5. Speed & efficiency
Global markets
Products & choices
Comparison, reviews
The long tail
Social media
Viral movements & news
Monetising clicks
Spam
Porn
The e-commerce shake out
6. … 2 fundamental types of transaction players?
Transactions are the
Channel
”I have a pipe and/or network and I want to monetise the
investments I made in creating it.”
”I want as much to get through that pipe and the (mobile)
phones accessing it as possible.”
Transactions via the
Channel
”I have stuff I want to do via channels. Enable my consumers to
control their bank account, make a payment, get a ticket, see an
ad, save or use loyalty points, etc.”
”I need as many (cost effective) channels and pipes to do it.”
7. How shall we define “transaction”?
Bank Account Value
Transfer, Payments
Value Depletion,
Prepaid, Wallets,
Transportation
Loyalty, Points,
Coupons,
Transformation
Moments
Eyeballs, Trust,
Engagement, Action
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8. 50% of consumers will pay more for products they trust
78% of consumers will look first to trusted brands when
in need of products or services
78% of consumers are willing to give trusted brands a
chance, even if unsure of what value the product or
service will bring to them
82% of consumers will choose to use a trusted brand’s
products or services frequently, rather than move
between brands
83% of consumers will recommend a trusted brand to
others, often un-prompted
Trust?
Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore (April 2013)
9. “Mobile” Banking & Payments Space: 1 View
CallCentre Banking
IVR Banking & Payments
SMS & Calling Alerts
(spending, ATM usage, fraud, etc.)
Transactions with Teller or
Agent using Mobile Devices
Mobile Banking & Payments Remote Payments &
Electronic Wallets
Mobile Contactless /
Proximity Payments
MNO “Mobile Money”
Mobile Remittances Advertising-led Models
= banks deploy = bank-led models = cooperative models
= mobile operator-led models = mobile operators deploy = third-parties deploy
= public transportation-led models
Mobile Contactless /
Proximity Payments
10. 2 Popular Starting Points for Mobile Proximity Payments
Card Emulation Bypass Card Emulation
Phone takes the place of a
physical card to transact at a
physical merchant location
Consumers are comfortable
with card operating models
Standardisation and ubiquity
of acceptance points a must
for economies of scale
Requires compatible
card/mobile acceptance
infrastructure
Trigger remote payment with
phone (apps, other manner)
Confirmation can be pushed to
merchant, but how to localise
the payment location without
NFC?
Receipt can be printed at POS
Latency in making payment
this way vs. cards
EMV / secure PIN keypad
Card acceptance still required
14. NFC Mobile as Retail Shopping Tool, Issued Device & Acceptance
Point @ AH To-Go (2008)
15. What do we expect from a wallet?
A place to store cash?
A place to store payment
tokens?
A place to store other tokens?
A personal object?
A private object?
Something small enough to
be portable/mobile?
… but … do we need a
physical object?
16. Then, what do we expect from a transaction device?
Identification of myself, my
rights and capabilities,
memberships.
Identification of myself, an
authentication tool for
payment.
Secure, multi-factor
Tamper-resistant/evident
Personal and private
Easy to use
… but … do we need a
physical object?
17. Consumers seem to love and trust it
• But who will pay for it’s implementation … merchants, banks, mobile
operators, handset manufacturers?
Given the “app revolution” in so many of our markets,
what value does NFC bring to payments?
• Convenience?
• Put all cards in one apparatus?
The phone-shaped wallet ..
• Addiction to mobile phones, but
not to our wallets?
• Leave cards at home?
• Add value to transactions?
The Consumer’s Perspective on NFC?
18. Cards seem to be entrenched in many markets (like NL),
and are likely to remain in play for the foreseeable
future, simply increasing the issuer and acquirer costs.
But, is NFC is fundamentally different from previous
steps forward in functionality .. ?
The Consumer’s Perspective on NFC?
SMS Mobile Data
Apps
Online Shopping
& Payment
19. Virtualisation benefits are clear, from the business POV ..
0
50
100
150
200
250
300
350
400
450
500
1980 1985 1990 1995 2000 2005 2010
*1million
Contacts via
devices (e.g. web
browser/internet, m
obile phone, IVR)
Total Customer Contacts
Contact via a
bank
advisor, bank
branch
20. The case is clear for our creativity to make virtualised
ecosystems work.
But it will take a lot more creativity, usability and value
to become a real business driver.
And for banks, they also need to achieve this without
sacrificing trust, security, longer-term relationships,
and (a certain degree of) transparency.
Virtualisation benefits are clear, from the business POV ..
Information
Some Branches
or a Website
Trust
23. Although you could still easily pay with a card when
you get to the POS …
For your consideration ..
24.
25. Limited smartphones
Limited (& expensive)
mobile data
Limited (& expensive) fixed
internet & electricity
Limited literacy
Limited trust in banks
High cost of ATMs & bank
branches, limited in-country
IT capabilities
Limited amount of people
with official IDs
Everyone wants a card
anyway, it’s modern
Limited cards issued &
limited acceptance points
(esp. NFC)
Leap-Frogging Card Acceptance Infrastructure in Africa
35. Thank You!
Dan Armstrong
Takashi Mobile | Financial Services
Rapenburgerplein 81
1011 VJ Amsterdam
The Netherlands
www.takashimobile.com
dan.armstrong@takashimobile.com
+31 652 085 071
skype: dd.armstrong
Editor's Notes
ContentsSome thoughts on paradigm shiftsRe-thinking the nature of transactions and transaction actorsProximity mobile payments: card emulation or not? 3 case studies from The Netherlands to validate consumer acceptance of NFCRebooting the conversation from a consumer point-of-viewWhat do we expect from a wallet, or a payment instrument?Is NFC a “tech-push’ or a “consumer pull’?How to differentiate with NFC?1 case study from Rwanda, where cards and card acceptance are virtually nonexistant
So I was thinking about some of the old conceptions of “e-commerce” and the “e-wallet” that we used to have at Netscape and MCI (1994-1996), when we were first deploying HTTPS.
MNOs tend to generate their revenues from “transaction-based business” (sale of SMS, data, voice calls), whereas margins on actual “transactions” for banks are thinning in most markets, and in some cases unprofitable in general.For banks, the question about the value of payments services is a burning one these days – especially for developed world banks, but also for the developing world as well.Deposit-taking and lending are major differentiating business lines of banks, although some MNOs and other parties are starting to make moves in this direction.
“Pinnen met je mobiel” retail shopping and payments trial using contactless PIN (NL direct debit) from Aug 2007- Feb 2008 Payment with a secure application on the mobile phone (Samsung x700)Also featured storage of value for recycled bottles on the phone – save your value, cash it in or donate it.Highly successful trial, proven consumer acceptance/trust a mobile as secure debit card replacement.
Proof-of-concept programme for NFC payment for soft drinks using MiniTixPartners: Capgemini, Coca-Cola, Rabo Mobiel, Yoonison, MiniTixBeginning in Apr 2007, 30 locations nation-wideProof-of-concept ‘Kroketjeuit de muur’ met je telefoon, Oct-Nov 2007 Capgemini, FEBO and Mertens GroupMiniTix NFC trial in Amsterdam (NFC mobile phones, cards)Proof-of-concept programme to explore cash management, saves coin traffic, fraud management
Major Dutch retailer Albert Heijn wanted to trial a new retail formula in their “To Go” storesNFC shelf-level tag shopping, as customer filled her basketCustomer built up a list of what they were buying, and performed self-checkout without queuing at busy store countersDiscounts and specials applied automaticallyReceipt can be printed upon existOccasional control checks to validate purchases