mPOS solutions for un -tapped merchants, but not only…

SEPTEMBER 18, 2014OTTILIA ROUGUETEASTERN EUROPE MARKETING SOLUTIONS & SERVICES DIRECTOR / INGENICO GROUP

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mPOS, what is it?

Source: Visa Europe, mPOS Implementation Guide_10 Dec 2013

mPOSMarket Dynamics

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mPOSA promising future…

5M

>50M

2012 2018

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Driven by new merchants acquisition and additional solution to existing merchants in all geographies…

mPOS market growth is driven by complementary solutions to existing merchants and by micro-merchants

Europe share in mPOS shipments will reach USA level in 2018

0

10

20

30

40

50

60

2013 2018

ROW

APAC

Europe

US

mPOS Shipments by Geography

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…and by significant changes in consumer - merchant relationship

• Must to accept card payment, even very small, to do not loose sales

• Need to adapt his payment and POS technologies to consumers expectations

• Look for consumer engagement and loyalty to enhance

• Wants deep consumer insight and data analytics to offer more personalized products

• Smartphone or tablet is at the heart of consumer relation to products

• Consumer wants to be considered as unique and expect dedicated offer

• A seamless payment experience whatever the channel is a must

• Consumer becomes the best brand promotion power to merchants

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…moving up on the value chainFor micro-merchants but not only…

Retail Merchants

(Tier 1, 2 & 3)

Small Merchants (Tier 4)

Mobile Merchants(Tier 5)

Micro Merchants(Tier 6)

Field Payments – Delivery, Catering, Pop-up Stores, Food Trucks

Line Busting, Client Servicing, Integrations, Global Deployments

Basic Mobile Card Acceptance – App + Reader + Processing

The payments ecosystem is becoming increasingly complex as merchants work with consumers in new ways.

Customized Solutions –Loyalty Programs, Offers

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…creating a diverse range of new use cases

Out-of-Store Mobile

Payments

On-Board Mobile

Payments

In-Store Mobile

Payments

DeliveryDelivery

Field SalesField Sales

Business ContinuityBusiness Continuity

Client ServicingClient ServicingLine BustingLine Busting

Fixed Tablet POS

Fixed Tablet POS

Pop-Up StoresPop-Up Stores

Home ServicesHome Services

FundraisingFundraising

EventsEvents

Onboard PurchasesOnboard

Purchases

TicketingTicketing

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Emerging markets where mPOS is leapfrogging fixed traditional POS

• Unique use cases

• Financial inclusion

• Demand for increased efficiency and security

• Government mandates for tax collection

High penetration of POS: Merchants looking to extend their business solutions

• Increased competition

• Higher demands from tech-savvy consumers

• New revenue opportunities and use cases

• Stay connected to customers in new and meaningful ways

…meaning that one size does not fit all / mPOS must adapt to different markets

Creating profitable business by answering mPOSmarket challenges

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New and complex requirements to address

mPOS solution requirements

Challenges

Back-end integration

� Integration with existing systems (ERP, inventory, CRM) and POS infrastructure

� Real-time device management� Allow to control devices used in nomadic way

Security � End-to-end encryption, PCI, EMV, Visa Ready� Risk engine enabling pre-processing controls

White-labelling� White labeling and customized branding options to brand continuity� Allow existing applications, value-added services use for brand

communication (through APIs)

Scalability

� Tools to board and manage thousands of mobile users� Support for global deployments (chip & sign, chip & PIN, global gateway

connections, certified to international processors) � Localization and multi-currency support

Management � Real-time control over devices, users and profiles� Transaction reporting, analytics and audit trails � Self-service portals for merchant & estate management

Speed to market � Turnkey solution that can be used off-the-shelf or customized� Sales training and support

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By building solutions putting complexity out

Powerful Mobile

Payments Engine

Back-end Integration

Security and Compliance

Customization and

Branding

Global Reach and Scalability

Device and Merchant

Management

Speed to Market

Solution providers must take the complexity out of mPOS by managing the work behind the scenes – i.e. connecting to acquirers, local card schemes, security, key injections, hosting and more.

