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MobileMonday DUS 03.09.2012 - Mobile Payment PWC
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Mobile Payments in Germany State of the industry and key success factors
www.pwc.de
September, 3rd 2012
1 Market Update 1
2 Challenges, risks & key success factors 9
Seite Kapitel Überblick
Agenda
PwC
September, 3rd 2012
Market Update Kapitel 1
Mobile Payments in Germany • State of the industry and key success factors 1
PwC
September, 3rd 2012
Mobile payment in the media The number of co-operations, roll-outs and press releases concerning mobile payment is exploding.
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
2
PwC
September, 3rd 2012
Current payment products Chosen payment methods depend on the items purchased
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
3
Virtual Currencies
Carrier based billing E-Wallet
Pre-Paid Cards
Mobile-based NFC
Card-based NFC
Mobile Money transfer
Account based services
Carrier based billing
Micro Payments
Bank Transfers QR-code based
payment
Mobile-based POS
Multichannel intl. remittance
PwC
September, 3rd 2012
What is NFC? ! Short for Near Field Communication ! Uses interacting electromagnetic radio fields ! Short-range communication between electronic devices ! A vehicle for data transmission to make transactions,
exchange digital content, and connect electronic devices with a touch
Examples for mobile payment solutions (1/3) NFC gets an Olympic discipline in 2012.
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
4
! London is model city for NFC payments ! Athletes and other VIPs during the London 2012 Games will try out Samsung's Galaxy S III with
Visa's Paywave NFC payments ! NFC terminals on taxis, retail outlets, and the Olympic Park itself ! Visa expects there to be more than 140,000 contactless terminals in the UK ! How to use: Select the Visa icon on their device's screen and then hold the phone to a contactless
payment terminal to pay for a purchase ! Payments above £20 require entry of a PIN as an additional security layer ! app will also allow customers to check their transaction history and see their account balance.
PwC
September, 3rd 2012
The goal is a more efficient payment process
Examples for mobile payment solutions (2/3) The Real Future Store uses the Mobile Shopping Assistant “MEA”.
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
5
! The MEA is a mobile phone with special software
! customer scan products with their cell phone camera
! MEA will show, for example, the current pricing information
! MEA also helps to find products in the market and to create shopping lists
! When the purchase is complete, the customer pushes a button on the MEA
! the mobile phone displays a bar code
! This barcode will be scanned at the pay points to the self-service fast cash.
! the customer can pay cash, by card or fingerprint
PwC
September, 3rd 2012
Examples for mobile payment solutions (3/3) Deutsche Bahn launches Touch & Travel.
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
6
How to use it: ! register and install the Touch & Travel app on the phone ! Before each ride register with the phone. This can be done by:
! Positioning ! Scan of the bar code printed on the terminal ! Entry of the printed number of the terminal ! Use of the NFC at the terminal
! After signing up, customers have a valid ticket ! During an inspection the customer just has to show the cell phone to the security staff :
! barcode on the control side of the app is read with the conductor´s control device and checks your ticket
! With a NFC phone the ticket can be read directly without contact ! At the end of the trip the customer logs out with the mentioned variants again. ! The price of the trip is displayed on the phone ! Once a month the customer gets a Touch&Travel invoice ! The billed amount will be deducted from the customer´s account via direct debit
PwC
September, 3rd 2012
The Mobile Payment Matrix An illustrative selection – not exhaustive
7 Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
Mobile Device
Paym
ent
Classic Use-Case: Any non-payment and non-mobile based use-case
generic Mobile Use-Case: A mobile device based non-payment use case
Classic & online Payment: A non mobile device applied payment method:
Mobile Payment: A mobile device based
payment method
PwC
September, 3rd 2012
The Mobile Payment Matrix An illustrative selection – not exhaustive
8 Mobile Payments in Germany • State of the industry and key success factors
Kapitel 1 – Market Update
Mobile Device
Paym
ent
Classic Use-Case generic Mobile Use-Case
Classic & online Payment Mobile Payment
PwC
September, 3rd 2012
Challenges, risks & key success factors Kapitel 2
Mobile Payments in Germany • State of the industry and key success factors 9
PwC
September, 3rd 2012
Mobile payment in the media With the rise of the transaction volumes, mobile devices are becoming an increasingly lucrative target for hackers.
