The Future of Payments:

bringing consumers

on board

©TNS 2013 1

Irene Ierardi

Senior Research Executive TNS Finance

Webinar, 16 Gennaio 2014, Milano

The roadmap

Payments today:an ecosystem in evolution1

Taking a closer look at consumers’ trends2

How TNS responds: a UK case study3

Activating insight to bring consumers on board

Looking to the future:pay your way5

4

TNS can take you

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TNS can take you through the detail to unlock growth

1Payments today: an ecosystem in evolution

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an ecosystem in evolution

Payment technology hits the newspapers and magazines headlines

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A range of providers have harnessed technology to create a range of payment solutions

Apps

Smartphones

Laptops

Tablet

Mobiles

Devices

Cards

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PAY

5

PAY

Telcos

Technology

Retailers

Banks

Software

Providers

And created a veritable soup of payment brands

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PAY

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2Taking a closer look at consumers’ trends

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consumers’ trends

Purchasing and payment behaviours are changing due to emerging trends

1. Technology Digital technologies, mobile, emerging retail models marrying virtual and physical environments

2. The shift in Reassurance, value for money, convenience,

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PAY

PA

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2. The shift in consumer expectations

money, convenience, simplicity, time saving

3. Social economic change

Social-economic change: Senior, Millennial, Migrants

Technology is pervasiveDigital facts and figures

European Internet users (% population*) European Facebook subscribers (% population**)

63%

518.512.109

31%

250.934.000

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European E-ShoppersEuropean smartphone ownership

Source: *Internetworldstats, June 30, 2012; **Internetworldstats, December 31, 2012;*** TNS Digital Life 2011; **** Ecommerce Europe , 2012

45% (% population***)

52% % Internet users among

mobile owners

31% (% population****)

€311,6bn (turnover****)

85%

InternetPenetration

40% 80%

62%Go online daily

Are brand

CHINA FRANCE

Technology is pervasive Are you on Facebook? Twitter? Pinterest?

% of Internet users that: % of Internet users that:

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23%

29%

88%

33%

74%

91%

Are brand fans on SN

Write about brands online

Research brands online

10

Source: Digital Life 2011

The digital empowered consumer impacting on Corporate Reputation

Trust and transparency are key words: social media is hugely influential, more so than a brand’s own voice

Disagree

10

11

63

68

Agree

“What other people say about brands can be trusted more than what brands say themselves”

France

Poland

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11

23

16

68

40

62

Poland

Brazil

South Africa

Source: TNS Digital Life 2011; I11; Comment reading attitudes Base: Online comment readers (all categories); 1167, 896, 1423, 184

Mobile bankingChecking bank accounts and using online payment mechanisms through specific apps or dedicated websites on your mobile phone

22%

New devices are changing behaviours: mobile and the financial world

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of mobile users globally have performed banking activities on their phones

22%

Source: TNS Mobile Life 2013

Consumers’ needs: at TNS, we speak about 3 currencies

Money

When you employ and activate technology, ask yourself: does it help my customers save money, time or angst?

The financial crisis gave permission to people to look for valueShoppers are better informed, partly as a result of digital and social media, about deals and about whether they represent good value

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Time

Angst

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Need of reducing the emotional and mental clutter in life so to make space for the important things

Consumers are looking to simplify: brand touch points (shop, online, mobile, tablet) have to guarantee a seamless experience

Social-economic change: the “Grey Age” getting real

01

By 2050 2 billion “seniors” globally–over 60 years

02

Europe today:65 or more years old: 17.5 %

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03

Europe 2025: 65 or over more than 20%

04 Rapid increase in no. of over-80sin the EU-27’s population: is projected to almost triple between 2011 and 2060

EU-27 - Median age: 1990 - 2010 - Eurostat

The “Millenials” have grown up as "digital natives“this will probably lead to greater demand for payments to be instantaneous or 24/7

LIMITLESS CONNECTIVITY:

The ability to operate in a multimodal, trans-media world is a baseline for Millennials

