Mobile Payments Ecosystem Overview

Transcription

1 Mobile Payments Ecosystem Overview April 2012 Copyright 2012 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

2 Accenture has a complete set of capabilities to cover the mobile landscape for our clients Vertical expertise, Deep client relationships CHT Financial Services Products Resources Health & Public Service Mobile consulting Business Technology Network Support and service for mobile applications Applications build and test Accenture Embedded Mobility Services (AEMS) Mobile Systems Integration Managed services applications/platform Accenture Mobility Operated Services (AMOS) End-to-end solution provider Strong vertical industry practices specializing in cutting-edge areas Leader in the Communications industry Cost-effective managed service platform (AMOS) 2

3 Consumer-to-business mobile payments, at POS (physical or virtual) will become a major transaction segment Mobile proximity payments Mobile phone capturing Barcode Examples: Starbucks (USA) Capture Barcode Mobile application processing details Program start Read barcode Identify payment details Get Users paymentpin Show payment confirmation Program end Mobile phone as passive NFC device Example: Oyster card NFC phone touched Backend application identifying registered user Program start Read NFC ID Log user activity Bill service Program end Mobile phone as active NFC device Examples: Payez Mobile (France) NFC phone initiates Mobile application capturing Program start Read NFC ID Log user activity Bill service Program end 3

4 The Cloud for Mobile Payments Number of Devices Worldwide (Millions in Log scale) 100,000 10,000 1, ABI Research believes that the emergence of the Mobile Cloud/ Web, is a disruptive trend in the mobile industry. Mobile Cloud eventually will overtake native and downloadable applications as the primary type of mobile application. Source: ABI Research - Mobile Cloud Computing, July 2009 Mainframe Minicomputer 10M+ Units PC 100M+ Units Cellular and Internet 1B+ Subscriptions Mobile Cloud? Connected Devices Source: BusinessWeek, etforecast, ITU, ITU-ITC, Winston (1998) pp.236 4

5 Mobile Barcodes will facilitate an active dialogue between the Merchant and Consumer Mobile Barcode Trends* UPC Scans: Top 10 Product Categories Scanned* Mobile barcode scanning is up 700% in 2010 There were more barcode scans performed in a single month starting in July 2010 than in all of D (UPC) and 2D (QR) codes are being scanned equally Linking to a website is the most popular action delivered by a 2D barcode scan, with 85% of scans Health and beauty products were the most popular items among 1D (UPC) scans, with 21%. They were followed by groceries (14.4%), books (12.6%) and kitchen items (9.2%) Over 45 countries have scanned barcodes Android was the most popular smartphone platform, with 45% of barcode users. This is attributable to the pre-loaded barcode scanners on some devices and support from carriers like Verizon Video Games, 3,6% Home Improvement, 3,6% Music, 3,7% Toys, 4.9% Office Product, 3,3% Electronics, 6.2% Barcode Sports, 2,2% Other, 8.6% Kitchen, 9,2% DVD, 6.4% Datamatrix Books, 12,6% Health and Beauty, 21,2% Grocery, 14,4% QR Code *Source: Mobile Barcode Trend Report, ScanLife, September

6 Mobile NFC Secure Element (SE) Implementations Card schemas in principle support all choices, but preferred option is still unclear: SIM-based approach expected to be adopted mainly in case of cooperating Mobile Operators, actively issuing NFC SIM cards and investing in co-marketing activites Micro-SD with RF onboard is the preferred short-term option by Visa, however: Is not working in handsets with metallic covers or battery (not transparent to RF) Visa is testing handsets to provide a list of certified phones to issuers Micro-SD without RF onboard is considered as the preferred long-term option by Visa Europe NFC stickers considered interesting by Mastercard and being trialed by NA issuers (Citi) and is attractive due to higher branding and marketing potential and ease of implementation (but limited functionality) 6

