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Mobile Payments in The Financial        Services Industry                                                      Jeff	  Fleis...
© 2011 Blue Panda Interactive. Proprietary And Confidential.!   2!
“The M o b i l e - S o c i a l E c o n o m y is theconvergence of mobile and social media enabled bytechnology. Financial ...
Trends That Influence Mobile Payments (mPayments) GrowthSummary²  mPayments is rapidly becoming the payment vehicle of ch...
Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary ...
Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary ...
Mobile BankingThe surge in mobile banking and cost dynamics are the main catalysts for theacceptance and usage of mPayment...
Drivers of mPayment Growth - Mobile BankingOne of the biggest advantages that mobile banking offers to banks is that itdra...
Mobile Banking – What Customer’s WantMobile banking has had the highest usage rates among basic transactions and isnow gro...
Mobile Banking – Remote Deposit       The surge in U.S. mobile banking features such as online remote deposit capture     ...
Mobile Banking    The surge in mobile banking is a catalyst for the acceptance and usage of    mPayments and a means to bu...
Mobile Banking Is Dramatically Cheaper Than Other ChannelsAs online and mobile continue to pick up share of volume, compan...
Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary ...
Drivers of mPayment Growth - Social MediaSocial media’s popularity, smart phone sales, and app proliferation have combined...
U.S. Social Media Habits Are Similar To Other Markets Social networks/blogs grabbing a large share of consumers time onlin...
China’s Sina Has Become Immensely Popular In China Due ToIts Microblogging Platform Known As WeiboWith over 513MM netizens...
Users Spend Well Over 8 Hours Per Month On Social    Media Properties; Facebook Is The Predominant LeaderTop 10 Web Brands...
Mobile Access To Social Media Networks Has Grown SharplyAcross All Age DemographicsSocial Network Growth, by Age, Ethnicit...
Females,18-34 Year Old, Are The Most Active On SocialNetworksU.S. Social Network Use by Age, DemographicsBase: U.S. social...
Over 50% Of Online Consumers Expect Weekly or Monthly  Updates Through Social Networks  Marketing Contact via Social Netwo...
Mobile Is a Growing Access Point For Smartphone OwnersAccounting For 51% Of Facebook And 12.5% Of Twitter UsersFacebook, T...
Approximately 39% Of Consumers Seek Purchase AdviceFor Financial Services ProductsSocial	  Networks	  as	  a	  Source	  of...
Globally, Chinese Internet Users Spend The Most Amount Of        Their Leisure Time Online Displacing Traditional Media   ...
There Is A Growing Shift In The Consumption Of Social MediaOn Mobile PhonesU.S.	  Top	  Mobile	  Apps	  for	  iPhone	  and...
Case Study: American Express                               © 2011 Blue Panda Interactive. Proprietary And Confidential.!   ...
Case Study: American ExpressThe Emergence Of The Social eCommerce ModelAmerican Express is arguably one of the most innova...
The Emergence Of Social eCommerce Model"Go Social" Tool for Small Business Merchants - Launched May 14, 2012 !            ...
The Emergence Of The Social eCommerce Model  “Sync, Tweet, Save” Twitter Initiative – Launched March 2012 !American Expres...
The Emergence Of The Social eCommerce Model“Link, Like, Love” Facebook Initiative Launched July 2011!                     ...
American Express Has Spent Years Developing The OPENSmall Business Network Community	  OPEN	  is	  American	  Express’	  s...
Drivers Of mPayment GrowthThere are several underlying trends that will drive mPayment adoption and usageas the primary pa...
Drivers of mPayment Growth - TechnologyAs carriers and telecomm companies have upgraded their infrastructure it has led to...
In Q411 There Were 1.1B Global Mobile 3G Subscribers, Up                  37% YoY With A 18% Share Of All Mobile Subscribe...
In 2002 A Global Milestone Was Reached As MobileSubscription Surpassed LandlinesMobile subscriber growth continues to grow...
Apple Has Achieved Exponential Growth With Each SuccessiveProduct Launch             First 8 Quarters Cumulative Unit Ship...
The iPhone Sales Rate Has Been Eclipsed By The AndroidPlatform And Continues To Outpace Apple           First 13 Quarters ...
Tablets And eReaders Are Growing Rapidly And Have BecomeA Third Screen For ConsumersTablets will play an increasingly inte...
In 2011 There Were 2.3B Global Internet Users, RepresentingA 8% CAGR From 2008 Rank	          Country	          2008-­‐201...
Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary ...
Drivers of mPayment Growth - UnbankedThe worlds unbanked are rapidly adopting mPayments without the need for abank. Banks ...
Many Parts Of The World Have A Large Percentage OfUnbanked ConsumersmPayments will provide access to a more efficient and l...
Emerging Partnerships and Platforms In China – UMPayLaunched	  in	  2003	  It	  provides	  China	  Mobile	  users	  with	 ...
India Is The World’s Second Most Populous Nation And HasOver 450MM Unbanked PeopleIn a country where cash is used in 65% o...
Payments Using SMS And USSD Has Grown Exponentially inCertain Regions Will Expand Globally²  Consumers in Africa, the Mid...
Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary ...
mPayments – Consumer & Retailer AcceptanceThe proliferation of digital technology and the rise of social media have contri...
The Emergence Of The Mobile Web As The Dominant ChannelOf Choice – It’s Become Mainstream Facebook mobile users have!     ...
Globally, Mobile Devices Are Increasing The Device Of Choice   For A Variety Of ActivitiesMobile	  Ac@vi@es	  by	  Share	 ...
Mobile Consumer BehaviorMobile devices have become an indispensible part of our lives……!             Over 300k apps have b...
Mobile Web Traffic Will Surpass Desktop Web Traffic By 2015Tablet access to the web will gain a large foot hold as it’s gr...
Mobile Web Traffic Growth  Global mobile traffic as a % of total web traffic has grown by a factor of 20 over the  past 4 ye...
China Has The Largest Online Population And By 2015 It IsExpected To Become The World’s	  Largest Online Retail Market	  C...
Internet Sales Have Taken Off As Online Retailers Gain Share,Mobile Will Become A Key Component Of This GrowthIn	  2010,	 ...
Mobile Commerce = Adoption Of Mobile Payments Has Accelerated in 2010 And Is       We Have Lift Off! Expected To Continue ...
MobileMobile Search –      Queries Are Growing Rapidly As Consumers Are UsingThem Increasingly For Information and Transac...
As US eCommerce Grows The Percent Of Mobile eCommerceIs Climbing, Reaching 8% in Q1 2012                            © 2011...
Social Sites Are A Source For Information, Comparisons, And   Ratings That Influences Buying Behavior    Community,	  Soci...
