Mobile Finacial Services

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Mobile Finacial Services

  1. 1. Mobile Financial Services Mobile Monday Norway 6th December 2010Thomas Bostrøm JørgensenBusiness Advisor+47 92032078thomas.bostrom.jorgensen@gmail.com
  2. 2. Credentials CEO, Luup from 2006-2010 Luup is an international leader in domestic and cross-border mobile payments Key achievements:  Built a successful B2C mobile- and online payments business in UK and Germany  Redefined the company strategy from B2C to B2B  Expanded sales organisation to cover Europe, Middle East and Asia.  Secured global strategic partnerships with Deutsche Bank, and MoneyGram.  Recruited and built a world-class executive team based on top talent from organisations like MoneyGram, RBS, IBM, Visa and Mastercard.  Raised a significant amount of capital from existing to fund the international expansion  Speaker at key industry event like MMT, IPS, Financial Services Club etc. 1
  3. 3. Market drivers  Mobile payments opportunity driven by 7 billion by continued growth in mobile 2015 phone penetration  Mobiles provide a new channel for banking, payments & transfers with greater reach than traditional bricks & mortar locations.  90% of the world’s population has network coverage & 60% has a mobile phone.  By 2015 total number of mobile phones estimated to 180k 500k 650k 1m 25m 4bn be 7bn.  Of these subscribers in MoneyGram Bank Post Mobile ATMs POS 2015, 1.5bn are expected branches Offices phones to be using their phones as a banking tool. With an estimated 7 billion mobile phones in use by 2015, traditional payment providers are now moving aggressively into the mobile payments space 2
  4. 4. How big is the payments market? 3
  5. 5. ... and the mobile payments market?Recent survey predicts the value paid by mobile to surpass $500 billion by 2015 Source: Edgar Dunn & Company Forecasts 2009 4
  6. 6. However … The mobile payments market has proven to be elusive… Source: Innopay, Mobile Payments 2010 5
  7. 7. The 4 Market plays Developed Countries Less Developed Countries Banked Making mobile part of the Leveraging and leapfrogging economic fabric These plays influence....  Propositions  Technology  Ecosystem structure  Ecosystem players Unbanked Bringing all into the locally  advanced financial Economics Social and economic inclusion system
  8. 8. Less developed countries 2 billion people unbanked Estimated 215 million migrant Global remittances in 2008 totalled workers worldwide (3% of world pop) $305bn Over 2.5 billion people under-banked India remittances received (2008): $45bn Africa remittances received (2008): $31bn South America SE Asia remittances remittances received Over 4 billion mobile phones in use received (2008): $60bn (2008): $57bn Remittances to developing countries totalled $247bn in 2008 Unbanked and migrant populations driving demand 7
  9. 9. The developed world demands convenience55% of mobile banking users have smart-phones Mobile banking services primarily used by 20-34 year olds – Generation Y 57% of m-banking users see convenience & anytime access as primary usage driver 90% of phones in Japan have NFC capabilities Sources: CheckFree survey, Yankee Group Research World Bank Mobile enables anytime, anywhere value-add services 8
  10. 10. Mobile Financial Services - ecosystem Mobile Network Banks Operators Original Equipment Money Transfer Manufacturers Organisations Schemes / Payment Government Sponsored Customers and Service Providers, Organisations Merchants SIs, BPOs Non Government Micro Finance Organisations Companies Mobile Financial Solution providers 9
  11. 11. DominantDominance of the Mobile ecosystem Following Developed Countries Less Developed Countries MNOs Banks MNOs Banks OEMs OEMs Banked MFSs GSOs MFSs MNOs MFSs MNOs GSOs OEMs NGOs MFIs Unbanked GSOs OEMs Banks MTOs MFSs MNOs are in the driving seat –banks lag, and are vulnerable
  12. 12. Live services and solution providers are emerging globally European live services South Asia live servicesAmericas SP  Deutsche Bank Europe SP  Barclays “Hello Money” Monitise  NatWest  Luup  Obopay Fundamo  M-Pesa (Safaricom)  Monitise  mChek Mcom (Fiserv)  Caisse d’Epargne  Paybox (Sybase) Paymate  MoBank  Mi-Pay M-Foundry  Beem  Macalla  Visa PayWave Asia SP  Luup  Fundamo  Paymate  Mcom (Fiserv)Americas live services Obopay JP Morgan Chase Bank of America PayPal Mobile S.E. Asia live services  Jibun Bank  Globe Telecom (GCash)  Western Union  SK TelecomAfrica SP Mi-Pay Fundamo Africa live services Middle East SP Middle East live services Paybox (Sybase)  M-Pesa (Safaricom)  Luup  NBAD Fronde Anywhere  Zap (Zain)  Fundamo  National Bank of Kuwait  Beem  Mi-Pay  Paybox  Zap (Zain)  Western Union  Globe Telecom GCash  Orange  Paybox 11
  13. 13. The industry is maturing Benefits Potential Consolidation Industrialisation Proliferation Proof of Concept Socialisation Time
