2012 Mobile Payments & Banking FirstPartner€¦ · Market Outlook M-Banking • Juniper Research...
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2012 Mobile Payments & Banking rwarren@firstpartner.net dsatta@firstpartner.net +44 (0)870 874 8700 FirstPartner Richard Warren Dimitri Satta www.firstpartner.net Regulators Industry Associations / Standards Markets USA A strong focus on NFC by leading carriers, financial institutions and technology companies puts the US at the forefront of the deployment of mobile payments in Western Markets. Mobile banking is also widely offered. Eastern Europe/ Turkey Western Europe Asia Pacific Developing Countries The powerful Sony/NTT DoCoMo alliance in Japan and aggressive deployment by Korean carriers has put Asia in the lead in mobile payment deployment. The region is moving from proprietary technologies to standard NFC. With large unbanked populations, developing countries have been at the forefront of mobile banking/payment innovation. Kenya's M-PESA demonstrated the potential and similar services are now widely deployed. National carrier consortia are forming to facilitate co-ordinated NFC payment ecosystems, often including retail banks and card networks. Money transfer agencies are embracing mobile as a remittance and bill payment channel and partnering aggressively with carriers to deliver international services. Retail banks lead some MMT services and will be the consumer channel for many mobile wallet and proximity payment services. Carrier Consortia Carriers Payment Processors Hardware Platform Owners Remittance Agencies Retail Banks Migrant Worker Often cash centric, the need to send money home drives use of international and domestic remittance services. Have regular needs to transfer money between family members and for parental control of spend. Potential adopters of mobile money transfer in developed markets. Low payment card ownership, high levels of group social activity and comfort with mobile devices makes this segment likely early adopters. Unbanked Those without ready access to traditional banking facilities, or having a low propensity to use them for cultural reasons. Mobile makes essential financial service accessible. Sophisticated Banked Families Acceptance Carriers are leading and branding many Mobile Money Transfer and NFC services, partnering with banks and payment processors as required. Leading Payment Processors are launching mobile wallets supporting multiple services. Google and Apple combine leading handset platforms with high levels of consumer engagement and established payment processing capabilities. Google Wallet launched in 2011 and an Apple launch is widely speculated on. Proximity Payments On-line and M-Commerce Mobile Money Transfer M-Banking Payment Services Physical Goods and Services Transport and Ticketing Loyalty and Couponing Mobile NFC Other Contactless Acceptance Terminals Mobile Point of Sale Reader equipped smartphones and tablets enable micro merchants and roving sales people to easily accept card and mobile payments. E&M Commerce Digital Goods and Services Domestic & international remittance; sole trader, merchant, bill & salary payments Balance Enquiry, Account Management, Money Transfer, etc. Carrier and In App Billing E&M Wallet Carrier Billing In App Billing Stored value or payment account linked M-Wallets support a simplified M-commerce payment experience. Mobile Money Transfer for the Unbanked Person to Person and Small Trader Payments International Remittance Banking the Unbanked Driving Convenience Mobile Authentication Banks in developed markets are widely deploying app and browser based M-Banking services to give consumers greater flexibility and choice. Mobile delivered one time passwords provide a convenient strong authentication tool for on-line financial services. Using the mobile to provide banking services where branch infrastructure and adoption is poor. Consumer Segments Young Socialisers • ISIS, Verizon, AT&T, T-Mobile • Vodafone, Everything Everywhere, O2 • TDC, Telenor, TeliaSonera, Three • Mpass, Deutsche Telekom, Vodafone, Telefonica • KPN, Vodafone The Mobile Wallet The battleground for the consumer System Vendors NFC Chips SIM Based Secure Elements TSM Platform Vendors Banking & Processing Systems Wallet & App Vendors Mobile payment for transport ticketing is well established in a number of countries. Turkey and Poland are among the most advanced payment markets in Europe with widespread deployment of contactless acceptance infrastructure and NFC consortia announced. Consortia have been announced in a number of countries to offer a co-ordinated carrier focussed ecosystem predominantly for NFC based proximity payments. Europe is experiencing rapid m-commerce growth and carrier billing is well established. The market for mobile P2P is still uncertain. Disclaimer The map includes information compiled from various reputable sources and other methods like structured interviews and surveys, conference material and information available in the public domain. As data and information sources are outside our control, FirstPartner makes no representation as to its accuracy or completeness. All responsibility for any interpretation or actions based on this map lies solely