M payments mobile_business_20120327


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EY Director Tim Wulgaerts: mobile payments

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M payments mobile_business_20120327

  1. 1. Mobile paymentsMobile Business27 March 2012
  2. 2. Introduction
  3. 3. Mobile Money Mobilebanking Mobile ticketing Mobile Mobile payment remittance Mobile shopping Mobile Mobile advertising presence Mobile Commerce
  4. 4. Different flavors and combinations Front end technology Back-end settlement Proximity payment Electronic wallet (e.g. via NFC) Mobile phone as POS Bank account SMS / USSD Credit card Mobile internet / apps Telecom bill
  5. 5. mPayment: just one additional mobile step Marketing Ordering Distribution Payment Go / e-mail / fax / Traditional Go to shop Traditional phone to shop “Normal” web “Normal” web Mobile = POSTraditional + QR Physical delivery QR scan or NFC NFCMobile presence NFC Digital to PC SMS / USSD mAdvertising SMS / USSD mCoupons Mobile web / app Digital to phone Mobile web / app
  6. 6. Do we need it? Some of the potential gains: Consumers Merchants► Phone always at hand ► Lower transaction cost (even more than wallet) ► Reduced transaction► Convenience processing time► Usability ► Reduced labor costs► Facilitates micro ► Ubiquitous channel to payments accept customer► More secure payments► Lower transaction cost ► Avoid churn, attract new customers ► Increase of electronic payments
  7. 7. Who’s involved?A whole eco system Regulator Card Technology association/ innovators network Clearing Application house / vendor Hub Customer NFC chip Integrator Mobile manufacturer operator Payment Handset network manufacturer Government
  8. 8. Banks, credit card companies and operatorsvery active Regulator Card Technology association/ innovators network Clearing Application house / vendor Hub Customer NFC chip Integrator Mobile manufacturer operator Payment Handset network manufacturer Government
  9. 9. But also many newcomers Regulator Card Technology association/ innovators network Clearing Application house / vendor Hub Customer NFC chip Integrator Mobile manufacturer operator Payment Handset network manufacturer Government
  10. 10. A sample …
  11. 11. Is the technology thereyet?
  12. 12. What do we need for mobile payments to happen? Enabled handsets User expansion Stable eco- Convenience promotes usage scene expansion system & usability Positive Usage scene User expansion feedback expansion CycleScalability of Trust and solutions awareness Usage scene expansion promotes user Standard Cost expansion
  13. 13. NFC = important enablerBut still issues with:► Standardization► Interoperability► Control (over secure element)► Business model► Customer awareness► Handset availability► Regulation
  14. 14. NFC-enabled handsets not yet omnipresentMobile handset shipments (million) 1.600 25% 1.420 1.400 1.335 20% 21% 1.200 1.133 1.152 1.092 1.000 15% 800 9% 10% 600 400 301 5% 3% 200 116 1% 0% 3 14 34 0 0% 2008 2009 2010 2011 2012 All mobile handsets NFC-enabled mobile handsets Share of NFC-enabled mobile handsets
  15. 15. NFC might be overhyped NFC Payment Media tablet Location-Aware Applications Mobile application stores QR / Color codeSource: Gartner, Hype Cycle for Emerging Technologies 2011
  16. 16. Not all future scenarios include mPayment Four scenarios based on scenario analysis – how will we communicate in 2020 Integration of internet and consumer life A Fully integrated & seamless B ‘Full Speed ‘Roller coaster’ Ahead’ Security and privacy Not in controlIn control ‘Speed Limit ‘Gear Down’ control’ Fragmented & separated C D http://www.ey.com/NL/nl/Industries/Telecommunications/telecoms2020
  17. 17. Should you wait?It may happen sooner thanyou think
  18. 18. Internet Mobile 13% 30% 87% 70% No Internet Internet No Mobile MobileSource: broadbandtrends, Feb. 2012 and ITU, Nov. 2011
  19. 19. Smartphones on the rise52 100 million activated Android devices (Google IO 2011) % 400.000 new Android devices activated per day (Google IO 2011)Of phones shipped in Europein Q1 2011 are smartphones(IDC, 2011) 468 million smartphones shipped in 2011 (expected, Gartner) 4 million iPhone 4S’ sold in first weekend (Apple)
