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Shikko nijland

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Shikko nijland

  1. 1. How  do  consumers  pay  in  2020   Global  E-­‐Commerce  Summit  Barcelona  2014     Shikko  Nijland  (shikko@innopay.com/@shikko)  
  2. 2. 2            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Innopay:  independent  management  consultants   specialized  in  digital  strategy  and  transformaSon   Digital   idenSty   Payments   E-­‐Business   E-­‐Commerce   1.  Product  and   pla1orm  strategy   2.  Innova8on   Management   3.  Project   management  and   transforma8on   •  Program   management   •  PMO  support   •  Change   Management   •  BPM/BPR     •  InnovaSon  strategy   •  AcceleraSon   •  Digital   transformaSon   •  Product   development   •  Open  innovaSon  &   Co-­‐creaSon   •  CollaboraSve   innovaSon   •  Growth  strategy   •  Market  &  Product   assessment   •  M&A  support   •  Business  plan   development     •  Vendor  &  soluSon   assessment     Digital   InnovaSon  
  3. 3. 3            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Cash  is  sSll  king  in  Europe   0 10 20 30 40 50 60 70 80 90 1 00 Finland   39   Norway   42   Sweden   50   France   50   Denmark   51   Netherlands   52   Belgium   54   UK   57   Austria   64   Estonia   65   Switzerland   66   Germany   69   Ireland     75   Portugal   78   Spain   80   Hungary   88   Czech  Rep.   88   Italy   89   Poland   90   Turkey   94   Greece   97   Bulgaria   98   Cash  share  of  transac8ons  in  %  (2012) Source:  McKinsey,  Innopay  analysis  
  4. 4. 4            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       E-­‐commerce:  preference  for  cards  at  EU  level….   Europe   Cards   E-­‐Wallets   Direct  debit   Cash  on  delivery   Bank  transfer   Other   59%   13%   5%   8%   5%   11%   Source:  Worldpay;  2014:  Your  global  guide  to  AlternaSve  Payments,  2nd  ediSon  
  5. 5. 5            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       …but  significant  variaSon  in  local  preferences   Source:  Innopay  analysis,  2013   0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Netherlands  France   Italy   United   Kingdom   Germany   Spain   Other   Cash  on  Delivery   Mobile     E-­‐wallet   Direct  debit   Bank  transfer   Cards   Legend  
  6. 6. 6            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       ...with  established  ecom  payment  brands  in  most  EU   countries   4B   Card Debit   card Source:  Innopay  analysis,  2013  
  7. 7. 7            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       7   How  is  payments  going  to  look  like  in  2020?   #GES14  crazy  dude  claims:   payments  in  2020  is  not   about  money  :D  :D  :D  :D    
  8. 8. Seven  trends  that  will  change  the  way  consumers  pay  
  9. 9. 9            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       9   Trend  1:  Changing  POS  interac3on  driven  by  convergence   From  ‘simple’  hardware  to  seamless  ‘customer  experience’   Future  2010/2013   Square   (mobile  card   terminal,   mag  stripe)   iZe[le  (mobile   card  terminal,   Chip&Sign)   Adyen  (mobile  card   terminal,  Chip&PIN)   Square  register     (tablet  ePOS)   Pay  with  Square   (mobile  wallet)   LevelUp   (cloud-­‐based  mobile  POS)   Loylogic   (Loyalty  payment   and  processing)   MyOrder  Rabobank   (mobile  ordering)   Passbook   (mobile  coupons,  SckeSng)   Past   Hardware   So`ware   Seamless   ‘experience’   Tillify   (cloud-­‐based  ePOS)   Source:  Innopay   InMarket  study  (May  2014,  n=25k):   •  19x  increase  in  interacSons  with   adverSsed  products   •  16.5x  increase  in  app-­‐usage  in  the  shop   •  6.4x  more  likelihood  to  keep  app   because  of  beacon  messages  
  10. 10. 10            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Trend  1:  Changing  POS  interac3on  driven  by  convergence   QR  allows  for  interac8ons  in  all  contexts  
  11. 11. 11            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Trend  2:    P2P  (mobile)  payments   Underbanked,  remi[ance,  consumers  and  now  SME  
  12. 12. 12            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.      
