A survey conducted among 600 Italian smartphone users revealed that while over 90% are aware of mobile payments, only 41% have used them in the past six months, primarily through internet connections and SMS. The study identified five user segments, with 'enthusiasts' and 'distrustful' users representing early adopters, whereas 'convenience users' and 'conservatives' are followers who will adopt m-payments once proven secure. Key barriers to adoption include concerns about security and a lack of awareness, indicating a need for targeted information campaigns to enhance user confidence and drive growth in the mobile payment sector.

1. Consumers: challenges and visions on the future of mobile payments Smart Phone users: Attitudes towards Mobile Payments Extract of the presentation Stefano Carlin – Director of Business TNS Italia Prepaid Summit Europe 2011 - Milan, 10-11 October 2011

2. AGENDA Awareness and usage of M-Payment Future opportunities of Mobile Payments Attitudes towards Mobile Payment Research Methodology |© TNS

3. Research Methodology Main purposes of the survey To get a picture of the actual awareness and usage of Mobile payments among consumers To understanding future opportunity of mobile banking Segmenting Smartphone users toward Mobile Payment attitudes (and mobile/ internet usage) Quantifying early adopter and followers Italy Collection method Panel Online (C.A.W.I.) Sample size 600 Smartphone users 18-65 years old Representativeness National by geographic area Fieldwork dates 16 th -19 th September 2011

4. M-Payment awareness has reached a high penetration through Smarthphone users ( more than 90%): Internet and SMS ways more than App and IVR. Less known the proximity concept. Only 41% of smartphone users have used M-Payments in the last 6 months, and that has mostly been completes via internet connections and SMS. Payments by App are still at a very early stage. Mobile Top ups are the most purchased services, followed by services related mobile and entertainment. Prepaid cards are the main source of charge, due to the fear of fraud “ Non-u sers” mainly don’t trust security in the device: but the main barrier is still lack of awareness . A detailed information and communication campaign is required to reassure users. Services linked to mobile telecoms besides to general payment will have the greater potentiality towards M-Payments. Key insights

5. Segmentation found out 5 clusters: Enthusiast (20%) - ready to use M-P -and Distrustful (21%)– ready to M-P if reassured about security. These two segments may be considered the “Early adopters”, those who will use M-P as soon as available in all its aspects (by remote, sms, contactless….). The other two segments, Convenience user (27%) and Conservatives (20%) will be the “Followers” (47%), those who will “join” M-P only when the payments system have been well tested and fine tuned! Only 12% of all Smartphone user are pure Rejectors : they simply don’t want to use M-P because they are “basic” users of mobile and internet If we consider the continuous growth of Smartphone users in Italy (now 35% of Mobile phone users*), we can assume that mobile payments have reached the “critical mass” of potential user… But now it’s time that providers invest hugely and move more in depth into the market. Key insights *ComScore font

6. Awareness and usage of M-Payment

7. Who is aware and already uses Mobile Payment service? D.2 Which of the following payments device do you know? D.3 And which did you use in the last 6 month? Base: Smartphone users More than 90% are aware of Mobile Payments, but less than half state to have used them in the last 6 months Awareness and usage of M-Payment service

8. … but not all kind of M-Payments are known and used at the same level… Internet connection is the main purchasing modality, followed by SMS… payments by apps are still in their infancy… D.2 Which of the following payments device do you know? D.3 And which did you use in the last 6 month? Base: Smartphone users SMS Internet connection Phone application Call or IVR Proximity Awareness and usage of M-Payment service awareness usage

9. D.4 Which of the following goods and services did you purchase by mobile phone payment? Base: Smartphone users – Multiple answers Services bought by Mobile in the past 6 months Mobile top ups are the main purchased services …. Followed by services related to mobility and entertainment M-P Services are linked to the mobile usage itself M-P users: 3.8 kind of services purchased in the last 6 months Mobile top ups Train/flight tickets Charity donations Game downloads Billing Mobile ring tones Parking tickets Prepaid card top up Song/movie downloads Concert/ event tickets Info/news Other None of these

10. Where are charged the Mobile Payment? D.5 Where did you charge the Mobile payments? Base: Smartphone users of Mobile Payments in the past 6 months - Multiple answers The “source” of Mobile Payments Prepaid cards are the main source to confirm the fear of fraud

11. Barriers towards Mobile payments usage D.6/7bis Why do you tell me you don’t / wouldn’t use mobile payments? Base: Not users of mobile payment - Multiple answers Security I don’t like using mobile phone for payments It’s too complicated to use Mobile for payments Devices Other reasons I prefer other kind of payments I loose the control of my expenditures …… .. 35% ... only needs more information to consider using But … 50% of the non users don’t trust security and device in some way I’m afraid of fraud/ cloning System is not secure It is less secure than cards

12. Future opportunities of Mobile Payments

13. D.7 Which of the following items would you purchase via mobile phone payment if available in the near future? Base: Smartphone users – Multiple answers Services linked to mobility have the main appeal besides to general payments, but room even for traditional payments as Medical check up, baby sitter fee… What they would buy via M-Payments in the next future WOULD BUY SOMETHING Parking/motorway/petrol Train/flight/events tickets Billings/sanction/fee Department stores Taxi Hotel/Restaurant Services (Medical Check up, home help/ baby sitter fee…)

14. Attitudes towards Mobile Payment

15. Attitudes towards M-Payments Cluster Analysis was applied to the sample (Smatphone users), in order to subdivide them into groups as homogeneous as possible on a member-to-member basis, and as different as possible on a group-to-group basis in terms of attitudes and behavior towards Mobile phone payment in particular and payment (credit / prepaid cards vs cash) in general. Base: total sample = 600 cases They are ready to use any kind of Mobile Payment Ready to use Mobile Payment only if reassured about security They will be ready to use Mobile Payment only after fine tuning They’ll never use any kind of Mobile Payment They will be the last to use Mobile Payment

16. Segment description 1/2 Segmentation of Smartphone users on the basis of their attitudes towards mobile payments

17. Segment description 2/2 Segmentation of Smartphone users on the basis of their attitudes towards mobile payments

18. Annex: Sample details

19. Internet usage frequency More times a day 1 time per day 5/6 days per week 3/4 days per week 1/2 days per week Less than once a week Never * They are on-line panellists D.12 How often do you connect to internet……. Base: Smartphone users By PC* By SMARTPHONE

20. PC Smart phone % of activities via …. Internet activity frequency D.13 How often do you connect to internet to……. Base: Smartphone users E-mail, Social networks and Personal interest are the main activities in both the instruments..

21. Overview of payment tools: ownership and frequency of usage S.6 What payment tools do you own? S.7 How often do you use these payment tools? Base: Smartphone users 12 11 6 2 Monthly times average

22. S.8 Have you any kind of current account? S.10 Which of the following finance goods/services do you own? Base: Smartphone users – Multiple answers Overview on financial services/products Online banking Car Insurance Deposit account Loan/Mortgage House insurance Life insurance Found/stocks Phone banking Saving bonds Other product none

23. S.8 Have you any kind of current account? S.10 Which of the following finance goods/services do you own? Base: Smartphone users – Multiple answers Smartphone users profile

24. |© TNS Thank You Stefano Carlin Director of Business – TNS Italia @: stefano.carlin@tnsglobal.com