Technology trends

Trending issues

also in this issue

mPayments (quick overview)

Elevator Pitch

Smartphonatics

Cashing in on the opportunities

4NOVEMBER 2012

Paying with a mobile device

Mobile Payments

mPayments.................................................................................................4

Elevator Pitch ........................................................................................... 11

Global Snapshots ............................................................................... 17

BBVA & Mobile Payments ......................................................22

SmartPhonatics ...................................................................................24

Cashing in on the Opportunities ...................................28

Innovation Forecast ........................................................................31

In Depth....................................................................................................... 34

Sections .......................................................................................................36

Trending Issues ............................................................................36

Technology Trends ................................................................. 43

Mobile Payments & Banking event .............................47

BBVA Innovation Center Open Day ...........................48

Credits ...........................................................................................................50

contents

04

mPaymentsThe mobile payments trend, undoubtedly, is on its way of

becoming a mainstream phenomenon. It will change how

society thinks about monetary transactions. Let’s take a

look into mPayments, meet the main actors and gain a basic

understanding of this fast moving trend.

quick overview

06 November 2012 | MOBILE PAYMENTS 07

DefinitionMobile payments are payments made using a mobile device. Generally, there are two ways to pay by mobile: online payments and proximity payments.“mPayments will transform customers’ lives”. See video

Example of wallets VISA ISIS (AT&T, Deutsche

Telecom & Verizon) Google

Online PaymentsMobile payments for digital or physical goods. Digital goods

payments refer to products/services consumed on mobile de-

vices, such as app purchases or digital content. Also, person to

person (P2P) payments may be considered as online payments.

Physical goods payments refer to products/services delivered

physically, but purchased via a mobile device.

Proximity PaymentsMobile payments for products & services purchases on-site via

a mobile device (short range radio technologies, such as NFC).

Generally used at POS terminals, transit, etc.

Main Actors

Banks & Card CompaniesIncumbents who are currently dominating the general payment

landscape; as the overall leaders, they are generally taking a wait

& see approach, looking for the right product at the right time.

Mobile walletsMobile wallets are platforms that bundle together products and

services from several providers. In general, mobile wallets offer:

■■■ A prepaid account (equiva-

lent of cash in real wallets)■■■ Credit, debit & charge cards

(payment instruments)

■■■ Loyalty programs & offers

(coupons)■■■ Transit (public transportation)■■■ Other (ID, electronic key, etc.)

08 November 2012 | MOBILE PAYMENTS 09

Retail CompaniesNew entrants who are disrupting the payments business with

mobile technologies, such as Starbucks and Amazon . Technology companiesThe financial services market is a new area for growth for these

aggressive players. Armed with the latest and greatest in technologies,

they are very active in experimenting with new value bundles and

business models.

Companies include Google , Facebook , and PayPal (an

eBay company).

Also, the mobile device is being used to process transactions. Retail

stores may now enable payments with a mobile device functioning

as a POS, such as Square or PayPal Here .

Mobile Operators (MOs)Looking for new avenues for growth, MOs

are looking to mobile payments as a way to

make their relationship with clients stickier by

offering payment services, as a part of the

overall voice & data portfolio.

10 November 2012 | MOBILE PAYMENTS 11

Mobile Payments

Let’s take visual journey through the mobile payment

space. We’ll look at the users and usage, deployment

scenarios, business models, and take a peek into the

future and the market.

elevator pitchmPayment & Value Bundles

“The smartphone is simply an enabler — not a driver — of changing behavior.”Ron Shevlin, Aite Group

Therefore, each actor is using or will use mobile payments to design and build the “best” value bundle for a given customer segment. Lots of collaborative models are emerging, such as ISIS and Boku which are collaborations between mobile operators and other entities.See video (Boku)

“Mobile payments on their own are not sufficient to drive consumer adoption but the value bundle — payments together with incentives and offers — has a higher chance of persuading consumers to change their behavior.”Advanced Payments Report 2012, Edgar, Dunn & Company

Mobile Payments

12 November 2012 | MOBILE PAYMENTS 13

What is happening with mobile payments?

In the next five years, insiders expect a majority of

brick-and-mortar retail transactions to take place on

mobile devices. That is a big change-up for a $5.5

trillion marketplace. Meanwhile, mobile devices users

who utilize mobile payments are expected to swell

from 6.8 percent in 2009 to 21.3 percent in 2012.

Who is using mobile payments?

39%Millenials

(18-26)

31%Gen-xers (27-39)

18%Young

Boomers (40-50)

9%Old

Boomers (51-61)

Seniors (62+) 3%

Users Deployment

Usage

How is the mobile payment industry shaping up?

