Post on 10-Sep-2020
© 2015, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Disruption in PaymentsNovember 2016
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 1
Visa, Visa Uber Alles• For 50 years cards have
been the dominantinternational form ofpayment
• Ever greater share ofconsumption
• Innovating to remainahead
– Embossed– Mag stripe– Chip– Contactless– Card on file– Tokenised
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 2
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 3
The Marketslove Visa andMasterCardHigh GrowthHigh MarginGlobal Scale
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 4
Film was ahigh marginbusinessKodak usedto dominate
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 5
By doing what theymust do to keeptheir marginsstrong and theirstock price healthy,every companypaves the way forits own disruption.
- Clayton M.Christensen
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 6
The Canaries
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 7
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 8
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Strong in Anglosphere, US, Europe, Japan
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… China, India, Africa?
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Everyone’s Taking a Piece of My Pie
• Consumer– Mobile: Apple Pay, Android Pay et al– Co branding
• Issuer– Transaction Processing: TSYS
• Scheme• Acquirer
– Transaction Processing: First Data• Merchant
– E-commerce: PSPs: Adyen, Ingenico– SMEs: ISOs: Paymentsense, Stripe– Micro-Merchants: Square, iZettle
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Innovators’ Dilemma
• Disruptive Technology oftendeveloped by incumbents
• Existing Customers don’t value it• Incumbents focus on sustaining
innovation• New entrants enter small fringe
markets• Changing the value proposition• Disruptive technology moves
upmarket• Established firms too late and too
slow to catch up.11
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
- Linda Evangelista
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I wouldn’t get outof bed for less than$10,000 per day
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Payments Niches
• PayPal• …• PaymentSense, CardSave• Square, iZettle• Klarna• …• Boku
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Mobile Network Operators – Compete with Banks?
• 5bn phones – more than bank accounts
• All have a built-in payment function
• All have a built in authentication function
• Never leave the house without it
• Looked at c. 100 times a day
• Increasingly a medium for commerce
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Mobile Network Operator Infrastructure – Some Challenges
• No standards– Every carrier has a different system
• High fees:– In some countries 40%
• Slow payment– As slow as 200 days
• No reconciliation:– As high as 3% mismatch
• No rules– Chargeback and bad debts liability might
vary carrier by carriers
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Is This Some Kind Of Joke?
They laughed at us because we were differentWe looked at them and saw that they were all the same.
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Let’s Play Games
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• Worldwide customer base• 100% gross margin• $109bn market size• Need monetisation
• Learned that real value wasacquiring new paying users…
• … not moving money
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 18
Boku in Action: More Premium Subscribers for SpotifyBoku Account’s 1-tap Activation out-performs credit card usage
by up to 20% as a method of customer acquisition.
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 19
Boku in Action: More Paying Users for AppleMany iPhones do not have bank cards linked, limiting millions to free apps or forcing them to use
gift cards. The integration of Boku option allows more payments from more consumers.
“Maestri said there has been a big increase in the number ofpaid accounts on the App Store… [Maestri] explained thatthe growth is not just driven by more devices being sold andused, though that certainly plays a role. [Maestri] pointed toApple’s efforts to use alternative methods of payment on theApp Store–such as via users’ phone bills … –as enabling awhole new class of customers.”
-Luca Maestri*, CFO Apple
“In fact, the quarterly increase in the number of payingaccounts was the largest we ever experienced.”
-Tim Cook, CEO Apple
*as quoted in VentureBeat’s coverage of Apple Q3 2017 Earnings Call
Source: Apple Q2 2017 Earnings Call
neverpaid
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Merchants and Carriers
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Illustrative list of carriers. No claim made about specific networks
The world’s largest digital companies connected to up to 3.2bn users in 50 countries
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Average User Lifetime
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Momentum: Starting to Get Real TractionStrong User GrowthTPV run rate >$2bn
Transaction Growth Solid
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
EBITDA Positive
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Profit / (Loss) / transaction
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
So what does this mean for Visa?
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Taken alone, clearly not very much…
…but as one of a thousand such attacks?
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© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc. 25
Mainframes:IBM
PC:Microsoft /
Intel
Mobile:Apple and
© 2016, Boku Inc. All rights reserved • PROPRIETARY AND CONFIDENTIAL. ‘Boku,’ and ‘Pay by Mobile’ are registered trademarks of Boku, Inc.
Whither Visa?
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