Cashing in on Mobile Payments with a Winning Strategy

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Cashing in on Mobile Payments with a Winning Strategy

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Is your organization ready to execute on new thinking in payments? Does your infrastructure accelerate time-to-market for new services? The boom in smart phone sales and mobile usage is changing......

Is your organization ready to execute on new thinking in payments? Does your infrastructure accelerate time-to-market for new services? The boom in smart phone sales and mobile usage is changing the way consumers pay for products and gain access to new banking services.
Perficient will help you navigate these paradigm shifts and address the technologies reshaping the payments ecosystem that will drive your digital strategies. You'll learn about:
A holistic view of the payments value chain - banking and retail
A technical review of evolving payment architectures
How you can provide innovative service utilities for greater consumer adoption
Framework enablers to support rapidly growing transaction volumes
Adapting your existing payment models to support the omni-channel experience

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  • 1. Cashing in on Mobile Payments with aWinning StrategyJune 25, 2013
  • 2. Perficient ProfileA national management and technologyconsulting firm, with expert teams focusedon helping our clients implement business-driven financial services solutions.Fast Facts:• Founded 1997• $380 MM+ in annualized revenues• 24 locations in North America• Offshore in Europe, China and India• 2000+ employees• 85% of revenue from recurring clients• Served 450+ clients in past 12 months
  • 3. Financial Services OfferingsPractice Snapshot Practice Leadership with over 20+years of financial servicesexperience Expertise delivering solutions acrossmultiple platforms Serving 19 of the top 50 U.S. RetailBanks (4 of the top 5) Serving 5 top Card and Prepaidcompanies Industry thought leaders andspeakers Formal methodology & tool set toensure successStrategies andDifferentiators Cross-functional business processexperience Enterprise architecture expertise Deep Payments & Integrationexperience Understand the balance betweenbusiness and IT In-house Experience Design team(Perficient XD)200+clients
  • 4. About the SpeakerJeff Fisher, Director, Operations & ClientAdvisory ServicesJeff Fisher has more than 20 years of experience infinancial services leading strategy, development, designand implementation of enterprise initiatives. He hasprovided IT leadership over enterprise systems andprocesses at companies like Capital One, FederalReserve and Visa. His areas of focus include payments,business process management, infrastructure services,regulatory compliance, risk management, andperformance management.
  • 5. Perspectives on thePayments Ecosystem3
  • 6. Players in the Payments EcosystemFinancialInstitutionsRetail &Merchant ServicesCard Companies& NetworksConsumerShould all banks make the shiftto mobile? Is mobile enoughfor banks to differentiate andbe competitive?Will rewards-based card offeringsand ever increasing merchantprocessing costs change thecurrent payments paradigm?Will emerging productinnovations fromintermediaries and newmerchant paradigmsimpact industrydominance?
  • 7. The Consumer PerspectiveMobile technology has altered the way consumers behave and how organizationsadapt their business models.• Emerging Payment Intermediaries have capital tobe innovative with no regulatory oversight• P2P payments are riding the Credit and Debit rails• Banks continue to be the “non-exciting”intermediaries to transfer funds – interbank/intra-bank transfers• New digital currencies are emerging – interventionby government not yet knownFolding Consumer Payments Intothe Ecosystem• Profitable market segments have not yet fully adoptedmobile• Emerging Payment products are and need to beinnovative & compelling to consumers• Consumers with smart phones using “showrooming”• Security still very important; though consumers areseeking value in retail side “rewards”Behavioral Shifts in Consumer DemandISOMessaging“CardPresent”MobileWalletRewardsClosedLoopIn-StoreRetailer’s SystemseCommerceWebServicesProcessorServicesCard CosNetworksPaymentIntermediaryServicesPaymentIntermediaryACHConsumer’s BankRetailer’s BankCC AcctBk AcctPaymentIntermediary’s BankCC AcctBk AcctBill Pay, P2PRetail, P2PIn-aisle “priceshopping”GPS DrivenCouponingRetail Website/PortalOnLineStoreMoneyLoadMobileCC AcctBk AcctCC GatewayCredit, Debit & ATMNetworksConsumer
  • 8. The Financial Services Perspective• Costs for infrastructure and platformdevelopment• Data to be monetized fromtransactions and online campaignmarketing tools• Reap savings in costs and services• P2P capabilities are top of mindPlan to Move to Mobile• Mobile not an additive service –it’s a replacement• User Experience must beeasy, and intuitive with mobileutility• Omni-channel challenge andopportunityEnsuring Adoption & Usage
  • 9. The Retail PerspectiveProprietary NW“CardPresent”MobileWalletIn-StoreCorp Retailers SystemsProcessor ServicesCard CosNetworksACHProcessorRetailer’s BankCC AcctSweep/DepositAcctACH ServicesMobileApp: In-AisleShoppingIn-AisleProprietaryCard SystemClosed LoopProcessorAcquirerPlatformCoupon,Inventory &Checkout“CardPresent”MobileWalletIn-StoreTerminal BatchAdmin/BOConsoleIn-StoreDistributed SystemSmall StoreCard Datain PCICompliantDSS ZoneLarge Retail StoreRetail LocationRetail Website/PortalTreasury Mgmt, Rewards,Payment Intermediary, Etc.Gateway/ SwitchServicesCC AcctDebit Acct, ACHRDFICustomer’sBankOnLineStoreCard MgmtRetail WebsiteOnLineStoreCard MgmtFRB ACHCC GatewayPaymentIntermediaryPayment Intermediary’s BankCC AcctSweep/DepositAcctConsumer• Closed Loop Systems and pre-paid branded card programsemerging• Credit card fees(authorization, discount, chargebacks), PCI Compliance, andother fees are too costly• ACH being leveraged for pre-paid card fundingRetail Side of Ecosystem isChangingRetailer Innovation MeetsMobile• Building consumer affinitytowards prepaid models• Leading retailers turnshowrooming into innovationopportunity• Retail systems enhancementsinclude mobile rewards andcouponing capabilities
