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©2012 MasterCard. Proprietary and Confidential
Mobile Payment: MasterCard perspective on changes ahead
September 2012 Christian Rau
©2012 MasterCard. Proprietary and Confidential
Getting started: Some things you should know about MasterCard.
1966
Company formed
Merged with Europay International
2002 2006
Became a publicly traded company (NYSE: MA)
210 countries 23,000 customers 33 mln. acceptance locations 1059 mlnMasterCard cards 705 mln. Maestro cards 2700 bln.USD GDV
We don’t issue cards We don’t determine the pricing for cards (fees and interest) We don’t decide on interchange, nor do we earn on it
Things MasterCard does not do:
©2012 MasterCard. Proprietary and Confidential
…before we start: definition of mobile payment.
Page 3
… Payment transaction involving the exchange of funds for either goods or services conducted via a mobile handset (1)
Mobile payment is…..
…. also referred to as mobile money, mobile banking, mobile money transfer, and mobile wallet generally refer to payment services operated under financial regulation and performed from or via a mobile device (2)
Mobile proximity
Mobile remote
P2P
1) Euro Monitor July 20122) 2) Wikipedia July 2012
©2012 MasterCard. Proprietary and Confidential
Industries change.
Page 4 Juni 12, 2012
Music industry MP3 (players) Apple,
Spotify Sharing, digitization
Cameras Digital cameras, smartphones
Sony, Samsung, Instagram
“Always on”, sharing online
Payment (mobile) internet, smartphones, tablets, mobile TAN
TelCos, PayPal, Facebook, iZettle, Groupon
(mob.) internet banking, (mob) E-commerce, mobile payment
Tele- coms
Mobile internet, smartphones
Skype, Facebook, What’s App
Social, one-to-many, text based
Technology Behavior Entrants
Market dynamics
Consumer behavior
Technology advances
©2012 MasterCard. Proprietary and Confidential
Evidence of changes relevant to mobile payment.
Page 5
72% of young German males have a smartphone (1)
70% of retailers say mobile contactless payment is “next big thing” (2)
1) Source: Nielsen e.o.y. 2011 for consumer postpaid tariffs 2) EHI 2012 3) Eurostat
59% of Germans already shop online, generating 18% of all sales (3)
112% YOY growth for PayPal transactions. 2nd largest already in E-Com (2)
Juni 12, 2012
26% did pre-purchase research thru smartphone and bought in shop (4)
4) Google - Our mobile planet – global smartphone users (In De)
©2012 MasterCard. Proprietary and Confidential
Our view on the changes we see.
Page 6 Juni 12, 2012
He who rejects change is the architect of decay.
“ ” Harold Wilson
! Technical and behavioral changes are significant (Steam engine, mass production)
! Change is irrevocable – generations of digital natives will entrench it in society
! Due to network character we expect the speed of change to increase rather than slow down
! MasterCard and our partners have assets that put us in good position to shape the future playing field
©2012 MasterCard. Proprietary and Confidential
We are still at the beginning of change.
Page 7 Juni 12, 2012
CONCEPTUAL
Time
Ado
ptio
n of
cha
nge
We are here today
PayPal offers interest on funds, increasing offline presence
Non perishable goods’ E-com sales overtake classical retail
Mobile fund transfers replace small value trx.
Virtual wallets replace “classical” ones
Acceptance curve is illustrative only, MasterCard accepts no liability for forecast
©2012 MasterCard. Proprietary and Confidential
MasterCard product initiatives.
Page 8 Juni 12, 2012
Mobile in store
Roll out of contactless retail ecosystem – on issuer and acquirer side.
Conver-gence
Enable all connected devices for consistent payment experience.
Value add Services such coupons, social network integration and P2P fund transfer.
Ensure “plastic cards” are transferred to digital wallet as digital payment tools.
Mob POS
P2P Mob
E-com
Digital wallet
Note: digital wallet also serves as enabler for convergence and value added services
©2012 MasterCard. Proprietary and Confidential
Opportunities opened up by mobile payment.
Page 9 Juni 12, 2012
Faster transaction time
Manage loyalty
Geo-location discounts
Comparison shopping
Read product reviews
Check account balances
I. Opportunities for merchants
II. Richer consumer experience
III. Value add from / for banks
IV. New opportunities for MasterCard
©2012 MasterCard. Proprietary and Confidential
Development path for mobile proximity payment.
Page 10 Juni 12, 2012
Classic form factor with contactless PayPass technology (relevant for acceptance build up).
Sticker form factor to go on mobile (or keys) to prepare consumers (educating users, cover NFC phone gap).
Multi card mobile wallet as target picture (incl. VAS).
Hig
h
Deg
ree
of “M
obili
ty”
Low
©2012 MasterCard. Proprietary and Confidential
Christian Rau
Senior account manager TelCos
[email protected] +49-172-1880723
To get in touch.
Page 11 Juni 12, 2012