Mobile payments: the convergence of
financial services and digital businesses
13 September 2013
osborneclarke.com
Welcome & Housekeeping
Fire rules
In the unlikely event of the Fire Alarm sounding, you must first liste...
osborneclarke.com
Mobile Payments – Players and
participants
osborneclarke.com
Mobile Payments - Predictions
• Consumers who say they have purchased items through
their mobile phone:
...
Adrian Kamellard - CEO
The Payments Council
Mobile Payments Service
13th September 2013
Mobile Payments Seminar
Osborne Clarke
Milon Veasey
Head of Mobile Solution Specialists
September 2013
The consumer environment is evolving rapidly
Social Media
Increased desire to interact with all
organisations using social...
Both consumers and businesses have new
and emerging payment needs
• Developing and managing
mobile (and omni-channel)
chan...
Barclays Pingit – the journey so far
Send now
Transfer money using
only a phone number
Launched February 2012
Pay now
Sett...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademark...
© 2013 Wirecard AG 16
Wirecard’s Role in the Ecosystem
ESTABLISHED
BANKS
MERCHANTS
MOBILE
NETWORK
OPERATOR
CONSUMER
© 2013 Wirecard AG 17
Web is the New Offline
Mobile is the New Online
© 2013 Wirecard AG 18
and both need payment!
© 2013 Wirecard AG 19
Mobile Payment is diverse!
with – on - at
© 2013 Wirecard AG 20
Technology for payment
with mobile (NFC) is
ready!
© 2013 Wirecard AG 21
but are the consumers
and merchants ready?
© 2013 Wirecard AG 22
ESTABLISHED
BANKS
MERCHANTS
MOBILE
NETWORK
OPERATOR
OVER THE TOP
PLAYER
And … the ecosystem is
still...
© 2013 Wirecard AG 23
The key questions?
„Where is the business
case?“
AND
„Who owns the user?“
© 2013 Wirecard AG 24
Mobile Payment must offer
more than payment!
Payment is just THE core
layer for further services.
© 2013 Wirecard AG 25
The race just started!
© 2013 Wirecard AG 26
And the winner will be
YOU
Break
A View from the USA
Developments and trends in
Mobile in Payments
John de Lavis
Managing Partner
Greenings
International
Mobile Payments: Environment
• Increasing convergence of channels
• Changing structure of the market
• Multiplication of o...
Stakeholders and their drivers
• MNOs
• OEMs
• Operating system providers
• Payment processors
• Alternative payment syste...
Value chain
• Security and fraud
• Merchant cost efficiency
• Incremental services
• Revenue and the business model
Conclusions
• Open wallet is likely to evolve
• Despite high cost NFC will prevail in the long term
• Payment will only be...
© 2013 Wirecard AG 33
Experiences and
the European
Perspective
© 2013 Wirecard AG 34
There is a difference
between
„I can“
AND
„I do“
© 2013 Wirecard AG 35
Legal and regulatory
frameworks are varying
and challenging!
© 2013 Wirecard AG 36
Where Telco meets Banks!
Similiarities
Differences
Difficulties
© 2013 Wirecard AG 37
What can we expect in the
near future?
Ecoystem will settle
Launches, launches, …
Services and Shapi...
© 2013 Wirecard AG 38
What do we need for
success?
The whole ecosystem
And services, services, …
osborneclarke.com
Mobile Payments – Access/Authentication
Mobile phone as initiator and number as proxy
Payer Payee
Payer'...
osborneclarke.com
40
Mobile Payments – Contactless
Typical structure for partnering arrangements
Thank you.
Please join us for refreshments.