7 NFC Services include payments, advertising, access control, information, sharing, and ticketing and transport. Mobile Transactions Payment (Coupons and Loyalty) Information, Navigation, and Tracking Promotions, Advertising Sharing Access Control & Security Ticketing & Transport Other 7

8 Juniper predicts that approximately 570 mill NFC-enabled phones will be shipped. Two-thirds will be used for NFC payments by Global Number of Mobile Phones Shipped with NFC Asia Europe Americas NFC Mobile Phones Shipped (in millions) Americas Europe Asia Total Source: Juniper Research NFC-Enabled Mobile Phones used for Payments (in millions) Americas Europe Asia Total Source: Juniper Research Global Number of NFC-enabled Mobile Phones Used for NFC Payments (in Millions) Asia Europe Americas Source: Juniper Research Juniper defines a mobile payment as payment for goods or services with a mobile device such as a phone, PDA, or other such device. By 2014, 17% of all mobile subscribers will have an NFC-enabled phones (In Japan, approximately 15% of all mobile users use FeliCa functionality) Initial usage of NFC-enabled phones for payments will be low at around 26 mill phones, but will ramp up over 17x within 4 years with a forecast of 430 million by 2014 Note: Juniper does note that there are additional interim users who will use non-mobile technologies such as stickers for payments as well. The total number of users using these interim technologies such as stickers will be 70 million by The number will decrease thereafter as mobile phones with NFC chips become more prevalent. 8

9 Mobile Payments Market Sizing and Trend Analysis We analyzed both global indicators to develop the market size as well as to understand the opportunities. Global Market 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Number of Global Mobile Payment Transactions (by Type) In Millions 125 Other Bill Payment Money Transfer Ticketing Merchandise Pre-Paid Top-Ups 380 CAGR = 105% ( ) 851 1,607 2,817 4, Market anticipated to grow to 4+ billion transactions per year, with prepaid top-ups (prepaying for mobile minutes) driving growth 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Number of Mobile Payment Transactions by Region In millions Latin America Eastern Europe, Middle East, Africa Asia Pacific and Japan North America Western Europe High adoption is evident in markets where the mobile device serves both as a banking and a communications solution Accenture : Technology Forwards Research February 2011 The most common commercial application of mobile phones is checking bank account balances. Nearly 20% of tech forward consumers in the global survey sample report having made purchases in a store using their mobile phone within the past six months, comparable to the share of these consumers who have made purchases by check. 9

10 Hotspots of activity, volume and growth are becoming apparent in consumer payments Hot spots Consumer Transaction Type Person to Person Payments Hotspots A. Revenue Opportunities Increased transaction volumes New transaction fees New products and services Consumer to Business Consumer to Machine Device to Business B. F. C. D. Examples A. MPESA B. Paypal E. C. MoBank D. UK contactless rollout E. Gold-to-Go F. Smart metering (EDF) Internet Mobile Remote Mobile/contactless Proximity Payment Channel 10

11 Successful next generation payments solutions will be those which are of equally high interest to both senders and recipients Next generation payments Level of fulfilment of sender needs L M H Cheque Cash EFT Online banking Integrated bill payments Biometric payments Contactless cards E-invoicing; Desktop software generated files Payroll and insurance cards Integrated contactless mobile device Virtual account based payments = business driven = technology driven = established ILLUSTRATIVE L M H Level of fulfilment of receiver needs 11 11

12 The Exploding Market for Mobile Payments Is a Complex Ecosystem Combining loyalty cards with mobile stored value services and mobile offers and vouchers; redemption at POS Handset Manufacturers Leading global handset manufactures are building out assets and services around mobile wallet / commerce; New patent filings; aggressive hiring Retailers m-commerce Service Mobile Network Provider Visa is testing a mobile technology that transforms many smart phones with a microsd slot into a Visa payment device Consumer reaction among smartphone users: Use your phone at checkout to make Payment; Consumers Mobile operators are uniting to offer differing flavors of mobile commerce applications and support OS specific apps as well Pure-play start-ups and evolving payment systems gain traction in emerging marketing 12

