From the Future Backwards

©2011 Jack Henry & Associates, Inc. All Rights Reserved.

…knowing next now.

Lee Wetherington, AAP Director of Strategic Insight, ProfitStars®

@leewetherington

Lee Wetherington Director of Strategic Insight

2

• Develops actionable insight and strategy for the financial services industry

• Delivers keynotes nationwide • Technology Faculty Chair for Southwest

CUNA Management School • Authors articles for industry trades • Degrees in Economics and English

from Duke University • Accredited ACH Professional (AAP)

Presenter

@leewetherington

Agenda

• Trends 2013 – Mobile; Churn; Demographics; “FPM” – The Future in 1, 2, 3

• Mobile Payments – Things We Know – Things We Don’t

• How CUs Win the Mobile Wars – Leveraging Data You Have That They Don’t – What That Looks Like (It’s Already Here) – Integrity, Integrity, Integrity

May 3, 2013

©2011 Jack Henry & Associates, Inc. All Rights Reserved.

3

Top Trends in 2013: Javelin

1. New alternatives at the Point-of-Sale 2. CUs’ position of trust threatened 3. Mobile banking = “Smartphone Banking” 4. Google surpasses Apple 5. Mobile wallets will be hybrids (NFC/cloud) 6. “Omnichannel” banking necessary, not just nice 7. Retailers challenge payments stakeholders 8. CUs must master their data S

OU

RC

E: J

avel

in S

trate

gy &

Res

earc

h; “1

0 Tr

ends

for F

inan

cial

Ser

vice

s in

201

3:

Forg

ing

a N

ew F

ront

ier f

or B

anki

ng, P

aym

ents

, Mob

ile, a

nd S

ecur

ity”;

Janu

ary

2013

The future is always already

here…if you know where to look.

The future is about better enabling

natural behavior…

…and nudging against behavior that is financially

harmful.

The key to your role in this future

is data…

Big Data?

Big Data? No, CU Data!

• CUs must begin to understand their own data. – That’s where the value is.

• Transaction data can tell a CU... – …what other financials institutions members use. – …what financial products/services they use. – …how much they pay to use other financial services. – …where they shop, how often, and how much they spend.

• Behavioral analysis is already necessary to bolster security, why not tap the same analysis to better understand and serve members?

Death of Checking Emergence of the “DeBanked” & the Rise of “NeoChecking”

12

Check Use Declines

61% 56 %

51 % 47 %

38 % 34 %

31 % 30 % 26%

23 %

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Source: Fiserv 2011 Consumer Trends Survey

Percent of payments paid by check

Overdraft Volumes Remain High

Source: Moebs Services, FDIC, NCUA, OCC, Federal Reserve

$0

$10

$20

$30

$40

2007 2008 2009 2010 2011

Overdraft Revenue (US$ billions)

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

2009: Worth Switching to Prepaid?

$(2,100)

$(1,600)

$(1,100)

$(600)

$(100)

$400

$900

$1,400

$1,900

Potential savings to checking account holders from switching to prepaid debit cards

18% would save

Median savings (US$)

Source: Aite Group

82% would be worse off

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

Monthly Account Fees Up…

Source: Bankrate.com

$ -

$1.00

$2.00

$3.00

$4.00

$5.00

$6.00

1998 2000 2002 2004 2006 2008 2010 2012

Average Monthly Service Fees on Checking Accounts

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

ATM Fees Up…

Average ATM Fees on Non-Members

$ -

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

Source: Bankrate.com

1998 2000 2002 2004 2006 2008 2010 2012

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

…And Interest Rates Are Down

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

2001 2003 2005 2007 2009 2011

0.79%

0.08%

Source: Bankrate.com

Average Checking Account Yield

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

The “Debanked”

Mainstream consumers who willingly opt out of the traditional banking system

SOURCE: Aite; “Trends in Retail Banking”; Ron Shevlin; March 2013

Characteristics of “NeoChecking”

• Mobile-first design • PFM the focus, not the add-on • Blending prepaid, debit, and credit

– Functions/transitions from one to the other do not require closing/opening of accounts

SOURCE: Aite; “Trends in Retail Banking”; Ron Shevlin; March 2013

Branch Facts

• Self-service reduces branch traffic dramatically

• Deposits are 25-30% of image ATM transactions

– 40% of deposit-taking ATMs are image enabled

• Daily per-branch deposits will decline from 250/day to 50/day by 2016. (Celent)

• 23% of banks expect branch contraction over the next five years

– No credit unions expect branch contraction

SOU

RC

E: C

elen

t; “T

OP

TREN

DS

IN R

ETAI

L B

ANK

ING

201

3”

By

Bar

t Nar

ter a

nd th

e C

elen

t Ban

king

Tea

m; D

ecem

ber 1

2, 2

012

Online Banking & BillPay Forecast

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“201

2 O

nlin

e B

anki

ng a

nd B

ill-P

aym

ent

Fore

cast

:: H

ow to

Boo

st P

rofit

abili

ty W

hen

Faci

ng F

lat-L

inin

g A

dopt

ion”