© 2011 Blue Panda Interactive. Proprietary And Confidential.!   58!
“Give people more control over their banking and you’llwin their loyalty. That’s because mobile is not achannel so much as...
mPayments Summary²  The Financial services industry has undergone a broad and rapid    transformation over the past decad...
mPayment Roadmap For Banks – Creating FrictionlessFinance Networks ²  Success will come from continued focus on building ...
History of Payments From Barter to Frictionless Finance       There has been more transformation in the payments space in ...
Evolution of Electronic PaymentsCoinciding with the evolution of payments has been the development oftechnological advance...
Mobile Users By % of Population  87%	  of	  the	  world’s	  popula@on	                      Smartphone	  sales	  increased...
Growth In mPayment Users 2010 – 2011: Use of mobilephone as payment device that is pre-loaded with funds.Emerging markets ...
The Growth Rate For mPayment Users By RegionMobile payment users had double digit growth across all markets from 2009 to20...
Global mPayment Transaction Growth By RegionsmPayments across all regions have experienced substantial growth from 2008 to...
Electronic Payments In The US Grew By Over 82% In 2011Mobile usage is growing rapidly for retail and payments creating an ...
mPayments In China 2010 - 2013  ²  mPayments are expected to grow by 1132% and mobile payment users will      increase by...
The Players: Several Industry Groups Are Working On Oneor More mPayment OptionsThe digital wallet is “owned” by several in...
The Players: Each Industry Group Has A Unique Role Within The mPayment Process Collectively mPayment players each provide ...
The Players: Who Owns The Customer Relationship?    The mPayment customer relationship is fragmented with each player havi...
To Establish A Mature mPayments Environment Key IssuesNeed To Be Addressed² Financial Institutions, Telecommunication Com...
KPMG 2011 mPayments Global Survey Highlights²  Survey focused on projected success of the current and emerging mPayment m...
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
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Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
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Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
Mobile Payments in The Financial Services Industry
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Mobile Payments in The Financial Services Industry

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A comprehensive overview of the payments space specifically mobile payments, and how macro trends are driving revolutionary changes in how consumers purchase and transact. Mobile Payments (mPayments) is rapidly becoming the payment vehicle of choice for consumers worldwide. The primary drivers that have influenced this growth include mobile banking, social media, enabling technology, “unbanked” communities, and consumer/retailer acceptance of mobile commerce.
Growth in mobile and tablet sales is outpacing computers and in many markets now exceeds those of computers.
Acceptance and usage of mobile/tablet banking, payments, money movement, and other financial transactions are growing rapidly.
Mobile social media’s global exponential growth has become the primary channel for people to interact with friends and brands.
Convergence of mobile/tablet usage combined with social media are evolving into new, dynamic interaction models and ecommerce opportunities.
Financial service companies, most notable Banks, are faced with disintermediation and must rethink payment models and customer centric experiences.

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Transcript of "Mobile Payments in The Financial Services Industry"

  1. 1. Mobile Payments in The Financial Services Industry Jeff  Fleischman   CEO,  Blue  Panda  Interac9ve   New  York,  NY   July  2012   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 1!
  2. 2. © 2011 Blue Panda Interactive. Proprietary And Confidential.! 2!
  3. 3. “The M o b i l e - S o c i a l E c o n o m y is theconvergence of mobile and social media enabled bytechnology. Financial institutions stand on thethreshold of a new paradigm in which payments,customer experience, and personalized offers willmerge. Those firms that adapt will succeed and grow,those that don’t face an uncertain future.”!! Jeffrey Fleischman
 CEO, Founder
 Blue Panda Interactive! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 3!
  4. 4. Trends That Influence Mobile Payments (mPayments) GrowthSummary²  mPayments is rapidly becoming the payment vehicle of choice for consumers worldwide. The primary drivers that have influenced this growth include mobile banking, social media, enabling technology, “unbanked” communities, and consumer/retailer acceptance of mobile commerce.!²  Growth in mobile and tablet sales is outpacing computers and in many markets now exceeds those of computers.!²  Acceptance and usage of mobile/tablet banking, payments, money movement, and other financial transactions are growing rapidly.!²  Mobile social media’s global exponential growth has become the primary channel for people to interact with friends and brands.!²  Convergence of mobile/tablet usage combined with social media are evolving into new, dynamic interaction models and ecommerce opportunities.!²  Financial service companies, most notable Banks, are faced with disintermediation and must rethink payment models and customer centric experiences.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 4!
  5. 5. Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary payment vehicle.! Technology   Social   Unbanked   Media   Consumer   Mobile   Banking   mPayments   &  Retailer   Acceptance   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 5!
  6. 6. Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary payment vehicle.! Technology   Social   Unbanked   Media   Consumer   Mobile   mPayments   &  Retailer   Banking   Acceptance   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 6!
