SMS 3. Purchase and confirma@on to
merchant
Or
Availability for specific mPayment type will vary based on cultural acceptance, technology, and financial provider access.!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 91!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 92!
“The era of mobile banking and payments is dawning. Around the world and across the banking value chain, everyone is waking up to the huge potential of a market that is emerging before their eyes and changing the way that customers interact with their financial institutions.” ! ! ! ! ! ! ! ! ! ! ! ! ! ! !KPMG! ! ! ! ! ! ! ! ! ! ! ! ! ! !!
© 2011 Blue Panda Interactive. Proprietary And Confidential.! 93!
mPayment Platform Summary
² Although mPayments have seen significant growth, the market in terms of technology, standards, and payment providers vary widely by market!
² The key players in the space are banks, financial service companies (e.g. credit card companies, telecoms, specialist web payment companies, online service providers, retailers/merchants, and technology companies.)!
² Companies have created multiple partnerships/alliances and networks as they test and promote these platforms !
² Although the market is nascent it is rapidly maturing and there will be an emergence of a few dominant players and platforms that will led to a few global platforms.!
² Over 2.5B adults are unbanked and using mPayment options from nonbanks will create disintermediation!
² It is likely that multiple technologies will co-exist on mobile devices and cards which are being pushed by giants such as VISA and FeliCa!
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The Growing Acceptance of mPayments
² While mobile payments are growing at a fast rate and will surpass US $172B in transaction values this year, NFC transactions are expected to remain relatively low through 2015.!
² The overall value of mPayment money volume is a growing number growing 61.9% over last year’s money volume. !
² The number of mobile payment users is also growing, Gartner Group predicts that the number of mobile payment users will reach 212MM in 2012, up from 161MM in 2011.!
² Growth is coming from almost all regions across globe and is expected to continue over the next 4 to 5 years. Through 2016 mobile transaction volume and value is expected to average 42% annual growth worldwide. !
² By 2015 global mobile payment transaction values will be exceed US $620B and the number of users will reach 450MM.!
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Source: Gartner Group, Mobile Commerce Daily NFC transac@ons to remain low through 2015: study, May 30, 2012
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mPayment Technologies
Source: KPMG, Mone@zing mobile, How banks are preserving their place in the payment value chain, July 2011
Descrip9on Pros Cons
Contactless (NFC)
Set of standard devices to establish radio communica@on with each other by touching them or bringing them into close proximity. Components include s@ckers, fobs, microSD cards, etc.
Leverages exis@ng contactless card standards, Devices oden limited to a single
payment account, poten@ally high setup complexity for user, requires distribu@on and cost to deploy.
Embedded NFC
Uses a mobile wallet technology on an embedded NFC chip to broaden payment op@ons within a proximity se�ng.
Uses exis@ng contactless card standards, enables access to mul@ple accounts via mobile wallet, provides some addi@onal security with PIN on the handset.
Limited availability of enabled handsets in the market, Merchant control handset inventory and distribu@on.
SMS Text USSD
Remote payments, primarily for digital content Similar to SMS but quicker and has the ability to invoke commands with common codes rather than opening a messaging applica@on.
Ubiquitous capability available on the vast majority of handsets. Enables payments in developing markets with low access to banks.
Message length limited, high cost to both merchant and consumer.
Voice/IVR A niche technology that provides mostly account servicing and bill payments, some mobile payment authoriza@on conducted via voice.
Person to person interac@on, opportuni@es for dynamic cross-‐selling.
High cost in ‘live agent’ situa@ons, inefficient data communica@ons.
Cloud Based Wallets
The user downloads an applica@on to a smartphone, connects a credit card or bank account to the app, and then can authorize payment to par@cipa@ng merchants via the phone’s Internet connec@on.
These do not require any specific hardware like NFC. Uses access to the web, no special hardware e.g. readers, point-‐of-‐sale (POS) upgrades.
Possible connec@on to web issues, subject to site availability.