  • 10. Who isdrivingmobilepaymentsinnovation?Payments Ecosystem
  • 11. Payments EcosystemThe Consumer!
  • 12. Validation of Consumer Adoption &Movement Towards Mobile Payments3
  • 13. Consumer Access to Retail Services“32% of smartphone users used‘showrooming’ to make a purchase”- Federal Reserve System“U.S. Online Retail Sales to Riseto $370B by 2017”“Projected to be 1.8B socialnetworking users worldwidein 2013”“Tablet sales expected tosurpass portable PCs in2013, total PCs by 2015”“1B smartphones will beshipped worldwide in 2013”
  • 14. Consumer Access to Banking Services24% to locate ATM21% for mobile RDC53% transferred money27% for bill pay87% to do a balance inquiry“Mobile banking userswill exceed 1B in 2017”
  • 15. Payment Volumes“Gartner cuts NFC paymentsforecast by 40%”-TechCrunch“US mobile wallet usersspent $500M in 2012”- Berg Insight“$3.8T in purchases onGeneral Purpose Cards”- The Nilson Report“Google to offer P2Pvia Gmail”“Mobile coupons trigger 51% ofconsumers to shop in-store”- RetailMeNot“More than 770M GPS-enabled smartphones”- Business Insider
  • 16. • 10% of transaction asm-payments• Loyalty program used25% by 9M members• $41M in payment volumeper day• On target to process $15Bin 2013• $20B in mobile commercein 2013• 10% of payments volumefrom mobile in 2012Nonbank Challengers
  • 17. Nonbank Challengers575,000,000Store Accounts?
  • 18. Helping Move the DialMore than 300+ VendorsGuide of 350+ Vendors175,000,000 Search Results
  • 19. The Bottom Line• Adoption of mobile will yield richconsumer “data” for the paymentsecosystem to leverage• Account aggregation and paymentinitiation for financial services clients –regardless of location• Omni-channel customer experience instores – retailers can steer purchasing• Ability to build brand affinity – targetmarketing with mobile will be rich• Convenience factor for the consumer –statistics validate growth trends in mobileto derive revenue for all partiesValue Propositions for Mobile Payments
  • 20. How to Elevate YourSuccess with Payments3
  • 21. Financial ServicesMobile Payment StrategiesGreen Dot’s prepaid cards are available toconsumers at more than 70,000 retaillocations nationwide and online.Challenge• Faced with significant growth &deploying new mobile product sSolution• CIO Advisory services to optimize ITServices and build a next generationmobile infrastructureBusiness Value• Increased agility to respond to rapidchanges in the industry and scale forfuture growth• User Experience + Empowering theCustomer = Mobile Payments Success• Data-savvy Players: Customer Analytics =Game-changer for Banks in PaymentsEcosystem• Mobile infrastructure platform and strategicpartnerships ensure Mobile Paymentsreadiness+
  • 22. Financial Services• Streamline transactionprocessing - Mobile apps thatextend couponing withrelevant offers (less is more)• Monetize data for smarterbanking – Fine-tune advertisingand promotions to consumers• “Under-banked” today will be“banked” tomorrow - Identifynew payment products tobetter serve this segmentTop of Mind for Consumers¹:• Improve Internet and MobileServices• Change Fee Structures1 Ernst & Young Global Consumer Banking Survey 2012
  • 23. Commercial PaymentsEnabling Strategies for WholesalePayments• Full array of B2B services - Portals withrole-based access control• Provide a corporate admin capability tomanage permissions, payment releaseworkflow, and reporting• Adopt a “payments hub” architecturethat interfaces with ACH, Wires, andSecurities services• Leverage a predictive analytics fraudmodel for ACH and wire services• Secure environment with seamless andcost effective back-office integration“Provide a mechanism thatoffers corporate customersleast cost alternative paymentmethods to use.”
  • 24. Retail & Merchant Services• Leverage technical partners for “virtual”POS terminal applications• Support all payment types to includesplit-tenders• Partner to monetize transaction data• Reduce merchant obstacles & promotedigital adoption• Provide guidance on EMV standardsand qualify transaction attributes well inadvance• Preclude unnecessary PCI feesassessed on merchantsMerchant Enablement StrategiesEmerging mobile commerce and paymentsinnovator serving the U.S. Retail industry.Challenge• Differentiate their mobile paymentsproduct and attract new merchantmembers to drive consumer adoptionSolution• Delivered UX design for a mobilewallet application on the iOS platformsupporting all payment types.Business Value• Decreased time to market for theirpilot mobile wallet
  • 25. Card Companies & NetworksWhat’s Important to Them• Promoting brand recognition• Highly competitive environment togrow volume in US market• Continue to expand intounderdeveloped markets• Card company infrastructure andnetworks require maintenancealong with enhancements – all at acost• Reduce fraudulent transactions• Expand “platform as a service”offerings beyond portal-based prepaidplatforms – make them competitive• Evaluate alternative message streamscontaining PAN data originating atPOS to reduce downstream PCI costs,impacts and fraud• Promote service offerings to helpbanks monetize data• Promote mobile adoption to alldemographic segmentsEnabling Ecosystem Strategies
  • 26. Questions?
  • 27. Other ResourcesSession ModeratorFollowOn Twitter@Perficient_FSCome VisitUs at Booth#532
  • 28. Thank you for your timeand attention today.Please visit us at Perficient.com