Mobile PaymentsMoving at the speed of innovation

May 2017Eric Kuhn, Enterprise Digital Product Development

Agenda

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• Mobile Payments Landscape

• Why Your Digital Products are Essential for Growth

• How to Craft an Effective Strategy for your Client Base

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Mobile Payment Landscape

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Who cares?

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“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

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• In-App Payments & Mobile Web

• In-App even when in-

person/Card on File

• Order Ahead

• Delivery

ApplePay is building momentum

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• 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

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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

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Probably too many…

Speaking of Starbucks…

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Sticking with Starbucks for a second

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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.”

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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

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• 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

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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?

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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

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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!

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