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Alternative payments: Turning Virtual Into Reality


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MetraTech Founder and CEO Scott Swartz presented “Alternative Payments: Turning Virtual Into Reality” at the C4 Brazil 2012 conference on August 16th. The presentation highlighted: new alternative …

MetraTech Founder and CEO Scott Swartz presented “Alternative Payments: Turning Virtual Into Reality” at the C4 Brazil 2012 conference on August 16th. The presentation highlighted: new alternative payment models, how social commerce is driving business in Latin America, technology innovations supporting alternative payments and how regulations are adapting to these new models.

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  • 1. Alternative PaymentsTurning Virtual Into RealityScott Swartz, Founder & CEO
  • 2. Alternative Payments & Virtual Currencies Alternative payments refers to payment methods that are used as an alternative to credit card payments. Virtual currency is used to purchase virtual goods within a variety of online communities; which include social networking websites, virtual worlds and online gaming sites.2
  • 3. Commerce is Changing Yesterday Today Tomorrow Online Online 6% 4% Web- Online Offline influenced + Offline 57% Offline 37% Offline 96% 2008 = $325B 2013 = $ 10T Source: Forrester, Euromonitor Source: Forrester Source: Economist Intelligence Unit and Economist Intelligence Unit3
  • 4. Real/Virtual Acquisitions and Partnerships4
  • 5. McKinsey on Payments (Sept 2011) “Brazil: Incumbents must reinvent themselves”5
  • 6. McKinsey on Payments (Sept 2011)6
  • 7. Every Player Must Change Card Brands Issuers Acquirers Card Holders Merchants7
  • 8. Changing Face of Business Models • Freemium • Social Gaming • 30% -> 1.5% (ARPU BRL 20/month) • LATAM(BRL 606) NA(BRL 521) • Causium (cause marketing) • Hybrid incentives MetraTech Confidential8
  • 9. Diablo III Real-Money Auctions (RMA) eBay → monitored channel Seamlessly integrated “Gold” or 9 real currencies DEAD AGAI N? Ma y be y o u n eed a bet t er sw o r d – c l i c k he r e t oc o me t o t he a u c t i o n ho u se No w $1 per item + 15% Source: Blizzard Entertainment, CEB TowerGroup 9
  • 10. MetraTech Payments Case Study Customer’s Platform 80+ payment methods • Credit/Debit Cards Payments • Phone and Mobile • Prepaid, Cash & E-Wallets • Bank Transfer Subscriptions 160+ Currencies Micro-transactions • Real and virtual B2C Proprietary Product Catalog • Cross-merchant points• Digital merchants B2C• Online games Pricing / Bundles• Virtual worlds B2B• Social networks Online Statements Least Cost Routing Legend Customer systems Anti-Money Laundering B2B Agreements MetraTech systems Customer Internal MetraTech10
  • 11. Need To Better Understand the CustomerHow, When, Where, Why they buyWhat they preferWhen they’re at riskHow to retain them 11
  • 12. McKinsey on Payments (Sept 2011) “Recent work suggests that pricing actions can improve bottom-line performance by more than 20 percent within three years without causing excessive attrition” “Executives need the skills and tools to make well-informed pricing decisions” MetraTech Confidential12
  • 13. What is the Customer Likely to Want?Applying Big Data to Cloud Commerce
  • 14. How Big Is Big Data? 2.5 quintillion bytes 98% of all data in the world today of data per day created in last two years
  • 15. Big Data Sources 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%Source: Aberdeen Group, January 2012
  • 16. Why is Billing & Compensation Critical? People’s behavior can be modified.Remember the whole supplyand demand thing?
  • 17. Reward Good Behavior• Loyalty• Affinity group: “think herd” pricing• Partnerships Rewards Discounts Incentives Points Accelerators
  • 18. Pricing • Difference in pricing is no longer whether online or offline or virtual or real • Timeliness of offers • Functional goods drive more users to pay • Price points need to be experimented with • Understand user demographics and customize when appropriate MetraTech Confidential18
  • 19. Wrap Up Offline, onl Build your Suppliers A3 data: Use ine, real business and Acquire, A pricing, re and virtual with distributers nalyze, Act wards and are business are as offers to blurring model important drive agility in as customer mind customers & partner behavior
  • 20. Questions Scott Swartz, Founder and CEO scott.swartz@metratech.com20 MetraTech Confidential