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A recent survey by the Carlisle & Gallagher Consulting Group on customers' preference on mobile concluded that banks are losing out to providers like PayPal and Google. Customers have voiced an overwhelming preference for these mobile-based payment solutions over those from their banks.
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Several Different mPayment Models Have Emerged And Are Competing To Gain Global Acceptance
Payment Models
CONTACTLESS NFC, RFID, FeliCa
MOBILE APPS Internet
SMS Text
Messaging
WEB Mobile Browser
USSD Similar to
SMS
There has been a prolifera@on in proprietary mPayment offerings that vary in func@onality and standards.
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In The U.S. There Has Been A Proliferation Of Platforms And Partnerships In The mPayments Space ² Mobile payment platforms are shaping up along the lines of several associations and
partnerships.!² The space is continuing to evolve and expect to see a movement towards platform
consolidation and standardization.!
Partne
rs
Plal
orm
In addi@on, retail giants Wal-‐Mart and Target have teamed up to launch their own mobile wallet and Facebook has recently announced plans to create person to person (P2P) payments.
Tech NFC Web Physical
Reader Web
New In 2012
Web/Mobile Web/Mobile
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There Has Been A Proliferation Of Platforms And Partnerships In The mPayments Space ² A handful of mobile payment platforms have emerged.!² The space is continuing to evolve and expect to see a movement towards
platform consolidation and standardization.!
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Several Different mPayment Models Have Emerged And Are Competing To Gain Global Acceptance
Payment Models
CONTACTLESS NFC, RFID, FeliCa
MOBILE APPS Internet
SMS Text
Messaging
WEB Mobile Browser
USSD Similar to
SMS
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NFC-enabled Phone Sales And Usage Will Surge, Pushing Global mPayments Up 180% To US $620B By 2015
0
100
200
300
400
500
600
2011 2014 2015
93.2
411.8
544.7
NFC-‐Enabled Mobile Phone Shipments #MM
2010 2011
102
141
49
86
Global mPayment Users and Volume
Users MM
Payments $B USD $240B
$620B
2011 2015
Source: NitroSapient
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NFC Estimates - Key Statistics and Figures
² Current barriers to growth include availability of NFC enable phones and POS terminals but both are expected to see strong through 2016.!
² In 2011 there were 40-50 million NFC-enabled phones and will grow to 300 million or 20% of smartphones worldwide by 2014. This number will jump 53% to 863 million units in 2015.!
² Global NFC mPayment transactions will reach US $50 billion worldwide by 2014 or 32.8% of the estimated US $1.13 trillion global mPayment.!
² 47 million Japanese have adopted tap-and-go phones in three years – making it one of the fastest roll outs of electronic products in human history. East Asia will see the fastest growth due in part to better cooperation between companies and governments.!
² There will be 169 million users of mobile contactless payment in China in 2013. Total number of mPayment users will be 410 million, making China the world’s largest mPayments market.!
Source: Mobile Commerce Daily; CNET; NitroSapient; Juniper Research, April/June 2011; Frost & Sullivan, Feb 2011; NFC Times, Oct, 2010; IE Market Research, July 2010; Celent, Nov 2010; IDTechEx, R&M, Feb 2011
Although expert’s opinions vary, all agree that NFC mPayments will become a major source of transac@ons.
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Several Different mPayment Models Have Emerged And Are Competing To Gain Global Acceptance
Payment Models
CONTACTLESS NFC, RFID, FeliCa
MOBILE APPS Internet
SMS Text
Messaging
WEB Mobile Browser
USSD Similar to
SMS
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Starbucks Is A Retailing Pioneer In The mPayments Space
Starbucks Card Mobile App!
² Mobile bar codes that are delivered to the app and scanned at retail store!
² The mobile app is helping to relieve lengthy morning queues by speeding purchases!
² Less than a year after the mobile app launched Starbucks had 26 million transactions and has climbed to 42 million payments since inception!