  7. 7. Mobile BankingThe surge in mobile banking and cost dynamics are the main catalysts for theacceptance and usage of mPayments.! ²  More than 40MM U.S. consumers will be using mobile banking by 2012.! ²  The cost of servicing for mobile transactions is relatively small compared to all other channels and reduces overall costs for banks.! ²  Banks are setting aside over one-third of their digital channel investments for mobile initiatives with a focus on alerts, remote deposit capture (RDC) and person-to-person payments.! ²  Mobile applications and technology have created complete pricing transparency.! ²  In the U.S., 15% of online adults were active mobile bankers in 2011, up from 5% in 2008. In Canada, 20% of online adults are active mobile bankers, up from 8% in 2010.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 7! Source: Forrester; The Yankee Group
  8. 8. Drivers of mPayment Growth - Mobile BankingOne of the biggest advantages that mobile banking offers to banks is that itdrastically cuts down the costs of providing service to the customers. !²  An average teller or phone transaction costs about $2.36 each, whereas an electronic transaction costs only about $0.10 each. !²  Mobile banking and payments such as SMS text messaging can reduce the burden on customer service and IT resources. !²  Using secure and integrated messaging platforms reduces the costs and errors associated with paper-based payments.!²  Mobile banking provides the opportunity to capture greater level of detailed information on spend, payments, location for CRM activities.!²  Additionally, this new channel gives the bank ability to cross-sell up-sell their other complex banking products and services such as vehicle loans, credit cards etc. ! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 8! SOURCE: Mobile Banking News
  9. 9. Mobile Banking – What Customer’s WantMobile banking has had the highest usage rates among basic transactions and isnow growing more rapidly for transfers, payments, and purchases.! What transactions customers are doing:! ²  Balance Inquiry: 74%! ²  Notifications: 73%! ²  Statements: 48% ! ²  Notification of account limit: 47% ! ²  Transfer funds between accounts: 35% ! ²  Pay accounts: 28% ! ²  Make a purchase: 21% ! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 9! Source:  Berg  Insight  
  10. 10. Mobile Banking – Remote Deposit The surge in U.S. mobile banking features such as online remote deposit capture (RDC) and mobile check deposit are a catalyst for the growth of mPayments.!² RDC   can   dras@cally   reduce   the   @me   and   cost  of  deposi@ng  checks,  many  banks  are   now   offering   RDC   to   cater   to   new   customers   as   well   as   to   retain   exis@ng   ones.    ² RDC   has   shown   an   impressive   growth   rate  of  70%  from  2004  to  2008.  ² RDC   via   a   mobile   device   launched   in   the   U.S.   in   2009   and   has   quickly   been   adopted   by   many   large   US   banks   with   high  adop@on  rates.  ² Mobile   RDC   capture   will   eliminate   over   1.5B   check   deposit   transac@ons   from   U.S.   bank  branches  by  2014.   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 10! Source: Market Research.com; Mercatus
  11. 11. Mobile Banking The surge in mobile banking is a catalyst for the acceptance and usage of mPayments and a means to build and protect customer relationships.!Consumer Benefits!²  Reduce Visits to Branches !²  Reduce Calls to Contact Centers!²  Change Their Spending Patterns!²  Generate More Transactions!²  Become more aware of their money !²  Become more educated about money!!Bank Benefits!²  Realize a Reduction in Costs!²  Be able to Generate More Loyalty!²  Be Able to Increase Their Customer Base!²  Create new mechanisms to stimulate impulse buying !²  Create new sales and marketing approaches! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 11! SOURCE: MOBILE-FINANCIAL.com
  12. 12. Mobile Banking Is Dramatically Cheaper Than Other ChannelsAs online and mobile continue to pick up share of volume, companies will seeaverage cost to service decline.! Call  Center    $4.00     Branch    $3.75     IVR    $1.25     ATM    $0.85     Online    $0.17     Mobile    $0.08     © 2011 Blue Panda Interactive. Proprietary And Confidential.! 12! Source: Tower Group Fiserv Mcom Data, 2009
  13. 13. Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary payment vehicle.! Technology   Social   Unbanked   Media   Consumer   Mobile   mPayments   &  Retailer   Banking   Acceptance   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 13!
  14. 14. Drivers of mPayment Growth - Social MediaSocial media’s popularity, smart phone sales, and app proliferation have combinedto create an organic and seismic shift in mobile-social media.!²  Social networking accounted for 50% of all page views on mobile phones in 2011.!²  Facebook mobile users quadrupled in 2 years from 50MM to 200MM.!²  More people access Twitter and Facebook on mobile devices than on desktop computers.!²  There are 200MM mobile video playbacks from YouTube every day.!²  There are 1.2B internet connected smartphones and 77% of individuals use mobile phones for search.!²  Nearly 30% of consumers conduct product research on mobile devices.!² Over 300,000 apps have been developed in the past 3 years and downloaded more than 10.9B times.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 14! SOURCE: Mobile Banking News
  15. 15. U.S. Social Media Habits Are Similar To Other Markets Social networks/blogs grabbing a large share of consumers time online – expect mobile to become the primary channel for social media consumption.!Time spent condensed to the equivalentof one hour ! Facebook remains the premier social media platform eclipsing all other competitors combined.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 15! Source: comScore; Google; Statista; Nielsen
  16. 16. China’s Sina Has Become Immensely Popular In China Due ToIts Microblogging Platform Known As WeiboWith over 513MM netizens in China, Sina’s 50MM Sina Weiboers represents rapidgrowth in a relatively short period of time since it’s launching in 2010.! Sina  Sta9s9cs:   ²  Monthly   Increasing   Rate   of   Registra@on:  33.8%   ²  Rate  of  Mobile  Blogging:  38%   ²  Blogs  per  Day:  25MM   ²  Number  of  Users  of  Sina  Weibo:   50MM  (Oct,  20,  2010)   ²  Number  of  Partnered  Sites:  10M   ²  Total   Blogs:   200MM   (Nov,   7,   2010)   ²  Blogs  per  Second:  785   ²  Daily   Traffic   that   Weibo   Brings:   30MM   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 16! Source:  Sina  Nov,  16,  2010  
  17. 17. Users Spend Well Over 8 Hours Per Month On Social Media Properties; Facebook Is The Predominant LeaderTop 10 Web Brands by Time Spent Top 10 Global Social NetworksTime per viewer, hh:mm, per month, August 2011 By unique visitors (000), June 2011Source: The Nielsen Company Source: comScore Facebook 7:46 Facebook 734,240 AOL Media 2:53 Twitter 144,441 Yahoo 2:12 Windows Live Profile 119,467 Google 1:48 LinkedIn 84,356MSN/Windows Live/Bing 1:44 QQ.com microblogging 74,821 MySpace 71,526 YouTube 1:41 Renren 66,073 Wikipedia 1:18 Vkontakte 61,035 Apple 1:06 Orkut 51,754 Microsoft 0:45 Yahoo Pulse 37,600 Amazon 0:31 © 2011 Blue Panda Interactive. Proprietary And Confidential.! 17!
