taking prepaid into account wednesday, 17 september 2014 ceesca, budapest
TRANSCRIPT
‘a container into which valuables can be stored and retrieved using specific methods’
Prepaid is…
CLOSED LO
OP
OPEN LOOP
GIFT CARDSCASH ACCOUNTS
STORED VALUE ACCOUNTS
PRIVATE LABEL
PHYSICAL CARD
VIRTUAL CARD
Merchants
• Means of increasing the brand loyalty of customers
• Anticipation of future purchases in exchange for store discounts
Transport and ticketing services
• Hong Kong’s Octopus prepaid travel card
• London’s Oyster Card
MNOs
• Mainly airtime• PAYG accounts
have eclipsed their pay monthly counterparts
• Prepaid mobile money initiatives
Past: Simple but Effective Tool
Enhancing existing physical products via mobile channel• Mobile reload / top up• Additional channel to improve customer value• Interactive channel to get in touch with the users
Mobile Prepaid: A Future Full of Opportunities
Enhancing existing physical products via mobile channel• Mobile reload / top up• Additional channel to improve customer value• Interactive channel to get in touch with the users
Digitisation of existing physical prepaid solutions• Replacement or endorsement of the existing solution• Host card emulation (HCE)
Mobile Prepaid: A Future Full of Opportunities
Merchant has a Winning Combo: HCE (or) Apple Pay + (Closed Loop) Prepaid
MN
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Bank
Paym
ent S
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Enhancement of existing physical products via mobile channel• Mobile reload / top up• Additional channel to improve customer value• Interactive channel to get in touch with the users
Digitisation of existing physical prepaid solutions• Replacement or endorsement of the existing solution• HCE?
Development of new mobile-based prepaid solutions• Launching a new mobile-based prepaid solution• No need to produce physical cards anymore - is there?
Mobile Prepaid: A Future Full of Opportunities
Benefits of Mobile Prepaid
Customer Benefits
• Lower entry barriers• More control• More functionalities• Perceived feeling of
security
Business Benefits
• Lower entry barriers• Lower operational
costs• More flexibility• Business agility• Less restrictive
regulatory environment
• Different stakeholders - each of them holding a piece of the puzzle (control points)
• Each of them is vying to establish a commercially influential position in the value chain
Deadlock and market fragmentationReduced integrative potential and market adoption
Mobile Wallets 1.0: Digitising Leather Wallet
• Strengthening the brand loyalties of customers • Uniquely pleasurable shopping experience • Minimising the inconvenience of payment
Prepaid: a way to minimise payment disruption Focus on unique advantages to conventional commerce
Mobile Wallets 2.0:Reinventing Commerce
• Prepaid instead of current account• Challenging the banks at their own game• Integrated cashback, reward and loyalty
schemes of high street and online retailers Prepaid as a model for personal mobile bankingProgressive banking customers and NOT underbanked
Mobile Wallets 2.0:Reinventing Banking
• Mobile or not, it must be ‘loaded’• No credit, prescribe or interests facilities• Not covered by any guarantee scheme
(insolvency)• No official board of appeal (customer
complaints)• Those that do not operate on the network of a
major payment scheme, may be less frequently accepted by merchants
Limits of Prepaid (Mobile or not)
Prepaid Options for Banks• Option 1: Deploy an invisible prepaid
infrastructure in support of a new service
• Option 2: Establish a prepaid agent network and resell the products of high profile merchants
• Option 3: Use prepaid openly and actively
• Option 4: Play a supporting back-end role to new players in prepaid
Examples: Options for Banks
Option 1:Danske Bank
Option 2:PostFinance
Option 3:Use prepaid
actively & openly
Option 4:CBW Bank
?
Looking to the Future – What a Bank Should Consider
Mobey Forum predicts: Prepaid – a major driving force in the near future of mobile wallets
New forms of engagement with the merchant sector (compare to PayPal)
Start paying attention to possible disruption of current account and customer relationship
Question your own role in the ecosystem
Obstacles such as with regulation, operating procedures and legacy systems integration are no good excuse for missing the momentum