Retailpurchase

53%

27%

10% 12%

20%

66%

Fastfood

8%

22%

70%

Masstransport

16%

37%

43%

Onlinepurchase

18%

35%

47%

Digitaldownloads

FOCUS

HIGH MODERATE

LOW

Mobilecarriers

Financialinstitutions Merchants

DEPLOYED

READY TO DEPLOY

TRIAL STAGE

PLANNING STAGE

NO INTEREST SO FAR

16% 17% 8%

16% 13% 9%

39% 38% 28%

25% 28% 36%

5% 3% 19%

Handsetmanufacturers

Paymentservice

Applicationproviders

10% 19% 22%

20% 24% 37%

37% 45% 30%

29% 11% 10%

3% 1% 1%

DEPLOYED

READY TO DEPLOY

TRIAL STAGE

PLANNING STAGE

NO INTEREST SO FAR

Mobile Payments

14 November 2012 | MOBILE PAYMENTS 15

The future

The market (1)

The market (2)

Business models

What is the most viable business model?

By 2014, an estimated 13 percent of all smartphones

will have built-in NFC capabilities.

*common platform shared by alliance of carriers

and financial institution.

43%Mobile-financial

institution partnership

20%Third-party

intermediation model

7%Mobile carrier

going solo

26%Open federation model*

Financialinstitutiongoing solo

4%

What will be the most popular mobile payment app in the near future?

As merchants, financial institutions, and mobile carriers

work together to figure out the future of the mobile

payment system. People should not be surprised if

their phone starts to replace the contents of their wallet

over the next few years.

27%NFC-enabled

payments

14%Mobile carrier

going solo

13%Java-based payment

application

19%SMS-based payments

16%Embedded credit cards

USSD-based

payments1%

10%Other

Percentage of respondents

Global E-payments: number of transactions (billion), 2009-2013FMost payments are not mobile. Alternative pay-

ments, which includes mobile, will account about

for 8% and 9% in 2013 of e-payments transactions.

Global M-payments: number of transactions (billion), 2009-2013FBanks are still in charge, but the competition is grow-

ing faster. By 2013, the new entrants will have taken

about 8% of the mPayment business, from a base of

0.5% in 2009.

Mobile Payments

Total Alternative Payments

Non-banking competition

Debit, credit, prepaid cards

CAGR‘09-’13F19.1%32.1%

18.1%

Total Non-bank providers Bank providers

CAGR‘09-’13F48.8%67.3%27.6%

Source: Capgemini I World Payments Report 2011, September 2011

Number of transactions (Million)

2009

3,120156

272

473

785

4,587

6,756

9,814

15,284

2010 2011F 2012F 2013F

1,223

2,9644,315

6,2839,029

14,062

Source: Capgemini I World Payments Report 2011, September 2011

Number of transactions (Billion)

2009 2010 2011F 2012F 2013F

14.2 16.819.8

23.427.6

15.10.9

17.91.2

21.31.5

25.42.0

2.7

30.3

Source: Deloitte.com

16 November 2012 | MOBILE PAYMENTS 17

The market

In 2010, the total volume of global credit card payments totaled

$6.2trillion dollars

The number of mobile payment users will reach

212.2million in 2012,

up from 160.5 million in 2011

We are forecasting a market with

448million users

by 2016

Source: Gartner, May 2012

Mobile Payments is a dynamic

trend; and, as such, is drawing a

lot of attention from around the

world. This section takes a look at

selected banks & card companies,

retailers, mobile operators and

technology companies and see

what they are up to.

Globalsnapshots

Mobile Payments

The market (3)

18 November 2012 | MOBILE PAYMENTS 19

TELEFONICA: O2 WALLETA deal with Facebook, Google, Microsoft, and RIM

allows a Telefonica subsidiary customers (O2) to pay

for digital goods and services directly through the

mobile phone bill.

See video

AT&T, T-MOBILE AND VERI-zON WIRELESS: ISISThe Mobile Operators led consortium is offering a

mobile wallet platform. The Isis mobile commerce

network will be available to all merchants, banks, pay-

ment networks and mobile carriers.

Fuente: Pay with Isis

TELIA, TELE2, TELENOR AND 3 (ThE SWEDISh BIG 4 MOS): WYWALLETWyWallet, the mobile wallet joint venture from Telia,

Tele2, Telenor and 3 has been launched with support

for person-to-person money transfers, SMS transit

and ticketing payments, and online shopping. Live

tests of POS payments using NFC are set to start in

July, with full-scale roll-out scheduled for 2013.

