State of US Mobile Payments (NFC)

Transcription

1 State of US Mobile Payments (NFC) (NFC State of the Industry Panel) Chandra Srivastava Business Leader, Visa SCA Mobile & NFC Council 2013 Payments Summit February 6, 2013 Draft - For Discussion Only 1

2 State of US Mobile Payments (NFC) Draft - For Discussion Only 2

3 Key Recent Industry Highlights in Mobile Payments NFC Solution Launches NFC handset launches POS NFC Enablement EMV Migration Mobile POS Bank Cards in Wallet Other Mobile Wallets / Apps Other Initiatives. Note: Use of 3 rd party logos does not imply Visa endorsement Draft - For Discussion Only 3

4 NFC Payment Ecosystem progress Banks Mobile Operating Systems Mobile Wallet Enabling Infrastructure Consumer Choice CONSUMERS The first & last say Payment Networks MNOs Trusted Services Manager NFC Chipset/Secure Element Providers Device Manufacturers Payment Terminals Note: Use of 3 rd party logos does not imply Visa endorsement Draft - For Discussion Only 4

5 Key Factors NFC Market Development Mobile Handset Refresh U.S. consumers replace their mobile handsets every months Smartphone penetration is increasing Major OEMs building NFC into new models NFC market is still in the early stages Indicators are pointing in the right direction, but widespread adoption seems to be few years away Merchant Payment Terminal Refresh Traditionally, payment terminal refresh cycle is 5+ years Payment network EMV initiatives may accelerate refresh/upgrade in U.S. Major payment terminal vendors now integrating NFC into most new models Isis and Google merchant activity in U.S. Mobile Payment Credential Issuance Isis Wallet participation by Visa, Mastercard, AMEX Sprint: currently supports Google Wallet; Complexity and friction involved in establishing commercial and technical integrations with MNOs, TSMs and wallet providers Draft - For Discussion Only 5

6 Availability of NFC Smartphones is Growing Rapidly Global NFC Handset Forecast (millions) NFC Smart phones as % of Total Mobile Handsets NFC Smartphones North America Far East & China Western EU Global Avg 80% CAGR 53% 70% 60% 1, e 2013e 2014e 2015e 2016e 2017e Source: Juniper Research, May % 40% 30% 20% 10% 0% 2012e 2013e 2014e 2015e 2016e 2017e Source: Juniper Research, May 2012 Key Drivers: 9 of Top 10 OEMs integrating NFC in devices (e.g., Samsung, LG, HTC, RIM, Nokia, Motorola) 3 of Top 4 mobile OS es support NFC (Android, Blackberry, Windows) Draft - For Discussion Only 6

7 POS Acceptance of Contactless Payments Anticipated to Grow POS Terminal Market Share of 93% (Aite Group) CAGR 49.4% NFC Enabled Product Families MX 800 Series VX Evolution V x 810 QX1000 PINpad 1000SE V x 810 DUET R3210 ist150 Telium iwl Touch iwl200 ict200 ipp L5000 Source: Berg Insight, June 2012 Penetration: Global 53% US 86% EU 78% ROW 38% EMV Contact/Contactless Migration key to US Payment Terminal NFC enablement NFC acceptance is becoming standard in the majority of current product models from the major card terminal manufacturers (VeriFone, Ingenico, Equinox) Draft - For Discussion Only 7

8 Global NFC Retail Payments Expected to Reach $180B in 2017 Global NFC Retail Payments ($ in billions) $180.5 $130.5 $84.5 $23.4 $31.6 $ e 2013e 2014e 2015e 2016e 2017e Source: Juniper Research, May 2012 Draft - For Discussion Only 8

9 Emerging Mobile Payment Trends Emerging and established players are innovating on the existing payments infrastructure - Solutions aim to address consumer demands for frictionless, cross-channel shopping with rewards and buying tools - Merchants are playing an increasingly important role (e.g. Starbucks, MCX) Competition for access to data access is intensifying - For a number of alternative schemes, payment data, not payment revenue, is the end game Cloud-based credentials combining with mobile form factors to enable new consumer payment services - Consumer device platform providers moving to control consumer identity and embed payments as a service Acceptance ubiquity is critical for consumer value proposition - Open network versus closed networks - Mobile POS innovation is extending reach to new classes of merchants Draft - For Discussion Only 9

10 Summary NFC payments market is in early stage positive market trends for growth NFC Handsets enablement is happening and may not be the big constraint NFC POS Retail is key Consumer adoption may require multi-party effort for acceptance & provisioning Value Added Services (offers, loyalty, etc.) / Mobile Apps may play a crucial role in consumer behavior change Alternate Mobile Payments solutions compete / co-exist Draft - For Discussion Only 10

11 Smart Card Alliance Mobile and NFC Council Mobile and NFC Council formed in 2012 over 70 member organizations Charter Raise awareness and accelerate the adoption of payments, loyalty, marketing, promotion/coupons/offers, peer-to-peer, identity, and access control applications using NFC Key Activities NFC Ecosystem webinar (member access only) Mobile & NFC Standards Landscape paper New activities being planned for FY13 NFC Solutions Summit May , San Francisco Draft - For Discussion Only 11

12 Thank You Draft - For Discussion Only 12