  13. 13. 13            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Bitcoin  is  characterized  by  speculaSon     Bitcoin  DESIGNED  to  play   out  as  a  ponzi  scheme   bubble?   All  8me  high  Nov.   2013:  >$1.200   Source:  Coindesk  
  14. 14. 14            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Depends  on  how  you  look  at  it  ...  
  15. 15. 15            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       ...  faces  compeSSon   on  ‘currency  and  technical  plaoorm’  level   Source:  Innopay  analysis  
  16. 16. 16            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Emerging  playing  field  aiming  to  simplify  bitcoins   Payment  processors   Mining  Hardware   Exchanges   Wallets   Financial  services   ‘universal’  players   Source:  Coindesk,  van  Doorne  
  17. 17. 17            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Increasing  adopSon  rate  by  merchants   >60k  (online)  merchants  accept  Bitcoin   Source:  Nasdaq.com,  van  Doorne  
  18. 18. 18            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       ...  while  authoriSes  sSll  struggle   Source:  Bitlegal.io,  Finextra,  WSJ.com   Legend:  Permissive  |  ContenSous  |  HosSle  |  Unkown  
  19. 19. 19            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       19   Trend  3:    Digital  wallets   Wallet  becomes  the  payment  method  (and  not  the  ‘money’  in  it)  
  20. 20. 20            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Wallets  as  a  duplicaSon  of  PSP-­‐model  on  issuing  side?   Consumer   Merchant   Acquirer  Issuer   Wallet  PSP  
  21. 21. 21            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       21   Trend  4:  EU  regula3on   Payment  innova8on  driven  by  EU  regula8on?  
  22. 22. 22            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Access  to  the  account  (XS2A)  will  force  banks  to  open  up   1.  PSD2   2.  ECB  legal  opinion   3.  Amendments  
  23. 23. 23            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       XS2A  is  nothing  new,  it  has  been  with  us  for  decades   Tradi8onal  4  corner  model   Debtor   account   Creditor   account   Scheme  &   Directory   Secure   messaging  Account   servicing  PSP   Acquiring  PSP   Merchant  Customer   Scheme  
  24. 24. 24            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       XS2A  could  drive  API  economy,  enabling  developers  to   build  payment  methods  on  host  plaoorms     Source:  Innopay  analysis  
  25. 25. 25            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       XS2A:  Redefining  acquiring  domain  in  the  payment  chain?   Source:  Innopay  analysis   New  XS2A  model:  entry  of  TPPs     Browser   Webshop   Rou3ng  Service   Creditor   account   Scheme  &   Directory   Scheme   Messaging     (in  scope)   Regulated  domain   Creditor   account   ‘Standardized  API’   Debtor   account   Debtor   Creditor   ‘TPP’   Online  pymt   provider   Account   servicing   PSP   Acquiring   PSP   Tradi8onal  4  corner  model   Browser   Webshop   Online  Banking   Rou3ng  Service   Debtor   account   Creditor   account   Scheme  &   Directory   Messaging     (in  scope)   TradiSonal   scheme   Secure   messaging   Account   servicing   PSP   Acquiring   PSP   Creditor  Debtor   Scheme   Online  pymt   provider  
  26. 26. 26            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Trend  5:  Cardlinked  marke3ng  &  offering  (CLM)   Combining  purchase  behavior  and  marke8ng  
  27. 27. 27            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Bank  of  America  survey  amongst  200  CMO  of  major   retailers  in  the  US  reveals  potenSal  of  CLM  
  28. 28. 28            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Level  of  sophisScaSon  of  ID/trust  Trend  6:    Changing  check-­‐out   Towards  a  truly  seamless  shopping  and  payment  experience   Seamless  shopping  &  payment  experience   Check-­‐out   Source:  Innopay  
  29. 29. 29            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Trend  6:    Changing  check-­‐out   Towards  a  truly  seamless  shopping  and  payment  experience   Check-­‐in   Check-­‐out   Source:  Innopay   Level  of  sophisScaSon  of  ID/trust   Seamless  shopping  &  payment  experience  
  30. 30. 30            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Trend  6:    Changing  check-­‐out   Towards  a  truly  seamless  shopping  and  payment  experience   Check-­‐once   Check-­‐out   Check-­‐in   Source:  Innopay   Level  of  sophisScaSon  of  ID/trust   Seamless  shopping  &  payment  experience  
