state of us mobile payments (nfc)draft - for discussion only 10 summary • nfc payments market is...

1 Draft - For Discussion Only 1

State of US Mobile Payments (NFC)

Chandra Srivastava Business Leader, Visa

SCA Mobile & NFC Council

2013 Payments Summit

February 6, 2013

Visa Public

(NFC State of the Industry Panel)


State of US Mobile Payments (NFC)

Visa Public


NFC Solution Launches

NFC handset launches

POS NFC Enablement EMV Migration Mobile POS

Bank Cards in Wallet

Other Mobile Wallets / Apps

Other Initiatives .

Key Recent Industry Highlights in Mobile Payments

Visa Public

Note: Use of 3rd party logos does not imply Visa endorsement


NFC Payment Ecosystem – progress En

ablin

g In

fras

truc

ture

C

onsu

mer

Cho

ice

CONSUMERS

The first & last say…

Payment Networks

Banks

MNOs

Mobile Wallet

Mobile Operating Systems

Device Manufacturers

NFC Chipset/Secure Element Providers

Trusted Services Manager

Payment Terminals

Visa Public

Note: Use of 3rd party logos does not imply Visa endorsement


Key Factors – NFC Market Development

NFC market is still in the early stages…

Indicators are pointing in the right

direction, but widespread

adoption seems to be few years away

Mobile Handset Refresh

Mobile Payment

Credential Issuance

Merchant Payment Terminal Refresh

•  U.S. consumers replace their mobile handsets every 20-24 months

•  Smartphone penetration is increasing •  Major OEMs building NFC into new models

•  Traditionally, payment terminal refresh cycle is 5+ years

•  Payment network EMV initiatives may accelerate refresh/upgrade in U.S.

•  Major payment terminal vendors now integrating NFC into most new models

•  Isis and Google merchant activity in U.S.

•  Isis Wallet – participation by Visa, Mastercard, AMEX

•  Sprint: currently supports Google Wallet; •  Complexity and friction involved in establishing

commercial and technical integrations with MNOs, TSMs and wallet providers

Visa Public


Availability of NFC Smartphones is Growing Rapidly

Source: Juniper Research, May 2012

Key Drivers: •  9 of Top 10 OEMs integrating NFC in devices (e.g., Samsung, LG, HTC, RIM, Nokia, Motorola) •  3 of Top 4 mobile OS’es support NFC (Android, Blackberry, Windows)

147 229

389

611

925

1,234

2012e 2013e 2014e 2015e 2016e 2017e

Global NFC Handset Forecast (millions)

NFC Smartphones

CAGR 53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2012e 2013e 2014e 2015e 2016e 2017e

NFC Smart phones as % of Total Mobile Handsets

North America Western EU

Far East & China Global Avg


Visa Public


POS Acceptance of Contactless Payments Anticipated to Grow

Source: Berg Insight, June 2012

CAGR 49.4%

Global 53%

US 86%

EU 78%

ROW 38%

Penetration:

NFC acceptance is becoming standard in the majority of current product models from the major card terminal manufacturers (VeriFone, Ingenico, Equinox)

Visa Public

NFC Enabled Product Families

MX 800 Series VX Evolution

Vx 810 QX1000 PINpad 1000SE

Vx 810 DUET R3210

iST150 Telium

iWL Touch iWL200 iCT200

iPP

L5000

POS Terminal Market Share of 93% (Aite Group)

EMV Contact/Contactless Migration key to US Payment Terminal NFC enablement


Global NFC Retail Payments Expected to Reach $180B in 2017

$23.4 $31.6 $53.3

$84.5

$130.5

$180.5

2012e 2013e 2014e 2015e 2016e 2017e


Global NFC Retail Payments ($ in billions)

Visa Public


Emerging Mobile Payment Trends

•  Emerging and established players are innovating on the existing payments infrastructure

-  Solutions aim to address consumer demands for frictionless, cross-channel shopping with rewards and buying tools

-  Merchants are playing an increasingly important role (e.g. Starbucks, MCX)

•  Competition for access to data access is intensifying -  For a number of alternative schemes, payment data, not payment revenue, is

the end game

•  Cloud-based credentials combining with mobile form factors to enable new consumer payment services

-  Consumer device platform providers moving to control consumer identity and embed payments as a service

•  Acceptance ubiquity is critical for consumer value proposition -  Open network versus closed networks -  Mobile POS innovation is extending reach to new classes of merchants

Visa Public


Summary

•  NFC payments market is in early stage – positive market trends for growth

•  NFC Handsets enablement is happening and may not be the big constraint

•  NFC POS Enablement @ Retail is key

•  Consumer adoption may require multi-party effort for acceptance & provisioning

•  Value Added Services (offers, loyalty, etc.) / Mobile Apps may play a crucial role in consumer behavior change

•  Alternate Mobile Payments solutions – compete / co-exist

Visa Public


Smart Card Alliance Mobile and NFC Council •  Mobile and NFC Council formed in 2012 – over 70 member

organizations

•  Charter – Raise awareness and accelerate the adoption of payments, loyalty,

marketing, promotion/coupons/offers, peer-to-peer, identity, and access control applications using NFC

•  Key Activities – NFC Ecosystem webinar (member access only) – Mobile & NFC Standards Landscape paper – New activities being planned for FY13

•  NFC Solutions Summit May 15-16 2013, San Francisco

Visa Public


Thank You

Visa Public

state of us mobile payments (nfc)draft - for discussion only 10 summary • nfc payments market is...

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