Together We Can Change How We Pay

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Key note on the mobile commerce opportunity, mobile payments as game-changing technology, and PayPal X developer platform (Nov 2009).

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  • Good afternoon everybody, I am Robbert de Haan and am excited to be on stage. I have a background since 2000 in mobile internet services, developing and launching innovations with Orange, T-Mobile, and Vodafone, and I am now heading up marketing at PayPal Benelux. I hope you have taken a cup of coffee after lunch, because we really have an interesting story: about the (real) mobile revolution, why PayPal has opened up it’s global payments platform with PayPal X, and what exactly that means for mobile commerce.
  • But first of all let’s briefly remind ourselves where we are coming from. And take a step back in history but not so long ago. Who remembers the Berlin Wall? Democracy vs. communist regime.
  • In 1989 the unthinkable happened: the walls came down and the democratisation process across Eastern Europe started. The analogy with the world of mobile is obvious. ‘Walled gardens’ and relatively small revenue shares for content providers/ software developers were reality late 90’s/ early 2000. However through the force of the internet services started to come ‘over-the-top’, also these walls came tumbling down around 2005/6. Let’s pick up the mobile story from there.
  • I’ll start to talk about the mobile commerce opportunity and why I think you should start mobilizing and monetizing your business if you haven’t done it yet. Second we will go over the different ways you could integrate PayPal into your mobile web or into your applications with the Mobile Embedded Payment Toolkit which was announced at Innovate 2009. Then we share a partner example, ShopSavvy which is a mobile comparison site, that we started to work with to embed our APi and test the Mobile Embedded Payments kit.
  • If you work in or you follow the mobile industry, you probably know that these are exciting times. After years of hype about 3G and mobile internet, I remember in 2000 when I was launching the 1 st mobile internet services for T-Mobile across Europe that we all believed that people would start browsing the web and downloading apps in a matter of a couple of years. Well now, finally the mobile internet revolution is happening. In the last couple of years 4 trends have been accelerating and driving the mobile internet revolution. The first one is the appearance of more powerful devices that can run multithread applications, have large touch displays and advanced media capabilities. The second one is the launch of rich software platforms like the iPhone, Android and WebOS that take full advantage of those powerful devices and create rich internet experiences The third one is the continuous rollout of 3G/4G networks that are enabling the delivery of those rich internet experiences And finally those mobile rich internet experiences are becoming more affordable as carriers are heavily subsidizing the smartphones and are offering more transparent and affordable dataplans with the objective to offset voice revenues decline with data revenues. The result is a booming smartphone adoption with about 180m smartphones that will be shipped in 2009 of which about half of them in NA and Europe. Not only people are buying smartphones, but mobile internet is becoming part of consumers life with about 26m in the US checking news and 14 m visiting social networking sites from their mobile device every day. The smartphone is also used as a computing and gaming platform with about 30-40 apps downloaded in a year and 80% of people checking app stores for new apps every week. This revolution just started and the nice thing is that those trends will continue for at least a few years. Some device vendors like Samsung believes the total number of smartphones will raise to about 500m by 2012.
  • And these are the best times to be a mobile developer because as you might have noticed by the iPhone ads the key differentiator for selling a device has now become the software ecosystem. So everybody is focusing on developers, developers, developers. At this stage the app stores have displaced the operator walled gardens and changed the old economics. Now a developer no longer has to go through a long business development and certification process with an operator but can drop his app on an app store and start getting paid 70% or 80% share and the opportunity to sell apps will become a sizable in the next few years.
  • But even though the appstore is important and in fact PayPal is accepted on iTunes and it is the only way to pay for Blackberry Appworld, when we talk about the mobile commerce opportunity it is not just about the app stores or the mobile digital content, but it is about what of much bigger online and physical commerce will move to mobile in the next few years. Japan which is a few years ahead of the rest of the world in mobile internet is clearly showing the way with mobile commerce reaching over 30% of all mobile internet revenues vs. the current 11% of the ROW mostly comprising of digital content.