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Mobile payments: the convergence of financial services and digital businesses

  1. 1. Mobile payments: the convergence of financial services and digital businesses 13 September 2013
  2. 2. osborneclarke.com Welcome & Housekeeping Fire rules In the unlikely event of the Fire Alarm sounding, you must first listen to the message over the tannoy. If the message informs everyone to evacuate, please do so immediately in an orderly manner via the nearest safe exit, which is just along the corridor. Stay with me and I will take you to the Fire Assembly Point, which is the: Churchyard of St Johns Zachary, located at the junction of Noble Street and Gresham Street outside the Lloyds TSB building. You are welcome to use our wireless network while you are visiting us. Our network is OCWIFI Our password is ocwifiuk386 We will be live Tweeting from @OC_Payments with the hashtag #mpay2013 If you experience any problems with wireless access, please talk to our receptionist. 1
  3. 3. osborneclarke.com Mobile Payments – Players and participants
  4. 4. osborneclarke.com Mobile Payments - Predictions • Consumers who say they have purchased items through their mobile phone: • UK – 52% • Germany – 57% • Spain – 46% • Visa predicts 52 million mobile payments every month across Europe by end of 2013 and number of contactless terminals to reach 1 million • By the end of 2017, Forrester Research predicts that U.S. mobile users will spend $90 billion via mobile payments • Gartner forecasts global mobile transaction market worth $721 billion and more than 450 million users by 2017
  5. 5. Adrian Kamellard - CEO The Payments Council Mobile Payments Service 13th September 2013
  6. 6. Mobile Payments Seminar Osborne Clarke Milon Veasey Head of Mobile Solution Specialists September 2013
  7. 7. The consumer environment is evolving rapidly Social Media Increased desire to interact with all organisations using social media and immediate communication 47% of customers likely to purchase from a brand they follow via social media sites4 Immediate Account Based Settlement Consumers move to debit card usage and the UK industry move to FPS Online card spend by debit card was greater than that by credit for the first time in 20122 Local Consumer accessing whenever and wherever they want through multiple channels 25% of all web traffic in Dec. 2012 came from mobile devices1 Instant Notifications Growing consumer need for real-time and up-to-date payment information On average, Barclays mobile banking clients access their app 3 times more than online and 6 times more than they visit a branch 6 Technology Platform Adoption Meteoric adoption of consumer Smartphone technology 51% of adults in the UK use a smartphone3 Mobile Buying The coming of age for mobile retail Mobile as a retail channel forecast to grow by c.55% YoY to 2016, compared with 8% for online channels and 1.6% for physical stores5 References: 1(IBM 2012); 2 Payments Council , UK Payment Markets 2012; 3OFCOM Communications Market Report 2013; 4UK eRetailer; 5The future of m-commerce – verdict consulting 2011; 6Barclays internal analysis 6 | Barclays Pingit for corporates | September 2013
  8. 8. Both consumers and businesses have new and emerging payment needs • Developing and managing mobile (and omni-channel) channel strategies • Managing cash flow • Responding to consumer change in a cost effective way • Managing delays and costs associated with processing of cash and cheques • Reconciliation of payments • Creating differentiation in the minds of consumers. Businesses • Ease of use for quick, simple & secure payments • Simplicity and being able to make payments whenever and wherever they are • Transparency and lack of an up to date view on cash position • Convenience to take advantage of the ubiquity of smartphones – but no way of using them to make payments. Consumers 7 | Barclays Pingit for corporates | September 2013
  9. 9. Barclays Pingit – the journey so far Send now Transfer money using only a phone number Launched February 2012 Pay now Settle a bill or invoice, easily and instantly and make Gift Aid enabled donations Launched May 2012 Buy now A range of m-commerce solutions to pay for goods and services on the go Launching September 2013 8 | Barclays Pingit for corporates | September 2013
  10. 10. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
  11. 11. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
  12. 12. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc. Boku vs. Other Payment Methods • • • • • ↓ • Boku Merchants put up with it because they sell more stuff User Reach EaseofUseonline
  13. 13. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.© 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc.
  14. 14. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc. CHANGING THE WAY THE WORLD USES MONEY Steffan Aquarone CEO, Droplet
  15. 15. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc. CHANGING THE WAY THE WORLD USES MONEY • With smartphone ownership set to reach 31m units in UK (60%+ market share), mobile expected to extend to payment imminently • Mobile payments will accelerate at the rapid pace of web development. • Retail sector accounts for roughly 8% of the UK‟s GDP. Equates to £300bn every year in retail sales being transacted by cash or card. • The payment component in an exchange of value in this space is fundamental and simple - whilst opportunities for customer relationship extension are infinite. • Non-bank payments expected to reach 10% worldwide by end of 2013. • Existing mobile payments innovations have been almost entirely focused on “credit cards on your phone”, maintaining the status quo and placing huge limits on innovative capacity. • An end-to-end payment method delivered in 5 seconds on the web free at the point of use can expect to seize the lion‟s share of the this market THE MARKET FOR MOBILE PAYMENTS
  16. 16. © 2013, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku', and 'Pay by Mobile' are registered trademarks of Boku, Inc. WHY DROPLET IS UNIQUE CHANGING THE WAY THE WORLD USES MONEY • API allows developers to integrate Droplet into existing systems. • Merchants can offer loyalty, customised marketing and mobile commerce options to their customers in seconds. • They can track, interact and directly engage with them all from within the Droplet space and without the need for a separate app. • The „Pay with Droplet‟ button means that merchants can even add one-touch mobile payments to their existing apps. • Droplet has quickly superseded such technologies as NFC and all similar proprietary offerings which require hardware. • Users are enjoying bespoke, timely and relevant messages within their mobile journey without any interruption for payment.