13 Starbucks Remote Mobile Payments Innovation Mobile Loyalty, Mobile Payment Description Starbucks nationwide plus Starbucks Stores in over 1,000 Target stores across the U.S., now are capable of mobile payments at the point-ofsale. Customers with a BlackBerry Curve, Tour or Storm smartphone, Apple iphone, or ipod touch and the Starbucks Card Mobile app can now experience the fastest way to pay at participating Starbucks locations. To experience mobile payment at participating Starbucks locations, customers just need to download the free Starbucks Card Mobile app on their supported mobile device. Customers can then swipe their mobile device at the register to pay for their purchase. The app produces a 2-D barcode that users hold over a countertop scanner to make purchases. In addition, the app allows customers to manage their card account, reload their card balance directly from their smartphone with any major credit card, check their My Starbucks Rewards status, or find nearby Starbucks stores, including those that accept mobile payments. 13

14 Osaifu Keitai (Felica) case Mobile Payments Felica technology and contactless cards Wireless communications technology developed by Sony Short-range (<10 cm) 13,56 MHz, 212 kbps transfer rate Mass deployment of Felica cards started in 2000 (subway and train transportation, Tokio area) Felica deployments also in Hong Kong, Taiwan and Singapore Osaifu-Keitai Felica Mobile In 2003 NTT Docomo allied with Sony forming Felica Networks NTT Docomo vision: handsets to substitute cards, vouchers, ID and loyalty cards, bringing added value through mobility Osaifu-Keitai (wallet phone) with Felica chip launched in 2004 Mobile Felica technology also licensed to KDDI and Vodafone (today SoftBank) The Felica Mobile ecosystem in Japan NTT Docomo had a pivotal role (investor) together with Sony (technology provider) Operator-driven approach, however the payment platform is open and multiple schemas are available Prepaid: EDY, Pasmo, Suica, etc. Credit: Dcmx, JCB, Visa, Mastercard NTT Docomo investments and participations Felica Networks (TSM): 37% Bitwallet EDY (prepaid wallets): 15% Sumitomo Mitsui Card (e-credit cards, issuing and acquiring): 34% FamilyMart (convenience stores): 3% 14

15 Jibun Bank Mobile Banking A joint venture between telco and bank creating a Mobile Bank Jibun Bank Highlights Mobile Banking services Mobile phone penetration levels in the bank's active customer base are near 100 percent Takeo Tohara, president and CEO Jibun Bank Corporation has established a Mobile Bank through a joint venture between KDDI (Telco) and the Bank of Tokyo- Mitsubishi UFJ, Ltd. Mission: become customers most familiar bank, by providing high-quality financial and payment services and operating only on the mobile channel Unique Jibun Bank products: Quick account opening Jibun Bank Passbook Mobile phone number bank transfers Jibun Bank payment service Charging electronic money notification service Jibun Bank loans 15

16 This image cannot currently be displayed. Bankinter Remote Mobile Payments Mobile money transfer easy like sending an SMS Bankinter Highlights Mobile banking screens Mobile Banking services Hal-Cash geo extension Hal-Cash is a service offered by Bankinter to send money instantaneously (no charges, no CA needed by the receiver) from mobile phone, telephone-banking, and internet, to the mobile phone of anyone you want The cash withdrawal can be made from any of the ATM s of the 12 banks associated to HAL, in any place in Spain, Ecuador or Morocco (extension planned also in USA and Poland) Steps to carry out a transaction with Hal-Cash by mobile-banking are: - The sender applies through his mobile banking: beneficiary s mobile number, amount to send, secret code - An SMS is sent to the beneficiary with the amount sent and code to enter in the ATM - The beneficiary carries out the transaction in an ATM by typing his mobile number and the secret code 16