; Aug

ust 2

012

60

81

92

32

44 52 41

47

-

10

20

30

40

50

60

70

80

90

100

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Milli

ons o

f Onl

ine

Hou

seho

lds

Actual Forecast© 2012 Javelin Strategy & Research

Banked online

Actual Forecast© 2012 Javelin Strategy & Research

Paid at biller site

Paid at FI site

Banked online

53

Mobile Banking

77% Adults Own Smartphones by 2017

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“201

2 M

obile

Ban

king

, Sm

artp

hone

, and

Tab

let F

orec

ast:

M

obile

Ban

king

Gai

ns 1

0 M

illio

n U

sers

as

Sm

artp

hone

and

Tab

let A

dopt

ion

Soa

rs”;

Dec

embe

r 201

2

Forecast of U.S. Adults’ Smartphone Adoption, 2009–2012

Mobile Banking Rides Smartphone Rev

Jave

lin S

trate

gy &

Res

earc

h: “2

011

Mob

ile B

anki

ng, S

mar

tpho

ne a

nd T

able

t For

ecas

t: M

obile

Ban

king

Mov

es M

ains

tream

to M

id-s

ized

, Com

mun

ity B

anks

and

Cre

dit U

nion

s”; D

ecem

ber 2

011

202182

202 205 209 212 216 219

36 35

5768

7989

99111

43

66

90102

114127

142158

0

50

100

150

200

250

2009 2010 2011 2012 2013 2014 2015 2016

Mobile users (in millions)

Mobile banking users in the last 12 months

Smartphone owners

Base: US adults with mobile phone.© 2011 Javelin Strategy & Research

Actual Forecast

Num

ber o

f mob

ile p

hone

use

rs (i

n m

illio

ns)

U.S. Mobile and Mobile-Banking Users, 2009–2016

Android Widens Lead in Mobile OS

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“201

2 M

obile

Ban

king

, Sm

artp

hone

, and

Tab

let F

orec

ast:

M

obile

Ban

king

Gai

ns 1

0 M

illio

n U

sers

as

Sm

artp

hone

and

Tab

let A

dopt

ion

Soa

rs”;

Dec

embe

r 201

2

Forecast of U.S. Adult Smartphone Owners by Device OS Type, 2009–2017

Mobile Bankers Double in Next 5 Years

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“201

2 M

obile

Ban

king

, Sm

artp

hone

, and

Tab

let F

orec

ast:

M

obile

Ban

king

Gai

ns 1

0 M

illio

n U

sers

as

Sm

artp

hone

and

Tab

let A

dopt

ion

Soa

rs”;

Dec

embe

r 201

2 Forecast of U.S. Adults’ Mobile Banking Adoption, 2009–2017

Tablets: 52% of Mobile Adults by 2017

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“201

2 M

obile

Ban

king

, Sm

artp

hone

, and

Tab

let F

orec

ast:

M

obile

Ban

king

Gai

ns 1

0 M

illio

n U

sers

as

Sm

artp

hone

and

Tab

let A

dopt

ion

Soa

rs”;

Dec

embe

r 201

2 Forecast of U.S. Mobile Adults Who Use Tablets, 2011–2017

Switchers: Sizing Churn

& Opportunity

Big Banks Vulnerable to Switching

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Onl

ine

Ban

king

and

Bill

Pay

For

ecas

t Rev

iew

201

2”; S

epte

mbe

r 201

2

Javelin Benchmark™: Likelihood to Switch Primary FIs in Next 12

Potential Switchers • 11% of consumers in 2012 plan to switch FIs

– 25% of Citibank customers; 21% of BoA customers

• Maintain 30% more deposits than consumers who do not plan to switch – Represent $675B in deposits

• Willing to pay $92M in fees – Money orders; cashier’s checks, safe deposit boxes, and

mobile remote deposit.

• Place a premium on personal finance and simplicity (Javelin Strategy & Research)

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“201

2 O

nlin

e B

anki

ng a

nd B

ill-P

aym

ent

Fore

cast

:: H

ow to

Boo

st P

rofit

abili

ty W

hen

Faci

ng F

lat-L

inin

g A

dopt

ion”

; Aug

ust 2

012

“Generations impact the economy.” John Augustine, CFA Chief Market Strategist Fifth Third Bank

Gen Y.1 Gen Y.2

18-24 25-34

PFM Demand by Age

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“21s

t-Cen

tury

PFM

for a

Mas

s A

udie

nce:

H

ow to

Bui

ld E

very

day

Onl

ine

and

Mob

ile P

FM’;

Febr

uary

201

3

PFM Demand by Income

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“21s

t-Cen

tury

PFM

for a

Mas

s A

udie

nce:

H

ow to

Bui

ld E

very

day

Onl

ine

and

Mob

ile P

FM’;

Febr

uary

201

3

PFM or FPM?

SOURCE: Ron Shevlin’s Snarketing 2.0 Blog; “PFM is Dead, Long Live FPM”; http://snarketing2dot0.com/2012/09/24/pfm-is-dead-long-live-fpm/

“Account aggregation and budget creation/tracking is great, but unless it changes behavior…then the potential impact of PFM is unfulfilled. Too many consumer advocates focus on financial literacy. Knowledge without action, or change in behavior, is useless.”

