Contactless & NFC Ecosystem in Turkey & Yapi Kredi Products/Perspective

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Contactless & NFC Ecosystem in Turkey & Yapi Kredi Products/Perspective

  1. 1. Turkish Contactless & NFC Ecosystem Yapı Kredi Perspective & Products June 21, 2012 Burak ILGICIOGLU
  2. 2. Agenda 2 • Turkey Card Payments Overview • Turkish NFC Ecosystem • Yapı Kredi NFC Architecture & Products
  3. 3. About Yapı Kredi 3 • Owned equally by Koç Holding and UniCredit • 17 K+ employees • 900+ branches • 2,500+ ATMs • 7 M+ credit cards • 7 M+ debit cards • 450K+ POS Terminals
  4. 4. Turkey Overview 4 75 M 35 M internet users 30 M+ 1 M+ 4 M+ Ranks 17th biggest economy in the world17 14,615 USD GDP per capita Member of OECD & G20 1 out of 5 card user is E-Commerce User
  5. 5. Turkish Card Payments Market Overview 5 Third in Europe Fourth in Europe Average annual growth rate = 9% 0 20 40 60 80 100 120 140 2005 2006 2007 2008 2009 2010 2011 Credit Cards Debit Cards Total Credit 51 M Debit 82 M Total 133 M
  6. 6. Turkish Card Payments Market Overview 6 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 2005 2006 2007 2008 2009 2010 2011 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000 2005 2006 2007 2008 2009 2010 2011 Number of POS terminals Number of ATMs 1,9 M 32,5 K Average annual growth rate = 10% Average annual growth rate = 14%
  7. 7. Agenda 7 • Turkey Card Market • Turkish NFC Ecosystem • Yapı Kredi NFC Architecture & Products
  8. 8. Turkish Contactless Market Overview 8 6 M 2005 14 60 K Start of contactless projects Number of banks issuing contactless products Number of contactless enabled POS terminals Number of contactless cards issued
  9. 9. Turkish Mobile & NFC Overview 64 M 20083 87 % Number of mobile subscribers Mobile penetration Number of MNOs Start of NFC trials
  10. 10. Turkish NFC Ecosystem Customers MNOs Banks NFC Handsets Merchants Regulators Solution Providers
  11. 11. Turkish NFC Ecosystem - Customers • 6 M current contactless card customers • MNOs and banks share the NFC customers • User experience for enrolling / installing / transacting are the key issues Customers
  12. 12. Turkish NFC Ecosystem - Handsets • Very limited number of handset available • NFC does not come with feature phones • Low smartphone penetration NFC Handsets
  13. 13. Turkish NFC Ecosystem - MNOs • All 3 MNOs are actively involved in NFC projects • MNOs’ strategy is based on mobile wallets • All 3 MNOs have their own TSMs • No cooperation like ISIS • MNOs consider NFC as a loyalty tool & value added service, not as a revenue generator • Multiple banks • Not just for payment; – Transport ticketing – Access control – Location based campaigns – Couponing – Smart posters – Loyalty programs Mobile Wallets MNOs
  14. 14. Turkish NFC Ecosystem - Banks • Enablers of contactless payment infrastructure • Not just SIM centric model • Mobile is more than just NFC; – Mobile banking – Mobile money transfer Banks
  15. 15. Turkish NFC Ecosystem - Merchants • Banks provide POS terminals and contactless readers to merchants • Essentially part of bank infrastructure • Important component for contactless acceptance & experience • Limited awareness (no extra financial benefit) for contactless • Limited contactless reader penetration Merchants
  16. 16. Turkish NFC Ecosystem – Regulators & Solution Providers • Visa, MasterCard and BKM are actively involved in NFC trials & projects. • In close cooperation with banks & MNOs. • Solution providers have required know-how and technology for NFC Regulators Solution Providers • TSM • National Switch • Clearing House • National Regulator
  17. 17. Turkish NFC Ecosystem – User experience & acceptance • The most critical component of the ecosystem • Enrollment & installation differs from bank to bank • Contactless penetration is %12 • Contactless : low or high value? • Contactless : online PIN?