REAL-TIME INTERACTION:

Millennials live on-the-go, and their

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Millennials = born between 1979 and 1997; ages 16-34 in 2013

Millennials live on-the-go, and their mobile devices ensure they are always connected and living in real time

LIVING LIFE THROUGH TECHNOLOGY:

For Millennials, digital isn’t just about bringing the offline online, it is about creating new spaces and behaviors to create, play, share and consume

Migration has started to pick up again

Migration has started to pick up again, driven largely by people moving within the European Union, after 3 years of continuous decline during the crisis (OECD, International Migration Outlook 2013)

Remittance flows to developing countries are expected to reach $414 billion in 2013 (up 6.3 percent over 2012) and $540 billion by 2016 (The World Bank, Migration and Development Brief, October 2013)

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Continuing to help immigrants to integrate will ensure they can play their part in driving growth

The new “Payment Services Consumer”: an active Stakeholder who contributes to choose his own payment way

A new Stakeholder, who acts as a pro-sumer, who decides which payments best meet his needs and who is aware of the

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needs and who is aware of the inclusive service the Electronic Payment System supplies

3How consumer responds: a TNS UK case study

TNS can take you through the details to unlock growth

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a TNS UK case study

The TNS UK case study

Requirements How current

Identify opportunities for payment methods to better serve consumers

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Requirements on payment occasions

Consumers ideal needs

How current payment methods meet those needs

Sample size: 1,706 Fieldwork: May 2013

Less is more...

But the consumer wants more from less

20

Personalised & intelligent

26Service & in-control

Budget planning

14

Consumers have three “core” needs which account for 41% of their spend; three further needs in financial planning and personalisation define a huge opportunity

o

No-hassle, quick & easy10

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19

21

n

Fraud-protection & benefits

16

Recognised & accepted

15

The six ideal needs are complementary and fit with different parts of the market landscape Currently no payment methods meet ‘personalised & intelligent’ need

CashDebit cards

Credit card w/o

benefits

Credit card with benefits

Online bank

account

Online 3rd

party

Tech enabled payments

No-hassle, quick and easy 10%

Recognised and accepted 15%

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Fraud-protection and benefits 16%

Budget planning 14%

Service and in-control 19%

Personalised and intelligent 26%

Less is more...

but the consumer wants more from less

There are many opportunities to meet

needs better

No payment method meets consumers

biggest need

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4Activating insight to bring consumers

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to bring consumers on board

There are two key drivers of consumer attitudes and behaviours; in relation to payments methods, there are 5 segments of similar sizes (of population)

+

Technologically engaged

Tech savvy best deal seeker

Tech loving with limited budget

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+-

-

Technologically disengaged

Financially involved

Financially uninvolved

Wealthy traditionalist

Risk averse conservative

Financially disengaged

Less is more...

but the consumer wants more from less

There are many opportunities to

meet needs better

No payment method meets

consumers biggest need

Opportunities exist within

each consumer segment

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5Looking to the future:pay your way

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pay your way

Optimising the ideation processPersonalised & Intelligent: Insight into action

Example of how learning can be used to start process of developing growth ideas

Example idea(*)

pai.com

Consumer insight

I want an integrated

Need gap

A “Personalised and intelligent” payment

Target consumer

Tech savvy best deal seeker

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I want an integrated shopping and payment

experience. With today’s technology it’s

ridiculous that I have to go through a

series of disjointed steps

payment method

Rewards connected to the purchase experience

(*) New APP for payments that does not exist in reality, it is just an illustrative idea

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Less is more...

but the consumer

wants more from less

There are many opportunities to

meet needs better

No payment method meets

consumers biggest need

Opportunities exist within

each consumer segment

Happier consumers

and opportunities

for all stakeholders

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from less

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Thank you

©TNS 2013

Thank you

Irene IerardiSenior Research Executive

TNS Finance tel. +39.02.270721

@: irene.ierardi@tnsglobal.com

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