The wallet in the cloud

€ $ £

The Wallet in the Cloud Eelco van Wijk Algemeen Directeur, PayPal Nederland en België

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

PayPal REPRESENTS 18% OF GLOBAL E-COMMERCE

>230 millions accounts worldwide, >106 million active

Incl. 67 million in Europe

Created in 1998, part of since 2002 $118B in total payment volume (+29%) $3B in stored value (saldo) spent every 2 weeks Bank License in Europe

2011 Key figures

26

10

12

5

110

3,5

3

2

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 4

2001 2002

2004

2007

2010 2011

LOGIN REVIEW PAYMENT COMPLETE

DONE

1998

MOBILE IS IN OUR DNA

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

2/2/2012 PayPal MOBILE CONFIDENTIAL AND PROPRIETARY 7

NEW OPPORTUNITIES

• m-Commerce to represent 20% of e-commerce by 20152

• Mobile devices will „close the loop„ by getting customers back into the stores

• Mobile offers high street retailers opportunities to take proven internet consumer acquisition & CRM methods offline

1) Morgan Stanley 2) ABI Reserach

M-COMMERCE IS HERE, NOW…

TRENDS

• Rakuten (Japan) sales already 20% via mobile1

• eBay, Inc.:

IF EU FOLLOWS US TREND, M-COMMERCE WILL AT LEAST DOUBLE

m-Commerce adoption in US twice as high as in Europe, and still growing…

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 8

Who is the mobile shopper, and what do they buy?

Source: Insight Express

A VERY attractive consumer for any retailer…

36% make a purchase on their

phone while in-store

83% are between 18-44 years old

72% are smartphone owners

54% are male, 46% are female

52% make more than $50k a

year; 32% make more than $75k a

year

32% have an iPad

18%

19%

22%

22%

23%

28%

30%

30%

31%

31%

36%

38%

43%

Groceries

Streaming Movie

Airline Tickets

CD

Hotel

DVD/Blu-Ray

Clothing

Books

Electronics

Music (other than MP3)

App

Ringtone

MP3 Music

Buying digital goods (as expected)… & a lot more!

Most attractive segment: “Dual owners”

10 PayPal Mobile Confidential and Proprietary Source: PayPal & Ipsos Mobile Usage & Attitude Research, October 2011

Highly Engaged with Mobile: • Make 2x as many mobile purchases as smartphone-only buyers (40% made >20 purchases in past 12 months) • Make purchases as frequently as online purchases Incremental Spenders: • 60% indicated higher overall spending due to their mobile purchase activity (vs. 29% for smartphones)

High Value Customers: • 67% Male; 37 yrs old, $120K average Household Income, 65% with kids

Tablet owners may be enticed to spend more due to the larger screen/keyboard and touchscreen capabilities. Retailers should think about how dual owners use both devices in complementary ways to shop their brand.

Different set of shopping activities for each device

10

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

M-COMMERCE WILL EVOLVE INTO NEW AREAS

•Portion of $700B+ e-Commerce migrating to m-Commerce

•LBS, time sensitive sales & ubiquity create incremental sales opportunities

•eBay sold $5B+ in 2011 •Japan showing the way

Global Mobile Apps Revenues ($B)

• Mobile driving store traffic with deals

• Mobile key enabler for redemption

• Estimated $1T opportunity

(Gartner)

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 13

6.8

11.8

19

29

2010 2011 2012 2013

Online2offline Remote commerce Apps

M-COMMERCE WILL EVOLVE INTO NEW AREAS

JAPAN SHOWING THE WAY IN “BLURRING THE LINES”

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 14

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

The future of shopping

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 16

A SEPARATE PAYMENT METHOD FOR EVERY SINGLE USE CASE?

THEORY REALITY

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 17

In 2 clicks!

