Rabo Mobiel Overview and Some Thoughts on Contactless Payments Rabo Mobiel B.V. IIR Next Generation Payments, Amsterdam Dan Armstrong, 18 December 2008 NL NFC Menu Menu Back Info

What do you get with Rabo Mobiel? Great Mobile Telecommunications Product – top-quality services, bundles or bundle-free, unlimited internet, competitive tariffs, SMS packages, MKB offers Core Rabobank Values - trust, security, quality, easy-to-use services, cooperative value Online Self-Care Environment Commitment to innovation - core asset for differentiation is Mobile Financial Services Independent company - for speed, innovation, customer experience trials Secure mobile banking

Great Mobile Telecommunications Product – top-quality services, bundles or bundle-free, unlimited internet, competitive tariffs, SMS packages, MKB offers

Core Rabobank Values - trust, security, quality, easy-to-use services, cooperative value

Online Self-Care Environment

Commitment to innovation - core asset for differentiation is Mobile Financial Services

Independent company - for speed, innovation, customer experience trials

Secure mobile banking

Rabobank GSM MVNO - Telecommunications Services (voice, SMS, VAS, Prepaid/Postpaid, MKB) - Mobile Internet Access (GPRS, UMTS, HSDPA), Portals and Self-Care Value-Added Bank Product - Banking “On the Go” Premium Product / Combination Communications Channel for Local Banks, Leden and Customers Mobile Incubator - Product/Business Development for Mobile Financial Services and Products - Launch of Remote and Contactless Payments and Partnerships Mobile Kenniscentrum - Encryption, Mobile Business Rules - Mobile Low-Value Payments - Standards, Retail/Consumer Acceptance, Security, Sustainability

Value-Added Bank Product - Banking “On the Go”

Premium Product / Combination

Communications Channel for Local Banks, Leden and Customers

Rabobank Banking & Payment Innovation 1980 1990 2000 2010 1981 – First ATM in NL 1986 – Pin Retail PoS 1989 – Telebanking 1994 – 1st web portal www.tref.nl 1995 – “Rabofoon” IVR Banking 1996 – Internetbankieren launched 1999 – 1st bank WAP site launched (mmm.rabobank.nl) 2003 – Mobielbankieren on i-Mode 2004 – Mobielbankieren launched on Vodafone Live!, Orangeworld, T-zones 2004 – MiniTix Online Launched 2007 – MiniTix SMS 2006 – Open Mobile Internet (OMI) programme launched 2006 – Rabo Mobile launched (world’s first bank MVNO) 2007 – Rabobank / Rabo Mobiel NFC Trials Kick-Off 2008 – Mobielbankieren up to €50k (RR) 2009 – NFC Payments Roll-Out 2008 – SMS Betalen Launched 2005 – Rabo tv 2007 – Rabo Schoolbank NFC Cashless Schools 2006 2007 2008 Postpaid Launch Launch of Segment Packages NFC Trials: Coca-Cola, FEBO Prepaid Launch C1000 NFC Trial 30 Banks Online Diergarde Blijdorp NFC Ticketing Retail Launch Postpaid Retail Launch Orange -> KPN 180k + customers 100k + customers 120 Banks Online SMS Betalen Launch AH To-Go Trial MyOrder Terrace Betalen MIB 6.0 (OMI) MIB 4.1 (RR) Senioren Youth MKB/ZZP Rabo Mobiel B.V.

MFS Product Launches and Trials 2006-2008

Some thoughts .. Mobility, Security and Perception Mobile Operators vs. Service Providers Standardisation TSM

Mobility, Security and Perception

Mobile Operators vs. Service Providers

Standardisation

TSM

Mobility, Security and Perception There is no such thing as perfect security. Security does not equal the perception of security . (ref. yesterday’s conversation on online payments) Putting everything into a mobile phone is not automatically what (NL) consumers are looking for. Important issues: security, information single point of failure, connected/electronic (“open”) device, risk and surrounding business rules. Unless there is true value-add , there’s no real reason stuff things into a mobile phone. Ticketing, payments, loyalty, etc. can be done with plastic cards. How to leverage the capabilities of a connected device? Permission-based marketing and location-based services as the basis of “context awareness” are not automatically the future of mobile VAS. What about behaviour (anonymous)? Multi-application mobile environments are interesting (is that a killer app? maybe), but key players in the industry on a nation-wide basis need to become more than applications/logos on slides, they need to become real actors in the mobile NFC ecosystem as well. GMSA statement in November in Macau on NFC and SWP means a lot.

There is no such thing as perfect security.

Security does not equal the perception of security . (ref. yesterday’s conversation on online payments)

Putting everything into a mobile phone is not automatically what (NL) consumers are looking for. Important issues: security, information single point of failure, connected/electronic (“open”) device, risk and surrounding business rules.

Unless there is true value-add , there’s no real reason stuff things into a mobile phone. Ticketing, payments, loyalty, etc. can be done with plastic cards. How to leverage the capabilities of a connected device?

Permission-based marketing and location-based services as the basis of “context awareness” are not automatically the future of mobile VAS. What about behaviour (anonymous)?

Multi-application mobile environments are interesting (is that a killer app? maybe), but key players in the industry on a nation-wide basis need to become more than applications/logos on slides, they need to become real actors in the mobile NFC ecosystem as well.

GMSA statement in November in Macau on NFC and SWP means a lot.

