Will Mobile Phones Replace Cards?

Transcription

1 Will Mobile Phones Replace Cards? Bastian Knoppers, Senior Vice President Card Personalization and Fulfillment, FIS Soren Bested, Managing Director Monitise Americas Kevin Morrison, Senior Vice President Prepaid, US Bank

2 Cards vs. Mobile Phones Headlines SEPTEMBER 20, 2011 Will phones replace wallets? Google Wallet lets you use your phone to pay for purchases at physical point-of-sale machines. Instead of swiping a card or handing over cash, Wallet users are able to open the Wallet app, enter a PIN, and wave their phone next to the reader. At the moment, the service works only with Nexus S 4G phones on Sprint. Mobile payments looking at turbulent times October 12, 2011 No Plastic Needed: Consumers and the Future of Mobile Payments September 30, 2011 Nov. 16, 2010, 6:00 a.m. EST U.S. Bank Expands Mobile Capabilities with Innovative New Visa Payment Solution How Visa Plans To Dominate Mobile Payments, Create The Digital Wallet And More August 7th, 2011 It s no secret that credit card companies are shelling out big bucks and aggressively forming partnerships and deals to start cashing in on the mobile and digital payments innovations currently taking place. Mass adoption of 'wave and pay' years away Friday 14 October 2011 NFC Technology to Redefine Smartphone Services New research report looks at the future development of International Near Field Communication markets December 15,

3 Cards vs. Mobile Phones Agenda Welcome and Speaker Introductions Subject and Format Introduction The Case for Mobile The Case for Cards Rebuttal Rebuttal 1 2 Minutes 2 3 Minutes 5 6 Minutes 5 6 Minutes 3 4 Minutes 3 4 Minutes U.S Bank Perspective 10 Minutes Town Hall Questions 10 Minutes 3

4 What is a Mobile Payment? Peer-2-Peer payments? Ability to accept credit card payments? Amazon on a mobile phone? Bill payment from a phone? Remote deposit capture (RDC)? The ability to use your mobile phone as a payment vehicle at a point-of-sale 4

5 The time has come 1. Convenience of payment Transaction Check -7.2% 1 Credit -0.2% 1 Mobile 48.8% 2 (CAGR 06-09) Debit 14.8% The 2010 Federal Reserve Payments Study 2 World Payment Report 2011 Prepaid 21.5% 1

6 The time has come 1. Convenience of payment 2. Google Wallet and ISIS 6

7 The time has come 1. Convenience of payment 2. Google Wallet and ISIS 3. Alternative payments networks and products Risk of non-interchange based transactions (e.g. 60% + of PayPal s transactions are ACH) 7

8 The time has come 1. Convenience of payment 2. Google Wallet and ISIS 3. Alternative payments networks and products 4. Availability of payment mobile devices 8

9 The time has come 1. Convenience of payment 2. Google Wallet and ISIS 3. Alternative payments networks and products 4. Availability of payment mobile devices 5. Availability of proximity Point-of-Sale devices 85% of POS terminals NFC enabled by 2016 ABI Research Aug

10 The time has come 1. Convenience of payment 2. Google Wallet and ISIS 3. Alternative payments networks and products 4. Availability of payment mobile devices 5. Availability of proximity Point-of-Sale devices 6. Convergence of coupons, loyalty and payments 10

11 The Case for Cards Any payment system form factor must meet the following criteria a.trusted Issuer The consumer understands the issuer relationship. b.business Case for the Issuer Low cost, and secure. c.interoperability Ubiquitous in its application. d.efficient/convenient for the Consumer Easy to carry, easy to use. e.dependable/reliable Durable, multiple technologies, long shelf life. 11

12 The Case for Cards Cards meet and exceed all of the following criteria of a form factor a.trusted Issuer The consumer understands the issuer relationship. b.business Case for the Issuer Low cost, and secure. c.interoperability Ubiquitous in its application. d.efficient/convenient for the Consumer Easy to carry, easy to use. e.dependable/reliable Durable, multiple technologies, long shelf life. 12

13 Cards vs. Mobile Phones Rebuttal 13

14 Cards vs. Mobile Phones The Case against Cards Trusted issuer? 14

15 Cards vs. Mobile Phones The Case against Cards Business case for the issuer? 15

16 Cards vs. Mobile Phones The Case against Cards Interoperability? Non-EMV cards for international travelers 16

17 Cards vs. Mobile Phones The Case against Cards Efficient/Convenient for the Consumer? The Costanza wallet 17

18 Cards vs. Mobile Phones The Case against Cards Dependable/Reliable? 18

19 The Case Against Mobile Phones Mobile Phones as a payment form factor will not replace cards until: a.trusted Relationship Who is the issuer? Who does the consumer call? Liability? b.business Case for the Issuer Incremental investment has to be offset by increased revenues. c.interoperability Mobile payments will have to operate seamlessly regardless of hardware, carrier, or location. d.efficient/convenient for the Consumer Total transaction time will have to be the same or less than cards. e.dependable/reliable Must be able to use for all transactions anytime anywhere. Regardless of 19

20 Cards vs. Mobile Phones Coverage Map Can you pay me now??? Uh oh! 20

21 Cards vs. Mobile Phones The Case Against Mobile Phones Even at the gas pump 21

22 Cards vs. Mobile Phones The Final Say 22

23 Our Mobile Form Factor R&D Experience Mobile Marketing & Alerts Microtags Handset Stickers microsd Mobile Apps Embedded NFC w/ OTA

24 Payments Innovation Timeline May: Utah Instant Issue Nov: Visa Mobile Offers- Android Dec: External OTA/NFC Pilot Aug: SMS Alerts August: ShopText Pilot Nov: Visa Mobile Payments App Launch Sep: REI iphone Credit Card Application Oct: Contactless Payment at Vending Machines Pilot May: Internal Mobile Payment Sticker Pilot Oct: AccelaPay Mobile App July: Flexperks Contactless & EMV Card April: Visa Money Transfer Pilot Dec: Visa Targeted Acceptance Reliacard Mobile App

25 Bringing Mobile Banking to Prepaid 1 st Bank in U.S. to offer mobile banking with mobile bill pay to the under-banked AccelaPay and ReliaCard supported

26 REI Visa Mobile Card Acquisition & Servicing App Move card offer marketing from in lane to the front of the store Allow for secure and simple application process Instant issue and access upon approval Mobile servicing app once activated Launched Sept 2011 for ios Available in Android soon

27 EMV Dual Interface Chip Cards First in the U.S. to issue dual interface EMV compliant cards for frequent international travelers U.S. Bank Payment Services Confidential 27

28 Pilot Initiative microsd enabled mobile payments Piloted with employees in 20 states Prepaid account with contactless payments, mobile banking, and mobile bill pay. Pilot was very close to how we envision commercialized mobile payments In refinement phase and can not comment on plans

29 VitaBand Contactless Pilot Contactless MasterCard PayPass installed in wristband, with online site that enables sharing info with first responders 2,000 U.S. Bank employees participating Employees will pay $10 to participate in the pilot, which will be donated to the Employee Assistance Fund month pilot with ongoing engagement activities and surveys to gather feedback.

30 Conclusion U.S. Bank believes the race is still to undefined to call at this point Testing numerous solutions in phone and card based options Infrastructure is key to determining short term winner and losers

31 Cards vs. Mobile Phones Q&A 31

32 Thank You