2. 2
Payment domains covered: Point of sale, Retail & online commerce, P2P
Trends discussed (small business, consumer)
1. Small businesses adopt mobile & cloud based new POS solutions in-store.
2. Skip the wait- enabled by new POS, multi-channel & mobile technology
3. Pay without “the hassle” of pulling out your credit card
4. Personalized, hyperlocal experiences seek to provide value to shoppers
5. Buying with digital wallets- “Hidden” and “invisible” payments accelerate
6. Blockchain’s going to be big “soon”…
7. P2P payments, a way into broader consumer finance & payments
8. Cash persists
Payment domains not covered: Bill Pay, B2B, Invoicing, Payroll & Govt. payments
5. 5
A lot has to come together to make this “fraction of a
second” work…
has an iPhone
early adopter
cares about convenience and/
or security
willing to change behavior
Customer set up
wants to offer customer
choices
early adopter
uses NFC enabled POS
enables Apple Pay
SB set up
NFC
Touch ID
Secure Element/
Tokenization
Passbook/ Wallet
Apple Pay
Servers
Card issuer
SB’s bank
Merchant acquirer
Payments Processor
Card networks
Technology
innovation
Parties enabling
transaction
+
+
+
Source: https://docs.spreedly.com/guides/apple-pay/
6. 6
Take it to the next level OR get it really wrong…
“Apple Pay with Apple watch feels magical.”
7. 7
But, most of us aren’t tapping to pay in stores yet…
“Do they accept Apple Pay?”
“Hard to determine if a location accepts it,
and I feel like a tool asking, when I can just
as well pull out a credit card”
“Why do I need it…”
“How is it any faster than
pulling out my credit card?”
“Still have to carry my
wallet around…”
“Until I can get my entire wallet on the phone,
I see no point in replacing any part of it.”
47% of Apple Pay users reported that
they had experienced a failed transaction
at least once
“Doesn’t always work…”
What makes payments
products successful?
So, let’s ask ourselves…
Even though Apple Pay is a well designed user experience
9. 01.
Small businesses adopt mobile & cloud
based new POS solutions in-store.
9
94%
6%
retail sales in brick
& mortar stores
sales value of brick & mortar
retailers = $3.9 trillion
sales value of ecommerce
retailers = $294 million
https://www.nchannel.com/blog/retail-data-ecommerce-statistics/
10. Background: Opportunity in the gap
10
1. Traditional POS
Cumbersome sign up
Need training to use
Expensive, static terminals
Functionality addressed in
store checkout needs
(scanning, receipts, record
transactions)
Manual toiling to get to reports
& insights
Fear of hardware failure
In store
Opportunity in the gap
Couldn’t take card payments on the go
Can’t get merchant account
Simplified sign up & Simple pricing
Good looking & Extremely easy to use
SB perceived savvy, great conversation starter
SB’s customer didn’t have to change a thing
2. mPOS
On the go
Solves real pain
Exceptional experience
Socially cool
Square’s card swiper3. POS 2.0 (SMART POS)
Closed by cloud based, tablets or mobile
terminals, equipped with point-of-sale apps
11. 11
“Right for me”
specialized solutions per industry
“Don’t have to change
everything”
Works with existing processors
& systems
“Great experience for
my customers”
Mobile support, rewards, multi-
channel shopping
“Helps me stay on top
of my business”
Get insights, real-time sales
tracking & inventory status
Experience- SBs get “right for me” benefits with POS 2.0
“Accept many payment types”
Accept many payment methods- Apple Pay, Chip
cards, mobile apps
“Gives me control”
Scalable & flexible to cover many
locations, employee roles
“Customize it (apps) to help my business grow”
Built in OR developer platforms for loyalty, rewards, inventory,
ecommerce, order management, customer feedback & more
LOWER
GET
PAID
SELL
MORE
Top POS systems- Clover/ First data, Square (mobility), Shopkeep (multiple locations), Revel (restaurants)
12. Background: EMV liability shift, a reason for SBs to upgrade POS
12
WHAT IS EMV?
EMV -- which stands for Europay, MasterCard and Visa -- is a global gold standard for cards equipped with computer chips and the technology used to
authenticate chip-card transactions. EMV Liability shift in US went into effect on Oct 1 2015. SBs are liable for any fraudulent tons if they don’t use EMV
chip enabled devices and applications to process chip cards.
OR, DIP WITH CHIP
TAP TO PAY (NFC)
EMV CHIP CARDS: TWO WAYS TO PAY
Chip card payments much slower than swipe interaction
Dual mode cards make it easier to fall back on the swipe
Lots of businesses either haven’t experienced fraud or are in an industry where it’s all about
speed of checkout line i.e. don’t see a reason to switch
enables mobile device tap to pay
13. 01.
