Successfully reported this slideshow.

The Consumer Side of NFC and Mobile Payments

1

Share

Loading in …3
×
1 of 37
1 of 37

More Related Content

Related Books

Free with a 14 day trial from Scribd

See all

Related Audiobooks

Free with a 14 day trial from Scribd

See all

The Consumer Side of NFC and Mobile Payments

  1. 1. The Consumer Side of NFC and Mobile Payments Lafferty Global Merchant Services Council, Amsterdam NL (25 April 2013) Dan Armstrong (dan.armstrong@takashimobile.com)
  2. 2.  Some nagging thoughts on paradigm shifts  Re-thinking the nature of transactions and transaction actors  Proximity mobile payments: card emulation or not?  3 case studies from The Netherlands to validate consumer acceptance of NFC  Rebooting the conversation from a consumer point-of- view • What do we expect from a wallet, or a payment instrument? • Is NFC a “tech-push’ or a “consumer pull’? • How to differentiate with NFC?  1 case study from Rwanda, where cards and card acceptance are virtually non-existant Contents
  3. 3. marketplaceMCI (1994-96)
  4. 4. marketplaceMCI (1994-96)
  5. 5. 1-800-MUSiC-NOW (1996)
  6. 6. The e-commerce shake out  Many shifting paradigms. However, once the supply chain and logistics matched people’s awareness, appetite and feelings of trust for e-commerce settled, clear winning business models emerged (my personal way of summarising): • Efficiency (Paypal, Netflix, online photo printing, online flight tickets/car rental/hotels, UPS/FedEx tracking, Amazon.com) • Products (HP, Netflix, Thomann.de, Amazon.com) • The Long Tail ( eBay, Marktplaats, publishing on demand … and of course Amazon.com) • … plus of course, Monetising Clicks (Facebook, Google, YouTube, TripAdvisor, pornography)
  7. 7. How shall we define “transaction”? Bank Account Value Transfer, Payments Value Depletion, Prepaid, Wallets, Transportation Loyalty, Points, Coupons, Transformation Moments Eyeballs, Trust, Engagement, Action <?>
  8. 8.  50% of consumers will pay more for products they trust  78% of consumers will look first to trusted brands when in need of products or services  78% of consumers are willing to give trusted brands a chance, even if unsure of what value the product or service will bring to them  82% of consumers will choose to use a trusted brand’s products or services frequently, rather than move between brands  83% of consumers will recommend a trusted brand to others, often un-prompted Trust? Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore
  9. 9. … 2 fundamental types of transaction players? Transactions are the Channel ”I have a pipe and/or network and I want to monetise the investments I made in creating it. I want as much to get through that pipe and the (mobile) phones accessing it as possible.” Transactions via the Channel ”I have stuff I want to do via channels. Enable bank account control, enable payments, provide ticketing, sell ads, credit loyalty points, etc. and I need as many (cost effective) channels and pipes to do it.”
  10. 10. “Mobile” Banking & Payments Scope CallCentre Banking IVR Banking & Payments SMS & Calling Alerts (spending, ATM usage, fraud, etc.) Transactions with Teller or Agent using Mobile Devices Mobile Banking & Payments Remote Payments & Electronic Wallets Mobile Contactless / Proximity Payments MNO “Mobile Money” Mobile Remittances Advertising-led Models = banks deploy = bank-led models = cooperative models = mobile operator-led models = mobile operators deploy = third-parties deploy = public transportation-led models Mobile Contactless / Proximity Payments
  11. 11. 2 Approaches to Mobile Proximity Payments Card Emulation Bypass Card Emulation  Phone takes the place of a physical card to transact at a physical merchant location  Consumers are comfortable with card operating models  Standardisation and ubiquity of acceptance points a must for economies of scale  Requires compatible card/mobile acceptance infrastructure  Trigger remote payment with phone (apps, other manner)  Confirmation can be pushed to merchant, but how to localise the payment location without NFC?  Receipt can be printed at POS  Latency in making payment this way vs. cards  EMV / secure PIN keypad  Card acceptance still required
  12. 12. Proximity Payments OfflineCounter Triggers Payment value on the card value in “the cloud’ Mobile Authentication Triggers Payment card-emulationbypasscard-emulation Card Authentication Triggers Payment
  13. 13. 3 Cases in Consumer Acceptance of Mobile as a Proximity Payment Tool
  14. 14. Mobile NFC as Debit Card and Shopping Tool – C1000
  15. 15. Mobile NFC for Low-Value Payments in Vending
  16. 16. NFC Mobile as Retail Shopping Tool, Issued Devices & Acceptance Point
  17. 17. What do we expect from a wallet?  A place to store cash?  A place to store payment tokens?  A place to store other tokens?  A personal object?  A private object?  Something small enough to be portable/mobile?  … but … do we need a physical object?
  18. 18. Then, what do we expect from a transaction device?  Identification of myself, my rights and capabilities, memberships.  Identification of myself, an authentication tool for payment.  Secure, multi-factor  Tamper-resistant/evident  Personal and private  Easy to use  … but … do we need a physical object?
  19. 19.  Consumers seem to love and trust it • But who will pay for it’s implementation … merchants, banks, mobile operators, handset manufacturers?  Given the “app revolution” in so many of our markets, what value does NFC bring to payments? • Convenience? • Put all cards in one apparatus? The phone-shaped wallet .. • Addiction to mobile phones, but not to our wallets? • Leave cards at home? • Add value to transactions?  Cards will remain in play for the foreseeable future, simply increasing the issuer and acquirer costs.  Perhaps the business case can be made on a country-by- country level, but this is fundamentally different from steps forward in functionality (e.g. cards, SMS, mobile data, apps, online shopping & payment). The Consumer’s Perspective on NFC?
  20. 20. Virtualisation benefits are clear, from the business POV .. 0 50 100 150 200 250 300 350 400 450 500 1980 1985 1990 1995 2000 2005 2010 *1million Contacts via devices (e.g. web browser/internet, mobile phone, IVR) Total Customer Contacts Contact via a bank advisor, bank branch
  21. 21.  The case is clear for our creativity to make virtualised ecosystems work.  But it will take a lot more creativity, usability and value to become a real business driver.  For banks, they also need to achieve this without sacrificing trust, security, longer-term relationships, and certain degree of transparency. Virtualisation benefits are clear, from the business POV ..
  22. 22. For your consideration .. impulse purchase / spam
  23. 23. For your consideration ..
  24. 24.  Although you could still easily pay with a card when you get to the POS … For your consideration ..
  25. 25.  Limited smartphones  Limited (and expensive) mobile data  Limited (and expensive) fixed internet & electricity  Limited literacy  Limited trust in banks  High cost of ATM and branch operations, limited in-country IT capabilities  Limited amount of people with official IDs  Everyone wants a card anyway. It’s modern. But limited cards issued Leap-Frogging Card Acceptance Infrastructure in Africa
  26. 26. Bank Branch: Rwanda No power, internet connectivity
  27. 27. Bank Branch: Rwanda Teller
  28. 28. Bank Branch: Rwanda Waiting for teller cash withdrawals
  29. 29. Bank Branch: Rwanda Teller
  30. 30. BPR Simbuka
  31. 31. 1. Balance Inquiry 2. Mini-Statement 3. Money Transfer (BPR Accounts) 4. iZi Cash 5. Prepaid Airtime • MTN • Tigo (pending) 6. Bill Payments • RECO Prepaid Electricity • StarTimes Africa TV • DStv • MTN Postpaid Bill • Tigo Postpaid Bill (pending) 7. Merchant Payments 8. Bank Services • Change BPR Mobile Banking PIN • Change Language • Order Cheque Book 9. Help BPR USSD Mobile Banking & Payments
  32. 32. BPR Mobile Road Shows & Sign-up Success
  33. 33. BPR Mobile Road Shows & Sign-up Success
  34. 34. Thank You! Dan Armstrong Takashi Mobile | Financial Services Rapenburgerplein 81 1011 VJ Amsterdam The Netherlands www.takashimobile.com dan.armstrong@takashimobile.com +31 652 085 071 skype: dd.armstrong / gtalk: dan.armstrong René Bruinsma Mob ile Health | BMFS Kerklaan 52 2912CK Nieuwerkerk ad Yssel The Netherlands www.mobilehealth.nl rbruinsma@mobilehealth.nl +31 63 888 5555

