Future of payments - Bilişim Zirvesi · Mastercard believes the future will have to be secure, converged & simple… Fully converged payment application for on-line and in-store

Onur KursunSVP, Business Development HGEMOctober 2017

Competitive Landscape & Strategies for future growth

Future of payments

This is how future looked from 1985

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And this is where we are...


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What is next ?

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Whereas, we focus on not how but what?

How we can increase share of electronic payments ?

This does not work anymore....


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Average US bank is under attack of 20 fintech startups

There are 15 unicorns ( >1 bn$) Fintechs in the world with their total valuation reaches 49 bn $.

©2017 MasterCard. Proprietary and Confidential

Money Management

New Banking

8C

ard

s

Bank Channels

Merchant

Back office / Operations

Pro

acti

ve O

ffer

s

Customer Motive

First point of Contact

Products Used

Channels

Systems B2C PlatformCore BankingB2B Platform

Need Money Have Money

Invest MoneySpend MoneyBorrow Money


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• Companies can’t get away with having crummy products, at least not for long. For example, bad product reviews trump clever marketing

Today, great U/X wins.

What do they trust?

• Power has shifted from companies to consumers, and expectations have never been higher


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What do they trust?

Regulators support these initiatives in view of innovation and open competition

Example : PSD2 in Europe


We are all equal on this screen

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No of Branches : 12,569

No of ATM’s: 75,269

No of Employees: 180,459

Founded in : 1617

No of Branches : 0

No of ATM’s: 0

No of Employees: 18

Founded in : 2016


Vs.

Big Capital Bank Garage Financial

Components of digital revolution...


1 Omni Channel shopping

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3 Alternative Payment flows

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Biometrics & Cyber Security

5 Blockchain and alternative currencies

New business models and formats

Forces shaping the payments industry



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Convenience

Control

Value

Stored preferences and account information enable both the automation and personalization of payments, which can be initiated anytime, anywhere, with virtually no geographic boundaries

Smart tools to control expenditures, increase savings and improve budgeting afford much broader control and stronger financial management than cash

Repetitive interaction enables merchants (usually in cooperation with their payments and data analytics partners) to extend offers and services tailored to a consumer’s location and needs

?

Omni Channel shopping will displace cash


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Cloud based Barbie ? Is it really a good idea ?

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Mastercard believes the future will have to be secure, converged & simple…

Fully converged payment application for on-line and

in-store payments

Issuer AppMastercard Cloud-Based

Payments (MCBP)

Authentication

Web / in-App

Mobile NFC

SIMPLE

Multi-channel solution

Consistent transaction experience

No manual entry

SECURE

Biometric authentication

All cards digitized (Tokenised

and provisioned to a mobile device)

EMV level security


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...and mobile will be the control center for authentication

Fingerprint

Voice Recognition

Face Recognition

Retina Scan

Geolocation





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Why P2P Payments still under penetrated

• Cost of acceptance

• Cost of transfers

• Difficulty in user experience (IBAN no, authentication)

• Distribution network (only banks and MTO’s)

• Gray economy

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But it is changing


Live Use case: Social media paymentsSend and receive money with social networks


Push Payments: Masterpass QR

Push payments aims at solving 2 fundamental problems of SME acquiring:

1. Cost of terminalization and associated operational costs

2. Distribution and management of SME’s





2


4 New business models and formats



Millennials are dismissive of banks


Online and mobile only banks are gaining traction





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4 New business models and formats




Blockchain is more than currencies


Authorization (no real-time, ~10 minutes)

It can handle only max seven transactions per second

Regulations vary by makets

Volatility risk (high fluctuations of BTC/€ rate)

Is bitcoin ready for global currency ?


Are t

A distributed, decentralized ledger

Shall we use blockchain technology as financial services?

We can save $20 billion a year by 2022

Brings “significant innovation” “far-reaching

implications” in the financial industry

Blockchain technology is one of the biggest confluence of tech. and business right now

Blockchain technology will be transformative

R3CEV partnership is part of ongoing research into blockchain technology

R3CEV important as we want to build best digital

experience and invest heavily in new IT and promising

technology


Confidential - Internal use only35

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Future of payments - Bilişim Zirvesi · Mastercard believes the future will have to be secure, converged & simple… Fully converged payment application for on-line and in-store