Small businesses adopt mobile & cloud based
POS solutions in-store.
Thought starters/ discussion….
14. 02.
Skip the wait-
enabled by new POS, multi-channel &
mobile technology
14
“1 in 3 shoppers abandoned their items when faced
with a 5 minute wait.”
http://digitalretailapps.com/death-checkout-line/
SHOPPER CONVENIENCE
15. Experience: POS enables SBs to offer their customers
15
Downtown crossing uses
LevelUp’s white labeled app
Posh Tomato uses Revel POS
with delivery management
“Buy online, skip the wait- pick up at store or have it delivered.”
16. Experience: Stores offer customers new ways to checkout
16
Pay right where I am
POS enables taking a sale to a
customer on floor. Some customers
report feeling pressured to buy.
Self checkout terminals
POS experience has evolved to a
customer friendly experience-
shoppers can check themselves out.
Mobile app self checkout
Scandit lets shoppers take
control by scanning items as
they shop and reduces
operational costs for retailers.
17. 17
Experience: Open Table’s “Pay and Go”
Customers say they feel
awkward when they get up
& leave; Unsure if the staff
knows you’ve paid.
18. 18
Wait to place order, Wait for coffee everyday/
multiple times a day
Carry loyalty card
Rewards & incentives are built in.
Order ahead, know exactly when your
coffee’s ready for pick up & skip the line
In store experience is reduced to pick
up & go
Solves real pain
Exceptional experience
Socially cool
21% of all transactions via Starbucks’ mobile app
Getting one out of every five orders through its smartphone app is an impressive feat for
Starbucks, considering mobile payments accounted for just 2.1 percent of U.S. retail
sales last year, according to estimates from Mercator Advisory Group.
Starbucks app
Rewards, killer app for
changing habits
Experience: Rewards proves to be payments killer app
19. 02.
Skip checkout lines-
enabled by multi-channel & mobile technology
Thought starters/ discussion….
20. 03.
Pay without “the hassle” of
pulling out your credit card
20
contactless payments, wearables, IOT, Biometrics
21. Experience: Tap to pay
21
Samsung Pay “works
everywhere”- unlike Apple Pay.
WHAT IS NFC?
NFC (near field communication), a set of communication protocols that enable two
electronic devices, one of which is usually a portable device like a smartphone, to
establish communication by bringing them within 4 cm (2 in) of each other.
Disney Magic
Band
Older RF technology,
Charge to my room
Samsung Pay
“Excruciating slow chip cards
finally give Apple Pay a problem to
solve.”
- wired.com
- Tokenization & fingerprint scanners
make device based payments more
secure than chip cards
Samsung Pay works anywhere (enabled with
LoopPay acquisition) unlike Apple Pay which
requires POS terminals to be NFC enabled.
Device based wallets predicted
to get some traction
22. Experience: London Transit’s tap & pay success story
22
Apple payChip Card
Time to buy a ticket
Time to buy Oyster card & top up
Have to calculate capping
Set up with chip cards you already have; Does
the calculations for you, so you’re always paying
the lowest amount
Tap and go- don’t hold up lines
Solves real pain
Exceptional experience
Socially cool
Explosive Growth when it meets a problem it can solve.
May 2016- VISA says contactless payments in Europe hit 3 billion transactions
mark in 12 months, from one-in-sixty to one-in-five. Contactless commuting on Transport
for London services is one key reason for this accelerated growth.
Contactless commuting
23. Futuristic: Will IOT make it easier to pay- “Put a ring on it”?
23
Visa’s smart jacket
MasterCard’s smart ring
MasterCard’s key fob
Futuristic payment solutions, MWC 2016, Barcelona
24. Futuristic: Easier to pay if you didn’t need devices or wearables?
24
PAY WITH YOUR FACE
Helsinki-based Uniqul uses “military-grade” facial
recognition algorithms
PAY WITH YOUR HAND
Biyo uses unique vein patterns in your palm to
create the most secure & convenient password that
you never have to remember.
Say Hi to Biometrics
25. 25
Japanese smartphone lets you pay with your eyes/ iris.
Fujitsu smartphone and Japanese telecom NTT Docomo use iris recognition in conjunction with fingerprint authentication. Users
will be able to unlock their phones and shop for things just by looking directly into the front-facing camera.
Futuristic- Easier to pay when you have to just look at it?
26. 26
FasTrak- Everyday “contactless payment”
70% of new cars expected to have internet
connection by 2020. Pay for gas, tolls,
drive-thru’s, parking with your car.
Futuristic- Connected Car Commerce
27. 03.
