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Current Trends and Future ProspectsOctober 24, 2013

Mobile Wallets

Wednesday, October 23, 13

What Exactly is a Mobile Wallet?

www.paytroniks.com I [email protected] I 469-271-4774Mobile Wallet Presentation, October 24, 2013 I © All rights Reserved

‣ An application on the mobile phone that processes electronic

payments.

‣ A mobile device that has a secure element associated with it

that allows important financial and personal data to be stored

on the phone.

‣ A service that lets users integrate payment, loyalty, account

history, and financial instruments all in one application.

‣ A service that is usually targeted to cardholders, although

some offers do focus on merchants.

2Wednesday, October 23, 13

http://www.paytroniks.com



Currently over 150 mobile wallet initiatives in the world!




Let’s Simplify it a Bit...


Holistic focus Cardholder focusMerchant focus




Agenda


‣ Recent Announcements and Their Implications

‣ Consumer Attitudes and Apathy

‣ The Mobile Wallet Simple Matrix

‣ Trends for the Future




Agenda









‣ Loop rolling out mobile wallet that works at 90% of retailers‣ Boston Business Journal, October 21, 2013

‣ How Will the Isis Mobile Wallet Stand Out? ‣ All Things D, October 16, 2013

‣ Central Bank approval awaited for mobile wallet‣ GulfNews.com, October 22, 2013

‣ Mobile wallet progress stalled in 2013, but could heat up in 2014‣ American Banking Journal, October 15, 2013

‣ Google Wallet Gets an Update‣ The Street, October 17, 2013

Recent Announcements

www.paytroniks.com I [email protected] I 469-271-4774Mobile Wallet Presentation, October 24, 2013 I © All rights Reserved 7Wednesday, October 23, 13

http://www.bizjournals.com/boston/blog/startups/2013/10/woburn-based-loop-uses-kickstarter-to.html


https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=2&cad=rja&ved=0CC8QqQIoADAB&url=http%3A%2F%2Fallthingsd.com%2F20131016%2Fhow-will-the-isis-mobile-wallet-stand-out-for-now-free-smoothies%2F&ei=97pmUtm2AsHK2AW324DABw&usg=AFQjCNHyqkKOkA0QiNlboDjnxBNEzsONSQ&sig2=FUSgVCdkaQkZNfK_GLbAmw&bvm=bv.55123115,d.b2I

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=newssearch&cd=2&cad=rja&ved=0CC8QqQIoADAB&url=http%3A%2F%2Fallthingsd.com%2F20131016%2Fhow-will-the-isis-mobile-wallet-stand-out-for-now-free-smoothies%2F&ei=97pmUtm2AsHK2AW324DABw&usg=AFQjCNHyqkKOkA0QiNlboDjnxBNEzsONSQ&sig2=FUSgVCdkaQkZNfK_GLbAmw&bvm=bv.55123115,d.b2I

http://gulfnews.com/business/technology/central-bank-approval-awaited-for-mobile-wallet-1.1245908

http://gulfnews.com/business/technology/central-bank-approval-awaited-for-mobile-wallet-1.1245908





Agenda









‣ 79% of consumers remain concerned with security of payment information stored on wallet First Data Universal Commerce Tracker Study, 2013

‣ Identification of Drivers - 34% of overall respondents would use a mobile wallet to originate payments UK Study FC Business Intelligence LTD, 2013

‣ ⬆46% for smart phone users

‣ ⬆49% for 25-34 year olds

‣ ⬆55% for 18-24 year olds

‣ ⬆51% when incentive is offered

‣ However, studies in the US indicate that over 60% of consumers are not interested in a mobile wallet. Why the apathy? Consult Hyperion, 2013

Consumer Attitudes




We have established that security is one key reason for low interest in mobile wallets...but maybe a stronger reason is in front of us in plain sight....could it be that 100% of smart phones already have a mobile wallet on them? The simple answer is YES!

Why the Mobile Wallet Apathy?


Beyond safety issues, consumer apathy is due to two reasons:

✓Mobile wallet offers are too many and too fragmented

✓Value offering is not yet strong enough10




Agenda









Mobile Wallet Simple Matrix


Mer

chan

tsCardholders

Alternative (Cash or other method)

Traditional (Visa / MC)