  17. 17. © 2013 Wirecard AG 16 Wirecard’s Role in the Ecosystem ESTABLISHED BANKS MERCHANTS MOBILE NETWORK OPERATOR CONSUMER
  18. 18. © 2013 Wirecard AG 17 Web is the New Offline Mobile is the New Online
  19. 19. © 2013 Wirecard AG 18 and both need payment!
  20. 20. © 2013 Wirecard AG 19 Mobile Payment is diverse! with – on - at
  21. 21. © 2013 Wirecard AG 20 Technology for payment with mobile (NFC) is ready!
  22. 22. © 2013 Wirecard AG 21 but are the consumers and merchants ready?
  23. 23. © 2013 Wirecard AG 22 ESTABLISHED BANKS MERCHANTS MOBILE NETWORK OPERATOR OVER THE TOP PLAYER And … the ecosystem is still developing
  24. 24. © 2013 Wirecard AG 23 The key questions? „Where is the business case?“ AND „Who owns the user?“
  25. 25. © 2013 Wirecard AG 24 Mobile Payment must offer more than payment! Payment is just THE core layer for further services.
  26. 26. © 2013 Wirecard AG 25 The race just started!
  27. 27. © 2013 Wirecard AG 26 And the winner will be YOU
  28. 28. Break
  29. 29. A View from the USA Developments and trends in Mobile in Payments John de Lavis Managing Partner Greenings International
  30. 30. Mobile Payments: Environment • Increasing convergence of channels • Changing structure of the market • Multiplication of offerings • Merging of technologies with platforms • Formation of multiple relationship structures • Growing role of non-banks • A number of issues emerging across the value chain • A growing need for universal interoperability standards
  31. 31. Stakeholders and their drivers • MNOs • OEMs • Operating system providers • Payment processors • Alternative payment system providers • Card and ACH networks • Financial Institutions • Merchants • Consumers • Regulators
  32. 32. Value chain • Security and fraud • Merchant cost efficiency • Incremental services • Revenue and the business model
  33. 33. Conclusions • Open wallet is likely to evolve • Despite high cost NFC will prevail in the long term • Payment will only be one thread in consumer and merchants models • Existing payment rails will be used but ACH will become very important • Standards for interoperability will emerge • Mobile will transform the payments landscape
  34. 34. © 2013 Wirecard AG 33 Experiences and the European Perspective
  35. 35. © 2013 Wirecard AG 34 There is a difference between „I can“ AND „I do“
  36. 36. © 2013 Wirecard AG 35 Legal and regulatory frameworks are varying and challenging!
  37. 37. © 2013 Wirecard AG 36 Where Telco meets Banks! Similiarities Differences Difficulties
  38. 38. © 2013 Wirecard AG 37 What can we expect in the near future? Ecoystem will settle Launches, launches, … Services and Shaping
  39. 39. © 2013 Wirecard AG 38 What do we need for success? The whole ecosystem And services, services, …
  40. 40. osborneclarke.com Mobile Payments – Access/Authentication Mobile phone as initiator and number as proxy Payer Payee Payer's PSP Payee's PSP Sale of goods and services Customer Ts&Cs Payment system Mobile App Ts&Cs Mobile phone number proxy database Customer Ts&Cs Mobile App Ts&Cs
  41. 41. osborneclarke.com 40 Mobile Payments – Contactless Typical structure for partnering arrangements
  42. 42. Thank you. Please join us for refreshments.

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