  31. 31. 31            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Check-­‐on/off   Trend  6:    Changing  check-­‐out   Towards  a  truly  seamless  shopping  and  payment  experience   Check-­‐out   Check-­‐in   Check-­‐once   Source:  Innopay   Level  of  sophisScaSon  of  ID/trust   Seamless  shopping  &  payment  experience  
  32. 32. 32            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Transac8on  Selec8on   Delivery   Customer  Care  Orienta8on   Check  out   •  My  name  is  John   •  I’m  really  John   •  I’m  18+   •  I  can  pay   •  I  approve  this  payment   •  This  is  my  address   Trend  6:    Changing  check-­‐out   Early  authen8ca8on  can  enable  be[er  customer  experience   Orientation Selection Delivery Customer CareTransaction Check  in   •  My  name  is  John   •  I’m  really  John   •  I  can  pay   •  I’m  18+   I  confirm  this   order   I  confirm  this   address   Source:  Innopay  analysis  
  33. 33. 33            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Less  visible  to  the   merchant/customer   Technology   Development   More  visible  to  the   merchant/customer   Source:  Innopay   Trend  7:    Digital  iden3ty:   Unbundling  of  payment  and  authen8ca8on  
  34. 34. 34            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Less  visible  to  the   merchant/customer   Technology   Development   Iden8ty  focused  players  More  visible  to  the   merchant/customer   Trend  7:    Digital  iden3ty:   Pure  ID  players  arise  fast   Source:  Innopay  
  35. 35. 35            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Less  visible  to  the   merchant/customer   Technology   Development   Payment  focus   More  visible  to  the   merchant/customer   Trend  7:    Digital  iden3ty   As  well  as  some  players  choose  to  focus  on  payments   Source:  Innopay  
  36. 36. 36            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       More  visible  to  the   merchant/customer   Less  visible  to  the   merchant/customer   Technology   Development   Full  service  providers   Trend  7:    Digital  iden3ty   While  full  service  providers  such  as  banks  can  do  both   Source:  Innopay  
  37. 37. 37            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       •  Private  demand  will  drive  the  market,  not  the  government   2014   Government   Private   2020   Non   Payment   TRX   Payment   TRX   •  Personal  data   •  ContracSng   •  Sign  up   •  Login   •  Payments   Market  about     to  explode   Number  of  idenSty  trx  is  much  higher  than  payment  trx   and  thus  more  relevant  to  consumers     Source:  Innopay    
  38. 38. 38            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Most  major  players  recognize  importance  and  are   moving  rapidly  into  the  Digital  ID  space   Banks:  customer  ownership,  trusted  relaSon,   strong  credenSals   Telco’s:  customer  ownership,  access  to  trusted   device     Social  Media:  lots  of  data  on  consumers   ‘Omnipresent’   Technology:  technology,  B2B  relaSons   Postal  Services:  physical  network,  brand   Merchants:  customer  knowledge,  brand  brand   Source:  Innopay    
  39. 39. Four  consumer  payment  scenarios  for  2020  
  40. 40. 40            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       40   12,000  consumers  and  450  experts  joined  forces  to  develop   shopping  and  payment  scenarios  for  2020   Shopper   Behaviour   Cross  border   (e)Commerce   Technological   Future   Touchpoints   Ecological   Poli8cal/legal   Orienta8on   Selec8on   Transac3on   Delivery   Business   Models   Omnichannel   Organisa8on   Security  and  fraud   The  new  shopping   center   Smarter   shopping   Supply  Chain   Future  Trends   Customer  Journey   Key  Themes   Travel   plan   Finance  plan   Retail  plan   …    plan   Ac8on  plan   Shopping2020   Customer  Care   Customer     Data  Value     Management   Online   enterpreneurship   …   Shopping2020   Visie   19  Expert  groups  
  41. 41. 41            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       41   Uncertainty  1:  Consumer  avtude  towards  Privacy   HIGH  privacy  awareness  and  control:   •  People  are  conscious  and  want  to  control  about   what  happens  with  their  personal  data   •  Dedicated  services  to  support  Digital  IdenSty   •  A  move  into  this  direcSon  can  be  sparked  by  an   incident  or  examples  of  data  breaches   LOW  privacy  awareness  and  control:   •  Currently,  experts  observe  a  trend  of   decreasing  privacy  awareness   •  The  adagio  ‘I  don’t  have  anything  to  hide’  is   sSll  strong  in  the  public  opinion   •  People  are  willing  to  ‘trade’  their  data  for   addiSonal  benefits   HIGH privacy awareness and control LOW privacy awareness and control We are here!
