Bankersrsquo challenges in electronic banking

management perspectives

April 2014

H Van de Vyver

Objective

(e-banking) is in many countries for a decade

already an everyday tool for millions of persons Operating direct on the

is no more limited to experts Even are turning

out to be used more electronically

Getting your account balance via alerts making in

shops or to friends creating savings for the unbanked customers hellip A

lot is moving fast for financial (eg banks) and (eg

telecoms) in these new channels

This can generate a lot of

- What are the risks of these new developments and how to tackle

them

- What type of new legislation do regulators create

- Who are these online banking clients

ndash What are the commercial and technical challenges for the future

- What about the security of e-banking

7 - 9 April 2014 2

Your trainer

Trainings all over the world

Long tracking record

marketing department of the BNP Paribas

Group in Luxemburg since 1999

Private Banking department of the

Kredietbank Group in Luxemburg

Mr Hubert VAN DE VYVER

7 - 9 April 2014 3

Electronic banking expert for the ATTF-

Luxemburg the Belgian Bank Academy and

Radcliffe Training in London

International Trainer and Consultant (seminars

on e-banking electronic finance and

multichannel banking)

E-banking

47 - 9 April 2014

Objective

(e-banking) is in many countries for a decade

already an everyday tool for millions of persons Operating direct on the

is no more limited to experts Even are turning

out to be used more electronically

Getting your account balance via alerts making in

shops or to friends creating savings for the unbanked customers hellip A

lot is moving fast for financial (eg banks) and (eg

telecoms) in these new channels

This can generate a lot of

- What are the risks of these new developments and how to tackle

them

- What type of new legislation do regulators create

- Who are these online banking clients

ndash What are the commercial and technical challenges for the future

- What about the security of e-banking

7 - 9 April 2014 2

Your trainer

Trainings all over the world

Long tracking record

marketing department of the BNP Paribas

Group in Luxemburg since 1999

Private Banking department of the

Kredietbank Group in Luxemburg

Mr Hubert VAN DE VYVER

7 - 9 April 2014 3

Electronic banking expert for the ATTF-

Luxemburg the Belgian Bank Academy and

Radcliffe Training in London

International Trainer and Consultant (seminars

on e-banking electronic finance and

multichannel banking)

E-banking

47 - 9 April 2014

Your trainer

Trainings all over the world

Long tracking record

marketing department of the BNP Paribas

Group in Luxemburg since 1999

Private Banking department of the

Kredietbank Group in Luxemburg

Mr Hubert VAN DE VYVER

7 - 9 April 2014 3

Electronic banking expert for the ATTF-

Luxemburg the Belgian Bank Academy and

Radcliffe Training in London

International Trainer and Consultant (seminars

on e-banking electronic finance and

multichannel banking)

E-banking

47 - 9 April 2014

E-banking

47 - 9 April 2014

Introduction

7 - 9 April 2014 5

Definition

e-banking or electronic banking is the use of electronic methods to deliver traditional banking services using any kind of payment media

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

7 - 9 April 2014 6

copy ediarocom

Introduction

Introduction

7 - 9 April 2014 7

Introduction

7 - 9 April 2014 8

Source httpwwwstatisticbraincomonline-mobile-banking-statistics

9

Situation of e-banking

7 - 9 April 2014

Introduction

7 - 9 April 2014 10

Source httpwwwcomscoredataminecom

Definition

e-banking or electronic banking is the use of electronic methods to deliver traditional banking services using any kind of payment media