  • But we are experiencing tremendous progress in mobile commerce from what we see on the eBay mobile app where PayPal is integrated. In 9 months the ebay iPhone app facilitated sales for $380 m dollars. This is the proof that once the consumers are presented on a smartphone a user friendly transactional experience and a trusted brand they will respond. We also see great progress on our side in general where the number of PayPal mobile transactions has grown 10X in the last year. Very encouraging for mobile commerce is also the strong popularity of online comparison shopping apps like ShopSavvy and Red Laser in the Android Market and in the iPhone appstore.
  • Hopefully I got you even more excited about our opportunity so now I will go over to the current and future PayPal mobile integration options.
  • PayPal offers integration solutions that span across : physical goods and digital goods across platforms (SMS, mobile web, clients)
  • For merchants/ developers with a WAP site that want to accept payments or donations. These can also be triggered from an SMS (marketing efforts or in-person). Currently available in Sandbox. Documentation is in developer portal.
  • The same functionality can be embedded within mobile applications using web kits that are part of the newer smart phones
  • We are also working on being able to re-skin these flows based on the device that you are on. A pilot with eBay is currently underway for the iPhone platform.
  • Billing agreements can be set up online or on the phone. These agreements can then be used on the phone (as Apple does) as long as security and UI requirements are met. These are the same agreements used with PayPal’s Adaptive Payments (with the same vetting requirements)
  • Now let’s look at a partner example which is ShopSavvy, a leading mobile comparison player, and their 1st experiences with testing the Mobile Embedded Payments toolkit
  • And to end the analogy, this is 14 days ago the Fall of the Berlin Wall Anniversary, 20 years on after it came down (no photo retouch). Together we can change the way we pay.
  • Together We Can Change How We Pay

    1. 1. TOGETHER WE CAN CHANGE HOW WE PAY Robbert de Haan, Marketing Director Benelux iCE Amsterdam, European Conference for Mobile Platforms & Strategies, 26 November 2009
    2. 2. Let’s briefly remind ourselves where we are coming from. And take a short step back in history. Who remembers the Berlin Wall? Democracy vs. communist regime.
    3. 3. In 1989 the unthinkable happened: the walls came down and the democratisation process across Eastern Europe started. The analogy with the world of mobile is obvious. ‘Walled gardens’ and relatively small revenue shares for content providers/ software developers were reality late 90’s/ early 2000. Through the force of internet services coming ‘over-the-top’, also these walls came tumbling down around 2005. Let’s pick up the mobile story from there .
    4. 4. AGENDA <ul><li>The Mobile Commerce Opportunity </li></ul><ul><li>PayPal’s Mobile Integration Options </li></ul><ul><li>Partner Example - ShopSavvy </li></ul>
    5. 5. THE (REAL) MOBILE INTERNET REVOLUTION Booming smartphone adoption North American & European Smartphone Shipments (m) NA EU US Daily Mobile Unique Users (millions) News Social networking Mobile internet becoming part of consumers daily life Powerful Devices Smartphones for the Masses 3G/4G Network Rollout Yearly Average Application Downloads/User Rich Software Platforms Source: Comscore, Strategy Analytics
    6. 6. DEVELOPERS – CENTER OF THE ECOSYSTEM The software ecosystem is the new differentiator. Application stores are fueling application sales. Mobile Applications Worldwide Spending ($B) Business Consumer Source: Piper Jeffrey
    7. 7. Japan shows the way. MOBILE COMMERCE – WHERE IS THE MONEY? Mobile Digital content $24B Online Physical goods & services $600B Mobile Applications $3B . Retail $5T Global 2008 Sales Mobile Commerce Mobile Data Access Mobile Advertising Mobile Internet Revenues Mix Source: McKinsey, Informa, Morgan Stanley Amazon.com WallMart vCast
    8. 8. MOBILE COMMERCE – READY TO EXPLODE 4 million downloads $380 million in sales (Jan-Sep 2009) Number of Mobile Transactions 10X Comparison shopping applications are the top downloads. Red Laser