Pay without pulling out your credit card
Thought starters/ discussion….
29. Background: Beacons allow passive (not user-initiated) triggers to action
29
WHAT IS A BEACON & WHAT IS BLE?
Beacons are small wireless sensors that broadcast signals using Bluetooth Low Energy (BLE), for other nearby devices (100-130 feet) like
smartphones to act upon once received. BLE is the power & app friendly version of bluetooth built for IOT.
uses
[user identity
+ location]
to deliver
highly relevant, contextual,
communication
that drive action
make it easier to use or act on
personalized communication
app
beacon
Beacon technology
30. Experience: Payments go hands-free
30
WHAT IS A BEACON & WHAT IS BLE?
Beacons are small wireless sensors that broadcast signals using Bluetooth Low Energy (BLE), for other nearby devices (100-130 feet) like
smartphones to act upon once received. BLE is the power & app friendly version of bluetooth built for IOT.
SB initiates payment- user confirms
PayPal Beacon
Experience similar to failed Square wallet,
doesn’t significantly improve current experience.
Low user confidence because of lack of ubiquity
Beacons connected to POS systems recognize
customer. Users simply have to say, "I'll pay with
Google" and give their initials to the cashier. The
store employee checks the initials and a picture to
verify that they are who they claim to be.
Apple Google’s beacon platform
31. Experience Potential - solving for broader location-based needs
31
Teams are using beacons to track fan behaviors, movement,
spending inside stadiums. Exclusive, stadium-only promotions and
trivia to fans devices. The geomapping also helps alert fans on
closest restrooms or concession stands with the shortest wait times,
helps them find their seats, pay & upgrade to better seats etc.
Nordstrom bridging online
and offline
Their beacon-enabled app notifies consumers if any item in
their mobile shopping bag is in stock, as they pass by the store
which has a beacon installed at its entrance. This helps
Nordstrom provide an enriching online-to-offline shopping
experience to its consumers.
Way-finding, exclusive offers,
shortest line notifications
Events, retail, airports, hospitality, healthcare…
33. 05.
Buying with digital wallets-
“Hidden” & “invisible” payments
accelerate
33
34. 34
Mobile/Device wallet
Apple Pay, Samsung Pay, Android Pay
Digital/ Internet wallet
PayPal, Google
Branded wallet
Amazon, Walmart, Starbucks
Experience: Many types of “hidden payments” wallets
Most powerful,
multichannel capability
35. 35
FI wallets
Capital One, Chase
Lesser known wallets
Specialty wallets
KeyRing (Loyalty cards)
Capital One Wallet lets you turn credit cards
on and off- prevent unauthorized use.
36. 36
Will they continue to compete with each other?
Apple Pay on websites via
browser
People will be able to pay for goods and services
purchased in online stores through the Safari
browser on iPhones and iPads that possess Apple’s
TouchID fingerprint technology.
“Pay with Amazon” on
small business websites
Amazon Payments enables shoppers to buy at
other merchants’ websites using the payment
information stored in their Amazon account. Its
main constituency are the small- and mid-sized
merchants that are looking for new source of
customers and want to ensure their customers
that their information is safe.
37. 37
or play nice with each other…
While Apple Pay’s tap & pay in the real-world may seem
pretty mundane, it’s power to be disruptive may be really as a
device based wallet that can integrate with apps like Uber.
Branded wallet (Uber) & device based
wallet (Apple Pay) work together
38. 38
Experience: “Invisible payments” meaningful in-person
It’s snowing outside & I need a ride.
Don’t have cash to pay the cab guy.
Certainty that you’ll get a timely ride;
can track driver & contact them
Completely eliminates the awkward
payment method conversation after ride
Solves real pain
Exceptional experience
Socially cool
Uber's “invisible”
pay for your ride
NatureBox
Netflix
These subscription payments are
“invisible” too, but feel different.
39. 39
Conversational commerce- payments in context
Chat with the store to get additional info on product
& complete purchase in chat session
Chat with virtual assistant
Your virtual assistant, a form of AI,
comes up with purchase suggestions
from multiple stores. You complete
purchase within chat UI.
40. 40
Not easy- some have gotten this wrong before…
video 2:51https://youtu.be/eGM8mw7l4wI
41. 41
Experience: Using voice with your digital wallet
Alexa, ask Capital One to
pay my credit card bill."
“Alexa, order me some post-it notes”
42. 05
Buying with digital wallets—
“Hidden” and “invisible” payments accelerate
Thought starters/ discussion….
44. 44
Background: From internet era to blockchain era (internet of value/ trust)
Why’s everyone excited about BLOCKCHAIN?