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

7 - 9 April 2014 6

copy ediarocom

Introduction

Introduction

7 - 9 April 2014 7

Introduction

7 - 9 April 2014 8

Source httpwwwstatisticbraincomonline-mobile-banking-statistics

9

Situation of e-banking

7 - 9 April 2014

Introduction

7 - 9 April 2014 10

Source httpwwwcomscoredataminecom

Introduction

7 - 9 April 2014 7

Introduction

7 - 9 April 2014 8

Source httpwwwstatisticbraincomonline-mobile-banking-statistics

9

Situation of e-banking

7 - 9 April 2014

Introduction

7 - 9 April 2014 10

Source httpwwwcomscoredataminecom

Introduction

7 - 9 April 2014 8

Source httpwwwstatisticbraincomonline-mobile-banking-statistics

9

Situation of e-banking

7 - 9 April 2014

Introduction

7 - 9 April 2014 10

Source httpwwwcomscoredataminecom

9

Situation of e-banking

7 - 9 April 2014

Introduction

7 - 9 April 2014 10

Source httpwwwcomscoredataminecom

Introduction

7 - 9 April 2014 10

Source httpwwwcomscoredataminecom

Introduction

7 - 9 April 2014 11

Source httpherculesgcsuedu

Why consumers buy financial products online

7 - 9 April 2014 12

Self-Direction Explains Which Markets Lead Online Finance

Some products are too complicated for even the self-directed to buy online without any online or off-line advice

Frequently purchased or simple products are moving online shares savings accounts credit cardshellip

hellip But infrequent and complex products need more than self-direction mortgage life insurance pension fund hellip most buyers are unfamiliar and need to speak to someone before buying or get online their position be able to analyse it get advice and tools to support decision-making and transaction

Why consumers buy financial products online

7 - 9 April 2014 13

Self-Directed Consumers account for half of all online finance buyers despite being only one-fith of all consumers

Online experience and confidence in security drive WHEN they buy

-The reason for the difference in behavior lies in consumersrsquo

-attitude to finance not technology

- Online financial buyers are confident both in

technology AND their own financial decision-making

-Self-direction motivation and confidence to research and take

financial decisions without the help of an advisor

Example of an e-bank InG Direct

Origin Netherlands

Online clients over 20 million customers in nine countries

Services offered current savings account and brokerage

Demo httphomeingdirectcom

Strategy Oldie but goodie in the ever advancing world of new

and better high yield savings accounts

Comments httpwwwmoneybluebookcom

7 - 9 April 2014 14

Introduction

Why consumers buy financial products online

7 - 9 April 2014 13

Self-Directed Consumers account for half of all online finance buyers despite being only one-fith of all consumers

Online experience and confidence in security drive WHEN they buy

-The reason for the difference in behavior lies in consumersrsquo

-attitude to finance not technology

- Online financial buyers are confident both in

technology AND their own financial decision-making

-Self-direction motivation and confidence to research and take

financial decisions without the help of an advisor

Example of an e-bank InG Direct

Origin Netherlands

Online clients over 20 million customers in nine countries

Services offered current savings account and brokerage

Demo httphomeingdirectcom

Strategy Oldie but goodie in the ever advancing world of new

and better high yield savings accounts

Comments httpwwwmoneybluebookcom

7 - 9 April 2014 14

Introduction

Example of an e-bank InG Direct

Origin Netherlands

Online clients over 20 million customers in nine countries

Services offered current savings account and brokerage

Demo httphomeingdirectcom

Strategy Oldie but goodie in the ever advancing world of new

and better high yield savings accounts

Comments httpwwwmoneybluebookcom

7 - 9 April 2014 14

Introduction

Introduction

157 - 9 April 2014

Channels in turmoil

7 - 9 April 2014 16

Introduction

Channels in turmoil

Challenges and pitfalls

Multichannel optimization

New payment methods

Multichannel optimization

New payment methods

Day 1

Channels in turmoil

7 - 9 April 2014 17

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08pdf

Channels in turmoil

7 - 9 April 2014 17

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08pdf

Channels in turmoil

7 - 9 April 2014 18

httpswwwkpmgcom

Channels in turmoil

7 - 9 April 2014 19

copy ediarocom

copy econumfr

From ebanking to social media (payments and

banking)