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 2 – Challenges, risks & key success factors
10
PwC
September, 3rd 2012
What are hurdles of mobile payments? Despite the high expectations, mobile payments have not reached projected adoption levels. Some possible reasons:
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 2 – Challenges, risks & key success factors
11
! low manageability due to numerous isolated solutions
! Registration and / or cash funding is required for every solution
! This lack of cooperation between the main players, including banks, mobile operators, and independent providers, is the significant barrier to mobile payments success
! Fears of cyber-crime ! Speculations about
security lapses in the NFC technology -> not yet fully developed?
! All forms base on a full battery
! Loss of mobile
! the benefits of mobile payment
! the different forms of mobile payment
! what happens if the battery is empty?
! Customers are afraid to get into a dubious subscription, especially if the charge is applied to their phone bill (e.g. ringtones)
! Merchants have to invest in new terminals and train staff on this new payment mechanism
Security and
Operability Uncertainty Missing
standards Imple-
mentation
PwC
September, 3rd 2012
How can we overcome this hurdles? Setting the accents and built trust
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 2 – Challenges, risks & key success factors
12
• BaFin „Banking licence“, FSA „E-Money Institute, etc. • E-Mandats & SEPA • EMD, EMD 2, PSD • PCI DSS Compliance • GWG, KYC, AML, ATF • Tax Implications
Regulatory & Compliance
• Payment Service Provider • Card-Issuance (Debit/Credit/Prepaid-Card) • Multi-Service Wallet (Payments, Couponing, Loyality,
etc.) • Technologie (NFC, QR-Codes, etc.) • POS Services (Mobile POS, etc.) • Multichannel Integration (Store, Online, Mobile, Apps,
etc.) • In-App Integration • B2B, B2C, P2P Business
Innovation & Strategy
• Platform technology selection • In-house solution vs. cloud (PaaS/SaaS) • Multi-Provider Interaction • Risk-, Fraud- und Scoring Integration • Merchant und User-Interfacing (APIs, UIs, etc.) • Technical intgration of G/L and Sub-ledger • Allocation of Customer Data
IT & Technology
• Positioning of products and services (internally and to the market)
• Market positioning, including additional services • Generating of Synergies
Organization
PwC
September, 3rd 2012
The growth of m-commerce makes mobile payments the next big thing! Worldwide mobile payment market is expected to have 448 million users and $617 billion in transaction value by 2016.
Mobile Payments in Germany • State of the industry and key success factors
Kapitel 2 – Challenges, risks & key success factors
13
Key Takeaways ! Many providers are entering the market, but there is currently no standard solution ! There are just a few global players that have the scale and resources to serve large customers and the mass
market ! Merchants have to adopt mobile and online strategies to ensure success in the changing market ! Mobile payments will sooner or later replace payments via credit card or cash ! For the transmission of payments Near Field Communication (NFC) will become increasingly important in the
future ! Bridge technologies like QR-codes and NFC-stickers are key to accelerate a solid market reach and train
customers and merchants
! Retail spending habits are transforming ! Use of smartphones, e-commerce and m-commerce are growing exponentially ! 54% of all purchases will be made in online by 2014 ! 212.2 million m-payment users with a total of US $171.5 billion in transaction value in 2012 (Gartner, May
2012) ! SMS is expected to remain the key vehicle for m-payments in developing markets. NFC transactions will
remain relatively low through 2015, but will start to pick up from 2016 (Gartner, May 2012)
PwC
September, 3rd 2012
Thank you for your attention!
Kapitel 2 – Challenges, risks & key success factors
14 Mobile Payments in Germany • State of the industry and key success factors
Jens Kohnen Moskauer Str. 19 40227 Düsseldorf +49 171 760 4743 [email protected]
Raphael Heiner Moskauer Str. 19 40227 Düsseldorf +49 170 799 5582 [email protected]