  18. 18. Mobile Access To Social Media Networks Has Grown SharplyAcross All Age DemographicsSocial Network Growth, by Age, Ethnicity% change, Q3 2010 v. Q3 2011 109% 76% 68% 70% 67% 61% 45% 44% 41% 37% 16% © 2011 Blue Panda Interactive. Proprietary And Confidential.! 18! Source:  The  Nielsen  Company  
  19. 19. Females,18-34 Year Old, Are The Most Active On SocialNetworksU.S. Social Network Use by Age, DemographicsBase: U.S. social media users, Q3 2011 108 103 104 103 102 100 101 101 96 98 94 91 88 © 2011 Blue Panda Interactive. Proprietary And Confidential.! 19! Source:  The  Nielsen  Company  
  20. 20. Over 50% Of Online Consumers Expect Weekly or Monthly Updates Through Social Networks Marketing Contact via Social Networks % of respondents (n=2,997) June 2011 28% 26% 13% 11% 7% 6% 4% 2% 3%More than Once Every other Twice Once Twice a month Once a month Never Otheronce a day a day day a week a week or less © 2011 Blue Panda Interactive. Proprietary And Confidential.! 20! Source:  ROI  Research  and  Performics  
  21. 21. Mobile Is a Growing Access Point For Smartphone OwnersAccounting For 51% Of Facebook And 12.5% Of Twitter UsersFacebook, Twitter Reach among Smartphone Users3-month average, ending June 2011 50.9% 31.7% 12.5% 7.4% U.S. smartphone users European smartphone users Facebook Twitter © 2011 Blue Panda Interactive. Proprietary And Confidential.! 21! Source:  Experian  Hitwise  
  22. 22. Approximately 39% Of Consumers Seek Purchase AdviceFor Financial Services ProductsSocial  Networks  as  a  Source  of  Purchasing  Advice  %  of  respondents  who  sought  advice,  June  2011   46% 42% 39% 34% 33% 33% 31% 30% 28% 28% 26% 25% Consumer Average 29%   24% 23% 22% 21% 19% 17% © 2011 Blue Panda Interactive. Proprietary And Confidential.! 22! Source:  ROI  Research  and  Performics  
  23. 23. Globally, Chinese Internet Users Spend The Most Amount Of Their Leisure Time Online Displacing Traditional Media China   44%   ²  In  Urban  areas  the  Web  will  soon  Sourth  Korea   40%   replace  newspapers  as  the  medium   Japan   38%   with  the  second-­‐highest  daily  reach.   Italy   31%   ²  Among  individuals  under  the  age  of   30,  the  Internet’s  penetra@on  is   US   30%   almost  as  high  as  television’s.     Spain   29%   ² Chinese  will  be  surfing  the  Web  more   Austraiia   29%   oden  at  home  and  at  work  and  less   Canada   28%   oden  at  Internet  cafes.  They  will  also   France   28%   be  relying  on  their  mobile  phones.     UK   28%   ² In  2011,  69%  of  users  said  they  used   Germany   23%   their  phones  to  access  the  Web—up   30  percentage  points  in  just  three   Norway   22%   years.  The  share  of  hours  spent   Netherlands   19%   accessing  the  Internet  on  mobile   Sweden   18%   devices  is  rising  rapidly  among  all  age   Finland   15%   groups.     Denmark   14%   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 23! Source:  TNS  “Digital  World,  Digital  Life”  December  2008  
  24. 24. There Is A Growing Shift In The Consumption Of Social MediaOn Mobile PhonesU.S.  Top  Mobile  Apps  for  iPhone  and  Android  by  Unique  Ac@ve  Users  (Age  18+)     iPhone  Top  Mobile  Apps   Android  Top  Mobile  Apps   Mobile’s Growing Influence! YouTube   Google  Search   ² Over 50% of Facebook and Twitter Google  Maps   Gmail   traffic! Facebook   Google  Maps   ² 200MM+ daily YouTube views ! Yahoo!  Weather   Facebook   ² 86% of mobile internet users use their Pandora  Radio   Google  News  and  Weather   mobile phones while watching TV! Angry  Birds   YouTube   ² Americans spend an average 2.7 hours Yahoo!  Stocks   Pandora  Radio   socializing on their mobile phones! ESPN  ScoreCenter   Angry  Birds   ² By 2014 mobile will surpass desktop The  Weather  Channel   Adobe  Reader   usage! Google  Search   Words  With  Friends   ² 70% of all mobile searches result in Words  With  Friends   Twiker   action within 1 hour! Nellix   Yahoo!  Messenger   ² One half of all local searches are Fruit  Ninja   Amazon  Appstore   performed on mobile devices! Twiker   Yahoo!  Mail   Movies  by  Flixster   Google  Talk   Facebook  Messenger   The  Weather  Channel   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 24! Source:  comScore  Mobile  Metrix  2.0,  Beta  Data,  Dec-­‐2011,  U.S.,  Mobile  Marketer    
  25. 25. Case Study: American Express © 2011 Blue Panda Interactive. Proprietary And Confidential.! 25!
  26. 26. Case Study: American ExpressThe Emergence Of The Social eCommerce ModelAmerican Express is arguably one of the most innovative companies to generateengagement and sales from the integration of web, mobile, and social media.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 26!
  27. 27. The Emergence Of Social eCommerce Model"Go Social" Tool for Small Business Merchants - Launched May 14, 2012 ! The "Go Social" offer tool is a virtual one-stop shop that allows American Express merchants to:! ²  Create and manage coupon-less offers into digital channels such as Facebook and other platforms.! ²  Track offer campaign results across multiple social networks and locations.! ²  Help merchants to build their business and evaluate their social offer campaigns with detailed reports that they can access through their own secure dashboards.! ²  The platform is built upon American Express Smart Offer API.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 27!
  28. 28. The Emergence Of The Social eCommerce Model “Sync, Tweet, Save” Twitter Initiative – Launched March 2012 !American Express turns twitter #hashtags into couponless national merchant offers andCardmember savings using its smart offer APIs. API enable Amex to provide valuable merchantreporting about customers’ spending behaviors. Cardmembers can now sync their cards withTwitter, tweet, and save at national merchant partners including Best Buy®, McDonald’s, WholeFoods Market, Zappos.Com, and more. The campaign generated over US $12.8MM in it’s firsttwo months.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 28!
  29. 29. The Emergence Of The Social eCommerce Model“Link, Like, Love” Facebook Initiative Launched July 2011! ²  On the American Express Facebook page, cardmembers can link their cards to the program and choose their favorite deals. ! ²  American Express will send statement credits to cardmembers accounts as they shop online or in stores, without the need to pre-purchase anything, print out or show a coupon at the point of sale. ! ²  Delivers deals and offers based on cardmember Facebook activity, pages they like and share, as well as the activities of Facebook friends. ! ²  When the related transaction is made with the American Express card within a specific time period, the discount is credited to cardmember account. ! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 29!
  30. 30. American Express Has Spent Years Developing The OPENSmall Business Network Community  OPEN  is  American  Express’  strategy  is  to  drive  higher  sales  and  share  of  wallet.   ²  OPEN is American Express’ strategy to create market leadership and engagement beyond its customer base! ²  The OPEN Forum is a central location for the small business community! ²  OPEN Forum includes pertinent articles, blogs, and contributors! ²  Articles and content throughout OPEN Forum can be shared through Twitter, Facebook, Linkedin, emai, RSS, etc. ! ! ²  Mobile and tablet applications are being introduced as additional distribution points! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 30!
  31. 31. Drivers Of mPayment GrowthThere are several underlying trends that will drive mPayment adoption and usageas the primary payment vehicle.! Technology   Social   Unbanked   Media   Consumer   Mobile   mPayments   &  Retailer   Banking   Acceptance   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 31!