Possibilities

Services

Costs

Channels in turmoil

7 - 9 April 2014 20

copy econumfr

Web 30 without banking

intervention

Disintermediation

Challenges

Benefits and dangers

Channels in turmoil

7 - 9 April 2014 21

copy dwprblogcom

Channels in turmoil

7 - 9 April 2014 22

copy timesofmaltacom

Upgraded ATMrsquos

bullPossibilities

bullServices

bullCosts

Channels in turmoil

7 - 9 April 2014 23

copy phandroidcom

copy seeedstudiocom

Payment tools in shops (Point

of Sales)

bullExisting and new cards

bullNo cash anymore

Channels in turmoil

7 - 9 April 2014 24

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08p

df

Channels in turmoil

7 - 9 April 2014 20

copy econumfr

Web 30 without banking

intervention

Disintermediation

Challenges

Benefits and dangers

Channels in turmoil

7 - 9 April 2014 21

copy dwprblogcom

Channels in turmoil

7 - 9 April 2014 22

copy timesofmaltacom

Upgraded ATMrsquos

bullPossibilities

bullServices

bullCosts

Channels in turmoil

7 - 9 April 2014 23

copy phandroidcom

copy seeedstudiocom

Payment tools in shops (Point

of Sales)

bullExisting and new cards

bullNo cash anymore

Channels in turmoil

7 - 9 April 2014 24

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08p

df

Channels in turmoil

7 - 9 April 2014 21

copy dwprblogcom

Channels in turmoil

7 - 9 April 2014 22

copy timesofmaltacom

Upgraded ATMrsquos

bullPossibilities

bullServices

bullCosts

Channels in turmoil

7 - 9 April 2014 23

copy phandroidcom

copy seeedstudiocom

Payment tools in shops (Point

of Sales)

bullExisting and new cards

bullNo cash anymore

Channels in turmoil

7 - 9 April 2014 24

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08p

df

Channels in turmoil

7 - 9 April 2014 22

copy timesofmaltacom

Upgraded ATMrsquos

bullPossibilities

bullServices

bullCosts

Channels in turmoil

7 - 9 April 2014 23

copy phandroidcom

copy seeedstudiocom

Payment tools in shops (Point

of Sales)

bullExisting and new cards

bullNo cash anymore

Channels in turmoil

7 - 9 April 2014 24

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08p

df

Channels in turmoil

7 - 9 April 2014 23

copy phandroidcom

copy seeedstudiocom

Payment tools in shops (Point

of Sales)

bullExisting and new cards

bullNo cash anymore

Channels in turmoil

7 - 9 April 2014 24

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08p

df

Channels in turmoil

7 - 9 April 2014 24

httpswwwdeloittecomassetsDcom-

UnitedStatesLocal20AssetsDocumentsus_fsi_CBS_Evolving_Models_may08p

df

Channels in turmoil

25

copy hdpaperwallcom

7 - 9 April 2014

Summary Seminar

7 - 9 April 2014 26

Introduction

Channels in turmoil

Challenges and pitfalls

Multichannel optimization

New payment methods

Multichannel optimization

New payment methods

Challenges and pitfalls

7 - 9 April 2014 27

How to challenge and handle the technical limits

- evolution of the technology

- acceptance by the end users

Challenges and pitfalls

7 - 9 April 2014 28

copy worthofwebcom

The internet community helping to develop services

- social media offering financial services

- scale effect and viral evolution

Challenges and pitfalls (Conclusion)

297 - 9 April 2014

Summary Seminar

7 - 9 April 2014 26

Introduction

Channels in turmoil

Challenges and pitfalls

Multichannel optimization

New payment methods

Multichannel optimization

New payment methods

Challenges and pitfalls

7 - 9 April 2014 27

How to challenge and handle the technical limits

- evolution of the technology

- acceptance by the end users

Challenges and pitfalls

7 - 9 April 2014 28

copy worthofwebcom

The internet community helping to develop services

- social media offering financial services

- scale effect and viral evolution

Challenges and pitfalls (Conclusion)

297 - 9 April 2014

Challenges and pitfalls

7 - 9 April 2014 27

How to challenge and handle the technical limits

- evolution of the technology

- acceptance by the end users

Challenges and pitfalls

7 - 9 April 2014 28

copy worthofwebcom

The internet community helping to develop services

- social media offering financial services

- scale effect and viral evolution

Challenges and pitfalls (Conclusion)

