February 28, 2009
Burt A Wilhelm, Global Products & SolutionsInnovative Platforms - Transportation
PayPass™ Update Smart Card Alliance - 2009 Payments Councils Summit
February 28, 2009 2
What is MasterCard® PayPass™?
Similar to a standard MasterCard card with some differences…
PayPass Identifier
PayPass Radial Mark
ShortenedSignature Panel
Embedded Antenna
EmbeddedChip
February 28, 2009 3
MasterCard PayPass
A contactless payment method enabling consumers to
pay via card or device without swiping; displaces cash for
everyday purchases; enhances credit, debit, pre-paid and
commercial accounts.
Displaces cash and expands payments footprint; broader acceptance means more usage and higher volumes; improves customer “stickiness” and provides key differentiator
Issuers Consumers MerchantsProvides a faster, simpler way to pay for purchases… and even access transport
Faster check-out time; customers no longer limited to cash on hand, higher average spend, enables shift to payments vs. ticketing
Ben
efits
Ben
efits
February 28, 2009 4
MasterCard PayPass Modular Solutions
February 28, 2009 5
MasterCard PayPass: Leading the Way
Launched first PayPass cards in Eastern Europe in
Poland
Royal Bank of Scotland and
MasterCard enable taxis for contactless payments in London
Best Buy finishes PayPass
deployment in stores
Passed the 20 million card/device
issuance mark
MasterCard launches several
PayPass on mobile trials globally
Launched PayPassin London
Canadian Tire and Tim Horton’s
announce acceptance of
PayPass
PayPass and Nokia consumer trial in Dallas—mobile phones
PayPass Employee Trial
PayPass launch: first consumer trial in Florida
McDonald’s acceptsPayPass
PayPass introduced in Canada, the
Philippines, and Japan
Finalized development of OneSmart PayPass
JPMorgan Chaselaunches PayPass
Southern Taiwan transitsystems accept PayPass
Citibank, GE/Meier,MBNA (BofA) put
PayPass on credit acct’s
HSBC, KeyBank putPayPass on debit acct’s
Duane Readeaccepts PayPass
Launch nationaladvertising
campaign in U.S.
HSBC, Citizens/RBS putPayPass on credit acct’s
Citibank, Citizens/RBS putPayPass on debit acct’s
MasterCard & Citi conducttrial with MTA inNYC subways
Announce over-the-airpersonalization forPayPass-enabled
cell phones
Nearly 50 Nearly 50 millionmillion
cards/devicescards/devicesNearly 141,000 merchantNearly 141,000 merchant
acceptance locationsacceptance locations28 countries28 countriesaround the worldaround the world
2002/20032002/2003 20042004 20052005 20062006 20072007 20082008
February 28, 2009 6
PayPass U.S. Issuance
Sources: Press releases, websites, mastercard.com/paypass
Nearly 50 million cards/devices issued globally (as of Q4 2008). Key U.S. issuers include:
February 28, 2009 7
Regional PayPass Merchants
February 28, 2009 8
Chain-wide PayPass Merchants
February 28, 2009 9
PayPass Stadium/Event Deployments
February 28, 2009 10
Built to Endure and Rapidly Evolve
Nearly 50 Nearly 50 millionmillion
cards/devicescards/devicesNearly 141,000 merchantNearly 141,000 merchant
acceptance locationsacceptance locations28 countries28 countriesaround the worldaround the world
Canada
U.S.
FranceU.K.
ItalyMexico
Germany Poland
KoreaJapan
MalaysiaIndonesia
Taiwan
Turkey
Australia
Philippines
U.A.E.
Lebanon China
Mongolia
Thailand
Spain
Russia
Serbia
Czech Republic
Switzerland
Romania
Slovakia
PayPassPayPass issuers offerissuers offer……CreditCredit CoCo--brandbrand
DebitDebit Small BusinessSmall Business
……and Preand Pre--paid Programspaid Programs
Global Interoperability Global Interoperability •• Consistent userConsistent user
experience worldwideexperience worldwide
•• Flexible and scalableFlexible and scalable
February 28, 2009 11
PayPass as a Primary Card
77%77%of PayPass consumers use PayPass as their primary card
Source: MasterCard PayPass Consumer Benchmark Survey, 2008.
