Nacha 2014 presentation non bank payment systems revolution final 030714

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NACHA PAYMENTS CONFERENCE - 2014

The Payments Revolution: The Role of Non-Banks

Tuesday, April 8, 4:30 p.m. — 5:30 p.m.
Crystal G
Mobile & Digital Payments
Intermediate

Non-bank providers are clearly not new to the payments area, but they are increasingly leveraging innovative technologies and evolving consumer preferences and behavior in new ways to redefine the playing field. Participants in this session hear the latest assessment of who is revolutionizing the mobile payments space and how, as they lead the relentless march to a checkless and cashless future.


Kevin H. Connelly
Executive Vice President, The RWC Group

Published in: Economy & Finance, Business
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Nacha 2014 presentation non bank payment systems revolution final 030714

  1. 1. NON-BANK PAYMENTS REVOLUTION Kevin H. Connelly Executive Vice President The RWC Group kevin.Connelly@therwcgroup.com
  2. 2. OVERVIEW • PAYMENTS EVOLUTION • PAYMENTS REVOLUTION • DISRUPTIVE TECHNOLOGIES • MOBILE MERCHANT TECHNOLOGY • ELECTRONIC WALLET • NFC • BLE
  3. 3. THE EVOLUTION OF PAYMENTS 100,000 Years 3,000 B.C. 650 B.C. 960 A.D. Dark Ages 1950’s Past 20 Years Now  Future.
  4. 4. OVERVIEW • NEW FRONTIER – CHANGES ALMOST DAILY • SOFTWARE VERSION “X.X” REPLACED WITH CUPCAKE, JELLYBEAN AND KITKAT • PAYMENTS UNIVERSE CENTER NO LONGER NY, CHICAGO OR LA – SILICON VALLEY • BANKS NO LONGER LEADING PAYMENTS INNOVATION • NON-BANKS LEADING – PAYPAL, GOOGLE, APPLE, SQUARE • TECHNOLOGY IS DRIVER – RAPID CHANGE IS NORM
  5. 5. THE REVOLUTION OF NON-BANK PAYMENTS tech·nol·o·gy tekˈnäləjē/ noun 1. the application of scientific knowledge for practical purposes, esp. in industry. •rev·o·lu·tion •ˌrevəˈlo͞oSHən/ •noun •1. a forcible overthrow of a government or social order in favor of a new system. pay·ment ˈpāmənt/ noun 1. the action or process of paying someone or something, or of being paid.
  6. 6. DISRUPTIVE MODELS/TECHNOLOGY • ITUNES • AMAZON • LINKED IN • PAYPAL
  7. 7. THE EVOLUTION OF NON-BANK PAYMENTS NEW PAYMENT PLAYERS – THE REVOLUTIONARIES • e-Commerce • E-Bay / Amazon / Apple • Retailers • Starbucks / Jamba Juice • Telecommunication • Isis • Pre-Paid Card Providers • Money Transfer Operators • Disruptors • PayPal / Google / Apple • Level Up / Square • Virtual Currency • Bit-Coin / Amazon • Angry Birds? • “The Cloud”
  8. 8. THE EVOLUTION OF NON-BANK PAYMENTS E-WALLETS In 2013 120 e-Wallet or Mobile Wallet Applications Gatekeeper Wallets Bank Wallets Retailer Wallets e- Commerce Wallets Aggregator Wallets Single- Feature Wallets
  9. 9. THE EVOLUTION OF NON-BANK PAYMENTS THE GEORGE COSTANZA WALLET http://www.youtube.com/watch?feature=pla yer_detailpage&v=yoPf98i8A0g
  10. 10. THE EVOLUTION OF NON-BANK PAYMENTS FACTORS DRIVING THE FUTURE OF MONEY?
  11. 11. THE EVOLUTION OF PAYMENTS E-WALLETS Hybrid Uses Not Just Payments
  12. 12. THE EVOLUTION OF NON-BANK PAYMENTS THE FUTURE OF MONEY? 31% CAGR / $1.6 Trillion
  13. 13. THE EVOLUTION OF PAYMENTS MOBILE PAYMENTS
  14. 14. THE EVOLUTION OF PAYMENTS MOBILE PAYMENTS
  15. 15. THE EVOLUTION OF PAYMENTS MOBILE PAYMENTS
  16. 16. THE EVOLUTION OF PAYMENTS MOBILE PAYMENTS