297 - 9 April 2014

Challenges and pitfalls

7 - 9 April 2014 28

copy worthofwebcom

The internet community helping to develop services

- social media offering financial services

- scale effect and viral evolution

Challenges and pitfalls (Conclusion)

297 - 9 April 2014

Challenges and pitfalls (Conclusion)

297 - 9 April 2014

Strategy

7 - 9 April 2014 30

httphttpwwwpwccom

Strategy

7 - 9 April 2014 31

httpwwwpwccoukbanking-capital-marketspublicationsbanking-survey-

digital-tipping-pointjhtml

Summary Seminar

Day 1

7 - 9 April 2014 32

Introduction

Channels in turmoil

Challenges and pitfalls

Multichannel optimization

New payment methods

Multichannel optimization

New payment methods

Multichannel optimization

7 - 9 April 2014 33

copy kpmgcom

Multichannel optimization

7 - 9 April 2014 34

Source httpwwwwiprocom

Multichannel optimization

7 - 9 April 2014 33

copy kpmgcom

Multichannel optimization

7 - 9 April 2014 34

Source httpwwwwiprocom

Multichannel optimization

7 - 9 April 2014 34

Source httpwwwwiprocom

Multichannel optimization

7 - 9 April 2014 35

Multichannel optimization

7 - 9 April 2014 36

httpfrslidesharenetbackbasebanking-on-digital-innovation-in-financial-services

Multichannel optimization

7 - 9 April 2014 36

httpfrslidesharenetbackbasebanking-on-digital-innovation-in-financial-services

Multichannel optimization

Advice in branches

expensive channel

specialized channel

brick and click

local (branch) vs global (web)

7 - 9 April 2014 37

Multichannel optimization

7 - 9 April 2014 38

Operations and brokerage in web banking

client works for the bank

good overview vs mobile

cheap

marketing tool or required

Multichannel optimization

7 - 9 April 2014 39

Information (only ) in m-banking

send receive smsalerts

payment tool

cheap

marketing tool or required

Multichannel optimization

7 - 9 April 2014 38

Operations and brokerage in web banking

client works for the bank

good overview vs mobile

cheap

marketing tool or required

Multichannel optimization

7 - 9 April 2014 39

Information (only ) in m-banking

send receive smsalerts

payment tool

cheap

marketing tool or required

Multichannel optimization

7 - 9 April 2014 39

Information (only ) in m-banking

send receive smsalerts

payment tool

cheap

marketing tool or required

Multichannel optimization

7 - 9 April 2014 40

Synchronisation between the channels

strategy

information

same

adapted

feedback between channels

Multichannel Optimization

417 - 9 April 2014

Multichannel Optimization

417 - 9 April 2014

New payment methods

7 - 9 April 2014 42

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

New payment methods

Terminology Mobile banking vs Mobile payments

Many consumers (and even a fair number of bankers) make the mistake of

using these two terms interchangeably

But there is a difference Mobile Banking refers to platforms that enable

customers to access financial services (such as transfers bill payments

balance information and investment options)

Mobile Payments on the other hand is generally defined as the process of

using a hand-held device to pay for a product or service either remotely or at a

point-of-sale

httpswwwkpmgcomGlobalenIssuesAndInsightsArticlesPublicationsmobile-payments-

for-banksPagesmonetizing-mobileaspx

7 - 9 April 2014 43

copy kpmgcom

New payment methods

Terminology Mobile banking vs Mobile payments

Many consumers (and even a fair number of bankers) make the mistake of

using these two terms interchangeably

But there is a difference Mobile Banking refers to platforms that enable

customers to access financial services (such as transfers bill payments

balance information and investment options)

Mobile Payments on the other hand is generally defined as the process of

using a hand-held device to pay for a product or service either remotely or at a

point-of-sale

httpswwwkpmgcomGlobalenIssuesAndInsightsArticlesPublicationsmobile-payments-

for-banksPagesmonetizing-mobileaspx

7 - 9 April 2014 43

copy kpmgcom

New payment methods

7 - 9 April 2014 44

New payment methods

7 - 9 April 2014 45

copy kpmgcom

New payment methods

Day 1

7 - 9 April 2014 46

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

New payment methods

7 - 9 April 2014 47

New payment methods

7 - 9 April 2014 48

Electronic money or e-money is any electronic payment media ndashany material device or system that conducts payment via the transfer of electromagnetically stored information

