1. The Consumer Side of NFC and Mobile Payments
Lafferty Global Merchant Services Council, Amsterdam NL (25 April 2013)
Dan Armstrong (email@example.com)
2. Some nagging thoughts on paradigm shifts
Re-thinking the nature of transactions and transaction
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-
• 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
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
• 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. How shall we define “transaction”?
Bank Account Value
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
83% of consumers will recommend a trusted brand to
others, often un-prompted
Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore
9. … 2 fundamental types of transaction players?
Transactions are the
”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
Transactions via the
”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. “Mobile” Banking & Payments Scope
IVR Banking & Payments
SMS & Calling Alerts
(spending, ATM usage, fraud, etc.)
Transactions with Teller or
Agent using Mobile Devices
Mobile Banking & Payments Remote Payments &
Mobile Contactless /
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 /
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
Trigger remote payment with
phone (apps, other manner)
Confirmation can be pushed to
merchant, but how to localise
the payment location without
Receipt can be printed at POS
Latency in making payment
this way vs. cards
EMV / secure PIN keypad
Card acceptance still required
16. NFC Mobile as Retail Shopping Tool, Issued Devices & Acceptance
17. What do we expect from a wallet?
A place to store cash?
A place to store payment
A place to store other tokens?
A personal object?
A private object?
Something small enough to
… but … do we need a
18. Then, what do we expect from a transaction device?
Identification of myself, my
rights and capabilities,
Identification of myself, an
authentication tool for
Personal and private
Easy to use
… but … do we need a
19. Consumers seem to love and trust it
• But who will pay for it’s implementation … merchants, banks, mobile operators,
Given the “app revolution” in so many of our markets, what
value does NFC bring to payments?
• 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. Virtualisation benefits are clear, from the business POV ..
1980 1985 1990 1995 2000 2005 2010
devices (e.g. web
mobile phone, IVR)
Total Customer Contacts
Contact via a
21. The case is clear for our creativity to make virtualised
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 ..
24. Although you could still easily pay with a card when
you get to the POS …
For your consideration ..
26. Limited smartphones
Limited (and expensive)
Limited (and expensive)
fixed internet &
Limited trust in banks
High cost of ATM and
limited in-country IT
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
37. Thank You!
Takashi Mobile | Financial Services
1011 VJ Amsterdam
+31 652 085 071
skype: dd.armstrong / gtalk: dan.armstrong
Mob ile Health | BMFS
2912CK Nieuwerkerk ad Yssel
+31 63 888 5555
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