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  • Andrew Griffin

    Member of Mobile Wallet Taskforce, Mobey Forum

    andrew.griffin@monitise.com

    Director of Market Intelligence, Monitise

    Future Payments 2013, May 15-16, London.

  • � Global, bank-led cross-industry expert consortium

    � Influencing the industry from the perspective of financial institutions

    � Filtering and analyzing complex information through its White � Filtering and analyzing complex information through its White Papers

    � Promoting sustainable, open business models

    � Thought-leader in the field of mobile financial services

    � Meetings 4 times a year in member events with high profile guest speakers and topic-specific roundtables

    2

  • 3

  • What is a mobile wallet?

    Technology, adoption trends and user acceptance

    War of wallets

  • digital wallet

    Google Wallet iPhone 5

    mobile wallet

    Source: Google Trends 5

  • 6

    www.mobeyforum.org/Knowledge-Center/Mobey-White-Papers

  • mCommerce Advertising, Infotainment

    Mobile Device as POS

    Coupons, Offers, Discounts

    Loyalty schemes

    Ticketing

    mBanking Bill Payments

    Cash-in, Cash-out

    Content related information

    Account Information

    Investments, Wealth management

    Functionality on a mobile device that can securely interact with digitized valuables

    7

    mPayment

    Proximity Payment

    Remote Payment

    Ticketing

    mIdentity Signature

    Authentication

    Access Control

    Physical or Digital

    Investments, Wealth management

  • Which communication technology,

    NFC, QR/barcode, cloud?

    Who owns the payment instrument?

    Usability/technology question

    Initiation Operation

    Connection from and to the Mobile Wallet

    Bearer /

    Connection

    Who owns the payment instrument?

    What if not the wallet service

    provider?

    Who sees the transaction and can

    therefore use/sell the data?

    Business model question

    Distribution channels for the Wallet

    Customer acquisition and enrolment

    Channels to get value into and out of the Mobile Wallet

    Data Flow /

    Data Ownership

    8

  • There are many compelling mobile financial

    propositions

    - Checking your bank balance via a mobile banking

    app, rather than visiting a branch, calling a call app, rather than visiting a branch, calling a call

    centre, finding an ATM, or going online.

    But just because it is mobile does not make it a

    compelling proposition

    - The consumer will only opt in to a mobile wallet

    solution when they decide that there is sufficient

    value on offer to justify a change in their behaviour

    9

  • Source: Consult Hyperion 10

  • Source: Tesco PLC, Pricerite Express Hong Kong 11

  • � 10% of US tender

    � 10m active users

    � 4m transactions

    12

    � 4m transactions

    /week

    � 1 transaction per

    2+ weeks?

    Source: Starbucks Q1 2013 results conference call

  • NFC radioNFC radio

    Standalone Secure Element ChipStandalone Secure Element Chip

    Source: Samsung, Mashable 13

    Standalone Secure Element ChipStandalone Secure Element Chip

    Trusted Execution EnvironmentTrusted Execution Environment

    Visa Visa PayWavePayWave IntegrationIntegration

    MobeamMobeam 1D IR Scanner1D IR Scanner

  • Four Party Model

    Card Issuer

    (bank)

    ~1.5%

    Merchant

    Acquirer

    (bank)

    ~0.2%

    Card network

    Marketing/Lead generation Merchant sees this as driving revenue

    eConsumer Online Ad

    Search

    eCommerce

    purchase

    ONLINE

    Merchant sees this as a cost

    Consumer

    Pays 100

    Merchant

    Receives 98

    Card network

    owner ~0.2%

    Processor ~0.1%

    • MDR is being squeezed by regulatory and merchant pressure

    • There’s not much to go spare.

    • Most non-bank business models either rent space to virtual cards or provide it for free.

    Lead generation fee 5-10% of transaction

    Consumer Mobile offer Purchase

    PHYSICAL

    14

  • Handset printed circuit board (PCB)

    2G

    RF

    3G

    RF

    LCD

    driver

    SIM card slot

    NFC

    Secure Element

    Included in the NFC chip

    (found on Google Wallet

    phones)

    On SIM/UICC card

    MNOs own the UICC so aim

    to charge card-issuers to

    use space. But slow, and

    little space. Even MNO’s

    are looking for alternatives

    Retrofit SE and NFC on a

    memory card. The idea has No SE!