Editor's Notes

  • So I was thinking about some of the old conceptions of “e-commerce” and the “e-wallet” that we used to have at Netscape and MCI (1994-1996), when we were first deploying HTTPS.
  • MNOs tend to generate their revenues from “transaction-based business” (sale of SMS, data, voice calls), whereas margins on actual “transactions” for banks are thinning in most markets, and in some cases unprofitable in general.For banks, the question about the value of payments services is a burning one these days – especially for developed world banks, but also for the developing world as well.Deposit-taking and lending are major differentiating business lines of banks, although some MNOs and other parties are starting to make moves in this direction.
  • “Pinnen met je mobiel” retail shopping and payments trial using contactless PIN (NL direct debit) from Aug 2007- Feb 2008 Payment with a secure application on the mobile phone (Samsung x700)Also featured storage of value for recycled bottles on the phone – save your value, cash it in or donate it.Highly successful trial, proven consumer acceptance/trust a mobile as secure debit card replacement.
  • Proof-of-concept programme for NFC payment for soft drinks using MiniTixPartners: Capgemini, Coca-Cola, Rabo Mobiel, Yoonison, MiniTixBeginning in Apr 2007, 30 locations nation-wideProof-of-concept ‘Kroketjeuit de muur’ met je telefoon, Oct-Nov 2007 Capgemini, FEBO and Mertens GroupMiniTix NFC trial in Amsterdam (NFC mobile phones, cards)Proof-of-concept programme to explore cash management, saves coin traffic, fraud management
  • Major Dutch retailer Albert Heijn wanted to trial a new retail formula in their “To Go” storesNFC shelf-level tag shopping, as customer filled her basketCustomer built up a list of what they were buying, and performed self-checkout without queuing at busy store countersDiscounts and specials applied automaticallyReceipt can be printed upon existOccasional control checks to validate purchases
  • ×