  32. 32. Drivers of mPayment Growth - TechnologyAs carriers and telecomm companies have upgraded their infrastructure it has led toa corresponding increase in adoption and usage. This trend will bolster mPaymentsglobally.!²  3G networks have seen dramatic growth and we expect to see the same trajectory for next generation systems (e.g. 4G).!²  Mobile subscriptions surpassed the number of landlines in 2002 and is now is 3 times larger globally.!²  Smartphone sales were up over 63% in 2011 from 2010 (488.5MM) and approximately 5.9B people use mobile phones globally!²  iPad/tablets have the fastest adoption rate in history – outstripping iPhone adoption by over 3 times.!²  Android-based devices continue to outpace iPhone sales and is the dominant mobile platform. The Google based system lags behind Apple app development but it is expected to narrow over the next 3 years.!²  There are a number of disparate mobile platforms that companies must build their mPayment capabilities for as standards vary by region. ! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 32! SOURCE: Mobile Banking News
  33. 33. In Q411 There Were 1.1B Global Mobile 3G Subscribers, Up 37% YoY With A 18% Share Of All Mobile Subscribers         Q411  3G   3G   3G       Q411  3G   3G   3G   Subscribers   Penetra@on   Subscribers   Subscribers   Penetra@on   Subscribers   (MM)   YoY  Growth   (MM)   YoY  Growth   1  USA     208   64%   31%   16  Canada   16   62%   34%   2  Japan   122   95%   9%   17  T  aiwan   14   48%   17%   3  China     57   6%   115%   18  South  Africa   13   21%   49%   4  Korea   45   85%   10%   19  Turkey   13   20%   62%   5  Italy   44   51%   25%   20  Portugal   13   78%   19%   6  UK   42   53%   25%   21  Vietnam   12   11%   358%   7  Brazil   41   27%   99%   22  Mexico   11   11%   55%   8  India   39   4%   841%   23  Malaysia   10   27%   7%   9  Germany   38   36%   23%   24  Sweden   10   73%   25%   10  Spain   33   57%   21%   25  Philippines   10   11%   45%   11  France   30   45%   35%   26  Saudi  Arabia   10   19%   17%   12  Indonesia   29   11%   27%   27  Netherlands   9   44%   34%   13  Poland   28   57%   17%   28  Egypt   8   10%   60%   14  Australia   22   76%   21%   29  Austria   7   58%   24%   15  Russia   17   8%   45%   30  Nigeria   6   6%   51%   Global  3G  Stats:  Subscribers  =  1,098MM        Penetra@on  =  18%          Growth  =  37%     © 2011 Blue Panda Interactive. Proprietary And Confidential.! 33! Source:  Informa  WCIS+.  
  34. 34. In 2002 A Global Milestone Was Reached As MobileSubscription Surpassed LandlinesMobile subscriber growth continues to grow rapidly while landlines are in a slowrate of decline! Global  Install  Base  MMs   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 34! Source: International Telecommunications Union
  35. 35. Apple Has Achieved Exponential Growth With Each SuccessiveProduct Launch First 8 Quarters Cumulative Unit Shipments! iPad  vs.  iPhone  =  3x   iPad  vs.  iPod  =  60x   iPhone  vs.  iPod  =  20x   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 35! Source: KPCB; Apple
  36. 36. The iPhone Sales Rate Has Been Eclipsed By The AndroidPlatform And Continues To Outpace Apple First 13 Quarters of Cumulative Unit Shipments! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 36! Source: KPCB; Gartner; Morgan Stanely
  37. 37. Tablets And eReaders Are Growing Rapidly And Have BecomeA Third Screen For ConsumersTablets will play an increasingly integral role for digital consumers – banks andretailers will need to adjust their strategy and experiences specifically for them.! %  Ownership  US  Adults  With  A  Tablet  or  eReader  60%   55%*  50%  40%   29%  30%   18%  20%   16%   14%  10%   5%   6%   3%   4%   2%   0%   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 37! *Estimate Source: Pew Research; Independent Research
  38. 38. In 2011 There Were 2.3B Global Internet Users, RepresentingA 8% CAGR From 2008 Rank   Country   2008-­‐2011  New   2011  Internet   YoY   Popula9on   Internet  Users  (MMs)   Users  (MMs)   Growth   Penetra9on   1   China   215   513   12%   38%   2   India   69   121   38%   10%   3   Indonesia   37   55   22%   23%   4   Philippines   28   34   44%   35%   5   Nigeria   21   45   N/A   28%   6   Mexico   19   42   19%   37%   7   Russia   16   61   3%   43%   8   USA   15   245   1%   79%   9   Iran   14   37   N/A   48%   10   Turkey   11   36   26%   49%  Top  10   444   1189   12%   32%  World   663   2250   8%   32%   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 38! Source: KPCB; internetworldstats.com
  39. 39. Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary payment vehicle.! Technology   Social   Unbanked   Media   Consumer   Mobile   mPayments   &  Retailer   Banking   Acceptance   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 39!
  40. 40. Drivers of mPayment Growth - UnbankedThe worlds unbanked are rapidly adopting mPayments without the need for abank. Banks will face stiff competition to win marketshare.!²  There are over 2.5B unbanked people globally, many of which are in Africa, Asia, and Latin America.!²  Because most of the unbanked currently own a mobile phone they are readily adopting mPayment based options.!²  Mobile payments are bringing disparate players together in collaboration to provide new payment options to the unbanked.!²  The majority of mobile payments are focused on retail and person-to-person (P2P) payments.!²  The ability to enhance the unbanked regions will vastly improve the flow of funds and ultimately spur economic growth that would otherwise be difficult to obtain.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 40! Source: Mobile Banking News
  41. 41. Many Parts Of The World Have A Large Percentage OfUnbanked ConsumersmPayments will provide access to a more efficient and lower cost payment systemfueling new economic prosperity for the world’s unbanked.! Unbanked   Banked   11%   45%   55%   61%   67%   76%   82%   89%   55%   45%   39%   33%   24%   18%  High  Income   East  Asia  &   Europe  &   La@n  America   South  Asia   Sub-­‐Saharan   Middle  East  &   Economies   Pacific   Central  Asia   &  Caribbean   Africa   North  Africa   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 41! SOURCE: Demirguc-Kunt and Klapper 2012
  42. 42. Emerging Partnerships and Platforms In China – UMPayLaunched  in  2003  It  provides  China  Mobile  users  with  a  comprehensive  mobile  payment  plalorm  and    mPayment  system  that  provides  mobile  wallets,  financial  message  services,  top-­‐ups  and  mobile  @cke@ng.     ²  According   to   UMPay,   e-­‐   and   mPayment  users  will  exceed  500MM   people   and   currently   has   100MM   mPayment   users.   Most   of   these   users  are  the  unbanked.   ²  The   greatest   growth   will   be   from   rural  farmers.    This  is  the  strategy  of   UMPay  today  -­‐  to  saturate  the  rural   loca@ons   with   UMPay   access   growing   to   half   a   billion   in   the   very   near  future  according  to  UMPay  CEO   Bin  Zhang.   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 42!