Convergence Online, Mobile

& Offline

Mobile Commerce

Mobile Wallet

THE FIRST 3 STEPS

CONVERGENCE INTO 1 MULTICHANNEL WALLET

A WALLET JUST LIKE YOUR LEATHER ONE… BUT BETTER

PROMOTIES & COUPONS LOYALITEIT

IN-STORE PRIJSVERGELIJKING

BOODSCHAPPEN- LIJSTJES

WINKELLOKATIE

BETALING

MOBILE COMMERCE

SCANNEN

€$£

MULTICHANNEL WALLET NOT RESTRICTED TO 1 DEVICE

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 21

Existing devices….

Samsung TV

POS (Ingenico)

Kiosk

Android & other tablets

Navigation

Parking

Xbox 360

& new ones!

ROAD TO A MULTICHANNEL WALLET

Apps available on iPhone, Android, RIM Key Features: Send/Request Money, Check

balance/History, Bank Transfer, Split Check, Charity Donation, Mobile Check Capture, Local

From a smartphone application…

5m consumers engaged

…to a multichannel Wallet

All that you have in your leather wallet: Cash, payments cards, loyalty cards, receipts

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 22

Confidential and Proprietary MOBILE 2011 STRATEGY 2/2/2012 23

WALLET CONCEPTUALIZATION: USE CASE “SHOPPING” 1/3

Confidential and Proprietary MOBILE 2011 STRATEGY 2/2/2012 24

WALLET CONCEPTUALIZATION: USE CASE “SHOPPING” 2/3

Confidential and Proprietary 2/2/2012 25

WALLET CONCEPTUALIZATION: USE CASE “SHOPPING” 3/3

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

27

OPEN PLATFORM ENABLES ACCELERATED INNOVATION

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY

28

BEYOND MOBILE: OPEN PLATFORM LETS DEVELOPERS EMBED AT WILL

Pay with remote control on Philips & Samsung connected TV‟s

Integration of SendMoney functionality in Internetbanking

1-click payment for paid content Empowering “social commerce”

BUT, TODAY IS ABOUT MOBILE…

..and taking away the hurdles in mobile payments is a key factor for successful m-Commerce models

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 29

PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 30

TAKING AWAY THE M-COMMERCE HURDLES

• Consumers less patient on mobile devices. Experience has to be better than the web

• Users unwilling to fill forms on a mobile device for billing and shipping information

• Entering debit or credit card info on a phone still a hassle

• Mobile is like the web: open to fraudsters and attacks

• Consumers perception at risk when requesting to enter financial info into an unknown environment

User experience

Trust & security perception

FAST

CONVENIENT

SECURE

TRUSTWORTHY

2/2/2012

PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 31

Review

LOGIN REVIEW

HOW PayPal ADDRESSES NEED FOR SPEED & CONVENIENCE

Expands to change shipping address

Expands to change funding source

Login

Expands to list purchase details

Log In using email and password or phone and pin

2/2/2012

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

SUCCESSFUL M-COMMERCE EXAMPLE 1

Proposition: • See listings, trailers • Select movie, cinema, time • Pay • Get QR-code as ticket

Advantages: • Buy ticket anyplace, anytime • No more waiting in line • Show up last minute

Result: • 5K tickets in 2 weeks, iPhone only! • Success led to decision to do Android, Streaming

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 33

SUCCESFULL M-COMMERCE EXAMPLES 2

2/2/2012 PAYPAL MOBILE CONFIDENTIAL AND PROPRIETARY 34

Consumers asked for buying functionality in the app

Time sensitive component crucial for auction model

About PayPal

m-Commerce is here

How will the market evolve?

Our vision: the mobile wallet

How we realize the vision

Real life examples

1 yr mobile on the NL market: insights

PayPal: MOBIEL BETAALGEDRAG VERRAST OP ALLE VLAKKEN

Wat wordt mobiel afgerekend?

Hoogste mobiele trx: $2.451 (juwelen) Merchants met grootste omzet mobiel: 1. Consumentenelectronica deals 2. Private sales 3. Mode-merk

Meeste transacties via mobiel: 1. Consumentenelectronica deals 2. VOIP top-up 3. C2C handelssite

Concluding…

Mobile shopping is happening now. It’s a huge opportunity for retailers

Simple, safe checkout will help drive conversion and adoption

Mobile will cause convergence of e-Commerce and traditional retail channels

37

€ $ £

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