  17. 17. THE EVOLUTION OF PAYMENTS MOBILE PAYMENTS ? ? ?
  18. 18. THE EVOLUTION OF NON-BANK PAYMENTS FACTORS DRIVING THE FUTURE OF MONEY?
  19. 19. THE EVOLUTION OF NON-BANK PAYMENTS E-WALLETS NFC – Embedded Isis, Google Cloud QR Code Hybrid
  20. 20. THE EVOLUTION OF PAYMENTS E-WALLETS
  21. 21. THE REVOLUTION OF PAYMENTS MERCHANT SERVICES
  22. 22. https://www.paypal.com/webapps/mpp/credit-card-reader EMBEDED VIDEO REMOVED – LINK BELOW
  23. 23. Amazon Coins is a new way to purchase Kindle Fire apps, games and in-app items from Amazon. The more coins you buy the more you will save! Purchased coins are immediately deposited into your account and they never expire. You can choose to spend them immediately or save them up for later. Facebook Credits are a virtual currency you can use to buy virtual goods in any games or apps of the Facebook platform that accept payments. You can buy Facebook Credits directly from within an app using your credit card, PayPal, mobile phone and many other local payment methods. [UPDATE] Bitcoin uses peer-to-peer technology to operate with no central authority or banks; managing transactions and the issuing of bitcoins is carried out collectively by the network. Bitcoin is open-source; its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin typically allows uses that could not be covered by any previous payment system VIRTUAL CURRENCIES DIGITAL & CRYPTO CURRENCIES
  24. 24. THE EVOLUTION OF PAYMENTS ISSUES AND POTENTIAL ROADBLOCKS • Security • Fraud losses • Identity theft • Privacy concerns • Technology • Multiple platforms competing • No clear winner yet • Consumer/Business confusion • Safety • Non-bank accounts • Criminal activity • Regulation
  25. 25. THE EVOLUTION OF PAYMENTS REGULATION • Multiple regulators • Overlapping reviews and conflicting enforcement • New laws phased in and untested • Catch up mode • AML • CFPB
  26. 26. THE EVOLUTION OF PAYMENTS IMPACTS TO BANKS • Disintermediation • Revenue loss • Still most trusted • Checking account remains financial hub • Burdened by regulation and scrutiny • Innovate and invest? • Partner and private label?
  27. 27. THE EVOLUTION OF PAYMENTS IMPACTS TO BUSINESS • Risk model changes • Investment increases • Technology disruptors can impact business • Opportunities for cost savings • Opportunities for revenue increase • Opportunities for customer relationship building
  28. 28. THE EVOLUTION OF PAYMENTS IMPACTS TO CONSUMERS • Enhanced convenience • Increased security but with new risks • Opportunities for savings • Loss of privacy • App-mania • Identify theft • Confusion
  29. 29. THE REVOLUTION OF PAYMENTS WHERE TO FROM HERE?
  30. 30. THE EVOLUTION OF PAYMENTS WHERE TO FROM HERE? • Will regulation kill the debit/credit card? • Is NFC DOA? • QR / Hybrid • Level Up? • Google Glass? • Pocket Change? • So What is Next?
  31. 31. THE REVOLUTION OF PAYMENTS BLE IS NEXT
  32. 32. https://www.paypal.com/webapps/mpp/beacon EMBEDED VIDEO REMOVED – LINK BELOW
  33. 33. https://www.paypal.com/webapps/mpp/beacon EMBEDED VIDEO REMOVED – LINK BELOW
  34. 34. THE EVOLUTION OF PAYMENTS COMMENTS & QUESTIONS Next Gen Will Drive What’s Nexthttp://www.youtube.com/watch?feature=player_detailpage&v=yoPf98i8A0g
  35. 35. www.therwcgroup.com

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