  43. 43. India Is The World’s Second Most Populous Nation And HasOver 450MM Unbanked PeopleIn a country where cash is used in 65% of retail transactions and mobile phonesare common, mPayments are poised to grow.! India Facts & Figures! ²  Mobile phone connections outnumber bank accounts by more than a factor of three: 893MM mobile phone subscribers and 250MM bank accounts. ! ²  The National Payment Council of India (NPCI) launched the Interbank Mobile Payment Service (IMPS). IMPS allows a person to pay/remit money to a merchant or an individual in real-time using a mobile phone number and a mobile phone identifier. ! ²  M-commerce been gaining traction. Indias leading m-commerce player, ngpay, has over 1.5 million registered users who can purchase products through their mobile phones. Their mobile mall has a daily volume of 40,000-50,000 unique users, with about 15% of those making purchases with an average transaction size of about Rs 700.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 43!
  44. 44. Payments Using SMS And USSD Has Grown Exponentially inCertain Regions Will Expand Globally²  Consumers in Africa, the Middle East, and India rely on telecoms including Vodafone and MTN to provide mobile money options.!²  Western Union has partnered with MTN in Uganda to launch a mobile-transfer service. WU has agreements with 11 mobile operators and an additional 17 is in the works.! M-Pesa Facts & Figures! ²  M-Pesa, Swahili for money! ²  SMS based mobile money mPayment Kenya   launched in 2007! ²  By 2011 68% of adults use mobile money! ²  Average transaction size is $30! ²  Users give cash to agent, money is loaded onto account, payment made via SMS, confirm given to merchant via SMS! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 44!
  45. 45. Drivers Of mPayment GrowthThere are several irreversible trends that will drive mPayment adoption and usageas the primary payment vehicle.! Technology   Social   Unbanked   Media   Consumer   Mobile   mPayments   &  Retailer   Banking   Acceptance   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 45!
  46. 46. mPayments – Consumer & Retailer AcceptanceThe proliferation of digital technology and the rise of social media have contributedto a growing adoption and usage of mPayment services.!² Purchases from mobile devices is on the rise with consumers - 24% bought on a mobile website and 18% on a mobile app.!² Mobile technology enables retailers to push local mobile offers, discounts, and rewards to incent in-store traffic. !² Retailers have seen a substantial increase in online traffic and sales coming from tablets. !² In the 2012 Shop.org/Forrester Research State of Retailing Online survey, 49% of retailers reported that the average order value via a tablet device is now higher than a smartphone or desktop. !² Retailers with both tablets and smartphone apps, 45% of their total mobile web traffic for smartphones occur on the Web and 17% on apps. For tablets, 28% occur on the Web and 11% on apps.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 46! Source: Mobile Banking News
  47. 47. The Emergence Of The Mobile Web As The Dominant ChannelOf Choice – It’s Become Mainstream Facebook mobile users have! Nearly 30% of consumers conduct product research on mobile devices ! from 50MM in 2009 to 200MM in 2011! Twitter has over active users There are mobile video playbacks from YouTube every day! sending over tweets a day! Social networking accounted for 86% of mobile internet users use their mobile of all page views on mobile phones in 2011! phone while watching TV ! Over 300k apps have been developed in the 90% of the largest retailers have a mobile site past 3 years and downloaded more than 10.9B or smartphone app! times! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 47!
  48. 48. Globally, Mobile Devices Are Increasing The Device Of Choice For A Variety Of ActivitiesMobile  Ac@vi@es  by  Share  of  Total  Mobile  Audience   Mobile’s Growing Influence! US   EU5   Canada   Japan   ²  Overall Text messaging is highest with Sent  text  message   74.3%   84.4%   69.2%   44.4%   Europeans preferring it the most at 84.4%. Japanese are much less likely in Took  photos   60.3%   59.8%   55.1%   63.9%   comparison at 44.4%! Used  email   40.8%   30.0%   35.9%   57.3%   ²  Mobile social media and blogging are Accessed  Social   35.3%   25.7%   31.2%   19.6%   relatively new and North Americans have networks/blog   the highest rates above 30%. Expect these Accessed  weather   35.2%   23.2%   29.8%   35.1%   numbers to jump globally.! Played  games   31.4%   27.5%   30.8%   15.3%   ²  Photos, and email rank consistently among the highest activities across all regions.! Accessed  search   29.5%   20.4%   25.6%   30.8%   ²  Gaming is bigger in the US and Canada Accessed  maps   26.5%   18.2%   21.65%   19.4%   than other regions that may be influenced Accessed  news   25.5%   20.0%   20.1%   24.3%   by popularity of the iPhone.! Listened  to  music   23.8%   27.4%   23.0%   13.3%   ²  Japanese are more likely to do email and, Accessed  sports  info   21.8%   16.5%   16.0%   19.7%   in general, access and search for content.! Accessed  financial   15.1%   11.3%   11.4%   17.9%   ²  Watching video from YouTube and news  or  stock  quotes   proprietary content providers will continue to grow as smartphone ownership Accessed  online  retail   12.2%   8.2%   6.1%   10.0%   increases and content becomes available.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 48! Source:  comScore  Mobile  Metrix  2.0,  Beta  Data,  Dec-­‐2011,  U.S.  
  49. 49. Mobile Consumer BehaviorMobile devices have become an indispensible part of our lives……! Over 300k apps have been developed in the past 3 years and downloaded more than 10.9B times!……  And  are  used  universally  by  consumers  throughout  the  day   98%   89%   79%   74%   64%   At  Home   On  The  Go   Shopping   At  Work   Commu@ng   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 49!
  50. 50. Mobile Web Traffic Will Surpass Desktop Web Traffic By 2015Tablet access to the web will gain a large foot hold as it’s growth is eclipsingdesktop sales and growing at a faster rate than mobile.! Web  Surfing  By  Device  100%   80%   73%   60%   57%   52%   40%   43%   48%   20%   27%   0%   2007   2011   2015E   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 50!