  18. 18. Turkish NFC Ecosystem – Main Barriers for NFC • Low contactless reader penetration (3%) • Consumers still need to be tech-savy to setup and activate (setups not convenient) • Lack of NFC enabled handsets • Lack of single customer experience • Standardization is still an issue
  19. 19. Turkish NFC Ecosystem – Critical Success Factors for NFC • Development of entire ecosystem by the main players and expanding contactless/NFC POS • More smartphone penetration • Enabling high value payments for NFC • Expansion towards P2P for complete ecosystem and user experience • Campaigns & customer education for NFC • More use cases for NFC other than payment
  20. 20. Agenda 20 • Turkey Card Market • Turkish NFC Ecosystem • Yapı Kredi NFC Architecture & Products
  21. 21. Yapı Kredi Contactless Overview 21 • One of the market makers in Turkey • Yapı Kredi started issuing contactless credit cards in 2009 • Full range of credit card products have contactless feature • 1 M+ contactless cards have been issued • 14 K+ contactless readers are deployed with %25 market share
  22. 22. Yapı Kredi Contactless Overview 22 • Contactless as enabler of faster and better user experience • Active engagement for contactless • Strong campaigns for contactless (1 out of 4 contactless transactions is credited back)
  23. 23. Yapı Kredi NFC Overview 23 • NFC positioned as an extension of current contactless product line up • PayMobile : branding for mobile product portfolio • Customers are encouraged to try the mobile payment products • Works closely with all MNOs in Turkey • Two NFC products are commercially available now: – MasterCard Mobile PayPass – Visa iCarte for iPhone • Two more NFC projects are in the pipeline for commercial launch
  24. 24. Yapı Kredi NFC Products : MasterCard Mobile PayPass 24 PayMobile MasterCard SIM product on Turkcell Cep-T Cüzdan
  25. 25. Yapı Kredi NFC Products : MasterCard Mobile PayPass 25 • MasterCard Mobile PayPass v0.91 (1.0 coming soon) • N-Flex antenna and NFC enabled phones are also supported • Transactions below 35 TL are processed offline • Online transactions over the contactless interface is possible • Both MNO wallet and STK have UI’s for accessing the payment application
  26. 26. Yapı Kredi NFC Architecture for Mobile SIM based products 26 Core Card Management NFC Gateway Internet /Telephone Banking MNO Sales Point (via EFTPOS) TSM Online Application Process Online Application Process MNO OTA 3G/EDGE/GSM Perso file Eligibility Check Personalization MNO Total personalization time is between 3 – 25 minutes Life cycle & counter reset scripts Personalization Issuer Scripting
  27. 27. Yapı Kredi NFC Products : Visa iCarte 27 • Awarded Visa Europe’s Most Innovative Product of 2011 • VMPA 1.3.1 is used on iCarte’s SE • Online only profile • Personalization is initiated by the customer • Works with iPhone 3G, 3GS, 4 and 4S • Users can save personal notes on transactions (merchant name, merchant type,etc)
  28. 28. Yapı Kredi NFC Architecture for iCarte 28 Core Card Management NFC Gateway Internet/SMS TSM Batch Application Perso file Personalization iCarte app installation Mobile Gateway Passcode Change Script Personalization Issuer Scripting
  29. 29. Conclusion: Towards a New Era 29 • NFC products are not intended to generate revenue in the short run for both banks and MNOs • NFC will not drive high usage volume before contactless POS terminals become widespread and NFC handset penetration reaches critical mass • MNOs consider NFC products as a loyalty tool as well as a value added service for subscribers • Yapı Kredi’s perspective on NFC is to position its NFC products as part of the mobile payment portfolio, which includes; – Location based services – Campaigns & loyalty program integrations – Expansion towards other P2P network – Expansion in POS network
  30. 30. PayMobile Ads 30 Newspaper & Magazine Advertorial
  31. 31. PayMobile Ads 31 Poster for Branches Newspaper & Magazine Ad
  32. 32. PayMobile Ads 32 Web content
  33. 33. 33 Thank you

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