Isis

Dwolla

MCX

Google Wallet

Tabbed Out

MocaPay

Cimbal

GoPago

Corduro

Western Union

YeCel

Roam X4

Level Up KuaPay

Paydiant

Mobile Pay

Corduro

PayPal P2PPayPal Here

PayPal Prepaid

Square Wallet

Square Cash

Square Reader

Square Register




Mobile Wallet Simple Matrix


Mer

chan

tsCardholders



PayPal P2P

Square Wallet

Square Cash

PayPal Here

Square Reader

Square Register

PayPal Prepaid

Solutions on Y axis are P2P

focused

Isis

Dwolla

MCX

Roam X4

Google Wallet

Tabbed Out

Level Up KuaPay

Paydiant

Mobile Pay

MocaPay

Cimbal

GoPago

Corduro

Corduro

Western Union

YeCelLegend

Competition Clusters

Niche Solutions

Square Cash Omnicommerce Players




Agenda










Mer

chan

tsCardholders



Dwolla

Cimbal

Square Register

Tabbed Out

GoPago

Square Reader

Roam X4

Level Up KuaPay

Paydiant

Mobile Pay

Corduro

Square Wallet

Isis

Google Wallet

Corduro

Square Cash


PayPal Prepaid


focused

MCX

MocaPay

Western Union

YeCelLegend


Niche Solutions


Future Trend # 1





Dwolla

Cimbal

Square Register

Tabbed Out

GoPago

Square Reader

Roam X4

Level Up KuaPay

Paydiant

Mobile Pay

Corduro

Square Wallet

Isis

Google Wallet

Corduro

Future Trend # 1Consolidation of vendors in competition clusters

Square to strengthen market position via increased acquisition of vendors / vendors run out of money and fall out / one or two key competing players by cluster / fewer new mobile wallet offerings / PayPal

absent in clusters

Activities and Comments

P2P cluster

Cardholder clusterBig retailer cluster

Small retailer cluster





Mer

chan

tsCardholders



YeCel

Future Trend # 2





Mer

chan

tsCardholders



YeCel

Strongest opportunity for new mobile wallet

development lies in this quadrant

Future Trend # 2





Expect new solutions that focus on the consumer but that offer alternative means of payment outside of traditional card products.

Mobile wallets focused on direct carrier billing / non-payment mobile wallets offering payment wallets / cross offering of non-payment wallets with mobile payment wallets / barriers to entry are lowest in this

quadrant

Activities & Comments

Strongest opportunity for new mobile wallet

development lies in this quadrant

Future Trend # 2





PayPal P2P

Square Wallet

Square Cash

Square Reader

Square Register

PayPal Prepaid

Corduro

Corduro


MCX

Roam X4

Level Up KuaPay

Paydiant

Mobile Pay

Mer

chan

tsCardholders



focused

Isis

Dwolla

Google Wallet

Tabbed Out

MocaPay

Cimbal

GoPago

Western Union

YeCelLegend


Niche Solutions


PayPal Here

Future Trends # 3





PayPal P2P

Square Wallet

Square Cash

Square Reader

Square Register

PayPal Prepaid Corduro

Corduro

PayPal Here

Future Trends # 3PayPal and Square battle it out to become the de facto mobile wallet of choice for merchants, however there may be room for other players in certain merchant categories

Both companies continue to expand their offering / solutions increasingly technology agnostic / Square issues a prepaid card / PayPal looks to gain strength via differentiation from other solutions / Square

purchases clones in emerging and mature markets / PayPal most likely to become dominant over Square





Future Trend # 4




Future Trend # 4


From an end consumer perspective, mobile wallets will not exist as stand alone, payment only services.

Financial institutions extend mobile banking services to include mobile payments / partnerships between FI’s and non-FI’s increase / Apple Passbook integrates payment / exception with P2P services








PayPal PrepaidSquare Cash

MCX

MocaPay

Western Union

YeCel

GoPago

Dwolla

Mer

chan

tsCardholders


Square WalletSquare Reader

Square RegisterSolutions on Y axis are P2P

focused

IsisRoam X4

Google Wallet

Tabbed Out

Level Up KuaPay

Paydiant

Mobile Pay

Cimbal

Corduro

Corduro

LegendCompetition Clusters

Niche Solutions


Future Trend # 5





PayPal P2P

PayPal Here

PayPal Prepaid

Square Cash

MCX

MocaPay

Western Union

YeCel

Future Trend # 5A few solutions will establish themselves in niches

Solutions mostly targeted to end users and not merchants / heavy focus on alternative forms of payment outside of Visa, MasterCard, and American Express / tied to prepaid cards or gift cards





‣ Emerging markets are laggards in mobile wallet adoption

‣ Key Drivers:

‣ Smart phone availability (currently at less than 40%)

‣ 3G availability

‣ WiFi availability

‣ Sound regulation by government entities - ex: Brazil

‣ Solutions will be driven by mobile operators and merchants

‣ Secure element most likely on SIM Card or Cloud Based

‣ Expect these markets to catch up to mature markets in 3 to 5

years

Emerging Markets Focus




Current Trends and Future ProspectsOctober 24, 2013

Mobile Wallets

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Download - Mobile wallet presentation

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