  51. 51. Mobile Web Traffic Growth Global mobile traffic as a % of total web traffic has grown by a factor of 20 over the past 4 years. ! 2011  Year  in  Review  and  Outlook  for  2012  Mobile  data  traffic  as  a  percent  of  total  web  traffic     ²  Mobile   data   traffic   more   than   doubled   in   2011.     Global   mobile   data   traffic   166%  CAGR   more   than   doubled   growing   133%   in   2011,  for  the  fourth  year  in  a  row.     ²  Mobile   data   traffic   will   double   again   in   2012   ²  Cisco  es@mates  that  traffic  in  2012  will   grow  110%,  reflec@ng  a  con@nua@on  in   the  tapering  of  growth  rates.     ²  The   evolving   device   mix   and   the   migra@on   of   traffic   from   the   fixed   to   mobile   network   has   the   poten@al   to   bring  the  growth  rate  higher.   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 51!
  52. 52. China Has The Largest Online Population And By 2015 It IsExpected To Become The World’s  Largest Online Retail Market  China has become a major Internet market with increasingly sophisticated consumers. ! ² By 2015, China will add nearly 200MM users, reaching an Internet population of more than 700MM users—double the combined number of Japan and the U.S. ! ² In 2011, consumers spent 1.9B hours a day online— an increase of 60% from two years earlier. ! ² Online buying and selling, including group purchasing, is the second fastest growing activity after micro blogging. ! ² Chinese consumers are quickly adopting mobile usage that will be used as a primary access point and payment choice for the internet.! ² Users have not only adopted real-time mobile social networking at a growing rate they are also doing so with increasing frequency.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 52! Source:  Bain,  Nielsen  
  53. 53. Internet Sales Have Taken Off As Online Retailers Gain Share,Mobile Will Become A Key Component Of This GrowthIn  2010,  more  products  were  purchased  on  Taobao  than  at  China’s  top  five  brick-­‐and-­‐mortar  retailers  combined.     ² Between 2011 and 2015, online retail sales will increase 300% to more than $360 billion. ! ² China’s consumer behavior continues to evolve as they rapidly adopt a digital lifestyle. ! ² Half of Internet users say that the Internet is their most trusted source of information, followed by television at 30% and newspapers at 15%. ! ² Between 2008 and 2011, the online share of consumer spending increased from 11.8% to 14.3%. Between 2011 and 2015, per capita online spending will likely rise by 15% annually. ! ² Consumers research products online that they eventually buy in physical stores and 25% of consumers research online before buying offline – a trend consistent in other markets.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 53! Source:  The  Boston  Consul9ng  Group,  China’s  Digital  Genera9ons  3.0    
  54. 54. Mobile Commerce = Adoption Of Mobile Payments Has Accelerated in 2010 And Is We Have Lift Off! Expected To Continue On An Upward Trajectory Mobile Sales or Payment Volume – eBay / PayPal / Amazon.com / Target / Square, 2009-2011E $5 Gross Mobile Sales or Payment $4 eBay PayPal Volume ($B) $3 Target $2 Amazon.com $1 Square $0 2009 2010 2011Note: Amazon.com disclosed 2010 mobile gross sale, 2009 / 2011 data are KPCB estimates.Source: eBay, Amazon.com, Target, Square.Copyright 2011. All rights reserved. 31 © 2011 Blue Panda Interactive. Proprietary And Confidential.! 54! Source:  KPCB  
  55. 55. MobileMobile Search – Queries Are Growing Rapidly As Consumers Are UsingThem Increasingly For Information and Transactions Growing Rapidly Google US Mobile Queries (Indexed), 2007 – 2011 120 100 4x Growth in past years 80 60 40 20 0 2007 2008 2009 2010 2011Source: Google. 19Copyright 2011. All rights reserved. © 2011 Blue Panda Interactive. Proprietary And Confidential.! 55! 19 Source:  comScore,  KPCB  
  56. 56. As US eCommerce Grows The Percent Of Mobile eCommerceIs Climbing, Reaching 8% in Q1 2012 © 2011 Blue Panda Interactive. Proprietary And Confidential.! 56! Source:  comScore,  KPCB  
  57. 57. Social Sites Are A Source For Information, Comparisons, And Ratings That Influences Buying Behavior Community,  Social  Tools  that  Impact  Buying   %  of  respondents,  June  2011   User-generated 59% product reviews Online customer Q&A 42% on product website Community forums (conversations between 26% customers) User-generated videos 15% Facebook company 13% fan pages Facebook newsfeed (friends talking about 13% products) Mobile (iPhone app, 9% text alerts) Twitter (monitor, 9%respond to, and post tweets) © 2011 Blue Panda Interactive. Proprietary And Confidential.! 57! Source:  e-­‐tailing  group,  PowerReviews  
  58. 58. © 2011 Blue Panda Interactive. Proprietary And Confidential.! 58!
  59. 59. “Give people more control over their banking and you’llwin their loyalty. That’s because mobile is not achannel so much as a way consumers live their livesand consequently, the way banks have to conduct theirbusiness.”! ! Douglas Brown! Senior VP Mobile Product Development! Bank of America! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 59!
  60. 60. mPayments Summary²  The Financial services industry has undergone a broad and rapid transformation over the past decade driven largely by technology and web based services!²  Mobile phone proliferation, development of mobile platforms, and capabilities have created a new dynamic paradigm in the payments industry!²  Convenience and ease of use of mobile capabilities has created a seismic shift in the consumer mindset and acceptance of mPayments !²  Social media coupled with mobile phones have been the catalyst to a growing opportunity to engage consumers and win share for companies!²  mPayments will grow rapidly as a percentage of total payments, however, banks risk disintermediation by non-bank competitors!²  A big driver of mPayments will be the nearly 2.5B unbanked people in developing markets turning to non-bank mPayment options! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 60!
  61. 61. mPayment Roadmap For Banks – Creating FrictionlessFinance Networks ²  Success will come from continued focus on building new distribution models and capabilities to enable mPayments.! ²  In order for the mobile wallet and payments to grow in adoption, it has to be simple, ubiquitous and have a compelling value to consumers.! ²  Prolific growth of smartphones and consumer acceptance is driving growth in mPayments.! ²  Banks must invest in several mPayment technologies as standardized platforms have yet to emerge and will likely vary across geographies.! ²  Banks must rethink their relationships with telecommunications companies and retailers to build and maintain market share and protect their payment marketshare form new competitors.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 61!
  62. 62. History of Payments From Barter to Frictionless Finance There has been more transformation in the payments space in the past 5 years than the prior 2,500 years.! BARTER/   COINS   PAPER   CHECKS   CREDIT   mPAYMENTS   TRADE   MONEY   CARDS  BEFORE   600BC  –   806  –     321BC  –     1800s  –     PRESENT  –  600  BC   PRESENT   PRESENT   PRESENT   PRESENT   FUTURE   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 62! Source:  SapientNitro  
  63. 63. Evolution of Electronic PaymentsCoinciding with the evolution of payments has been the development oftechnological advances that have created a frictionless, global ability to movemoney anywhere anytime.!Late  1970’s    –  Mid  1980’s   1994   1997   Today   Rudimentary  Home   Online  Banking  and   First  Mobile   Fric@onless  Finance  –   Banking  system  based  on   Bill  Pay.    Ability  to   Banking  service   device,  currency   landlines   access  accounts   agnos@c   any@me   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 63!