  20. 20. 97Of youth (age 12-18) in Europe has a mobile phone %(Source: EY, compiled from several national studies) How many have a credit card?
  21. 21. Digital natives are coming
  22. 22. 90 71 % mobile subscribers in US and Western Europe have a phonethat can access the mobile Web US consumers likely to use mobile payments if it were instant % (half of which already HTML browser) Source: ComScore, 2011 Source: Toluna Survey and Poll Services, and Obopay 2011
  23. 23. Products researched or purchased using amobile device?70% 62%60% 55% 54%50% 47% 42% 40%40% 36% 32% 28% 29%30% 24% 22%20% 17% 14% 13% 8%10% 0% Researched PurchasedSource: JiWire research with WiFi hotspot users, Q1 2011
  24. 24. Also … NFC is more than mobile payments► Identification► Physical access► Time registration► Mobile ticketing► Car rental► Information provider► Advertising► Medical solutions► Games► Connecting devices
  25. 25. Again … Should you wait?It is alreadyhappening
  26. 26. De Lijn Mobile For 3 Million 3,5 MillionSMS tickets in 2011 mobile parking tickets (25% YoY increase)
  27. 27. Korea Japan 100% 9,8 million users 80% (10% mobile subscription base) Where are they paying? 60% 40% 20% 0% Source: ComScore, 2011
  28. 28. 28%Total revenue growth 2011 24% Total payment volume (TPV) growth in 2011$ 5 billioneBay revenue originating frommobile commerce in 2011 $ 4 billion Mobile payments volume 2011
  29. 29. What’s ahead?
  30. 30. What’s ahead?20 $ 245 billion mobile payment value by 2014 (Gartner, 2011) 40 % of all phones will be NFC enabled by 2015 (Ovum, 2011)Countries are expected to launchNFC services in the coming 18months 32,8 % of global m-payments transactions will be NFC driven by 2014 (IE Market Research, 2010) $ 74 billion in NFC facilitated payments by 2015 (Juniper Research, 2012)
  31. 31. Some final thoughts
  32. 32. Biggest challenge:Getting the positive feedback cycle going Positive feedback cycle Negative feedback cycleUser expansion Limited user inducespromotes usage merchants’scene expansion reluctance adoption Usage Usage scene scene User User decrease expansion expansion decrease User does not Usage scene increase expansion because of promotes user limited place of expansion usage
  33. 33. Mobility is not in thefuture, it is alreadyhappeningNFC is promising
  34. 34. Towards “smart” commerce?► Mobile is just one channel► We are moving to a multi-channel environment ► Mobile wallet ► Online wallet ► Credit card Moving from mobile payments to a new holistic way of payment offerings?
  35. 35. Some recent thought leadershipAvailable via our EY Insights app or online http://www.ey.com/NL/nl/Industries/Teleco mmunications/telecoms2020
  36. 36. Ernst & YoungAssurance | Tax | Transactions | Advisory Contact detailsErnst & YoungAssurance | Tax | Transactions | AdvisoryAbout Ernst & YoungErnst & Young is a global leader in assurance, tax, transactionand advisory services. Worldwide, our 152,000 people areunited by our shared values and an unwavering commitmentto quality. We make a difference by helping our people, ourclients and our wider communities achieve their potential.For more information, please visit www.ey.com.www.ey.com© 2012 EYGM Limited.All Rights Reserved.Ernst & Young refers to the global organization of memberfirms of Ernst & Young Global Limited, each of which is aseparate legal entity. Ernst & Young Global Limited, a UKcompany limited by guarantee, does not provide services toclients.This publication contains information in summary form and istherefore intended for general guidance only. It is notintended to be a substitute for detailed research or theexercise of professional judgment. Neither EYGM Limited norany other member of the global Ernst & Young organizationcan accept any responsibility for loss occasioned to anyperson acting or refraining from action as a result of anymaterial in this publication. On any specific matter, referenceshould be made to the appropriate advisor.