Creating a seamless experience, combining powerful business solutions with payment , and changing the relationship between merchants and consumers.

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And creating more value by combining business solutions with payments

Source: McKinsey Small Business Panel – June 2013Smart Insights Report: mPOS Expansion Shakes the POS Industry

Ingenico Group & Ingenico Mobile Solutions

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INGENICO GROUP at a glance

Global footprint / multi-local solutions

Trusted partner / from small merchants to global brands

Seamless experience / whatever the channel

Security / Ingenico’ DNA

Innovation / consumers’ lifestyles

• A Solid financial track record

• A continuous growth

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One group Empowering in-store, online and mobile commerce

Operating the widest range of terminals, and connected

to more than 1,000 acquirers and banks, the Group’s smart terminals

offer more than 250 payment methods .

Ingenico Payment Services turns complex financial

transactions into seamless payment solutions . We

leverage on historical position in Europe to set the ground

for a global offer .

The global reference in mobile acceptance today operates in 14 countries ,

serving 100,000connected merchants

and accounting for 70% of white label mobile

solutions in the USA.

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Merchant Commerce Manager Platform

Ingenico Group innovative mobile payment solutions

Ingenico App Your App

Device management

Merchant Boarding &

SupportFraud Engine

Transaction Analytics

What the merchant commerce manager

platform deliver?

� Enables each component to work seamlessly together & integrate with external services.

� Provides centralized management through two intuitive interfaces – one for the estate owner and one for the merchant.

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Building a value proposal to all players

� Gain access to their own self-service management portal

� View real-time reporting of all transactions for both merchant and sub-merchant accounts

� Customize receipts with branding, messaging and social media links

� Integrate with back-office systems and reduce the need for reconciliations

� Enrich enterprise offerings to capture high value customers and migrate to professional accounts

� Drive market share while generating recurring transactional revenues

� Increase average revenue per user (ARPU) and create long-term relationships with professional account holders

� Disrupt the payments ecosystem and ensure customer and merchant adoption of their mobile money and value-added services programs

� Add new recurring revenue streams from their small business channel

� Enhance customer loyalty by providing small business merchants with a solution that lowers card acceptance costs

� Enables them to take payments anywhere, anytime

� Grow their brand outside of your traditional markets, becoming a recognized leader in mobile payments

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US: Operating 70% of enterprise-level mPOS solutions

International: Leveraging Ingenico Group’s strong network to grow

Leading to a strong commercial success

New verticals:QSRs and Fundraising

Direct Sales Organizations

ISOs and Acquirers

New Entrants

The only player operating in

14 countries

Strong network of acquirers

New Entrants

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mPOS is a complete mobility solution & professional serviceOur business model is simple, transparent and customer tailored

Our baseline model• HW• Set-up • Monthly operation fee

Full managed services in white label• All components delivered from payment to merchant commerce manager back-office and

mobile apps

• Fully white-labelled with customization need

• Project based design & build and implementation

Tailored managed services trough SDK components and APIs• SDKs available for Customer own mobile apps or payment apps developments

• APIs available to easy integration in existing reporting system

mPOSSolution implementation success factors

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mPOS Solution on the fieldThe winning implementation model in 5 steps

Define and agree on the scope

Put in place a strong multi-party project management team

Architecture & build the solution

Integrate and test

Pilot and roll-out

1

2

3

4

5

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Customers feedback on mPOS so farWhat’s going well, what to improve ?

Small merchants • New merchant acquisition for mPOS solution subscription is not difficult because of its

attractiveness compared to traditional POS for specific merchant segments or for vertical experience� the solution has a market !

• More appropriate support to provide to merchants in the “ 1st step use” period to facilitate the apps downloading and the solution grip phase. This is the best guarantee of the regular use of the mPOS Solution by the merchants

Large retailer• Seen as a complementary solution to standard POS as value added services are a great

opportunity and easiest to be addressed thru this solution compared to standard ones

• Extended functionalities on the mobile apps in order to increase the solution usability and more functionality on the business side are the main success factor

Thank you!