February 28, 2009 12
Future Usage and Intent
90%
94%94%of consumers that tap are“Very Satisfied” or “Satisfied”with tapping PayPass.
in 2008
of consumer say PayPass ”Exceeds”or “Meets” their expectations.
90%
Source: MasterCard PayPass Consumer Benchmark Survey, 2008.
February 28, 2009 13
PayPass Performance
Close to 70% of PayPasstransactions are less than $25
Average ticket is justunder $31
Cardholders use PayPass at Merchants that mostly accept cashPayPass expands where Cardholders can use their card. As more consumers carry PayPass, acceptance at new merchants is growing in step.
Spend per 28–42%Account (Total) Increase
Transaction Per 33–52% Account (Total) Increase
Average ticket up to 40%sales IncreaseFrequency of everydaypurch. over mag 35% stripe credit cards Increase
Wait time 15%–20%in stores Reduction
Wait time at drive- 40%thru & QSRs ReductionAverage 10%–40%transaction time Reduction
Source: MasterCard Data Warehouse Q2 2008, Issuer Case Studies, Press Release Data
Contributes to the Contributes to the Bottom Line
Decreases Wait TimeDecreases Wait TimeFor ConsumersDisplaces CashDisplaces Cash Bottom Line For Consumers
Expands Where Expands Where Cardholders ShopCardholders Shop
Increases MerchantIncreases MerchantSalesSales
February 28, 2009 14
PayPass U.S. Roll-Out Strategy
Build critical mass of cards and merchant locations to effect conversion from cash to electronic payment across credit, debit, and other payment types
• Deploy turnkey implementation solution forissuers, regardless of their size
• Grow merchant support in everyday categories
• Continue consumer education on how and where to use PayPass through integrated media efforts to drive consumer awareness, adoption and usage
• Build diverse supplier options for cards,devices and terminals
February 28, 2009 15
Long-term Strategy
Build the Foundation Build the Foundation & U.S. Deployment& U.S. Deployment Expand Global Expand Global
Continue Expansion & Continue Expansion & DeploymentDeploymentRollout GloballyRollout Globally• Implement rules and organizational
framework
• Begin U.S. rollout started in 2005
• Build national marketing, promotional and PR campaign to build consumer awareness, adoption and usage
• Begin trials in Europe, APMEA, Canada and LAC
• Support card and terminal products development
• Develop transaction reporting infrastructure
• Continue U.S. and AP region rollout. Continue trials and rollouts in Europe, Canada and LAC
• Continue merchant category expansion (i.e., transit, vending, taxis, parking, toll lanes)
• Implement low value payments rollout in UK/parts of Europe
• Continue trial and rollout of mobile phone deployment as part of the MasterCard Mobile Strategy
• Continue value added enhancements to PayPass (i.e., content, multiple form factors )
• Continue as payment category leader
• Continue support for US, Canada, AP, LAC and Europe regions in mature rollout stage - BAU
• Expand beyond low value payments channels
• Continue content expansion for mobile phones and other formfactor options
February 28, 2009 16
Continuing to Expand PayPassAcceptance
Public Transport Vending Machines Parking Meters
Taxi Cabs Toll Roads
February 28, 2009 17
Additional Functionality Delivered by MasterCard Mobile with PayPass
Search directory, guide & Search directory, guide & recommendationsrecommendations•• ShoppingShopping •• EatingEating•• DrinkingDrinking •• EventsEvents•• TravelTravel
Alerts and tailored offersAlerts and tailored offers•• StoresStores•• Eating and drinkingEating and drinking•• Exclusive and last minute offersExclusive and last minute offers
PurchasesPurchases•• At POS using At POS using PayPassPayPass•• Leverage for increased security Leverage for increased security
CustomizableCustomizable•• New applications & services New applications & services
securely downloaded over securely downloaded over the airthe air
•• Expired services removedExpired services removed•• Personalized for individualPersonalized for individual
ElectronicElectronic•• Supply and secure storage of Supply and secure storage of
coupons, receipts, rewards, coupons, receipts, rewards, ticketstickets
•• Redemption interfaceRedemption interface
Direct CommunicationDirect Communication•• Contact merchant, issuer through web, voice, textContact merchant, issuer through web, voice, text
BankingBankingRobust authentication Robust authentication mechanism to supportmechanism to supportonline bankingonline banking