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

New payment methods

7 - 9 April 2014 49

1 Micro payments Card-based e-money

2 Retail POS payments Card-based e-money

at POS

3 Buddy Banking e-money peer-to peer

4 Bill payments ATM Internet bankinge-money

5 Electronic commerce e-money

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 45

copy kpmgcom

New payment methods

Day 1

7 - 9 April 2014 46

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

New payment methods

7 - 9 April 2014 47

New payment methods

7 - 9 April 2014 48

Electronic money or e-money is any electronic payment media ndashany material device or system that conducts payment via the transfer of electromagnetically stored information

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

New payment methods

7 - 9 April 2014 49

1 Micro payments Card-based e-money

2 Retail POS payments Card-based e-money

at POS

3 Buddy Banking e-money peer-to peer

4 Bill payments ATM Internet bankinge-money

5 Electronic commerce e-money

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

Day 1

7 - 9 April 2014 46

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

New payment methods

7 - 9 April 2014 47

New payment methods

7 - 9 April 2014 48

Electronic money or e-money is any electronic payment media ndashany material device or system that conducts payment via the transfer of electromagnetically stored information

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

New payment methods

7 - 9 April 2014 49

1 Micro payments Card-based e-money

2 Retail POS payments Card-based e-money

at POS

3 Buddy Banking e-money peer-to peer

4 Bill payments ATM Internet bankinge-money

5 Electronic commerce e-money

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 47

New payment methods

7 - 9 April 2014 48

Electronic money or e-money is any electronic payment media ndashany material device or system that conducts payment via the transfer of electromagnetically stored information

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

New payment methods

7 - 9 April 2014 49

1 Micro payments Card-based e-money

2 Retail POS payments Card-based e-money

at POS

3 Buddy Banking e-money peer-to peer

4 Bill payments ATM Internet bankinge-money

5 Electronic commerce e-money

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 48

Electronic money or e-money is any electronic payment media ndashany material device or system that conducts payment via the transfer of electromagnetically stored information

Source Six Puzzles in Electronic Money and Banking

Connel Fullenkamp and Saleh M Nsouli

International Monetary Fund

New payment methods

7 - 9 April 2014 49

1 Micro payments Card-based e-money

2 Retail POS payments Card-based e-money

at POS

3 Buddy Banking e-money peer-to peer

4 Bill payments ATM Internet bankinge-money

5 Electronic commerce e-money

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 49

1 Micro payments Card-based e-money

2 Retail POS payments Card-based e-money

at POS

3 Buddy Banking e-money peer-to peer

4 Bill payments ATM Internet bankinge-money

5 Electronic commerce e-money

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 50

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 51

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 52

Country Type of system Loading process Value limit (Usd)

Canada Visa Cash card based special loading procedure Internet

325

France Moneo card based ATM 100

Germany Geldkarte card based ATM 200

USA Visa Amex Master card network based

credit card or bank account 25 ndash 10000

Hong Kong Octopus card based Yahoo Pay Direct network based

Autoreloading over the counter from bank accounts

130 640

Russia PayCash network based

Internet No limit

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 53

Consumersrsquo E-Wallet wish list

Ability to check statements 58

Checking of bank balances 54

Ability to pay bills 34

Intra account transfers 35

Scope for P2P payments 29

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 54

(and problems)

when lost the money and credits can not totally be recuperatedimprove confidence of use (one does not see how much stands on his electronic purse)

reduce the use of coinsimprovements with non financial creditsintegration in the existing cards (credit debit shopsrsquo fidelity )promotional supportrequest from younger consumers

Electronic purse

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 55

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

56

Peer to peer payment

7 - 9 April 2014

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 57

Peer to peer payments

ndash p2p lending marketplaces (eg Prosper Zopa Lending

ClubSmava) ndash participants driven mainly by economic

motives

ndash social lending services enabling micro financing

(eg Kiva MyC4) ndash participants driven mainly by social

motives

ndash other concepts (eg Virginmoney ldquoWe manage loans

between family and friendsldquo)