² Starbucks has expanded it’s mobile payment app to Canada and the UK !
² The app also includes a store locator and its rewards program!
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Mobile initiatives allow retailers to monitor and analyze purchase patterns, providing new insights to customer behavior. The ability to create highly personalized experiences will continue to drive retailers entry into the mobile space.!
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Starbucks Is A Retailing Pioneer In The mPayments Space
The upside for mobile commerce and smart phone growth is enormous as all mobile phones will eventually become internet connected. That translates to over 4.7 billion smart phones that will be sold and connected! How will your bank ready for the new mobile-social economy?!
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PayPal Has Aggressively Forged Partnerships With Retailers And Point Of Sale Developers
² First mobile payment partner, Home Depot, rolled out to 2,000 locations. Customers make purchases with their PayPal accounts by typing in their mobile phone number and PIN. Customer receives an electronic receipt on their mobile device after making a purchase.!
² May 2012 announced additional 15 retail partners some of which include: Abercrombie & Fitch, Barnes & Noble, Foot Locker, JC Penney, Office Depot, and Toys "R" Us.!
² Redesigned website has cross-sell space for promoting mobile payments. The site is also designed to be touch-friendly for use with tablets and smartphones. !
² Signed deals with point of sale systems developers and point of sale terminal manufacturers. These partnerships give PayPal access to over 40 million payment terminals across the world.!
² PayPal is also testing a new app in Britain that enables users to make purchases via a unique bar code linked to their account.!
² Launched a joint venture in Japan and has plans to enter India, China and other global markets.!
PayPal Here
PayPal is quickly becoming a formidable player in the payments industry and mobile is a major component of that strategy!
Source: Mobileburn, TechCrunch
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Retailer’s Will Expand Mobile Presence To Include Payment Oriented Mobile Applications
Currently Have
Within 12 Months
12-‐24 Months
19% 29% 22%
7% 41% 20%
7% 25% 22%
1% 16% 19%
3% 7% 19%
3%` 6% 10%
The majority of North American retailers plan to use mobile barcode or coupon scanning within the next two years. NFC based loyalty functionality and payments will ramp up at an increasing rate as enabled phones and retailers install the needed hardware. !
SUPPORT FOR REGULAR BARCODE SCANNING
COUPONS ON MOBILE SCREEN
SUPPORT FOR 2-‐D BARCODE
COUPONS BY NFC/RFID LOYALTY
SUPPORT BY NFC/RFID FOR PAYMENT
CONSUMER SELF-‐CHECKOUT
Source: SapientNitro November 2010
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Several Different mPayment Models Have Emerged And Are Competing To Gain Global Acceptance
Payment Models
CONTACTLESS NFC, RFID, FeliCa
MOBILE APPS Internet
SMS Text
Messaging
WEB Mobile Browser
USSD Similar to
SMS
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SMS And USSD Has Grown Exponentially in Certain Regions And Can Be Expected To Grow Globally
² There are over 2.5B unbanked adults with the vast majority living in Asia, Africa, and Latin America that will use non-bank options for payments and money movement.!
² Consumers in Africa, the Middle East, and India rely on telecoms including Vodafone and MTN to provide mobile money options.!
² Western Union has partnered with MTN in Uganda to launch a mobile-transfer service. WU has agreements with 11 mobile operators and an additional 17 are planned.!
² In India, the National Payment Council (NPCI) launched the Interbank Mobile Payment Service (IMPS). IMPS allows a person to pay/remit money to a merchant or an individual in real-time using a mobile phone number and a mobile phone identifier. !
² SMS payments went viral in the US for Haiti earthquake relief payments totaling over $US 30MM.!
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SMS And USSD Kenya – M-Pesa
Kenya
M-Pesa Facts & Figures!² M-Pesa, Swahili for money.!
² Users give cash to agent, money is loaded onto account, payment made via SMS, confirm provided to merchant via SMS.!
² SMS based mobile money mPayment launched in 2007.!