  42. 42. 42            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       42   Uncertainty  2:  Number  of  payment  methods   (providers)   FEW  payment  methods:   •  With  different  channels  converging,  demand   for  an  omnipresent  payment  method  (and   brand)  increases   •  A  force  that  might  support  this,  are  schemes   that  restrict  the  use  of  their  brand  to  support   other  payment  services   MANY  payment  methods:   •  More  payment  methods  because  user   experiences  throughout  various  channels  are   more  and  more  opSmized   •  Wallets  we  currently  see  arise  may  develop   into  payment  methods  in  their  own  right     MANY payment Methods (providers) We are here! FEW payment Methods (providers)
  43. 43. 43            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       Scenario  2  -­‐  ‘Consumer  Driven’     “I  choose  for  convenience  and  a   smooth  user  experiences  in  a  given   context”   Scenario  3  -­‐  ‘Back  to  the  Trust’     “I  trust  a  limited  set  of  payment   methods”   Scenario  4-­‐  ‘Big  Brands,  Big  Data’       “My  payment  provider  knows  a     lot  about  me  and  can  therefore   provide  me  with  useful  services   in  all  contexts”    Scenario  1  -­‐  ‘In  Control’      “Out  of  the  many  payments   methods  I  can  choose  the  way   I  pay  to  fit  my  privacy  needs”       Four  consumer  payment  scenarios  for  2020   Few payments methods (providers) Many payments methods (providers) High privacy awareness and control Low privacy awareness and control Source:  nnopay,  Shopping  2020  
  44. 44. 44            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       44   An  incident  can  accelerate  a  shiz  to  another  scenario   (Consolidation) t=0 2 1 Incident + regulation! 3 4 Few payments methods (providers) Many payments methods (providers) High privacy awareness and control Low privacy awareness and control
  45. 45. 45            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       45   Service  providers  have  to  choose  a  posiSon  between   ease  of  use  and  data  security   Source:  Innopay   Convenience  /  ease  of  use  →   Trust  /  Privacy   Technology  or   regulaSon  push   PosiSoning  
  46. 46. Wrap  up:  payments  is  not  about  money  in  2020?  
  47. 47. 47            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       47   Now  you  know  that…..   1.  Consumers  want  a  convenient  and  seamless  shopping   2.  Therefore  payments  need  to  be  pushed  to  the  background   3.  Merchants  need  reassurance/trust  before  consider  doing  this   4.  Early  or  automaSc  authenScaSon  will  increase  the  required  trust  to  do  this   5.  Major  players  recognize  this  and  are  moving  into  the  idenSty  space   6.  ResulSng  in  reliable  and  convenient  authenScaSon  soluSons   7.  Which  will  increase  further  unbundling  of  payments  and  authenScaSon   ….you  may  aggree  that:  payments  is  not  about  money  …     ……but  payments  in  2020  will  be  about  iden8ty!    
  48. 48. 48            How  do  consumers  pay  in  2020  –  Shikko  Nijland  –  June    2014.  ©  Innopay  BV.  All  rights  reserved.       48   Don’t  forget  to  recSficate  your  iniSal  tweet……   #GES14  recSficaSon:  crazy  dude  is  right   Payments  in  2020  will  be  about  idenSty!  
  49. 49. Thank  you!   Shikko Nijland, shikko@innopay.com, @shikko +31 6 537 414 65

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