mobile payments: the convergence of financial services and digital businesses
TRANSCRIPT
Mobile payments: the convergence of financial services and digital businesses13 September 2013
osborneclarke.com
Welcome & Housekeeping
Fire rules In the unlikely event of the Fire Alarm sounding, you must first listen to the message over the tannoy.
If the message informs everyone to evacuate, please do so immediately in an orderly manner via the nearest safe exit,
which is just along the corridor.
Stay with me and I will take you to the Fire Assembly Point, which is the:
Churchyard of St Johns Zachary, located at the junction of Noble Street and Gresham Streetoutside the Lloyds TSB building.
You are welcome to use our wireless network while you are visiting us.
Our network is OCWIFI
Our password is ocwifiuk386
We will be live Tweeting from @OC_Payments with the hashtag #mpay2013
If you experience any problems with wireless access, please talk to our receptionist.
2
osborneclarke.com
Mobile Payments – Players and participants
osborneclarke.com
Mobile Payments - Predictions
• Consumers who say they have purchased items through their mobile phone:• UK – 52%• Germany – 57%• Spain – 46%
• Visa predicts 52 million mobile payments every month across Europe by end of 2013 and number of contactless terminals to reach 1 million
• By the end of 2017, Forrester Research predicts that U.S. mobile users will spend $90 billion via mobile payments
• Gartner forecasts global mobile transaction market worth $721 billion and more than 450 million users by 2017
Adrian Kamellard - CEOThe Payments CouncilMobile Payments Service
13th September 2013
Mobile Payments SeminarOsborne ClarkeMilon Veasey
Head of Mobile Solution Specialists
September 2013
The consumer environment is evolving rapidlySocial Media
Increased desire to interact with all organisations using social media and
immediate communication
47% of customers likely to purchase from a brand they follow via social
media sites4
Immediate Account Based
Settlement
Consumers move to debit card usage and the UK industry move to
FPS
Online card spend by debit card was greater than that by credit for
the first time in 20122
Local
Consumer accessing whenever and wherever they want through multiple
channels
25% of all web traffic in Dec. 2012 came from mobile devices1
Instant Notifications
Growing consumer need for real-time and up-to-date payment information
On average, Barclays mobile banking clients access their app 3 times more
than online and 6 times more than they visit a branch 6
Technology Platform Adoption
Meteoric adoption of consumer Smartphone technology
51% of adults in the UK use a smartphone3
Mobile Buying
The coming of age for mobile retail
Mobile as a retail channel forecast to grow by c.55% YoY to 2016, compared with 8% for online
channels and 1.6% for physical stores5
References: 1(IBM 2012); 2 Payments Council , UK Payment Markets 2012; 3OFCOM Communications Market Report 2013; 4UK eRetailer; 5The future of m-commerce – verdict consulting 2011; 6Barclays internal analysis
7 | Barclays Pingit for corporates | September 2013
Both consumers and businesses have new and emerging payment needs
• Developing and managing mobile (and omni-channel) channel strategies
• Managing cash flow• Responding to consumer
change in a cost effective way
• Managing delays and costs associated with processing of cash and cheques
• Reconciliation of payments• Creating differentiation in the
minds of consumers.
Businesses
• Ease of use for quick, simple & secure payments
• Simplicity and being able to make payments whenever and wherever they are
• Transparency and lack of an up to date view on cash position
• Convenience to take advantage of the ubiquity of smartphones – but no way of using them to make payments.
Consumers
8 | Barclays Pingit for corporates | September 2013
Barclays Pingit – the journey so far
Send now
Transfer money using only a phone number
Launched February 2012
Pay now
Settle a bill or invoice, easily and instantly and make Gift Aid enabled donations
Launched May 2012
Buy now
A range of m-commerce solutions to pay for goods and services on the go
Launching September 2013
9 | Barclays Pingit for corporates | September 2013
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
September 2013
10
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc. 11
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc. 12
Boku vs. Other Payment Methods
• More expensive• Slower to Settle• Data quality inconsistent• Regulatory constraints• Implementation
complexity↓
• Boku Merchants put up with it because they sell more stuff
User Reach
Ease
of
Use
onlin
e
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
CHANGING THE WAY THE WORLD USES MONEY
Steffan AquaroneCEO, Droplet
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
CHANGING THE WAY THE WORLD USES MONEY
• With smartphone ownership set to reach 31m units in UK (60%+ market share), mobile expected to extend to payment imminently
• Mobile payments will accelerate at the rapid pace of web development.