Fuente: WyWallet

Mobile OperatorsBanks & Card

Companies

RetailBARCLAYS: PINGITUsers can send and receive money by using just a

mobile phone number.

See video

COMMONWEALTh BANk: kAChING Allows customers to make payments to email, to

Facebook, to mobile, and to PayPass (MasterCard)

contactless terminals.

See video

ChASE: INVESTMENTS & PARTNERShIPS■■■ Square, GoPago (investor)■■■ ISIS (partner)

Source: GoPago

ChASE: QUICkPAYAllows customers to make P2P payments to emails

or mobile phone.

Source: Chase

MASTERCARD: PAYPASS WALLETIt’s a digital wallet service that makes online shopping

safe and easy by storing payment and shipping

information in one convenient and secure place. With

PayPass Wallet, customers simply shop, click and

checkout faster online.

Source: PayPass

STARBUCkS: ANNOUNCES DEAL WITh SQUAREThe coffee giant chooses Square to process pay-

ments in all of its stores and also takes an equity

investment. “The focus is on the experience, and

putting that above everything else,’ says Square

founder Jack Dorsey about Starbucks’s stores.”

FastCompany added, “Square treats payments a

lot like Starbucks treats coffee: by focusing on the

experience around a product that is more or less a

commodity.”

Source: Starbucks

AMAzON MPS Amazon allows its merchant partners to accept mo-

bile payment with its Amazon Mobile Payment Ser-

vice (Amazon MPS). On the other end, Amazon offers

its customers to make payments via mobile devices.

Additionally, Amazon facilitates P2P, sending money

to an email or a mobile number.

Source: Payments. Amazon

20 November 2012 | MOBILE PAYMENTS 21

Technology Companies

GOOGLE WALLET Fast and easy payments, with any card. Google Wallet

now supports all major credit and debit cards, from

Visa, MasterCard, American Express, and Discover.

Google Wallet stores cards online so they’re available

wherever customers go in the real or virtual worlds.

See video

APPLE: PASSBOOkWith the iOS 6, Apple introduced the “Passbook,” a

mobile app which manages boarding passes, tickets,

store cards, and coupons. The leading mobile tech-

nology company is expected to further pursue its

“iWallet” strategy. The company launched Passbook

with it newest OS, the iOS 6. “Apple controls the hard-

ware and the mobile OS, and now with Passbook, it

provides brand app developers the ability to link their

products to a centralized and easy management.”

Source: Forbes | What CIOs Need to Understand about Apple’s Pass-book Service, October 2012.

FACEBOOkFacebook has scrapped its Facebook Credits and

has everyone wondering what they will do in the

mobile payments arena. There is a tremendous

amount of buzz as Facebook continues to grow and

the company is uniquely positioned to completely

revolutionize commerce.

Source: Thedailybeast l June 2012

SQUAREWith Square, small business owners and merchants

can accept card payment using an Android phone,

iPhone, or iPad. Also, the company offers “pay with

Square,” allowing customers to pay with their mobile

device at the POS.

Source: Squareup

PAYPAL hERE Keeping up with its competitor, PayPal recently

launched PayPal Here, allowing customers to accept

cards and also checks. Also allows users to invoice

and track cash payments. Of course, PayPal contin-

ues to win mindshare as it facilitates payments, in-

cluding mobile devices. Recently, a survey revealed

that 8 of 10 consumers would use PayPal’s wallet, if it

were to be available.

Source: PayPal

LEVELUPA new mobile payment network, LevelUp provides a

QR code pay-by-phone application for consumers and

a terminal system for merchants. Recently it raised $21

million ($9 million coming from the venture capital

arm of Deutsche Telekom) in a 2nd round funding.

See video

IzETTLEEurope’s answer to Square, iZettle allows businesses

to take card payments using an iPhone or iPad.

See video

DWOLLAThe company’s product allows anyone with an in-

ternet connection to safely send money to friends

or businesses.

