CPNI Inc. Proprietary Information Jason Hurlbut VP Global Sales & Business Development CPNI Inc. [email_address] September...
Agenda <ul><li>Disintermediation </li></ul><ul><li>Disruption </li></ul><ul><li>Definition </li></ul><ul><li>Opportunity <...
DISINTERMEDIATION
Who is this bank? <ul><li>157+M customer accounts </li></ul><ul><li>In 190 markets, and support 19 currencies </li></ul><u...
Who is this bank?
Who is this bank?
Disintermediators – many entrants MTO’s Mobile Carriers Mobile/Online Financial Services
DISRUPTION
Disruption <ul><li>“ There are only 2 potentially disruptive movements in the banking industry for the foreseeable future:...
The Most Valuable Piece of Real Estate in the World! Over 3.3 Billion Users
DEFINITION
What is Mobile Commerce? <ul><li>“ Mobile Commerce” </li></ul><ul><ul><li>the ability to perform financial transactions on...
Mobile Banking <ul><li>Selling the same thing, to the same people…. for no more money </li></ul><ul><li>No creation of vir...
Mobile Payments NFC Remote Proximity
The NFC adoption problem… <ul><li>“ The study found around 12% of all mobile phones in circulation … will support NFC by 2...
Mobile Payments Person to Person AND Person to Merchant Person to Merchant ONLY P2P payments are an additional revenue str...
OPPORTUNITY
The Industry is moving ahead…. <ul><li>“… the number of consumers accessing banking services and products via their mobile...
Customer Acquisition is the Name of the Game Youth :  Cell phone penetration greater than credit card ownership Immigrant ...
Who else in the Ecosystem Benefits from Remote Payments? <ul><li>Mobile Carriers </li></ul><ul><ul><li>Increased data, SMS...
Who else in the Ecosystem Benefits from Remote Payments? … and Merchants who have another channel through which to sell
European Mobile Commerce Market - Transactions <ul><li>Assumptions:  </li></ul><ul><ul><li>10% of the Payments market is  ...
Canadian Mobile Commerce Market – Total Payment Value <ul><li>Assumption:  </li></ul><ul><ul><li>Average transaction size ...
Consumers will Pay for the Convenience of Mobile Payments <ul><li>Price sensitivity testing suggests that around 70% would...
Mobile Commerce Revenue Forecasts: Bank Transaction Fees € 500 Million by 2013
SECURITY
Pent Up Demand for Banks to Provide Mobile Payments Source:  P8 What kinds of organisation would you trust to offer this t...
Security Concern – Who will consumers trust? Consumers want  you  to provide the mobile application
CHALLENGE
Leveraging Two International Standards Existing Clearing & Settlement Channels Mobile Carrier  Network
Remote Mobile Purchases <ul><li>Purchases which satisfy: </li></ul><ul><li>Immediate or Impulsive </li></ul><ul><li>AND  I...
WHAT DOES THIS MEAN FOR YOU?
Ecosystem Requirements –  valid for all Key Stakeholders! A) Initial Requirements B) Operational Requirements <ul><li>Busi...
Why is this market important? <ul><li>Provides de novo high growth transaction market </li></ul><ul><li>NEW incremental re...
Bank Audiences – Mobile Strategy Wealth Management Private Client Card Issuing (Visa) Debit/Core Banking Retail Bank Self ...
The Big Question…. <ul><li>Can the mobile payments market mature without you? </li></ul>
CPNI Inc. Proprietary Information Thank You Mobile Commerce  The Opportunity is Now…
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CPNI Mobey Forum Mobile Payment Trusted Service Provider Sept 23 2008

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Mobey Forum quarterly meeting Sept 23, 2008. The opportunity for banks and the entire mobile payment ecosystem created by focusing on remote mobile payments.

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  • IBM Confidential
  • CPNI Mobey Forum Mobile Payment Trusted Service Provider Sept 23 2008

    1. 1. CPNI Inc. Proprietary Information Jason Hurlbut VP Global Sales & Business Development CPNI Inc. [email_address] September 23, 2008 Mobile Commerce The Opportunity is Now…
    2. 2. Agenda <ul><li>Disintermediation </li></ul><ul><li>Disruption </li></ul><ul><li>Definition </li></ul><ul><li>Opportunity </li></ul><ul><li>Security </li></ul><ul><li>Challenge </li></ul><ul><li>What does this mean for you? </li></ul>
    3. 3. DISINTERMEDIATION
    4. 4. Who is this bank? <ul><li>157+M customer accounts </li></ul><ul><li>In 190 markets, and support 19 currencies </li></ul><ul><li>Merchant Services growth rate of 57% per annum </li></ul><ul><li>Record Total Payment Volume (TPV) of $14.9 billion in Q2-08 </li></ul><ul><li>Advised on banking strategy by ex-head of retail banking for Lloyds TSB and ex-chairman of Master Card UK </li></ul><ul><li>Brand name widely known and trusted </li></ul><ul><li>Provide key ring sized authentication devices for customers use alongside regular user IDs and passwords. </li></ul><ul><li>Award winning Anti-Fraud capabilities </li></ul>
    5. 5. Who is this bank?
