When Worlds Collide Payments meet mobile Osman Inegol, Mobile Business Unit

When Worlds Collide Payments meet mobile Osman Inegol, Mobile Business Unit Croatia, Israel, Romania and Turkey Zadar 17 September 2013

Agenda 1 What does Visa Europe do? 2 What is Visa Europe s vision for mobile payments? 3 What progress are we making with contactless payments? 4 What are the key challenges for mobile payments? 5 Key messages

What does Visa Europe do? A payments technology business owned and operated by member banks and payment service providers from 36 countries across Europe It is not an American credit card company: almost 80% of its business is on debit cards In the last six years, Visa Europe has invested over 1 billion in new technology and infrastructure Our values are: Visionary leaders Passionate achievers Obsessed with volume Trusted partners

What does Visa Europe do? 1 in every 1 in every 1 in every 1TRY in every 7 3 5 5.50 Europe consumer spend Visa cards UK consumer spend on Visa cards France consumer spend on Visa cards Turkey consumer spend on Visa cards

Visa s vision for mobile payments Enabling easy, engaging commerce in a mobile connected world Our immediate priority Giving consumers faster, safer ways to pay on mobile devices and by 2020 50% of Visa transactions will be made via a mobile device

Enabling new commerce Security Data Networks Brand Core assets Expertise Enhanced consumer experience New capabilities Process Platform Systems

Contactless payments are all around us Iceland Norway Sweden Finland Estonia Ireland Denmark Latvia Lithuania UK Netherlands Belgium Germany Poland Luxembourg Czech Rep France Slovakia Switzerland Austria Hungary Romania Croatia Portugal Spain Italy Bulgaria Consumer rollout Pilot Study phase Greece Cyprus Turkey Israel

Contactless is growing rapidly in Europe 66 million cards 33 live mobile NFC programmes 91 acquirers 110 issuers 22 markets Transaction x5 volumes 1mio terminals in last year 250m transactions forecast in 2013

Big retailers and transit operators are signing up to accept NFC contactless payments Big retailers: Marks & Spencer Ikea Carrefour McDonalds Migros Starbucks Boots Contactless payments launched on London buses December 2012 Phase Two (entire network including underground, variable fare) scheduled for December 2013 Wroclaw in Poland has 800 terminals in buses and trams, generating 300k contactless payments per month

Smartphone ownership and usage rising rapidly European mobile phones installed base, million 1 Global Mobile Data Traffic, Exabytes per Month 2 NFC Smartphone 0% 675 9% 750 3% 30% 825 32% 21% 6.9 10.8 Feature phone 91% 67% 47% 0.6 1.3 2.4 4.2 2008 2012 Share in new device sales 2017 Mobile connection speed to increase 6-fold with 4G impact by 2016 Smartphone NFC 18% 64% 83% 0% 10% 57% 2011's mobile data traffic was eight times the size of the entire global Internet in 2000 Source: 1 - Strategy Analytics estimates as of Oct 2012 2 Cisco Visual Networking Index: Global Mobile Data Traffic Forecast Update, 2011 2016 Visa Europe Confidential

Mobile market is heavily consolidated across the value chain Key players European market share Mobile operators 1 Smartphone manufacturers 2 Top 2 Top 5 Top 2 Top 5 34% 63% 45% 78% Smartphone OS 2 Top 2 Top 5 68% 98% Internet / OTT players 3 1,000m 145m 400m 425m 150m 1 Share in number of subscribers in Visa Europe territories as of 2011 (Source: Strategy Analytics) 2 Share of installed base of smartphones as of 2012 (Source: Strategy Analytics) 3 Number of active users worldwide as of 2012 (Source: Business Insider, VE Insights, company websites, press clippings) Visa Europe Confidential

Trusted partners are essential for success in mobile payments Members MNOs TSMs Handset manufacturers Strategic alliances

Partnering to deliver a seamless consumer experience at the Olympics More than 700 phones distributed. Overwhelmingly positive response Mainstream contactless mobile payments will launch across Europe early in 2013 helped greatly by the real world experiences of the users taking part in this showcase Usain Bolt was so delighted by his Olympic phone that he tweeted a photo of it to 750,000 people

Agenda 1 What does Visa Europe do? 2 What is Visa Europe s vision for mobile payments? 3 What progress are we making with mobile / contactless payments? 4 What are the key challenges for mobile payments? 5 Key messages

Mobile payments is more than NFC Visa paywave for mobile Visa Alerts Visa Personal Payments Visa Rewards and Loyalty V.me by Visa Consumers can use their mobile device to shop conveniently, quickly and securely in a face-to-face environment Consumers can receive confirmation of payments processed by Visa made on their Visa debit, credit, prepaid and commercial cards in near real-time Consumers can send money from their Visa card to any Visa card, anywhere in the world, only knowing the receiver s mobile phone number or PAN Consumers receive free, personalised offers from top brands, available on the go Consumers get a convenient and secure way to shop online, that protects the privacy of personal card details with a modern user experience

A new payments ecosystem brings new challenges Must haves Wallets Brand Mobile experience Reaching commercial levels of acceptance with major brands Developing new commercial arrangements between all the relevant stakeholders Delivering compelling consumer propositions

Key messages Reaching commercial levels of acceptance with major brands is key Cards are the building blocks that accelerate NFC acceptance development Choosing the right trusted partners to build your business with is crucial Delivering compelling consumer propositions and use cases will ultimately determine the success of mobile payments

Thank you 21