with the reader. Copyright 2012 Prepared by +44 (0) 870 874 8700 FirstPartner www.firstpartner.net find us at call us on t: +44 (0) 870 874 8700 f: +44 (0) 870 874 9888 e: [email protected] Need Extra Copies? firstpartner.net Market Outlook M-Banking • Juniper Research forecasts 860 Million users of mobile banking services worldwide by 2016. • Retail banks are widely deploying mobile banking services. A survey undertaken on behlaf of American Banker suggests that 42% of U.S. banks offer mobile banking or mobile payments and 40% of those that don't have firm plans to do so. Mobile Money Transfer and Finance Services • At the start of 2012 there are 117 live and 9 planned deployments of mobile money services in developing markets. The GSMA expects these to reach 20 million unbanked people by year end (source GSMA). • M-Pesa in Kenya has 14.9 M customers, equivalent to 63% of the adult population with $3.15 billion moved between April and Sept 2011 (source Safaricom). • Many schemes have seen much slower rates of adoption, with barriers including lack of consumer understanding and trust, weaknesses in agent networks and complex registration requirements. • The global value of international remittances was estimated at $440BN in 2010 with expected growth to $536BN by 2013 (source World Bank) and International remittance via mobile devices are set to reach $55BN in 2016 (source Juniper Research). Proximity Payments • An estimated 6.8 million NFC SIMs were shipped during the third quarter of 2011, most of which were purchased by the 3 leading South Korean carriers. (source SIM Alliance). • Korea Telecom has forecast 20M active NFC handsets in Korea by the end of 2012 - around 42% penetration, with transport being a significant driver to adoption. • Eurosmart expects shipments of secure NFC devices (excluding Felica) to be in the range of 80 to 120 million units in 2012 (source Eurosmart). • FirstPartner estimates the Worldwide installed base of NFC enabled handsets will reach 843 million by 2015. Introduction Mobile Payments and Banking top the strategic agenda for Mobile Network Operators, Financial Institutions and Payment Providers World-wide. Driven by the opportunity to extend consumer reach and engagement, traditional and new entrant providers are vying to offer consumers a range of complementary services via branded mobile wallets. Market Drivers and Enablers In developed markets Carriers and Financial Institutions view mobile payment and banking services as a way to widen choice in consumer channels and drive retention - especially when addressing younger segments. Consumer uptake will however depend upon perceptions of convenience, speed and ease of use and security. Penetration of NFC enabled handsets and contactless Point of Sale terminal infrastructure will be critical enablers for proximity payments. In developing markets, key factors include the level of unbanked consumers and consumer need for secure money transfer and money management alternatives. Source: FirstPartner NFC is the most widely backed technology for "touch and go" payments, ticketing and point of sale promotions. Market adoption is dependent on compatible handset and terminal penetration and an effective commercial ecosystem. NFC Stickers, MicroSD Cards & Sleeves Heavy users of cards, on-line banking and e-commerce services . Mobile commerce and banking services fulfil needs for immediacy and control. A number of alternatives allow PoS payments from a non NFC equipped handest. Technologies include QR codes, SMS and MF Tones and cloud based services. Security Concerns Security remains a concern for mobile banking and wallet based payment services and could undermine consumer confidence and slow adoption. Leading security companies have highlighted the risk of hackers and criminals targeting mobiles to gain access to consumer bank accounts and have highlighted vulenerabilities. In February 2012 Google disabled its linked prepaid card after security flaws were highlighted in Google Wallet. MMT Platforms Handset Vendors Payment Processors and Service Providers Acquirers Payment Service Providers M-Commerce/Carrier Billing Payment Processors and M-Banking Trusted Service Managers (TSM) Couponing and Loyalty Business Models Consumer Account Provider Source of Founds Funds Transfers Funds Withdrawal / Settlement The Four Party Model Bank Wallet Provider • Card • Stored Value • Bank Carrier Bill/Prepaid Balance Mobile Network Operator • Carrier Bill • Mobile Money Agent • Mobile Wallet • Agent • Bank Mobile PSP Bank/Interbank Network Mobile Network Operator Partner Bank Issuer Card Network • Acquirer • PSP The E-Wallet Model The Mobile Money Transfer Model The Carrier Billing Model Transaction Fee Mobile payment schemes face dual challenges: - The opportunities to charge transaction fees for remittances are limited as alternatives are often free. - Introduction of additional fee sharing parties into the processing chain could put pressure on merchant service fees and issuer margins making mobile uncompetitive vs. traditional card payments Payment Processing Value Chain FirstPartner Evaluation Copy
Transcript of 2012 Mobile Payments & Banking FirstPartner€¦ · Market Outlook M-Banking • Juniper Research...