² By 2011 68% of adults use mobile money.!
² Average transaction size is $30.!
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SMS And USSD Uganda – Western Union and MTN Group
Western Union/MTN Facts & Figures!² Western Union (WU) and MTN Group launched a
mobile money transfer service in Uganda, allowing MTN customers to use mobile phones to send and receive money across borders.!
² 2 million customers of MTN’s Mobile Money will be able to add funds to their accounts. Customers can also send money internationally with WU directly, online, or from their Mobile Money accounts for cash payout at WU Agent locations or mobile phone partner subscribers.!
² To gain traction, 9,000 branded mobile “Yellow Phones” were distributed to Ugandans. Customers who receive these devices must already have an active MTN Mobile Money account or sign up for one. !
² MTN attracted 16% of its customers to its mobile money service in its initial 13 months, and approximately 60% of its transfers are to ‘unbanked’ customers in rural areas.!
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Several Different mPayment Models Have Emerged And Are Competing To Gain Global Acceptance
Payment Models
CONTACTLESS NFC, RFID, FeliCa
MOBILE APPS Internet
SMS Text
Messaging
WEB Mobile Browser
USSD Similar to
SMS
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Web/Mobile Browser: Serve!² Launched by American Express in March 2011, Serve is
an online payment system similar to PayPal.!
² Initially, for residents of the US, American Express announced in January 2012 the first global with Lianlian Group, one of China’s leading mobile payments providers. It has also signed deals with Verizon and Sprint to allow people to buy goods by entering in their phone number and PIN.!
² Serve allows users to buy things, withdraw cash from ATMs and make personal payments from their phone or computer using an account that is funded from a bank account or credit or debit card. !
² Serve is following PayPal’s to enable personal payments through Facebook with the launch of a Serve Facebook app, that allows users to pay each other back for free without leaving Facebook.!
² American Express is working with Payfone to support Serve checkout on Verizon devices. Payfone's back-end systems will help Verizon customers to make mobile payments simply and securely.!
Source: TechCrunch January 18, 2012; American Express!
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Online Payment Comparison – Serve & PayPal ² Both services are becoming increasingly undifferentiated from each other – both provide
more functionality and flexibility compared to other payment methods.!² Both are planning to launch expanded functionality such as NFC, retailer alliances, and
loyalty/reward programs.!
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Web/Mobile Browser: Google Wallet
² The Google Wallet online service stores your credit cards in the cloud and are all managed with a single password. When you checkout at online merchants that accept Google Wallet, you can quickly pay by signing into your Google Wallet account.!
² Like other competitors fraud protection policy covers users against unauthorized purchases made through Google Wallet, and payment information is securely encrypted and stored. !
² The Google Wallet expanded to a mobile app in 2011 that stores your credit cards and offers on your phone. When you check out at brick-and-mortar stores that accept Google Wallet, you can pay and redeem offers quickly just by tapping your phone at the point of sale.!
² Google has partnered with Sprint which has preloaded the Google Wallet on many of their handset devices.!
² Last year Google announced its NFC-based Google Wallet mobile payment service, with backing from a number of retail and financial partners including Subway, Macy's, Walgreens, Toys 'R Us, First Data, Citibank and MasterCard and Sprint on the carrier side. A Citi MasterCard or Google Prepaid Card is required with the service, although the latter can be funded from any other card.!
² The partnership with MasterCard means Google Wallet will be fully compatible with the PayPass contactless payment system that's widely in place today. Google may use NFC stickers for phones without built-in NFC.!
Source: Google; Engadget
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NFC Case Study – FeliCa
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² The name derives from the word "felicity," suggesting convenience, was introduced in Japan, FeliCa is a technology developed by Sony in which a microchip, embedded in a card or electronic device, combines processing, storage, and communications functions. Over 100MM chips have been shipped and there are more than 70 million NFC enabled devices in Japan.!