Mobile Operators vs. Service Providers In the European NFC ecosystem (for the most part) most mobile operators will likely be primarily B2B enablers in NFC, service providers will be primarily B2C and provide the application and the environment for it’s interaction. Who owns the customer? Silly question. If anyone does, all of us do somewhat. However, there are areas it gets critical to sort it out: e.g. NFC customer support. SE form factor, does it really matter so much? Is physical, legal and application control, is SWP is so bad? It’s the cashflow ecosystem that matters. Who the consumer can call about a problem (NFC transaction, TSM activity) is all about market positioning of NFC. Mobile operator, service provider, a third-party tasked to play that role? We make this decision early in NL to effectively roll out services on a national level. GSMA members: “Mobile operators will not buy mobile phones that banks specify. They will buy mobile phones that they specify.” Rabo Mobiel is both; which is highly interesting from a learning perspective. other MVNOs

In the European NFC ecosystem (for the most part) most mobile operators will likely be primarily B2B enablers in NFC, service providers will be primarily B2C and provide the application and the environment for it’s interaction.

Who owns the customer? Silly question. If anyone does, all of us do somewhat. However, there are areas it gets critical to sort it out: e.g. NFC customer support.

SE form factor, does it really matter so much? Is physical, legal and application control, is SWP is so bad? It’s the cashflow ecosystem that matters.

Who the consumer can call about a problem (NFC transaction, TSM activity) is all about market positioning of NFC. Mobile operator, service provider, a third-party tasked to play that role? We make this decision early in NL to effectively roll out services on a national level.

GSMA members: “Mobile operators will not buy mobile phones that banks specify. They will buy mobile phones that they specify.”

Rabo Mobiel is both; which is highly interesting from a learning perspective.

Standardisation We must look carefully at the heart of what we want with standardisation. Standardisation for standardisation’s sake alone is not (a priori) a business goal. SEPA and the PSD are major and important projects, but the long-term goals for them are to benefit EU citizens and companies success. The EPC eChannel and mChannel expert groups need to keep that in mind. An interesting model is the GSM standard. For banks and other service providers taking NFC seriously, GSM has provided both benefits and drawbacks. Global Platform card and device specifications are critical. Issues with TSM interoperability, transaction latency (e.g. OV), SWP, HCI and BIP will not solve the standardisation requirements needed for acceptance of mobile payments alone. The user-experience is critical, therein mobile phone hardware, OS and UI are critical. Are there possibilities to extract the same standardisation goals from different market environments? What are the analogues between e.g. Korea, Japan, France, United Kingdom, The Netherlands? Defacto: Do we already have an NFC SE standard? Defacto: Do we already have a ChipKnip follow-up?

We must look carefully at the heart of what we want with standardisation. Standardisation for standardisation’s sake alone is not (a priori) a business goal.

SEPA and the PSD are major and important projects, but the long-term goals for them are to benefit EU citizens and companies success. The EPC eChannel and mChannel expert groups need to keep that in mind.

An interesting model is the GSM standard. For banks and other service providers taking NFC seriously, GSM has provided both benefits and drawbacks.

Global Platform card and device specifications are critical.

Issues with TSM interoperability, transaction latency (e.g. OV), SWP, HCI and BIP will not solve the standardisation requirements needed for acceptance of mobile payments alone. The user-experience is critical, therein mobile phone hardware, OS and UI are critical.

Are there possibilities to extract the same standardisation goals from different market environments? What are the analogues between e.g. Korea, Japan, France, United Kingdom, The Netherlands?

Defacto: Do we already have an NFC SE standard?

Defacto: Do we already have a ChipKnip follow-up?

TSM Many TSMs in one national mobile or payment ecosystem inter-working to manage similar applications on mobile phones won’t really work. Will there be a role for pre-TSM operations (e.g. TransLink)? Can there be multiple TSMs in NL? Examples: single bank-launches, FeliCa, Payez. What is the scope and limits of the TSM role? Pretty much everyone has a different opinion. Isn’t the real question: What are the successful building blocks of a healthy NFC ecosystem? OTA application delivery, life-cycle management, ecosystem creation, application design, customer service? OTA App Delivery OTA App Life-Cycle Mgmt. Standardisation App Design Customer Service POS Formulas & Mgmt. Brand & Promotion GSM Radio Network Mobile Handsets & SIMs Service Provider Mgmt. ??? ??? TSM other MVNOs

Many TSMs in one national mobile or payment ecosystem inter-working to manage similar applications on mobile phones won’t really work.

Will there be a role for pre-TSM operations (e.g. TransLink)?

Can there be multiple TSMs in NL? Examples: single bank-launches, FeliCa, Payez.

What is the scope and limits of the TSM role? Pretty much everyone has a different opinion. Isn’t the real question: What are the successful building blocks of a healthy NFC ecosystem?

OTA application delivery, life-cycle management, ecosystem creation, application design, customer service?

Dan Armstrong, CTO Rabo Mobiel B.V. Oosterdok 2 1011 VX Amsterdam The Netherlands [email_address] http://www.rabomobiel.nl/innovaties http://www.youtube.com/RaboMobielNFC

Dan Armstrong, CTO

Rabo Mobiel B.V.

Oosterdok 2

1011 VX Amsterdam

The Netherlands

[email_address]

http://www.rabomobiel.nl/innovaties

http://www.youtube.com/RaboMobielNFC