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Mobile PaymentsMoving at the speed of innovation
May 2017Eric Kuhn, Enterprise Digital Product Development
Agenda
2
• Mobile Payments Landscape
• Why Your Digital Products are Essential for Growth
• How to Craft an Effective Strategy for your Client Base
3
Mobile Payment Landscape
4
5
Who cares?
6
“56% of consumers are now aware that there is
technology to use their phone to pay”
-Accenture
Mobile Payments are not just at the point of sale
7
• In-App Payments & Mobile Web
• In-App even when in-
person/Card on File
• Order Ahead
• Delivery
ApplePay is building momentum
8
• Transaction volume is up 500% year over year
• “2 million small businesses—and soon Comcast— are now accepting invoice payments with the service.” (ApplePay on Web)
• “two years Apple has managed to move from four to 35 percent of retailers (or 4 million locations) supporting Apple Pay in the US. “
Financial institutions launching payments apps
9
Capital One Wallet
Chase PAY
Wells Fargo Wallet
FIS Commerce App launched!
Quick call out to the FIS Commerce App
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• Android Contactless Payments HCE
• Transaction Alerts
• Balance and Transaction History
• Card Controls On/Off (Credit)
• Visa Checkout Provisioning
• App to App Linking
• In-App locator for Branches, ATMs
and Contactless Payments Retailers
• Fingerprint Authentication
Top-of-
Wallet
Android
iOS
Credit
Debit
Prepaid
Now
Pending Roadmap
• MasterCard
• Card Controls (Debit/Prepaid)
• P2P
• Offers/Loyalty
• ApplePay Provisioning
• Credit Due Date and Payment
Easier Checkout Leads to Lock In
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Autofill Wallets
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• Desktop and
Mobile Web One
Click Autofill of
Card Info
• Drives card
usage over 80%
for user
• No Checkout
Button Needed
Retail launching wallets too
13
Probably too many…
Speaking of Starbucks…
14
Sticking with Starbucks for a second
15
Does anyone want a coffee?
1.2 Billion
Uber and Card on File
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• Transportation is changing
• Card on file for frequent in-app purchases is
becoming increasingly important
• “Frequent Uber users spend 1.3% of their
income on the service.
• “Uber and Lyft use generally goes up with
income…for the highest income group, people
with incomes over $75,000, 27 percent have
used Uber and 9 percent have used Lyft.”
17
What does this all
mean?
The Conversation is Happening
18with or without you…
The 5th Annual MasterCard Digital Payments Study
“Digital Wallets overwhelmingly led the payments
discussion with 75% of the conversation and more than
2 million mentions”
72%
Positive
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“Over one-half (57% of
cardholders say they would be
likely to use a mobile payment app
from their primary bank that would
allow them to make purchases
with that bank’s cards.”
-The Payments Report
Consumers want to choose their primary financial institution
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Consumers are
1.5X more likely to
choose an FI
wallet than Apple
or Android Pay
Past two years
primary FI has
topped the charts
Important Demographics
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via
Millenials Mass Affluents+
“52% of both groups consider themselves to be
among the first to try new technologies”
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"The customer relationship is the
trump card that issuers have to
play in the mobile wallet game"
"Tapping into existing card
functionality that your customers
have come to expect quickly sets a
higher bar for third-party wallet
providers.“
JAVELIN
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Strategy and execution
One App vs Multi App
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• Highly debated topic
• My favorite discussion
mBanking is established
Potential Wallet characteristics: (not just payments)
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• Payments!• Contactless
• P2P
• Donate to a Cause
• Light Account Management• Balance, Transactions, Alerts, Credit Due Date and Payment
• Fraud Mitigation• Card Controls, Location Awareness, Biometrics
• Receipt Capture
• Merchant & Issuer Offers
• Points/Rewards
• Loyalty
• eCommerce Provisioning
• Order Ahead
Options
26
• No Mobile Wallet Strategy
• Device-Centric Only
• ApplePay, AndroidPay, SamsungPay
• mBanking with Integrated Wallet
• i.e. Wells Fargo Wallet, FIS API’s
• Separate Mobile Wallet App
• i.e. Cap One Wallet, ChasePay, FIS Commerce App
• Not debating NFC, QR, Barcode, Beacons, Blue Tooth strategy
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• Maybe?
• In China, WeChat dominates
• “WeChat is actually more of a
portal, a platform, and even a
mobile operating system depending
on how you look at it.”
• “it is worth noting that Chinese apps
tend to combine as many features
as possible into one application.
This is in stark contrast to Western
apps, which lean towards “app
constellations”).”
Can one app do everything well?
Case study: Multi-App Approaches
28
Facebook gave Messenger it’s own
experience and now it’s a thriving platform
(Except for the whole SnapChat copying, let’s
not talk about that)
Platforms take time to grow
“By liberating Messenger from the bloated
Facebook app, it was able to pack it full of new
features”
Integrating payments with mobile banking limits
the opportunity
“But just before announcing Messenger had hit 200
million users in April 2014, Facebook rattled its
community with a heavy-handed announcement: It
would remove chat from its main app, forcing people to
download Messenger instead. The rhetoric was that
you and your friends would respond faster and be less
likely to miss messages if you had a dedicated app.”
“The Pays are fine for me”
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• Don’t confuse the Pays with what a Wallet App is
• Not just about NFC payments
• It’s an entirely different experience for Commerce
brought to the cardholder by an Issuer
• Everyday buying vs managing bills, mortgage,
retirement
• Disenfranchisement is a real possibility
• Commoditize your value
• Cardholders miss out on enhanced Issuer features if
Pays are the only option
• Still need to participate in the Pays, especially
ApplePay
App Constellations
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• It’s ok to try out new strategies
• DropBox: Mailbox and Carousel
(Shut down)
• Facebook: Paper (Shut down)
• Important for App Constellations
• Single Login Access
• Deep Linking between the App
Constellations
“If you own a leading constellation,
you can use your apps and your
relationship with the users of those
apps to promote and distribute new
apps that you either build or buy.”
Are App Constellations Real?
31
Facebook= 16
Twitter = 3
YouTube = 6
DropBox = 3
Amazon = 20+
Microsoft = 20+
Google = 20+
Financial Institutions may not need 20
apps (I don’t recommend it), however
more than 1 gives you ultimate flexibility.
Final thoughts
32
Mobile Payments are becoming
essential for cardholders
Your users are talking, trying and
using these products
Issuer’s have a strategic
advantage
Building a new platform takes time
Outside of China, App
Constellations are the norm
Thank you!
Follow me on Twitter - @erickuhn19
Check out the FIS Commerce App booth
Take my survey and get an email with this deck and all sources used.
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