    Application

    Processor

    Flash

    memory

    Baseband

    processor

    DRAM

    BT / WiFi SD card slot memory card. The idea has

    been around for a while

    but not taken off (no

    memory card slot on an

    iPhone)

    Sticker – no electronic link

    to phone.

    No SE!

    Trusted Execution

    Environment (TEE) –

    embedded in app

    processor using existing

    ARM core TrustZone secure

    environment.

    15

  • A bank’s “busiest branch”A bank’s “busiest branch” 25

    Proactive

    logins per

    month

    1

    6

    B ra

    n ch

    O n

    li n

    e

    M o

    b il

    e

    Source: Monitise customer data, RBS mobile banking video clip

  • • Developed world 10-20% of account owners are mobile bankers

    • World retail banking report (Capgemini/EFMA) “mobile emerges as key tool in fight for

    bank customers”

    • $14bn of payment volume on mobile (PayPal 2012)

    • Over $10bn annual payment volume run-rate (Square January 2013)

    • 2017: $1tr mobile payment volume (IDC, Juniper Research, Heavy Reading)

    • “By 2020, I predict that 50% of transactions across Visa’s network will be from a

    mobile”(Peter Ayliffe, President & CEO, Visa Europe)mobile”(Peter Ayliffe, President & CEO, Visa Europe)

    • 45% of deals accessed via mobile (Groupon Q1 2013)

    • Facebook mobile ad revenues zero to $374m in four quarters, 30% of total ad revenue

    (Q1 2013)

    • “Mobile continues to be a game-changer...a staggering surge in mobile shopping and

    payments on devices that did not exist just a few years ago“ (eBay CEO Q2 2012)

    • 79% of smartphone owners see themselves as “smartphone shoppers”, and 90% use

    their phone for pre-shopping (Google Q4 2012 survey)

  • Customers already use their mobile apps a lot so extending the banking app to a wallet app seems natural

    Financial Institutions Less fragmented,

    many users but apps are very low

    usage so far. No use case yet.

    Mobile

    Retail, Transport,

    Social networking, search, email, are the highest use apps, so a major competitor, but both banks and retailers are suspicious, look at Google Wallet.

    Social Media and

    online advertising,

    new entrants Many branded apps,

    supporting offers, promotions. Even

    Starbuck probably only has 2-3% penetration of

    regular users

    Retail, Transport,

    Ticketing

    18Source: Monitise

  • POS Communications

    Technologies

    NFC

    QR Codes

    Location of Payment

    Credentials

    Secure Element

    • SIM

    • Micro-SD

    • Embedded

    Payment Account

    Card Schemes

    Bank Account

    Customer Interface

    Mobile Wallet Owner’s Brand (Google, MNO

    Wallet Schemes)

    Sound based Data

    SMS

    Cloud / Various tokens

    Cloud

    TEE

    MNO

    Single-Merchant (Starbucks)

    Multi-Merchant Scheme (MCX)

    Multi-Merchant 3rd Party Scheme (Paypal)

    Issuer Brand (Bank, Merchant)

    19

  • �Samsung (&Visa): embedded secure elements in Android phones

    * Already in 2/3 of all NFC phones an embedded SE

    * Visa managed service running the show (Oberthur in the background)

    * Samsung holds the master keys for SE

    * MNOs have said they will block some non UICC SE’s (like Google Wallet)

    �Bankinter (&Visa): virtual card for mobile contactless payments

    �MNO-led model: UICC as SE

    �Google Wallet: Combination of SE & Cloud

    * Google has a virtual card in the phone, while the card information is in the cloud

    * Embedded SE

    �PayPal Mobile payments: No NFC

    * Various authentication methodscontactless payments * Mobile contactless payment & single use debit

    or credit card

    * One-time authentication

    * No need for MNOs or Handset vendor or Google: this is Bank-centric solution

    * EMV compliant from the POS side

    * Various authentication methods

    * Targeting for high-street merchants

    �USBank and GoMobile iPhone NFC case (NFC micro-SD card in case)

    20