See video

Other notable companies

BANkS & CARD COMPANIES (TEChNOLOGY PROVIDERS TO BANkS)■■■ Telepin Software ■■■ Customer Engagement■■■ Corfire ■■■ MChek ■■■ First Data■■■ Braintree ■■■ JMango

MOBILE OPERATORS (IN APP PURChASES, BILL TO MOBILE COMPANIES)■■■ Bango ■■■ PayOne■■■ Mopay ■■■ Dimoco ■■■ BilltoMobile

MOBILE WALLETS■■■ Serve ■■■ Magtek■■■ MasterCard ■■■ MobilePay ■■■ Cimbal■■■ Tabbedout ■■■ NoMoreCards

TEChNOLOGY COMPANIES POS SOLuTIOnS ■■■ Charge Anywhere■■■ VeriFone ■■■ InTuiT GoPayment ■■■ Roam Data■■■ RedFin network■■■ Moneris Solutions■■■ Corduro■■■ Handpoint

LOyaLTy PROGRaMS■■■ Foursquare■■■ Mogley■■■ Swagg

nFC■■■ DeviceFidelity■■■ Giesecke & Devrient■■■ Ingenico■■■ Oberthur Tecnologies■■■ Vivotech■■■ Xius Innovate Lead

22 November 2012 | MOBILE PAYMENTS 23

The Channel Director of BBVA Bancomer, Mauricio Pallares, highlighted during the presentation that the company is turning to electronic banking to lead it’s strategy to bank the unbanked and promote financial inclusion. With ‘Mobile Money,’ the group intends to extend banking services to 1.5 million customers and reach a volume of 19.5 million transactions in the first year of operations.

BBVA Bancomer Mobile Money results from an interest in developing a modern and innovative bank that offers alternatives that facilitates access to low-cost, financial services while ensuring safety, proximity, availability, time savings, and convenience. The new service launched by BBVA Bancomer is also available in Spain under the name, “dinero móvil.”

BBVA &Mobile PaymentsBBVA Bancomer recently

launched ‘Mobile Money’, a new

service that allows customers

to send money anywhere in

the country using a mobile

phone. This service will

provide access to banking

to 1.5 million users,

contributing to their

financial inclusion.

November 2012 | MOBILE PAYMENTS 25 24

SmartphonaticsAre a group of consumers who are driving the demand for

mobile payments. They aggressively change the way they

shop and pay for products and services.

Based on a global survey of 4,200 consumers (realized in Q1 2012), Aite Group’s research reveals leading mobile payment consumers, the Smartphonatics.

Source: Aite | The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adop-tion in the Americas, EMEA, and Asia-Pacific, May 2012.

4%

31%41%Less important

Very important

Low High

Importance of mPayments

Interest in mPayments ussage

smarphonatics!

24%

“smartPhonatics”The rise of the mobile class

Customer surveys always seems to facilitate

understanding. In this section, we’ll take a look at the

recent survey results related to mobile payments and

some insights they reveal.

26 November 2012 | MOBILE PAYMENTS 27

Are twice as likely than non-Smartphonatics to adopt

mobile payments.

Are driving mobile payment adoption around the world .

Offer clues to creating and meeting demands for mobile

payments (albeit at different rates across the globe).

Represent a country’s mobile maturity level.

Do not necessary use smartphones (it’s all about the behavior).

Will continue to use a myriad of payment options,

including mobile.

Smartphonatics / Key Findings

Source: Aite | The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adoption in the Americas, EMEA, and Asia-Pacific, May 2012

Mobile payment usage

Smartphonatics

Others consumers

has used mobilephone to make

a payment in the last six months.

70%

23%

23%

Who are they?

32%

Gen X

18%

BoomerSenior

36%

Gen y

6%

■■

11% Sweden

10% Germany 31% China16% UK

8% France 27% Italy

34% U.A.E60% India

24% Singapore

16% Australia

42% South Africa

37% Brazil

20% U.S

7% Canada

Where are they?

November 2012 | MOBILE PAYMENTS 29

Whoever creates the most meaningful financial

value bundle for a given customer segment will

win marketshare. The walls between industries

are beginning to breakdown and the market

is turning into a free for all. Can the banks be

competitive?

Cashing in on theopportunities

New business models

Be part of someone else’s value bundle! Banks can collabo-

rate with platform providers for value delivery. For example,

Chase, CapitalOne and Barclays are part of ISIS mobile wallet, a

consortium of mobile operators.

November 2012 | MOBILE PAYMENTS 31 30

forecastInnovation

Mobile Payments is a trend that is gaining a lot of

momentum and, as such, banks and other financial

services companies are watching it closely. In this section,

we’ll take a quick look how banks should understand

mobile payments and how to approach it.

Meaningful Value Bundle

For banks, mobile payments are not an end to it-

self. In a world of customer experience as the new

value proposition, products by themselves do not

offer a competitive advantage. Together with other

building blocks of the business model, banks can

leverage mobile banking and put together a value

bundle that can delight customers and regain their

trust and confidence, such as offering value added

financial products/services; such as helping custom-

ers to save, to invest, and to borrow. In other words,

banks are positioned to provide a meaningful expe-

rience to customers when it comes to addressing

their financial needs/wants, including the ability to

pay for purchases via mobile devices.