    9. 9. AGENDA The Mobile Commerce Opportunity PayPal’s Mobile Integration Options Partner Example - ShopSavvy
    10. 10. TYPES OF MOBILE INTEGRATIONS Entirely client-based experience leveraging APIs and plug & play interface Clients (Mobile Embedded Payment Toolkit) Utilized WAP infrastructure and reskinning techniques for seamless integration Mobile Web (eBay) Web onboarding for a mobile billing agreement Pre-approval (Apple)
    11. 11. MOBILE WEB CHECKOUT
    12. 12. IN-APPLICATION CHECKOUT VIA MOBILE WEB
    13. 13. IN-APPLICATION CHECKOUT VIA MOBILE WEB
    14. 14. ONLINE BILLING AGREEMENTS <ul><li>Billing agreements can be set up online or on the phone. </li></ul><ul><li>Agreements can then be used on the phone. </li></ul><ul><li>These are the same agreements used with the PayPal X developer platform (Adaptive Payments APIs). </li></ul>
    15. 15. <ul><li>Mobile Embedded Payments Toolkit – COMING in Q1 2010 </li></ul><ul><ul><li>Creates an easy way to add PayPal to iPhone applications </li></ul></ul><ul><ul><li>Customers never leave the application to pay </li></ul></ul><ul><ul><li>No worries about collecting or handling financial information </li></ul></ul><ul><li>Example use cases </li></ul><ul><ul><li>Restaurant chain application for ordering and payment </li></ul></ul><ul><ul><li>Plumbing service application for booking and paying </li></ul></ul><ul><ul><li>Charity application for donation collection </li></ul></ul>CLIENT INTEGRATIONS
    16. 16. AGENDA <ul><li>The Mobile Commerce Opportunity </li></ul><ul><li>PayPal’s Mobile Integration Options </li></ul><ul><li>Partner Example - ShopSavvy </li></ul>
    17. 17. SHOPSAVVY <ul><li>ShopSavvy is a popular comparison shopping application on Android and iPhone http://www.youtube.com/watch?v=8jmWSbqa6Lk&NR=1 </li></ul><ul><ul><li>1.2M active users a month </li></ul></ul><ul><ul><li>600K~1M scans per day and growing </li></ul></ul><ul><ul><li>Main categories: consumer electronics (50%), Books/DVDs (25%), personal care/groceries (25%) </li></ul></ul><ul><ul><li>Planning to shortly launch on BlackBerry, Palm, and Windows Mobile devices </li></ul></ul><ul><li>ShopSavvy app with PayPal integration planned to go live before end of year </li></ul><ul><ul><li>Top eCommerce brands already integrated and adding new large merchants constantly </li></ul></ul><ul><ul><li>Launch with ShopSavvy internationally (NB. half of ShopSavvy users are in major EU countries) </li></ul></ul>
    18. 18. USER EXPERIENCE – comparison shopping Bar code scan Scanned item details (online and local prices, reviews, etc.) Online price comparison (with ability to pay with PayPal) Selected item & merchant details (PayPal the only payment method!)
    19. 19. USER EXPERIENCE – comparison shopping Login Payment review Payment Complete PayPal account creation Existing PayPal users New PayPal users
    20. 20. CONCLUDING THOUGHTS <ul><li>Mobile commerce is ready to explode, and not just for applications. </li></ul><ul><li>PayPal enables developers, entrepreneurs, innovation teams and offers mobile payments integration solutions that span across physical and digital goods, and across platforms. </li></ul>
    21. 21. This is the Fall of the Berlin Wall Anniversary, 20 years after it came down. Now is our turn to break down the walls in mobile commerce. Together we can change the way we pay.
    22. 22. MORE INFORMATION <ul><li>Robbert de Haan– [email_address] </li></ul><ul><li>Twitter:  @robbertdehaan </li></ul><ul><li>PayPal X: www.x.com </li></ul><ul><li>Come and join us 9-10 December at: </li></ul>Thank you!
    23. 23. FAST FACTS <ul><li>194M accounts </li></ul><ul><li>190 countries and 24 currencies </li></ul><ul><li>9% of worldwide ecommerce </li></ul><ul><li>17 country offices across the world, HQ in San Jose, USA </li></ul>
    24. 24. PayPal MOBILE COMMERCE OFFERING Digital Goods Physical Goods and Services Mobile Web Mobile Web Checkout Clients API embedded in partner application store/ platform <ul><li>In-application mobile web checkout </li></ul><ul><li>Web pre-approval </li></ul><ul><li>Mobile Embedded Payment Toolkit </li></ul>

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