2012 Mobile Payments & Banking rwarren@�rstpartner.netdsatta@�rstpartner.net+44 (0)870 874 8700 FirstPartnerRichard Warren
Dimitri Sattawww.�rstpartner.net
Regulators Industry Associations / Standards
Mar
kets
USAA strong focus on NFC by leading carriers, financial institutions and technology companies puts the US at the forefront of the deployment of mobile payments in Western Markets. Mobile banking is also widely offered.
EasternEurope/Turkey
WesternEurope
AsiaPaci�c
DevelopingCountries
The powerful Sony/NTT DoCoMo alliance in Japan and aggressive deployment by Korean carriers has put Asia in the lead in mobile payment deployment. The region is moving from proprietary technologies to standard NFC.
With large unbanked populations, developing countries have been at the forefront of mobile banking/payment innovation. Kenya's M-PESA demonstrated the potential and similar services are now widely deployed.
National carrier consortia are forming to facilitate co-ordinated NFC payment ecosystems, often including retail banks and card networks.
Money transfer agencies are embracing mobile as a remittance and bill payment channel and partnering aggressively with carriers to deliver international services.
Retail banks lead some MMT services and will be the consumer channel for many mobile wallet and proximity payment services.
Carrier Consortia Carriers Payment Processors Hardware Platform Owners Remittance Agencies Retail Banks
Migrant Worker
Often cash centric, the need to send money home drives use of international and domestic remittance services.
Have regular needs to transfer money between family members and for parental control of spend. Potential adopters of mobile money transfer in developed markets.
Low payment card ownership, high levels of group social activity and comfort with mobile devices makes this segment likely early adopters.
UnbankedThose without ready access to traditional banking facilities, or having a low propensity to use them for cultural reasons. Mobile makes essential financial service accessible.
Sophisticated Banked Families
Acc
epta
nce
Carriers are leading and branding many Mobile Money Transfer and NFC services, partnering with banks and payment processors as required.
Leading Payment Processors are launching mobile wallets supporting multiple services.
Google and Apple combine leading handset platforms with high levels of consumer engagement and established payment processing capabilities. Google Wallet launched in 2011 and an Apple launch is widely speculated on.
Proximity Payments On-line and M-Commerce Mobile Money Transfer M-Banking
Paym
ent
Serv
ices Physical
Goods and Services
Transportand
Ticketing
Loyaltyand
Couponing
Mobile NFC Other
Contactless Acceptance Terminals Mobile Point of Sale
Reader equipped smartphones and tablets enable micro merchants and roving sales people to easily accept card and mobile payments.
E&M Commerce
Digital Goods and
Services
Domestic & international remittance; sole trader, merchant, bill & salary
payments
Balance Enquiry,Account Management,
Money Transfer, etc.
Carrier and In App Billing
E&M Wallet
Carrier Billing In App Billing
Stored value or payment account linked M-Wallets support a simplified M-commerce payment experience.
Mobile Money Transfer for the Unbanked
Person to Person and Small Trader Payments
International Remittance
Banking the Unbanked
Driving Convenience
Mobile Authentication
Banks in developed markets are widely deploying app and browser based M-Banking services to give consumers greater flexibility and choice.
Mobile delivered one time passwords provide a convenient strong authentication tool for on-line financial services.
Using the mobile to provide banking services where branch infrastructure and adoption is poor.
Cons
umer
Segm
ents Young Socialisers
• ISIS, Verizon, AT&T, T-Mobile
• Vodafone, Everything Everywhere, O2
• TDC, Telenor, TeliaSonera, Three
• Mpass, Deutsche Telekom, Vodafone, Telefonica
• KPN, Vodafone
The Mobile WalletThe battleground for the consumer
System VendorsNFC Chips SIM Based Secure Elements TSM Platform Vendors Banking & Processing SystemsWallet & App Vendors
Mobile payment for transport ticketing is well established in a number of countries. Turkey and Poland are among the most advanced payment markets in Europe with widespread deployment of contactless acceptance infrastructure and NFC consortia announced.
Consortia have been announced in a number of countries to offer a co-ordinated carrier focussed ecosystem predominantly for NFC based proximity payments. Europe is experiencing rapid m-commerce growth and carrier billing is well established. The market for mobile P2P is still uncertain.
DisclaimerThe map includes information compiled from various reputable sources and other methods like structured interviews and surveys, conference material and information available in the public domain. As data and information sources are outside our control, FirstPartner makes no representation as to its accuracy or completeness. All responsibility for any interpretation or actions based on this map lies solely with the reader. Copyright 2012
Prepared by
+44 (0) 870 874 8700
FirstPartnerwww.firstpartner.netfind us atcall us on
t: +44 (0) 870 874 8700f: +44 (0) 870 874 9888e: [email protected]
Need Extra Copies?
firstpartner.net
Market OutlookM-Banking• Juniper Research forecasts 860 Million users of mobile banking services
worldwide by 2016.