Mobile BANKING

Mobile PAYMENT+

+ Mobile WALLETS

+ Value-added financial

PRODUCTS/SERVICES = MEANINGFUL

VALUEBUNDLE

32 November 2012 | MOBILE PAYMENTS 33

Sources: BCG | How Banks Can Take

the Lead in Mobile Payments, June 2012

Take the Long View

Between the seemingly imminent domination

of mobile payments as seen in the news and

knowing that they represent a small percentage of

total payments lies the true relevance this trend.

Mobile payment is a business opportunity for

banks... it’s just a matter of timing.

For now, most banks are dipping their toes to see

how the water is... and don’t seem to be in a hurry

to dive in. In this context, the Boston Consulting

Group in their recent article, how Banks Can Take the Lead in Mobile Payments, offers some in-

sights for banks:

■■■ The value will be in deals and offers, not in pay-

ments.■■■ Cards will not disappear anytime soon.■■■ mPayments are not yet superior to traditional pay-

ment methods.■■■ Banks are the masters of their own destiny.

Insights

The Long ViewThe article also offers suggestions for banks on

how to seize the moment:

■■■ Invest to gain experience.■■■ Form a “house view” on the m-wallet.■■■ Preserve the attractiveness of cards.■■■ Establish security protocols.

Suggestions

34 November 2012 | MOBILE PAYMENTS 35

A list of sources to other useful tools and resources that you may find useful as a supplement to the information offered on the ‘Mobile Payments’ report.

Books & PublicationsAite | The Global Rise of Smartphonatics: Driv-ing Mobile Payment and Banking Adoption in the Americas, EMEA, and Asia-Pacific, May 2012.

Capgemini | World Payments Report 2011, Septem-ber 2011.

Capgemini & EFMA | 2012 World Retail Banking Re-port, April 2012, May 2012.

Celent | Preserving Merchant Relationships When Mobile Comes to the Retail POS, January 2012 presentation

Deloitte | Cell me the money: Unlocking the Value in the Mobile Payment Ecosystem, 2011.

Forrester | 2012 US Mobile Banking Functionality Rankings, April 2012.

Forrester | Consumers Bankers Association Survey, June 2012.

Deloitte | Mobile Payments: a Deloitte Analysis -- Managing change in the “mobi-payscape.”

Edgar, Dunn & Company | Advanced Payments Re-port, March 2012.

In depth On the WebAmazon | Amazon Mobile Payment Service

Barclays | Pingit

Boku | Introducing Boku Accounts. Smarter phone, smarter payments (Vimeo), February 2012.

Boston Consulting Group | how Banks Can Take the Lead in Mobile Payments, June 2012.

Business2Community | Facebook Credit Card As Your New Universal Payment Solution?, July 2012

Chase | QuickPay

Commonwealth Bank | kaching

Daily Beast | Universal Wallet: Facebook’s Very Bright Future

Dwolla

FinExtra

Google | Google Wallet

Google | Introducting Google Wallet (YouTube), Au-gust 2011.

GoPago

Intuit | The Marketplace in Your hand, 2012

ISIS

ISIS (PayWithIsis) | The Isis Vision (YouTube), February 2012.

izettle

Lafferty | QR code to boost mobile payments dra-matically, September 2011 (subcription article).

LevelUp

MasterCard | PayPass

Brandon McGee | Mobile Banking Blog (covers mo-bile payments as well)

Mobile Money

Mobile Payments Today

New York TImes, Technology | PayPal here is More Than a Square Imitator, July 2012

NFC World

Payments News

Pymnts.com: What’s next in payments

PayPal here

PayPal | PayPal’s Global Mobile Solution Unveiled: Merchants Around the Globe (YouTube), May 2012.

PayPal | PayPal here: how It Works (YouTube), March 2012.

SapientNitro | The Future of Money and Mobile Pay-ments (YouTube), June 2012.

Square | Boccalone Gets Paid with Square (Vimeo), December 2011.

Square | Pay with Square

Starbucks | Mobile Apps

Starbucks | New! Starbucks iPhone Apps (YouTube), September 2009.

TechCrunch | Apple Announces New Passbook App To Store Movie Tickets, Retail Cards, And Board-ing Passes, June 2012

Telefonica (O2) | Mobile Wallet

Visa | Visa Digital Wallet (YouTube), May 2011.

WyWallet (Telia, Tele2, Telenor and 3 - the Swedish Big 4)

EFMA | EFMA Global Yearbook 2012, May 2012.