    6. 6. Who is this bank?
    7. 7. Disintermediators – many entrants MTO’s Mobile Carriers Mobile/Online Financial Services
    8. 8. DISRUPTION
    9. 9. Disruption <ul><li>“ There are only 2 potentially disruptive movements in the banking industry for the foreseeable future: </li></ul><ul><li>E-Invoicing and </li></ul><ul><li>Mobile Payments” </li></ul><ul><li>Eric Sepkes, Former Citibank VP and Director of Global FI Strategy, Financial Services Club, London, May 2008 </li></ul>
    10. 10. The Most Valuable Piece of Real Estate in the World! Over 3.3 Billion Users
    11. 11. DEFINITION
    12. 12. What is Mobile Commerce? <ul><li>“ Mobile Commerce” </li></ul><ul><ul><li>the ability to perform financial transactions on your mobile phone </li></ul></ul><ul><li>Comprised of two components: </li></ul><ul><ul><li>Mobile Banking </li></ul></ul><ul><ul><li>Mobile Payments </li></ul></ul><ul><ul><ul><li>Person to Person </li></ul></ul></ul><ul><ul><ul><li>Person to Merchant </li></ul></ul></ul><ul><li>The majority of solutions are focused on Mobile Banking. </li></ul>
    13. 13. Mobile Banking <ul><li>Selling the same thing, to the same people…. for no more money </li></ul><ul><li>No creation of viral growth… </li></ul><ul><li>“ Yet one in 10 m-banking customers at Charlotte-based Wachovia Corp . are new to the bank!” </li></ul>
    14. 14. Mobile Payments NFC Remote Proximity
    15. 15. The NFC adoption problem… <ul><li>“ The study found around 12% of all mobile phones in circulation … will support NFC by 2011.” </li></ul><ul><li>Juniper Research 2007 </li></ul>
    16. 16. Mobile Payments Person to Person AND Person to Merchant Person to Merchant ONLY P2P payments are an additional revenue stream providing a superior business case NFC relies on phone hardware advances and the uptake of merchant PoS devices NFC Remote Proximity
    17. 17. OPPORTUNITY
    18. 18. The Industry is moving ahead…. <ul><li>“… the number of consumers accessing banking services and products via their mobile phones will reach 816 million by 2011, a tenfold increase on the number using such services in 2007…. </li></ul><ul><li>… the annual number of global mobile banking transactions will rise from 2.7 billion in 2007 to 37 billion by 2011….” </li></ul><ul><li>Mobile Financial Services: Banking & Payment Markets 2007-2011 Juniper Research </li></ul>
    19. 19. Customer Acquisition is the Name of the Game Youth : Cell phone penetration greater than credit card ownership Immigrant workers : Growing at 12+% per annum Everyone : Those without a cheque or credit card handy, or not near a card terminal – practically every customer at some time The Highly Mobile : Use PC banking from the hotel/airport
    20. 20. Who else in the Ecosystem Benefits from Remote Payments? <ul><li>Mobile Carriers </li></ul><ul><ul><li>Increased data, SMS and voice revenue </li></ul></ul><ul><ul><li>Lower cost and increased frequency of mobile top-ups </li></ul></ul><ul><ul><li>Sell content without drawing down on a prepaid account, more high margin revenue on core services </li></ul></ul><ul><ul><li>Mobile couponing - charge merchants </li></ul></ul><ul><ul><li>Mobile advertising - charge merchants </li></ul></ul><ul><ul><li>Incents users to upgrade handsets </li></ul></ul><ul><ul><li>Promotes consumers’ use of other data applications through familiarity </li></ul></ul><ul><ul><li>Complements proximity payments but better </li></ul></ul><ul><ul><li>Cash distribution through retail outlets </li></ul></ul>
    21. 21. Who else in the Ecosystem Benefits from Remote Payments? … and Merchants who have another channel through which to sell
    22. 22. European Mobile Commerce Market - Transactions <ul><li>Assumptions: </li></ul><ul><ul><li>10% of the Payments market is suitable for mobile payments </li></ul></ul><ul><ul><li>P2M Transactions account for Debit and Credit card, and Direct Debit conversion transactions </li></ul></ul><ul><ul><li>Conversion rates to Mobile Commerce: 1.25% - 2009, 2.5% - 2010, 4.5% - 2011, 7.5% - 2012, 11.0% - 2013 </li></ul></ul>1.25% of 10% of the Market
