Andrew Griffin
Member of Mobile Wallet Taskforce, Mobey Forum
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
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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
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www.mobeyforum.org/Knowledge-Center/Mobey-White-Papers
mCommerceAdvertising, Infotainment
Mobile Device as POS
Coupons, Offers, Discounts
Loyalty schemes
Ticketing
mBankingBill 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
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mPayment
Proximity Payment
Remote Payment
Ticketing
mIdentitySignature
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
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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
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Source: Consult Hyperion 10
Source: Tesco PLC, Pricerite Express Hong Kong 11
� 10% of US tender
� 10m active users
� 4m transactions
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� 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
eConsumerOnline 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
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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.
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A bank’s “busiest branch”A bank’s “busiest branch”25
Proactive
logins per
month
1
6
Bra
nch
On
lin
e
Mo
bil
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 InstitutionsLess 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)
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�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)
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Mobile Wallet Strategies for Banks (21 May 2013)
Security issues in mobile wallets, from payments perspective (11 June 2013)
Mission mPOSsible: mPOS revolution and its consequences for
traditional payments industry (April)
Mobile Wallet Strategies for Banks (21 May 2013)
Mobile Financial Terms explained: Cross-industry endorsed paper (11 June 2013)
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20mRegisteredcustomers
300+ FIs & Partners
2.1 bntransactions pa
FIs
$31bnValue ofpayments & transactions pa
700+ Mobile Money ExpertsWorld leading partnerships