Ernst & Young | Global Banking 2020: Foresight & Insights

Gartner | Forecast: Mobile Payment, Worldwide, 2009-2016, May 2012.

IDC Financial Insights | Consumer Payments Survey, July 2012.

Juniper Research | NFC Mobile Payments — No Con-tact Required, June 2012.

kPMG | 2011 kPMG Mobile Payments Outlook, July 2011.

kMPG | kPMG Banking Outlook Survey, June 2012.

kPMG | Monetizing Mobile: how banks are preserv-ing their place in the value chain, July 2011.

MasterCard | The Mobile Payments Readiness In-dex, May 2012.

Pew Internet & American Life Project | The future of money: Smartphone swiping in the mobile age, April 2012.

36 November 2012 | MOBILE PAYMENTS 37

Have the need to better understand customers and the value bundle? Go back into the core.

“Banks need to seriously consider core renovation.

Core renovation allows modern architecture to

deliver new functionality like dynamic pricing and

product and pricing simulations which help banks

to understand, at an enterprise level, the value of

customer relationships and the potential of any

given product offer or bundle.”

Source: Finextra

Core banking platform

New formats Enterprise 2.0

Which Way to Go?

Most mobile banking apps in the market today are native

apps. That is to say, the kind of apps you purchase from an

app store for a particular mobile platform, such as Apple’s

App Store, Google’s Play, etc. These apps currently provide

the best experiences for customers as it integrates the

functionalities of the smart devices into the mobile banking

app, such as camera or GPS. However, keeping the mobile

banking up to date for each platform can quickly run up

the costs. With the coming of html5, banks can “write once,

publish in many platforms;” not only html5 can save money,

but also decrease time to market. Banks will have more

choices regarding mobile banking applications in the post

PC era. Which way to go?

Source: Finextra | Apps, a continuing debate: html5 vs. native, 12 August 2012

The future of bank channels, as seen by Cisco

Cisco Internet Business Solutions Group Global

Research reveals new ways for banks to prosper in the

omnichannel world: the future of the branch.

The Knowledge Economy is coming

“The knowledge workers’ revolution will come from a re-

newed workstation, and it will live in the cloud, whether

it is public, private or hybrid,” fueled by Desktop as a

Service, Social Desktop or whatever it may be called.

Currently, the challenges enterprises face include:

■■■ Growing number of communication channels: email,

Facebook, Twitter, Skype, RSS, etc.■■■ Dispersed knowledge (internal and external)■■■ Short-term vision of social integration

Source: Forbes | July

Mobile bankingIn this section, readers will find summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry. The summaries were prepared by the editorial board. Further information is made available for each given topic.

Trending issues

■■■ The old branch is dead; long live the

omnichannel branch■■■ Mobile: The promise of embedded

banking in consumers’ lives■■■ Social: The potential is here—when will

banks be ready? ■■■ Video: Seeing is believing

Source: Cisco

25%

7%

22%

30%

25%

20%

15%

10%

5%

0%virtual banking

would not be happy, but

would keep the same deposits

would switch banks

would not be happy and

would reduce deposits

38 November 2012 | MOBILE PAYMENTS 39

20 % of Europeans already make payments with mobile

According a recent report from Forrester, 1/5th

of european consumers. “Banks need mobile

payments to protect their retail payments

businesses from digital disruption.”

Source: Internetretailing | July

The social bubble seems to

be bursting

A quick look at the Global X Social

Media Index Fund pretty much tells

the whole story. The fairy-tale story is

ending and it’s time for social media

companies to begin delivering real

value to consumers and businesses.

Source: Seekingalpha

Mobile payments Digital Marketing

Crowd financeSocial Media

Taken from weekly stat monitoring by Econsul-

tancy, a digital marketing firm:■■■ Between 7.30pm and 9pm more people click on

tablet ads than on mobile ads■■■ A quarter (25%) of respondents said they would be

likely to click interactive ads

Source: Econsultancy

Put your money

where your mouth is

Crowd-sourcing is used to fund innova-

tive farm and food projects. ThreeRevo-

lutions.com offers food and farm enter-

prises an opportunity to raise funds from

appreciative consumers who are eager to

support and connect with their favorite

businesses and really put their money

where their mouths are ...