² The FeliCa chip can be used in portable digital devices such as cell phone sets, handheld computers, wristwatches, and calculators. This makes it possible for the portable device to contain multiple forms of data including personal or business identification (ID) information, bank account numbers and balances, medical information, credit account data, transportation passes, and authorization codes!
² Mobile FeliCa a subsidiary company of both NTT DoCoMo and Sony. DoCoMo has developed a mobile wallet, Osaifu-Ketai, literally meaning "Wallet Mobile”, refers to mobile phones that integrate Mobile FeliCa ICs, as well as to services provided by applications of these phones. Mobile FeliCa has a wide network of partnerships and business models. au (KDDI,) SoftBank, Samsung, Gemalto and others have partnered or licensed mobile FeliCa from FeliCa Networks.!
² Although it was developed by NTT DoCoMo, the system is also supported by other mobile phone operators, making it the de facto standard mobile payment system in Japan. Osaifu-Keitai services include electronic money, identity card, loyalty card, fare collection of public transits (including railways, buses, and airplanes), or credit card.!
² In 2002 Visa International announced the establishment of a joint working relationship with Sony Corporation and Infineon Technologies for the joint development and promotion of a single-chip Global Platform multi-application chip product that supports Visa Smart Debit/Credit (VSDC) payment and contactless applications based on FeliCa. !
Overview of FeliCa
Source: Miscellaneous, Adver@sing Age June 11, 2012
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FeliCa Products and Applications
Source: Wikipedia and NitroSapient
² The Bank of Tokyo-Mitsubishi UFJ: ”Super IC Card” !The “Super IC Card” rolled out by the Bank of Tokyo-Mitsubishi UFJ is a dual-interface (contact and contactless), 3-in-l IC card designed for the utmost in security, flexibility and customer convenience. With a choice from prepaid (“Edy” e-money), debit (cash card) and charge (credit card) payments, cardholders can use the card for a variety of purposes.!
!² Wallet Phones !
FeliCa compatible wallet phones, referred to as “Osaifu-Keitai” and marketed by NTT DoCoMo, KDDI and Softbank Mobile, are used increasingly in Japan for a wide variety of applications including e-money, credit cards, payments. Additional companies are adopting usage of FeliCa based payment products.!
² Non-Financial Applications!e-tickets, membership IDs, airline tickets, airport check in, entertainment, loyalty programs, reward membership, pc/online encryption, home security. New functionality is continuously being added to the FeliCa platform!
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FeliCa Functionality Has Become Ubiquitous in Japan and is Spreading Globally 50% of Japanese mobile users have a FeliCa phone and 20% of users have used a mobile wallet to make a purchase Mobile.!
Source: Wikipedia, SONY, Smartnfc
Boarding Pass
Consumer Electronics
Transit Ticket
IC Card
Vending Machine
Access Control
Internet Credit Service
Retailers
ID Card
eTicket
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FeliCa Has Expanded Throughout Asia
Source: Wikipedia and NitroSapient
1997 Hong Kong Octopus Card on 95% of phones. Also on wristwatches, phones, keyholders. Used for transporta@on systems, convenience stores, coffee shops, supermarkets, vending machines
2002 Singapore EZ-‐link system (defunct) train @ckets, emoney, student military ID cards
2004 Shenzhen Buses and subway networks
2004 Bangkok Thailand Subway @cke@ng system
2002 India Train @cke@ng system
Japan – Founded IC Cards and wallets for transporta@on, emoney (vending machines, amusement centers, baseball @ckets, retail), airport check-‐in and rewards, home access key, PKI network authen@ca@on, email encryp@on, wireless LAN communica@ons, FeliCa Pockets (membership cards, promo@onal coupons, customer loyalty point cards) 2004 Edy prepaid emoney service launches. 15mm+ cards, 27k par@cipa@ng merchants/shops 2004 Launch of mobile wallet phones 2004 Internet based credit card, eLIO, used with personal computer via a embedded or tethered port
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FeliCa NFC-enabled subway straps were activated last May 21st and has been serving ads for a travel agency called HIS. The straps let commuters with compatible phones retrieve an embedded URL that redirects their mobile browsers to an advertising website. No personal information is required or transmitted in the process.!
