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 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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Alternative payments: Turning Virtual Into Reality

  1. 1. Alternative PaymentsTurning Virtual Into RealityScott Swartz, Founder & CEO
  2. 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. 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. 4. Real/Virtual Acquisitions and Partnerships4
  5. 5. McKinsey on Payments (Sept 2011) “Brazil: Incumbents must reinvent themselves”5
  6. 6. McKinsey on Payments (Sept 2011)6
  7. 7. Every Player Must Change Card Brands Issuers Acquirers Card Holders Merchants7
  8. 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. 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. 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. 11. Need To Better Understand the CustomerHow, When, Where, Why they buyWhat they preferWhen they’re at riskHow to retain them 11
  12. 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. 13. What is the Customer Likely to Want?Applying Big Data to Cloud Commerce
  14. 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. 15. Big Data Sources 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%Source: Aberdeen Group, January 2012
  16. 16. Why is Billing & Compensation Critical? People’s behavior can be modified.Remember the whole supplyand demand thing?
  17. 17. Reward Good Behavior• Loyalty• Affinity group: “think herd” pricing• Partnerships Rewards Discounts Incentives Points Accelerators
  18. 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. 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. 20. Questions Scott Swartz, Founder and CEO scott.swartz@metratech.com20 MetraTech Confidential