It’s decentralized, and
has potential to impact all
industries on a global
basis that rely on or
utilize record keeping and
require trust, i.e. anything
today favoring
intermediaries like banks,
music labels etc.
Payments implications
- Instant settlement
- Lower costs
- Eliminates fraud
- Easier cross border
transactions
- Increased transparency
- Secure, inclusive and
efficient
- No downtime
NOTE- Bitcoin is the best known
example today of cryptocurrency,
using blockchain technology.
The block chain consists of
blocks that hold
timestamped batches of
valid transactions.
Each block includes the
hash of the prior block,
linking the blocks together.
The linked blocks form a
chain, with each additional
block reinforcing those
before it.
WHAT IS BLOCKCHAIN?
Blockchain is a distributed database that maintains a continuously growing list of data records hardened against tampering & revision. 44
Source: http://www.rogerharvey.net/blockchains-101
45. 45
Potential blockchain applications & barriers
Unknowns that may
slow down progress
Complex technology
Regulatory implications
Competing platforms
Implementation challenges
- Digital currency (Global payments)
- Record Keeping (Voting, Healthcare)
- Securities (Debt)
- Smart Contracts (Digital rights)
Examples of applications
45
47. 07.
P2P payments, a way into
broader consumer finance
and payments ecosystem.
47
Business Insider predicts that P2P payments will go from $5 billion in 2015 to a
transaction volume of $86 billion in the US by 2018.
48. 48
P2P payment experiences - what’s easier?
48
Could P2P change consumer behavior & promoting adoption of financial
products & commerce? Does that make it worth giving it away for free?
Social networks/ messaging Banks & Card NetworksPayments/ Technology
“Send money” in context of
a conversation
e.g. Facebook messenger
“Send money” from my
internet wallet - feels secure
e.g. PayPal Send Money
“Send money” from
where my money lives
e.g. Chase QuickPay
49. 49
Experience: Venmo &“social payments”
49
Venmo (PayPal) & P2P
Consumers used Venmo to transfer $1 billion in January 2016,
which is 2.5 times the volume from January 2015, and 10 times
the volume from January 2014.
Food delivery service Munchery and event tickets seller
Gametime have started accepting Venmo payments.
Splitting dinner bills or gifts or expenses with friends
Dealing with cash or checks and/or awkwardness of
asking for money
Easy sign up with Facebook & even easier to
find your friends & pay them
Made it fun for its millennial audience to post creative
comments, descriptors and inside jokes with payment
transaction, even auto-completes with emojis.
Solves real pain
Exceptional experience
Socially cool
50. 50
Experience: Getting P2P wrong
50
PayPal bump your phones to pay
socially awkward
wasn’t perceived as a significantly
better e2e experience
51. 51
P2P payments- mPesa (mobile money)
Don’t have a bank account
Banks are too far & security problems in
getting to them
Risky, i.e. High transaction costs for banks
Use any phone to transfer money via text
message
Convenient for locals who interact with these
intermediaries anyway when reloading mobile
balance
Solves real pain
Exceptional experience
Socially cool
m- Pesa in Kenya
WHAT IS mPESA?
M-Pesa, mobile phone based payment & money transfer service, allows people to transfer e-money between each other via text message. Virtual
money is backed up by real money in a bank account not owned by the user. Use it to deposit, withdraw, transfer money & pay for goods/ services
mPESA launched by Vodafone in 2007 for
Safaricom (Kenya) and Vodacom (Tanzania)
52. 07
P2P mobile payments moving at light speed.
Thought starters/ discussion….
54. 54
WHY WE DON’T LIKE CASH…
bulky,
messy,
less secure,
money out of my pocket now
(problem for both investment
savvy & for cash strapped),
expensive for businesses to
count, deposit & reconcile
and the list goes on…
CASH IS FADING…
“I have less than
$20 on me…”
54
Our wallets
increasingly
look like this…
55. 55
Why are some still holding on to cash?
No set up costs
No per transaction fees
More customers
Real money (perceived low risk)
BUSINESSES
Convenient for small purchases
Accepted everywhere
Only method accepted
Easier for unbanked households
Back up method when technology fails
Off the record spending
CONSUMERS
57. 57
Estimated cash usage worldwide…
Transactions via cash in India: 98%
Transactions via cash in US: 55%
Source: https://www.technologyreview.com/s/534021/technology-repaints-the-payment-landscape/
58. 58
FUTURE: CASH IN OR CASH OUT?
DENMARK TO BECOME THE
FIRST CASHLESS NATION…
CITIES PRINT THEIR OWN CURRENCY
TO BOOST LOCAL ECONOMY…
Source: news.com.auSource: http://www.bbc.com/news/uk-england-devon-34112438