New payment methods

7 - 9 April 2014 58

Fees

ndash borrowers1 of the funded loans

ndash lenders 05 annual loan-servicing

New payment methods

7 - 9 April 2014 59

get information on standard interest rates and default rates

associated with the various credit rating levels

make judgments about reasonable payments and risk levels

bids with the lowest rates combined to produce a single loan (

repaid over three years)

payments drawn from the borrowers bank account and sent to

the various lenders accounts

New payment

methods

7 - 9 April 2014 60

Source

P2P-bankingcom

New payment methods

7 - 9 April 2014 59

get information on standard interest rates and default rates

associated with the various credit rating levels

make judgments about reasonable payments and risk levels

bids with the lowest rates combined to produce a single loan (

repaid over three years)

payments drawn from the borrowers bank account and sent to

the various lenders accounts

New payment

methods

7 - 9 April 2014 60

Source

P2P-bankingcom

New payment

methods

7 - 9 April 2014 60

Source

P2P-bankingcom

New payment methods

7 - 9 April 2014 61

bull Card based payments

bull Network money

Situation

bull Possibilities

bull Services

bull Costs

bull Demo

Mobile payments

bull Possibilities

bull Services

bull Costs

bull Demo

Peer to peer payments

Friends to family payments

New payment methods

7 - 9 April 2014 62

facilitator of friends and family p2p loans in the US

does not do the matchmaking between borrowers and lenders

supports the process between persons that already had offline

relations

number on loan volume generated was 390 million US$

acquired predecessor Circlelending in 2007

New payment methods

7 - 9 April 2014 63

New payment methods

7 - 9 April 2014 64

New payment methods

7 - 9 April 2014 65

copy kpmgcom

New payment methods

7 - 9 April 2014 66

httpswwwkpmgcomGlobalenIssuesAndInsights

ArticlesPublicationssocial-bankerDocumentsthe-

social-banker-v20pdf

New payment methods

7 - 9 April 2014 62

facilitator of friends and family p2p loans in the US

does not do the matchmaking between borrowers and lenders

supports the process between persons that already had offline

relations

number on loan volume generated was 390 million US$

acquired predecessor Circlelending in 2007

New payment methods

7 - 9 April 2014 63

New payment methods

7 - 9 April 2014 64

New payment methods

7 - 9 April 2014 65

copy kpmgcom

New payment methods

7 - 9 April 2014 66

httpswwwkpmgcomGlobalenIssuesAndInsights

ArticlesPublicationssocial-bankerDocumentsthe-

social-banker-v20pdf

New payment methods

7 - 9 April 2014 63

New payment methods

7 - 9 April 2014 64

New payment methods

7 - 9 April 2014 65

copy kpmgcom

New payment methods

7 - 9 April 2014 66

httpswwwkpmgcomGlobalenIssuesAndInsights

ArticlesPublicationssocial-bankerDocumentsthe-

social-banker-v20pdf

New payment methods

7 - 9 April 2014 64

New payment methods

7 - 9 April 2014 65

copy kpmgcom

New payment methods

7 - 9 April 2014 66

httpswwwkpmgcomGlobalenIssuesAndInsights

ArticlesPublicationssocial-bankerDocumentsthe-

social-banker-v20pdf

New payment methods

7 - 9 April 2014 65

copy kpmgcom

New payment methods

7 - 9 April 2014 66

httpswwwkpmgcomGlobalenIssuesAndInsights

ArticlesPublicationssocial-bankerDocumentsthe-

social-banker-v20pdf

New payment methods

7 - 9 April 2014 66

httpswwwkpmgcomGlobalenIssuesAndInsights

ArticlesPublicationssocial-bankerDocumentsthe-

social-banker-v20pdf

New payment methods

677 - 9 April 2014

68

More and questions

Website

httpebankinghomesteadcom

YouTube Channel

httpyoutubecomebanking

E-mail address

infoCelufobiz

7 - 9 April 2014