  14. 14. Mobile Financial Services – what are they? M-banking M-commerce M-payments  P2P payments  Account balance  Contactless  Payments  Remittance services  Mini-statement  Smart transit  Mobile wallet transfers  Account limit alerts  Merchant  Mobile airtime top-up  Account transfers payments by SMS  Bill payments  ATM/branch locator  Event tickets  Loans and insurance 13
  15. 15. Mobile Banking:Shinginko Bank – the world’s first mobile-only bank Personalised banking services Full banking services:  Account opening  Yen deposits  Funds transfers  Loans & insurance  Mobile payments Targets Generation Y customers Changing the face of banking in Japan Won the Best Core Banking Project Award 2008 – Asian Banker 14
  16. 16. Mobile Commerce:MoBank – capitalising on the call for convenience MoBank is a mobile banking service, which allows users to pay for purchases, check balances. The user can register one debit or credit card (Maestro, MasterCard, Visa or Visa Debit) to the MoBank account. The user needs to install a free application on the mobile phone in order to be able to use MoBank Enables mobile purchases of:  Train tickets  Books  DVDs  Event tickets  Fast food Generates revenue through commission on purchases 15
  17. 17. Mobile Payments:M-Pesa – capitalising on the unbanked value chain Safricom, Vodafone’s Kenyan subsidiary, offers an SMS-based payment and money transfer service Based on SMS and pre-paid accounts. Through M-PESA a user can deposit or withdraw money, transfer money to another M-PESA customer or send money to a non M-PESA customer, buy Safaricom prepaid airtime and manage the M-PESA account. In December 2008, Safricom announced an extension of the service with UK-Kenya remittances in cooperation with Western Union. 11.5 million previously unbanked customers (over 40% of Kenya’s adult population) 30% of users save money in their M-Pesa account Understand the potential for disintermediation 16
  18. 18. Mobile Payments:M-Paisa - Mobile Microfinance Vodafone and Afghan mobile operator Microfinance Roshan have launched M-Paisa for  microcredit, savings, insurance, microfinance institutions. money transfers, and other In a country where 36% of its people financial products targeted at poor live below the poverty line, Afghanistan and low-income people is the poorest country in the world  $25 billion currently at work in outside Africa microfinance loans & 20 million microfinance accounts globally It also has a 40% penetration rate of 12  India - 188 million accounts (18% million mobile subscribers out of a of population) population of 30 million  Latin America and Caribbean - 14 M-Paisa is based on an IVR service million accounts which will enable greater use of M-  Africa - 27 million accounts (4% of Paisa by consumers who might population) otherwise be excluded due to high illiteracy rates in Afghanistan 17
  19. 19. Mobile Payments:Osaifu-Ketai – an NFC success Osaifu-Keitai, literally meaning "Wallet Mobile", is a trademark of NTT DoCoMo, which developed the system. It refers to the mobile phones integrated with Sony’s Mobile FeliCa ICs, as well as the services provided by the applications on these phones. Although it is developed by NTT DoCoMo, the system is also supported by other MNOs, making it the de facto standard mobile payment system in Japan. Osaifu-Keitai services include electronic money, identity card, loyalty card, fare collection of public transits or (including railways, buses and airplains), or credit card 18
  20. 20. Current headlines point to the future NAIROBI, Kenya, Dec 2, 2010 - Financial institutions plan to leverage on mobile money transfer technology to enlist more Kenyans in the formal banking system New York, Nov 16, 2010 - AT&T Mobility, T-Mobile USA and Verizon Wireless today announced the formation of a joint venture chartered with building ISIS™, a national mobile commerce network that aims to fundamentally transform how people shop, pay and save India, Dec 1, 2010 - Nokia Stores To Serve As Banking Correspondents For Union Bank of India’s Mobile Payments Australia, Nov 26, 2010 – Mobile payments taking off. PayPal reports that this year mobile payments took off in Australia California, Nov 18, 2010 - Google CEO Eric Schmidt revealed that upcoming Android devices would include support for something called Near Field Communication 19
  21. 21. In summary Mobile Financial Services are getting foot-hold everywhere Roll-out is faster and take-up is higher in less developed countries because if offers the users greater value Developed countries will see mass take-up and usage with NFC (driven by next gen iPhone and Android?) Mobile operators are leading the way and banks are lagging The future is mobile! Thank you for listening! 20

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