    23. 23. Canadian Mobile Commerce Market – Total Payment Value <ul><li>Assumption: </li></ul><ul><ul><li>Average transaction size is €40.00 for Person to Person, €50.00 for Person to Merchant Remote </li></ul></ul>€ 23.7 Billion by 2013
    24. 24. Consumers will Pay for the Convenience of Mobile Payments <ul><li>Price sensitivity testing suggests that around 70% would consider usage for the tested scenarios if a fee were payable </li></ul><ul><li>The table illustrates likely adoption levels at various price points after excluding those who would never use the service </li></ul>Source: GFK research, March 2006 Consumers pay ATM Fees in Many Countries >0p 25p 50p £1 £2 £3 Scenario 1 – Paying £100 to friend/relative 83% 78% 70% 61% 41% 24% Scenario 2 – Paying £100 bill to organisation 78% 71% 64% 51% 36% 22% Scenario 3 – Paying £100 to tradesman 77% 69% 61% 51% 30% 18%
    25. 25. Mobile Commerce Revenue Forecasts: Bank Transaction Fees € 500 Million by 2013
    26. 26. SECURITY
    27. 27. Pent Up Demand for Banks to Provide Mobile Payments Source: P8 What kinds of organisation would you trust to offer this type of service to you? – GfK NOP March 2006 93% of all respondents felt that the most trusted provider of this service would be a bank – most secure! How long will this last with disintermediators fighting for this market?
    28. 28. Security Concern – Who will consumers trust? Consumers want you to provide the mobile application
    29. 29. CHALLENGE
    30. 30. Leveraging Two International Standards Existing Clearing & Settlement Channels Mobile Carrier Network
    31. 31. Remote Mobile Purchases <ul><li>Purchases which satisfy: </li></ul><ul><li>Immediate or Impulsive </li></ul><ul><li>AND Inconvenient to use another channel </li></ul>
    32. 32. WHAT DOES THIS MEAN FOR YOU?
    33. 33. Ecosystem Requirements – valid for all Key Stakeholders! A) Initial Requirements B) Operational Requirements <ul><li>Business Case </li></ul><ul><li>Transparency of Ecosystem </li></ul><ul><li>Mass-market potential </li></ul><ul><li>Open standards </li></ul><ul><li>Added new value </li></ul><ul><li>Service adaptability </li></ul><ul><li>Business Sustainability </li></ul><ul><li>Retain Control & Management of your own business </li></ul><ul><li>Branding </li></ul><ul><li>Clarification of roles </li></ul><ul><li>Risk management </li></ul><ul><li>Consumer freedom for change </li></ul>C) Usability Requirements D) External Requirements <ul><li>International Usage </li></ul><ul><li>Service Integrity </li></ul><ul><li>Service Availability </li></ul><ul><li>Easiness of enrolment </li></ul><ul><li>Clear customer service </li></ul><ul><li>Service scope </li></ul><ul><li>Legal requirements </li></ul><ul><li>Seamless Audit-trail </li></ul><ul><li>Security demands </li></ul><ul><li>Customer authentication & transaction non-repudiation </li></ul>
    34. 34. Why is this market important? <ul><li>Provides de novo high growth transaction market </li></ul><ul><li>NEW incremental revenue opportunity </li></ul><ul><li>Customer acquisition tool – attract the youthful unbanked, new residents </li></ul><ul><li>Increased “share of wallet” from existing customers </li></ul><ul><li>Improves customer retention “stickiness” </li></ul><ul><li>Attract new merchants </li></ul><ul><li>Increase transactions with existing merchants </li></ul><ul><li>Increases Interchange volume from existing issued cards </li></ul><ul><li>Quickly Curtails Disintermediation </li></ul>
    35. 35. Bank Audiences – Mobile Strategy Wealth Management Private Client Card Issuing (Visa) Debit/Core Banking Retail Bank Self Service Banking Remittances Merchant Services Payments
    36. 36. The Big Question…. <ul><li>Can the mobile payments market mature without you? </li></ul>
    37. 37. CPNI Inc. Proprietary Information Thank You Mobile Commerce The Opportunity is Now…

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