Source: Marketwatch | July

Trending issues

Interesting digital marketing stats: people use tablets in the evening & interactivity is best in tablets

Sep Oct Nov Dec 2012 Feb Mar Apr May Jun Jul Aug

12.212.412.612.813.013.213.413.613.814.014.214.414.614.815.015.215.415.6

15.8

SOCL (Global X Social Media Index Fund) Nasdaq GM. 2 - Aug - 2012 SOCL (Daily) 11.93

Open 12.07 high 12.10 Low 11.84 Close 11.93 Volume 125.4k Chg -0.15 (-1.24 %)

11.93

40 November 2012 | MOBILE PAYMENTS 41

App ecosystem

New banking concepts

Join & enjoy

New Gizmo era

It’s not a bank; it’s a banking store: The Virgin Money Store The first Virgin Money Store opened its doors in

July, with plans to open some 70 plus more stores

in the future. The “stores” feature free WiFi, iPads and

iMacs, and a “no hard-sell policy” adopted by staff.

“Customers can simply come in, take the weight

off their feet, enjoy a cup of tea and use our free

facilities.”

Source: Thefinancialbrand

“Only” 1.6% of Facebook users spent money on virtual goods

In percentages, it’s pretty paltry. But ... when

expressed in dollars, that becomes over 1 billion dollars. Uh, that would be nine zeros. “The newly

launched Facebook App Center will spur pay-

ments usage. In addition to in-app purchase, app

developers (not only social games developers)

now have the flexibility to charge users one-off flat

fee and/or subscription.”

Source: Forbes | August 2012

Trending issues

They’re finally here: enterprise app stores

Now big software vendors hope to stream-

line the searching and buying process by

following in Apple’s footsteps. SAP and other

enterprise software companies are opening

app stores and hoping that they can monetize

the app ecosystem, such as The SAP Store.

Sources: PC Advisor / EcoHub.

3D printers to go

Couple of MIT students developed

the first truly portable 3D printer

that fits inside a metal briefcase, a

“personal fabrication machine.” In a

short period of time, consumers will

become mobile manufacturers. What

could that enable? Time will tell.

Source: Arstechnica

42 November 2012 | MOBILE PAYMENTS 43

According to Daimler AG, it’s the best

way to get from A to B “Moovel,” brings together entirely different means of

travel and presents the options so that they can be

seen at a glance – transparently, in a user-friendly way

and on an equal footing. The recommendations are

based on the offers of the mobility service providers. A

pilot program is launched in Stuttgart and another one

is planned in Berlin. As of July, the app is available for

download in Apple’s App Store.

Source: Media Daimler

Is there a doctor in the phone?

There is an explosion of mobile medical

apps, beyond the diet and exercise kind.

The president of the American Academy

of Physicians, Glen Stream states, “People

want to be empowered to take care of their

health” and are asking for apps for help.

Current apps include:

■■■ Diabetes monitoring■■■ Heart EKG monitoring■■■ Blood pressure monitor (wrists)■■■ Electrocardiogram device■■■ E. coli sensor■■■ Ear infection checker

Source: USAtoday l August 2012

Smart cities + urban mobility

Health

Trending issues

The following section outlines the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

3D Printing3D printing is a process of making three dimensional solid objects

from a digital file. 3D printing is achieved using additive processes,

where an object is created by laying down successive layers of

material. In other words, 3D printing turns bits into atoms.

Technology trends

“3D printing makes it as cheap to create single items as it is to produce thousands and thus undermines economies of scale. It may have a profound impact on the world as the coming of the factory did. … Just as nobody could have predicted the impact of the steam engine in 1750 —or the printing press in 1450, or the transistor in 1950— it is impossible to foresee the longterm impact of 3D printing. But the technology is coming, and it is likely to disrupt every field it touches.”

Source: The Economist

44 November 2012 | MOBILE PAYMENTS 45

Technology as marketingWHEN TECHNOLOGY BOOSTS MARKETING CAMPAIGNS

Building a product is just the beginning. Once in

the market, users will evaluate if the application

developers have been working on during the

last months is good enough or not. It is true

that this evaluation depends on a never-ending

number of variables - customer satisfaction,

needs covered, look and feel, expectations,

overall experience - which makes the success

almost impossible to predict.

Technology trends

The market for 3D printing and related products

and services are expected to grow because ad-

ditive manufacturing essentially makes the cost of

complexity free (or almost free). Massive personali-

zation doesn’t mean massive costs. In terms of man-

ufacturing, personalization becomes essentially free.

■■■ The cost of 3d printers is dropping dramatically. The cost of basic home 3D printer is dropping to about

$1,000 and a industrial 3D printer to about $10,000.

■■■ The material base is expanding. Plastics, metal

alloys, ceramics, food, etc.

■■■ 3D model creation is being democratized. What

was a complex & expensive is now simple & af-

fordable; and readily accessible.

3D printing comes in all shapes and sizes. For ex-

ample, they can go big or go small and everything

else in between.