• Retail banks are widely deploying mobile banking services. A survey undertaken on behlaf of American Banker suggests that 42% of U.S. banks offer mobile banking or mobile payments and 40% of those that don't have firm plans to do so.
Mobile Money Transfer and Finance Services• At the start of 2012 there are 117 live and 9 planned deployments of
mobile money services in developing markets. The GSMA expects these to reach 20 million unbanked people by year end (source GSMA).
• M-Pesa in Kenya has 14.9 M customers, equivalent to 63% of the adult population with $3.15 billion moved between April and Sept 2011 (source Safaricom).
• Many schemes have seen much slower rates of adoption, with barriers including lack of consumer understanding and trust, weaknesses in agent networks and complex registration requirements.
• The global value of international remittances was estimated at $440BN in 2010 with expected growth to $536BN by 2013 (source World Bank) and International remittance via mobile devices are set to reach $55BN in 2016 (source Juniper Research).
Proximity Payments• An estimated 6.8 million NFC SIMs were shipped during the third
quarter of 2011, most of which were purchased by the 3 leading South Korean carriers. (source SIM Alliance).
• Korea Telecom has forecast 20M active NFC handsets in Korea by the end of 2012 - around 42% penetration, with transport being a significant driver to adoption.
• Eurosmart expects shipments of secure NFC devices (excluding Felica) to be in the range of 80 to 120 million units in 2012 (source Eurosmart).
• FirstPartner estimates the Worldwide installed base of NFC enabled handsets will reach 843 million by 2015.
IntroductionMobile Payments and Banking top the strategic agenda for Mobile Network Operators, Financial Institutions and Payment Providers World-wide. Driven by the opportunity to extend consumer reach and engagement, traditional and new entrant providers are vying to offer consumers a range of complementary services via branded mobile wallets.
Market Drivers and EnablersIn developed markets Carriers and Financial Institutions view mobile payment and banking services as a way to widen choice in consumer channels and drive retention - especially when addressing younger segments. Consumer uptake will however depend upon perceptions of convenience, speed and ease of use and security. Penetration of NFC enabled handsets and contactless Point of Sale terminal infrastructure will be critical enablers for proximity payments.In developing markets, key factors include the level of unbanked consumers and consumer need for secure money transfer and money management alternatives.
Source: FirstPartner
NFC is the most widely backed technology for "touch and go" payments, ticketing and point of sale promotions. Market adoption is dependent on compatible handset and terminal penetration and an effective commercial ecosystem.
NFC Stickers, MicroSD Cards & Sleeves
Heavy users of cards, on-line banking and e-commerce services . Mobile commerce and banking services fulfil needs for immediacy and control.
A number of alternatives allow PoS payments from a non NFC equipped handest. Technologies include QR codes, SMS and MF Tones and cloud based services.
Security ConcernsSecurity remains a concern for mobile banking and wallet based payment services and could undermine consumer confidence and slow adoption. Leading security companies have highlighted the risk of hackers and criminals targeting mobiles to gain access to consumer bank accounts and have highlighted vulenerabilities. In February 2012 Google disabled its linked prepaid card after security flaws were highlighted in Google Wallet.
MMT Platforms
Handset Vendors
Payment Processors and Service ProvidersAcquirers Payment Service Providers M-Commerce/Carrier Billing Payment Processors and M-Banking
Trusted Service Managers (TSM) Couponing and Loyalty
Business Models
ConsumerAccountProvider
Source ofFounds
FundsTransfers
FundsWithdrawal / Settlement
The Four Party Model
Bank
Wallet Provider• Card• Stored Value• Bank
CarrierBill/Prepaid
Balance
MobileNetworkOperator
• Carrier Bill• Mobile Money
Agent
• Mobile Wallet• Agent• Bank
Mobile PSP
Bank/Interbank Network
Mobile Network Operator
Partner Bank
Issuer Card Network• Acquirer• PSP
The E-Wallet Model
The Mobile Money Transfer
Model
The CarrierBilling Model
Transaction Fee
Mobile payment schemes face dual challenges:
- The opportunities to charge transaction fees for remittances are limited as alternatives are often free.
- Introduction of additional fee sharing parties into the processing chain could put pressure on merchant service fees and issuer margins making mobile uncompetitive vs. traditional card payments
Payment Processing Value Chain
FirstPartn
er
Evaluation Copy
