The Future of Mobile Payment– Mary Meeker, KPCB, Mobile & Internet Trends – Henry Blogett,...
Transcript of The Future of Mobile Payment– Mary Meeker, KPCB, Mobile & Internet Trends – Henry Blogett,...
The Future of Mobile Payment Christopher Boone
President & CEO, Cimbal Inc. E: [email protected]
T: (650) 743-2732
September 24, 2013
Who is This Guy? Christopher Boone President & CEO, Cimbal, Inc. • 20 years global experience in corp/
product development, inv banking, ecommerce and P&L management
• Senior roles: JP Morgan, Excite@Home, AppCentral, Visuvi, Price Waterhouse
• BS Pre-Med/Physics, Notre Dame; JP Morgan Executive Finance Program (Harvard, Wharton, Columbia, NYU)
• Lead inventor on 12 patents in mobile payment, financial processing, virtualization, network security
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Mobile Payment 101
Let’s make sure we are all on the same page...
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Mobile Acceptance is NOT Mobile Payment
Acceptance Payment
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Mobile Commerce is Not the Same as Mobile Payment
• Mobile payment means using the mobile device as the payment token instead of a plastic card, check, or cash
• Easy way to remember: if you can do the same thing on a computer browser, its mobile commerce
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Why payment?
Why mobile?
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Transaction Markets Represent the “Law of Large Numbers”
US Market figures. Source: Fed Survey 2010. 7
Transaction Markets Represent the “Law of Large Numbers”
US Market figures. Source: Fed Survey 2012. 8
$36.9
$3.8 $1.5
$USD Trillions ACH
Credit Cards
Debit Cards
0
200
400
600
800
1000
1200
2006 2007 2008 2009 2010 2011 2012
($) B
illio
ns
U.S. Annual Credit and Charge Card Payment Volumes
Visa MasterCard American Express Discover*
Mobile is the Lifestyle Device of Choice, Globally
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iPhone: Fastest Consumer Growth in History
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iPod Changed Music iPhone Revolutionized Telecom
iPad Growth 3x iPhone Changing PCs
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Global Smartphone + Tablet Installed Base Exceeded PC Installed Base in Q2 ‘13
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Mobile + Tablets = 24% of Online Shopping Black Friday 2012 (vs 6% 2010)
iOS 4x > than Android
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59% CAGR
Android ‘Phone’ Adoption Ramped @ 6x iPhone!
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Android has a Major Fragmentation Problem
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Right Now It’s a Two-Horse Race: iOS and Android. Everyone Else is Toast.
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iOS is Where the Money Is Cross-Platform Revenue Comparison: iOS vs. Android
12%
• 88% of total mCommerce volume
• iOS users spent 18% more on average
• Android was 24% in
2010
iOS Spend c2012
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ü Multi-Trillion dollar payment market…
ü 85% of the world has a mobile device…
ü Explosive mobile adoption trends…
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Something Doesn’t Add Up
So what’s taking mobile payment so long?
Payment Innovation Lags Technology by 15 Years!
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In History of Mobile Payment, Many Have Tried but No One Got it Right
Ø No benefit to consumer Ø Require additional hardware Ø No targeted promotion Ø Disjointed user experience Ø Single channel limitation Ø Limited to one payment tender Ø E-receipts limited to summary
information
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EMV Global Penetration Today… 2015 US Mandate Closing Fast
Source: Richard Detura, Managing Director, Citigroup Global Consumer Fraud Risk Management
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The Most Vital Key to Any New Payment Success
Merchant Adoption
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Crucial to Any New Payment Technology Merchant Adoption
Which makes MCX all the more interesting!
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What do Merchants Want?
1. Sales – increase sales revenue 2. Loyalty - repeat sales, loyalty to brand 3. Data – verified customer information 4. Security – fraud reduction
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Technologies • NFC • RFID • Barcode • Bluetooth 4.0 • Watermarks • Status quo
VS
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The Good • “Tap and go” simplicity • No network connection required
The Bad • Awful consumer experience to set up • Expensive to deploy • One financial instrument only • Requires NFC enabled handset
approved by telcos • Inflexible in long term
The Ugly
• Denounced by Mike Cook, Treasurer Wal-Mart “Godfather of payments”
• Closed ecosystem • $0 billion today • <1% addressable handset market
To NFC or Not to NFC That is the Question
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The Good • Multiple apps, global standards • Empower consumer with choice • 100% addressable smartphone/tablet
market • MCX rumored to use barcodes
The Bad
• Requires network connection (WiFi or carrier)
• Ugly • Multiple formats (DataMatrix, QR,
PDF417, Aztec, etc.) • Consumer confusion
The Ugly • QR is not truly open source • If code is on phone, security can be
questionable
Barcode: Interim Solution or Long-Term Winner?
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Wallet to be Re-Imagined • Over 600 Million credit cards
in use in USA • Average American carries 4
credit cards PLUS
ü Check cards ü Loyalty cards ü Coupons ü Cash
• Average credit card borrowing rate is 18% vs. 2.8% 10-Year US Treasure note yield*
Source: *Credit Card #s per Federal Reserve Bank of Boston, Credit Card interest rate per Indexcreditcards, 10-year Treasury yield are 01/31 averages, per Dept. of Treasury 28
“Asset-Light Generation” Wallet
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The Economics of Mobile Payment
• Card-Not-Present rate ü Card organization “contactless
protocol” ü Potential for new interchange class ü Google Wallet subsidizing difference
between CNP and CP rates; ISIS will not.
• Value-add ü Targeted offers – GPS (where you
are) + personal information (who you are, what you buy)
ü Digital coupons online to offline ü Data
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Winning Mobile Payment Solution Will Include
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Authentication: Leverage the Capabilities of the Device
ATM/Kiosk Access via Mobile Device – No Card, No Spoofing!
• Enhanced KYC • Mobile device + PIN code • Multi-factor authentication • Cost effective • Reduce risk • Easily integrated into ATM/
kiosk & mobile app • “Wow!” factor • Less steps for best
customer experience
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Takeaways 1. Market: Payments represent a multi-trillion market opportunity 2. Device: Mobile is the device of choice, globally, double digit CAGR 3. Technology: iOS vs Android and that’s it 4. Key to a successful, new payment solution is one thing:
MERCHANT ADOPTION
The winning solution will be: ü Convenient to use, simple to set up ü “Open,” allowing any financial instrument (credit/debit cards,
bank accts, stored value, etc.) ü Add value to consumers, merchants and banks ü Cloud based, not client based ü Multi-modal (in-store, online, proximity/P2P, other mediums)
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Who is Going to Win?
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Thank You
Questions? Contact me Christopher Boone President and CEO Cimbal, Inc. T: (650) 743-2732 E: [email protected]
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Appendix Sources
– Mary Meeker, KPCB, Mobile & Internet Trends
– Henry Blogett, Business Insider, The Future of Mobile
– Morgan Stanley Equity Research – Fed Reserve, various studies – Creditcards.com – GigaOm
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