Source: Forbes

Even the most simple solution needs a

marketing campaign accompanying

the launch —it may not be mandatory

but it really helps!— Spreading the word

can be done in many different ways, but

surprising the final users is becoming

harder and harder. Google has detected

the opportunity and their teams are creat-

ing amazing examples about how to take

their products to the limit. In other words,

Google uses the technology beyond their

product as the marketing campaign. Let’s

enjoy with a few examples.

3D printed passenger planes

Printing Houses

Fat, even at nano-scale

46 November 2012 | MOBILE PAYMENTS 47

Events

Mobile PaymentsMobile payments are on their way to become a mass phe-

nomenon. Analysts believe that on the next five years most

of the transactions done in physical commerce will be ex-

ecuted through mobile devices.

This payments will shape the way monetary transactions

are seen in the future by the society as a whole, and will

surely transform the clients’ lives.

The Mobile Payments event will be held on November 29th.From 9.30 to 2.00 pm. BBVA Innovation Center

Plaza de Santa Bárbara, 2, 28004. madrid

Check out the videos and photos

of the event in our web

www.centrodeinnovacionbbva.com

Other events

■ INICIADOR Iniciador Madrid with Enrique Burgos “Keys to developing your personal Brand”. Iniciador Madrid dismissed the 2012 season with an interview

to Enrique Burgos (Chief Marketing Officer at QDQ Media) to

discuss the main keys to creating a personal brand.

Date: December 12th, 18.00 in BBVA Innovation Center

■ KNOWSQUARE

know Square Workshop: “Creating an optimal present”. The crisis has led to a further weakness in the already difficult

world of channeling emotions. This workshop aims to fami-

liarize and empower main mindfulness, from the standpoint

of both theoretical and practical.

Date: December 18th at 18:30 BBVA Innovation Center

More info

Videos, pictures and all the info

Technology trends

Play the CubePlayMapsCube is a tilt-to-roll marble game using 3D

and the Google Maps API. The game is a tutorial for

Google Maps but it includes some features that make

it an addictive game. Is it really needed to explain how

Google Maps works? For most of the people probably

not, but it is cool and it will be useful during the maps

war for sure.

Chaos to perfectionThe Google Cultural Institute has created an amazing

3D virtual tour of the Palace of Versailles. This

example shows the true power of Google Chrome

navigator working with WebGL for rendering

interactive 3D graphics without the use of plug-ins.

World Wonders ProjectAnother example created by the Google Cultural

Institute to show how Google Street View works.

Google makes world heritage sites available

to users across the globe by using the Street

View technology including videos, photos and

in-depth information. Users can now explore

the world wonders just as if they were there.

48 November 2012 | MOBILE PAYMENTS 49

BBVA Innovation Center Madrid, is a place where ideas become reality. Would you like to know? You can see the prototypes we created to model the bank of the fu-ture, to understand how we crossed the barrier of convention to seek new sources of value for our customers and to observe new forms of work that we have de-ployed to support our innovation methodology.

The first few days available for the month of December are:

December 4th at 18:00

December 12th at 10:00

December 19th at 18:00

www.centrodeinnovacionbbva.com

Follow us:

www.facebook.com/centrodeinnovacionbbva twitter.com/cibbva

www.youtube.com/user/centroinnovacionbbva www.slideshare.net/CIBBVA

Just make a reservation the day that want to come

Open day

Where we are

Calle de SagastaAlonso

Martínez

Calle de Génova

Plaz

a de

Sta

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bara

Cal

le d

e la

Ben

efic

ienc

ia

Plaza de Sta. Bárbara, 2. 28004 Madrid.

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December

©BBVA2012

BBVA Innovation Edge is the result of a collaborative work done by all the people who are involved in innovation at BBVA Group.

CONTRIBUTORS TO THIS ISSUE:Maria Pilar ÁlvarezAlfonso BeyReyes BolumarJose FernándezAntonio GarcíaEduardo Gabriel GarcíaMaría HormaecheCarmen LópezJavier LópezMarcos MarrodánDavid MartínLuz MartínManolo MoureMarcos PastorJay ReinemannAlicia SánchezJavier SebastianLuis UguinaGustavo VinacuaJose Manuel VillaSang Gu “Phil” YimPedro Francisco Zago

No part of this publication can be reproduced or communicate in any form or by any platform electronic o mechanic, including photocopying, recording o any other system of storage and retrieval, without permission of the publisher, BBVA.

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BBVA Innovation Edge is the first corporate magazine focused on innovation. Innovation Edge aims to explore new trends and technologies that may impact the financial industry, especially retail banking.

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DL: M-38720-2012