Mobility, Banking and Payments: Evolution or Revolution?2015.mobievent.kz/presentation2015/2.Prepaid...

PRESENTATION TITLE GOES HERE

CHALLENGES AND OPPORTUNITIES

Bernardo NicolettiAlmati, 1 October 2015

Mobility, Banking and Payments: Evolution or Revolution?


Questions and Answers

1914: Launch of the first credit card by Western Union

PRESENTATION TITLE GOES HERE3

Payments Trends

• Strong Interest in Young Generations, Underbanked and Unbanked

• Modernization of Payment Systems • Payment Systems at the heart of financial growth•Joint Finance and Risk Management

• Growth fueled by New Channels •Increase in e-Commerce activities

• Large CAGR in Internet based Commerce over the last 5 years•Digital Transformation

• Mobile Payments across the world expected to double in 2 years

Convergence of Financial Services and Digital Businesses: FinTech


Cards are growing all over the world


Non-Cash Payments are Exploding EspeciallyCard Payments


Payment Card Market – Global View

EMEA Forecasted to Exceed North America by 2017(Card Circulation in Billions)

2012 2017

Market Size: 11.8B Market Size: 15.9B

• Today 11.8B payment cards circulate worldwide; number forecasted to reach 15.9B by 2017 (+6%)

• Growth is strong across regions however is slowing down in the 5 years.

• Growth mainly driven by Global EMV migration and increase in card adoption across emerging markets.

• EMEA forecasted to be the second largest market for card circulation by 2017, to cross NA by 2015.

• Growth also stronger than North America mainly driven by Middle East and Africa


Payment Card Market – Emea

2012 2017

Market Size: 1.9B Market Size: 2.6B

• Western EU continues to be the largest market in EMEA region consisting of 60% of card market today

• Western EU, only region to show an increase in growth (forecasted) mainly driven by volume increase in prepaid

cards and debit cards.

• Middle East and Africa, a bigger market than Eastern EU forecasted to grow 2X faster in next 5 years: Growth mainly driven by increase in credit and debit card volumes.


0.0 50.0 100.0 150.0 200.0 250.0

Israel

Morocco

Oman

United ArabEmirates

Egypt

Saudi Arabia

Iraq

Syria

South Africa

Iran 219M

106M

63M

61M

57M

53M

21M

20.7M

13M

11M

11%

6%

11%

13%

12%

24%

14%

15%

7%

6% CAGR 2012-2017

Top Countries by Region

0 100 200 300 400

Sweden

Belgium

Switzerland

Netherlands

Spain

Italy

Germany

UnitedKingdom

France

Turkey 318M

300M

284M

169M

104M

72M

54M

41M

40M

30M

15%

9%

2%

1%

3%

1%

1%

10%

9%

1% CAGR 2012-2017

0 100 200 300

Serbia

Belarus

Bulgaria

Croatia

Hungary

Czech

Republic

Romania

Poland

Ukraine

Russia 271M

49M

47M

16M

13M

11M

10.5M

10.5M

9.5M

7M

7%

4%

4%

2%

2%

3%

3%

2%

4%

2% CAGR 2012-2017

Western EU - 2017 Eastern EU - 2017 MEA - 2017

All three regions are highly concentrated markets with top 10 countries accounting for 92% to 94% of card circulation


Mobile Payment Users by Region (in 000)

Skinner, C. “Digital Bank”

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

W. Europe North America As/Pac EMEA Latin America

Chart Title

2009 2010 2011 2012 2013 2014 2015


The Four Challenges in Payments: 4C

Co

mp

etit

ion

Compliance

Cu

stom

ers

Computers &

Technology


Evolve or Die

It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.”

Attributed to Charles Darwin

–Charles


Time of Innovative

A disruptive innovation creates a new market and value network, and eventually disrupts the existing ones (over a few years or decades)

Innovation can be on:• Products• Processes• Distribution• Business Models


Both Customers and Banks have New and Emerging Payment Needs

• Responding to consumer change in a value effective way to fight new and old competition

• Differentiation in the minds of customers.

• Omnichannel strategies• Managing credit lines and

cash flows• Cost reduction

Financial Services

• Ease of use• Make payments whenever

and wherever• Transparency and up to

date view on cash position• Convenience• Security

Customers

13 | Barclays Pingit for corporates | September 2013


Mobile Payments: A Disruptive Innovation

Type of Innovation

Characteristics

Product Combines all types of use of the card

Process Combines different modes: biometrics, pictures, voice

Distribution Everywhere and Everytime

Business Model Ecosystem in Parternship: Banks, Telco, Retail, etc.

7 billions phones vs. 2 billions of banking account


Innovation in Payment Systems

Mobile & NFC

Smart Cards

M-Wallet

P2P Payments

Huge Untapped Market

Quick and Convenient

Capable of Displacing Cash

Technology to play a major role

Can provide ‘Top-of-Wallet’ status

Suica in Japan & Octopus in HK

Increased time spending on these forums

Extend Banking Services apart from marketing & Branding

Large reach at minimal investment

Apprehensions over security and

privacy

Taking success of cards to the next level

One card does it all

Safe and Secure

Tool for Microfinance and Financial Inclusion e.g. Rural Smart Cards in LatAm

Witnessing growth all over

Comfort and Convenience

Broadened product offering such as GiroPay, PC Pay, EPS etc.