17 European Mobile Money Schemas SUCCESSFUL SERVICES Parking Transportation and ticketing Online gambling and gaming Vending machines UNSUCCESSFUL SERVICES Retail mobile payments, including NFC Mobile authorization for online shopping Domestic money transfer (P2P) RECURRING ISSUES 1 Lack of economy of scale 2 Unadequate investments / cash flow 3 Lack of inter-operability 4 Merchants acceptance Copyright 2010 Accenture All Rights Reserved. 17

18 North American vs European Approach USA: ISIS schema o Driven by Verizon, AT&T wireless and T- Mobile o AMEX, Visa, MasterCard, Discover o Full Mobile NFC ecosystem o First pilots planned Q Germany: mpass@pos o Driven by Vodafone D2,Telefonica O2 and DT o Large scale pilot with NFC stickers planned Q o Rely on SVA/wallets refilled through DD (Direct Debit) o Operators looking for a wallet processor / Trusted Party with Issuing license 18

19 Handset Manufacturers Augmenting their business with payments 19

20 The Cash on the table in North America Micropayments: Micropayments are transactions under $5 and represented $1.7 trillion dollars of consumer spending in the US in The rates charged to merchants for facilitating credit card transactions for micropayments have traditionally been too high, making it unprofitable for merchants to accept credit cards. In recent years, payment companies have recognized the unmet need, and developed payment solutions for micro-transactions. However, these solutions have primarily been focused on monetizing digital content in the online channel, leaving micropayments in the brick and mortar channel a largely untapped opportunity. Mobile payments can capture this market if rates are low enough and use cheaper and more flexible internet-based payment processing infrastructure developed by companies like Revolution Money (acquired by American Express in Q1 2010). Emerging Payments The Changing Landscape Federal Reserve Bank of Boston. April

21 As mobile payments grow the electronicification of cash will accelerate m-payment market trends Number of global m-payment transaction volume (Forecast by Technology , in million) , % , , Total m-payment transaction value (Regional Forecast , in USD M) ,000 80,000 60,000 40,000 20, WAP/Web 2010 USSD 2011 NFC SMS Mobile payments will grow significantly over the next years, with SMS payment solutions accounting for the highest volume of mobile transactions NFC is projected to be the fastest growing m-payment technology Source: Market Insight: Mobile Payment, Gartner Asia/ Pacif EMEA Western Europe North America Latin America m-payment users will increase globally from 70.2 M in 2009 to M in 2014 Asia, Eastern Europe and the Middle East and Africa (MEA) currently lead the world in mobile payment adoption. Combined, they will account for 81% of the global transaction volume and 69% of the value in 2014 Source: Market Insight: Mobile Payment, Gartner 2010 WAP: Wireless Application Protocol ; USSD: Unstructured Supplementary Service Data; NFC: Near Field Communication; SMS: Short Message Service 21

22 A new ecosystem between merchants and consumers that will potentially disintermediate traditional payment providers Consumers Mobile Network Operators Retailers Mobile Commerce Handset Manufacturers 22

23 There are several models that TD should investigate. The economics of these new ecosystems are still developing Ecosystem: possible business models Merchant Sells goods & services Merchant Acquirer Offers electronic payments services to Merchants Payment Scheme Rules and markets the payment circuit Payment Issuer Issues payment instrument to its customers Channel Enabler Mobile VAS Enables Provider mobile payment VAS (e.g. OTA, Secure element, Mobile Payment app) Network Services Offers network connectivity to his customers (voice, data) Purchases goods & services Customer Typical revenue sharing in e-payment process Possible Business Models Bank MVNO Bank-centric Partnership Traditional e-payment players Traditional e-payment players Traditional e-payment players Telco operator-centric Traditional e-payment players Telco Payment Institution Traditional e-payment players Bank Bank All Telco's Bank Telco Partner All banks Telco Operator Telco Operator Examples Key: BANK TELCO 23

24 Thank you Copyright 2012 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.