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FeliCa Sample Usage
FeliCa based payments are used:!² Yahoo Dome Baseball Park to purchase
tickets!² Sega Amusement Centers, ANA airline
tickets!² Kesaka System offers a keyless entry
system enabling residents to lock or unlock doors using FeliCa cards or mobile phones. !
² At some Tipness fitness clubs in Japan, members wear FeliCa-equipped wristbands called TIP GEAR to check in, open lockers, and pay for purchases with Edy e-money.!
² In Finland, 20 universities and colleges use FeliCa ID cards for cashless payment at cafeterias on campus and access control.!
Users can upload digital cash from a credit card to a cell phone, pass a wristwatch near a scanning device at a department store checkout station, use a calculator as a virtual train ticket, or use a FeliCa card to log on to a computer at an Internet kiosk.!
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“We are approaching a new age of synthesis. Knowledge cannot be merely a degree or a skill... it demands a broader vision, capabilities in critical thinking and logical deduction without which we cannot have constructive progress.”!!
Li Ka Shing!Chairman, Hutchison Whampoa Limited!
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Q&A
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Glossary Of Terms ² Embedded NFC: By including a microchip in mobile device hardware, manufacturers are able to add
NFC capabilities to handsets, effectively turning mobile devices into contactless payment solutions.!
² EMV/Chip and Pin: EMV is a global standard that uses integrated circuit cards to enable the authentication of credit and debit card transactions (also known as Chip and PIN cards in Europe).!
² iOS/Android: Most mobile devices are powered by one of a handful of mobile operating systems such as iOS (developed by Apple) or Android (developed by Google).!
² App: Short and common name for mobile applications, apps provide proprietary services through a secure and easy to use program. Low-value Payments: While there is no formally set definition of what constitutes a low-value payment, the level tends to represent a nominal amount according to the spending trends within each jurisdiction.!
² MicroSD Card: Secure Digital cards, and their MicroSD counterparts act in a similar fashion to SIM Cards by storing a mobile users data and information in a secure format.!
² MNO: Mobile network operators are telecom companies with the proper radio spectrum licences and infrastructure to deliver robust services to mobile phone subscribers.!
² Mobile Banking: Platforms that enable customers to access financial services (such as transfers, bill payments, balance information and investment options).!
² Mobile Payments: The process of using a hand-held device to pay for a product or service at a point-of-sale.!
² NFC: Near Field Communications is a set of short-range wireless technologies that supports two-way communication of data such as banking information across short proximities.!
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Glossary Of Terms ² NFC companion device: Companion devices enable users to add NFC capabilities onto mobile
devices that do not contain embedded NFC. These usually take the form of stickers, dongles or fobs.!
² Proximity Payments: Using a device or card with an integrated circuit chip, payment is made by bringing the device within 3 inches of an enabled POS terminal.!
² SIM Card: A subscriber identity module (SIM) is an integrated circuit which stores subscriber information and mobile device identities in a secure and removable format.!
² Smart phone/device: The integration of mobile phones with sophisticated computing abilities to emulate the computing power and functionality of handheld computers.!
² SMS Text/Text Codes: Standing for Short Message Service, SMS has been used by merchants and banks since the 1980s to exchange information and make purchases using text codes (a 160 character or less code that generates an automated response from the recipient).!
² TSM: Specific to mobile payments, Trusted Service Managers work with banks and MNOs to bridge multiple banks and operators to ensure a interoperable and secure system.!
² USSD: Unstructured Supplementary Service Data (USSD) is a protocol used by GSM cellular telephones to provide services such as WAP browsing and mobile-money services.!
² WAP/Mobile Browser: Wireless Applications Protocol (or WAP) is a technology standard that enables mobile devices to view and interact with web-based programs and services.!
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