• Retail sector accounts for roughly 8% of the UK’s GDP. Equates to £300bn every year in retail sales being transacted by cash or card.
• The payment component in an exchange of value in this space is fundamental and simple - whilst opportunities for customer relationship extension are infinite.
• Non-bank payments expected to reach 10% worldwide by end of 2013.
• Existing mobile payments innovations have been almost entirely focused on “credit cards on your phone”, maintaining the status quo and placing huge limits on innovative capacity.
• An end-to-end payment method delivered in 5 seconds on the web free at the point of use can expect to seize the lion’s share of the this market
THE MARKET FOR MOBILE PAYMENTS
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
WHY DROPLET IS UNIQUE
CHANGING THE WAY THE WORLD USES MONEY
• API allows developers to integrate Droplet into existing systems.
• Merchants can offer loyalty, customised marketing and mobile commerce options to their customers in seconds.
• They can track, interact and directly engage with them all from within the Droplet space and without the need for a separate app.
• The ‘Pay with Droplet’ button means that merchants can even add one-touch mobile payments to their existing apps.
• Droplet has quickly superseded such technologies as NFC and all similar proprietary offerings which require hardware.
• Users are enjoying bespoke, timely and relevant messages within their mobile journey without any interruption for payment.
© 2013 Wirecard AG 17
Wirecard’s Role in the Ecosystem
ESTABLISHEDBANKS
MERCHANTS
MOBILE NETWORK OPERATOR
CONSUMER
© 2013 Wirecard AG 18
Web is the New Offline
Mobile is the New Online
© 2013 Wirecard AG 19
and both need payment!
© 2013 Wirecard AG 20
Mobile Payment is diverse!
with – on - at
© 2013 Wirecard AG 21
Technology for payment with mobile (NFC) is
ready!
© 2013 Wirecard AG 22
but are the consumers
and merchants ready?
© 2013 Wirecard AG 23
ESTABLISHEDBANKS
MERCHANTS
MOBILE NETWORK OPERATOR
OVER THE TOPPLAYER
And … the ecosystem is still developing
© 2013 Wirecard AG 24
The key questions?
„Where is the business case?“
AND„Who owns the user?“
© 2013 Wirecard AG 25
Mobile Payment must offer more than payment!
Payment is just THE core layer for further services.
© 2013 Wirecard AG 26
The race just started!
© 2013 Wirecard AG 27
And the winner will be
YOU
Break
A View from the USADevelopments and trends in
Mobile in Payments
John de LavisManaging Partner
Greenings International
Mobile Payments: Environment
• Increasing convergence of channels• Changing structure of the market• Multiplication of offerings• Merging of technologies with platforms• Formation of multiple relationship structures• Growing role of non-banks• A number of issues emerging across the value chain• A growing need for universal interoperability
standards
Stakeholders and their drivers
• MNOs• OEMs• Operating system providers• Payment processors• Alternative payment system providers• Card and ACH networks• Financial Institutions• Merchants• Consumers• Regulators
Value chain• Security and fraud
• Merchant cost efficiency
• Incremental services
• Revenue and the business model
Conclusions• Open wallet is likely to evolve• Despite high cost NFC will prevail in the long
term• Payment will only be one thread in consumer
and merchants models• Existing payment rails will be used but ACH
will become very important• Standards for interoperability will emerge• Mobile will transform the payments
landscape
© 2013 Wirecard AG 34
Experiences and
the European
Perspective
© 2013 Wirecard AG 35
There is a difference between
„I can“
AND
„I do“
© 2013 Wirecard AG 36
Legal and regulatory frameworks are varying
and challenging!
© 2013 Wirecard AG 37
Where Telco meets Banks!
Similiarities
Differences
Difficulties
© 2013 Wirecard AG 38
What can we expect in the near future?
Ecoystem will settle
Launches, launches, …
Services and Shaping
© 2013 Wirecard AG 39
What do we need for success?
The whole ecosystem
And services, services, …
osborneclarke.com
Mobile Payments – Access/AuthenticationMobile phone as initiator and number as proxy
Payer Payee
Payer's PSP Payee's PSP
Sale of goods and services
Customer Ts&Cs
Payment system
Mobile AppTs&Cs
Mobile phone number proxy
database
Customer Ts&Cs
Mobile AppTs&Cs
osborneclarke.com
41
Mobile Payments – ContactlessTypical structure for partnering arrangements
Thank you.Please join us for refreshments.