  64. 64. Mobile Users By % of Population 87%  of  the  world’s  popula@on   Smartphone  sales  increased  63.1%   have  a  mobile  phone   from  2010  to  2011   CIS 14.3%Americas 103.3% Europe 11 9 . 5 % Asia 73.9% Arab States 96.7% Africa 53% 30%  of  the  world’s  mobile   users  live  in  China  and  India   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 64! Source:  KPCB  Internet  Trends,  Mary  Meeker  May  30,  2012    
  65. 65. Growth In mPayment Users 2010 – 2011: Use of mobilephone as payment device that is pre-loaded with funds.Emerging markets have higher penetration and growth rates for mobile payments. ! USA   CHILE   BRAZIL   KENYA   SINGAPORE   HONG  KONG   CHINA   6%   8%   1%   7%   9%   20%   10%   25%   10%   13%   21%   16%   17%   9%   Source:  NitroSapient   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 65!
  66. 66. The Growth Rate For mPayment Users By RegionMobile payment users had double digit growth across all markets from 2009 to2010. ! Mobile  Payment  Users  By  Region  (000)   Region   2009   2010   %  Change   Asia  Pacific   41,865   62,  828   50.0%   EMEA   16,823   27,091   61.0%   La@n  America   5,131   8,010   56.1%   Western  Europe   4,519   7,127   57.7%   North  America   1,905   3,502   83.8%   Total   70,243   108,558   54.5%   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 66! Source:  Javelin  Strategy  2009  
  67. 67. Global mPayment Transaction Growth By RegionsmPayments across all regions have experienced substantial growth from 2008 to2012; rates will slow as markets reach saturation.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 67! Source:  Arthur  D.  Likle  
  68. 68. Electronic Payments In The US Grew By Over 82% In 2011Mobile usage is growing rapidly for retail and payments creating an opportunity togain share of wallet for ecommerce.! 40,000   US  Top  Mobile  Categories  By  Growth  In  Audience  (000)   160%   Dec-­‐10   Dec-­‐11   35,000   134%   140%   30,000   120%   Audience  (000)   25,000   100%   87%   80%   82%   77%   74%   74%   20,000   72%   70%   69%   80%   15,000   60%   10,000   40%   5,000   20%   0   0%   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 68! comScore  MobiLens,  3  month  average  ending  Dec.  2011  vs.  Dec.  2010,  US  
  69. 69. mPayments In China 2010 - 2013 ²  mPayments are expected to grow by 1132% and mobile payment users will increase by 472%. ! ²  In 2011, 69% of users said they used their phones to access the Web—up 30 percentage points in just three years.! 481   Payment growth will be fueled by:!Mobile  Payments  (Billion  Yuan)   ² The share of hours of internet accessMobile  Payment  Users  (MM)   on mobile devices is rising rapidly among all age groups. ! 308   ² Growing usage of mobile apps.! ² Technology that increases the utility of 219   mobile devices as a payment option.! 191   ² Proliferation of mobile devices and 121   mobile infrastructure.! 102   48   ² Greater access to the web through 19   mobile devices.! ² Convenience in researching product 2010   2011E   2012E   2013E   information and pricing transparency.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 69! Source:  China  Internet  Watch  
  70. 70. The Players: Several Industry Groups Are Working On Oneor More mPayment OptionsThe digital wallet is “owned” by several industry segments that each provide keycomponents for mPayments and digital wallets.! Financial   Telecommunica@on   Retailers   Ins@tu@ons   Companies  (1)   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 70! (1)Telecommunica@on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  71. 71. The Players: Each Industry Group Has A Unique Role Within The mPayment Process Collectively mPayment players each provide key components for mPayments and digital wallets. They must work together to create end-to-end experiences.! Financial   Telecommunica@on   Retailers   Ins@tu@ons   Companies(1)   Banking  services   Wireless  Networks   Loyalty  Programs   Loans   Handsets   Merchandise   Payment  Processing   Mobile  Apps   Shopping  Experience   Credit  Card  services   Mobile  Payment  Services   Consumer  Data  Security  Infrastructure   Mobile  Coupon  Services   Point  of  Sale   Security  Infrastructure   Security  Infrastructure   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 71! (1)Telecommunica@on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  72. 72. The Players: Who Owns The Customer Relationship? The mPayment customer relationship is fragmented with each player having a unique role that will vary by market.! Financial   Retailers   Ins@tu@ons   Shopping  Experience  Financial  Rela@onship   Telecommunica@on   Companies(1)   Reliability   © 2011 Blue Panda Interactive. Proprietary And Confidential.! 72! (1)Telecommunica@on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  73. 73. To Establish A Mature mPayments Environment Key IssuesNeed To Be Addressed² Financial Institutions, Telecommunication Companies, Financial   Telecommunica@on   and Retailers need to collaborate   and structureRetailers   Ins@tu@ons   Companies  (1) a revenue share model.!² How businesses will get enough consumers to use the digital wallet and enough merchants to accept mobile payments.!² Ensure that the end-to-end user experience is easy to use, intuitive, and seamless.!² Focus on establishing global standards that can facilitate the growth of mPayments.! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 73! (1)Telecommunica@on  companies  include  carriers,  handset  makers,  chip  makers,  OEMs  
  74. 74. KPMG 2011 mPayments Global Survey Highlights²  Survey focused on projected success of the current and emerging mPayment methods, which were described in the survey as: ! Ø  M-wallet (mobile wallet): account and transaction info is stored on a SIM card; ! Ø  M-banking (mobile banking): direct access to the subscriber’s bank services and information via the mobile device; ! Ø  Contactless card systems: a short-range high frequency wireless communication technology which enables the exchange of data between devices; ! Ø  Specialist online payment systems: for example, Google checkout or PayPal; ! Ø  Carrier billing: for example, purchases are billed on the subscriber’s mobile phone bill. !²  Opinions across geographies were remarkably consistent, while variation across industries was in some cases more pronounced. !²  Only mBanking and online payment systems are seen as gaining traction in the short term. However, most respondents believe the mPayments will grow dramatically over the next 4 years. !²  For the remaining solutions, respondents were most likely to say that it was still too early to predict whether or not the solution would be adopted widely. ! © 2011 Blue Panda Interactive. Proprietary And Confidential.! 74!
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