Enhanced security- virtual keyboard, virtual card, multi-facto authentication


In-store navigation

ATM/Branch Locations

Self-scanning & Self-checkout

Shopping Lists

Loyalty

Coupons Extended packaging

Mobile eCommerce

Payments

Advertising & Promotions

A Disruptive Innovation:The "Mobile Payment Experience"


Technology Helps

NFC

Biometrics

Host Card Emulation (HCE) With Host card

Without Host card


M-Wallet

The m-wallet is the use of mobile similarly to a real wallet. It is a convenient solution for any business looking to allow customers

to purchase their products with greater ease, therefore driving sales.

What can it hold other than payments?• Bank account details• Credit cards• Gift coupons and reward certificates• Loyalty cards• Offers


Some Data and Trends

79% concerns with security of information stored on a e-wallet (First Data Universal Commerce Tracker Study, 2013)

‣ New Identification Drivers - 34% of overall respondents would usea mobile wallet to originate payments (UK Study FC Business Intelligence LTD, 2013)

– 46% for smart phone users– 49% for 25-34 year olds– 55% for 18-24 year olds– 51% when incentive is offered

•A few solutions established in niches

•Expect:

•Consolidation of vendors

•New solutions that focus on the customer but that offer means of

payments alternative to cards.

•Mobile wallets will not exist as stand alone, payment only services


P2P – Person to Person

Person-to-person payments (P2P) allows customers to transfer funds online to another individual via the Internet or a mobile phone

Two methods:• Customers, identified by their email, establish secure accounts

with a trusted third-party vendor.Ex. Paypal, MyBank

• Customers use an online interface or mobile application to designate the amount of funds to be transferred.Ex. Pingit by Barclays and Paym in UK, Jiffy in Italy


A Successful Story: Barclays Pingit

Send now

Transfer money using only a phone numberLaunched

February

2012

Pay now

Settle a bill or invoice, easily and instantly and make Gift Aid enabled donationsLaunched

May 2012

Buy now

A range of m-commerce solutions to pay for goods and services on the goLaunched

September

201321 | Barclays Pingit for corporates |

Transfer now

Possibility to transfer money to India and several other countries (e.g. Kenya)Launched

2014


What Should we Do?


Recommended Approach

• Define Vision & objectives

• Find your ecosystem

• Make mPayment technology decisions

• Production-ready deployment

• Measure, adapt and optimize


Define Vision & Objectives

Offensive– New channel/new revenue– Expand offerings for existing

customers– Attract new customers,

gain share– Prepaid Travel cards are ideal for

mobile

Defensive– Protect existing customer base

against traditional competitors– Prevent disintermediation by new

non-traditional competitors

… More on the Master Class


Innovation for the m-Generation

Simplify Value Integrate and Virtualize

Product Process Platform

ClienteProgettazione

ProduzioneComme

rcialeAssistenza tecnica

Processo

http://images.google.it/imgres?imgurl=http://upload.wikimedia.org/wikipedia/commons/thumb/8/83/Process_states.svg/300px-Process_states.svg.png&imgrefurl=http://en.wikipedia.org/wiki/Process_(computing)&h=300&w=300&sz=26&hl=it&start=13&tbnid=lFfc8gn_ssLymM:&tbnh=116&tbnw=116&prev=/images?q=process&gbv=2&hl=it&sa=G

http://images.google.it/imgres?imgurl=http://upload.wikimedia.org/wikipedia/commons/thumb/8/83/Process_states.svg/300px-Process_states.svg.png&imgrefurl=http://en.wikipedia.org/wiki/Process_(computing)&h=300&w=300&sz=26&hl=it&start=13&tbnid=lFfc8gn_ssLymM:&tbnh=116&tbnw=116&prev=/images?q=process&gbv=2&hl=it&sa=G


The Final Message To Beat Your Competition… … Strive For Perfection

Continuous improvementThe policy of the Bonsai, small steps at a time


Bernardo Nicoletti

[email protected]+39 348 470 7016Blog: www.leandigitize.com

Transigma Emea, Director

Professor at the Master in procurement at the University of Rome, Tor Vergata, Rome, Italy.

Consultant and Coach

Master Black Belt

MOBILE

BANKING

E v o l u t i o n o r R e v o l u t i o n ?

B E R N A R D O N I C O L E T T I

PALG

RAVE

STUDI

ES IN

FINAN

CE

TECH

NOLO

GY

Mobility, Banking and Payments: Evolution or Revolution?2015.mobievent.kz/presentation2015/2.Prepaid...

Documents

Transcript of Mobility, Banking and Payments: Evolution or Revolution?2015.mobievent.kz/presentation2015/2.Prepaid...