SOURCE: Ron Shevlin; Snarketing 2.0; “Finance Dot Data Dot Gov”; http://snarketing2dot0.com/2012/09/28/finance-dot-data-dot-gov/

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“21s

t-Cen

tury

PFM

for a

Mas

s A

udie

nce:

H

ow to

Bui

ld E

very

day

Onl

ine

and

Mob

ile P

FM’;

Febr

uary

201

3

16%20%

21%23%

29%29%30%30%31%31%

34%36%37%38%38%38%

49%

0% 10% 20% 30% 40% 50% 60%

Social-network shopping recommendations Archive business expenses

Investment toolsMotivational alerts

Automatic budget categorizationFinancial plannning tools

Cash-flow estimatorGPS-based merchant discountsCard-reward recommendations

Record cash purchasesPrice-change alerts

View finances on a calendar Comparison pricing

Personal finance alertsRewards reminders

Earn points or enter sweepstakes View all account balances

Percent of consumersQ17: Please indicate your likelihood of using the following products or services if they were available to you. Q18: Please indicate your likelihood of using the following products or services if they were available to you. Q19: New applications and services are becoming available, Please indicate your likelihood of using the following products or services if they were available to you.

August 2012, n = 3,000Base: All consumers.

© 2013 Javelin Strategy & Research

Tier 1

Q17: Please indicate your likelihood of using the following products or services if they were available to you. Q18: Please indicate your likelihood of using the following products or services if they were available to you. Q19: New applications and services are becoming available, Please indicate your likelihood of using the following products or services if they were available to you.

August 2012, n = 3,000Base: All consumers.

© 2013 Javelin Strategy & Research

Tier 4

Tier 3

Tier 2

Most Desireable PFM Features

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“21s

t-Cen

tury

PFM

for a

Mas

s A

udie

nce:

H

ow to

Bui

ld E

very

day

Onl

ine

and

Mob

ile P

FM’;

Febr

uary

201

3

38

50

52

58

0 10 20 30 40 50 60 70

Plan

Buy

Shop

Spend

Points (100-point scale)

Q21: Please rank the categories based on your likelihood of using the types of products and services included under them.

August 2012, n = 3,000Base: All consumers.

© 2013 Javelin Strategy & Research

Spend, Shop, Buy, Plan PFM Features Ranked by Financial Chores

SOURCE: Javelin Strategy & Research; “21st-Century PFM for a Mass Audience: How to Build Everyday Online and Mobile PFM’; February 2013

Spend, Shop, Buy, Plan

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“21s

t-Cen

tury

PFM

for a

Mas

s A

udie

nce:

H

ow to

Bui

ld E

very

day

Onl

ine

and

Mob

ile P

FM’;

Febr

uary

201

3

38%44%44%45%

51%50%

53%51%

52%53%54%56%56%57%

56%57%

62%

0% 20% 40% 60% 80%

Social-network shopping recommendations Archive business expenses

Investment toolsMotivational alerts

Automatic budget categorizationFinancial plannning tools

Cash-flow estimatorGPS-based merchant discountsCard-reward recommendations

Record cash purchasesPrice-change alerts

View finances on a calendar Comparison pricing

Personal finance alertsRewards reminders

Earn points or enter sweepstakes View all account balances

Percent of consumers

Moneyhawks

Gen Y.2

$100,000 - $149,999

All consumers

Tier 1

Tier 2

Tier 3

Tier 4

Q17: Please indicate your likelihood of using the following products or services if they were available to you. Q18: Please indicate your likelihood of using the following products or services if they were available to you. Q19: New applications and services are becoming available, Please indicate your likelihood of using the following products or services if they were available to you.

August 2012, n varies: 548 - 3,000Base: Moneyhawks; Consumers aged 25 - 34;

Consumers a household income of $100,000 -$149,999; All consumers.

© 2013 Javelin Strategy & Research

Moneyhawks: Highest PFM Interest

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“21s

t-Cen

tury

PFM

for a

Mas

s A

udie

nce:

H

ow to

Bui

ld E

very

day

Onl

ine

and

Mob

ile P

FM’;

Febr

uary

201

3

Post-Durbin Payments

Lemons and Lemonade

• The Lemons – Dodd-Frank increases regulatory burden – Recession raises unemployment – Durbin amendment shifts power to merchants – Non-FI 3rd parties lead mobile payments evolution

• The Lemonade – Dodd-Frank targets biggest FIs – Unemployment creates churn in banking – Durbin creates competitive carve-out for FIs under $10B – Consumers prefer primary FI for mobile wallets/payments

IMAGE SOURCE: www.shutterstock.com

Interchange Wars: Drivers

• Interchange Lawsuit Settlement – A clear win for MasterCard and Visa networks

• Prevents future legal action against the 2 networks

• Enables merchant surcharging at the POS in 40 states where allowed

– Likely to deter further legal regulatory action – Merchants must address interchange expense

management in the marketplace

• Shifts in consumer and merchant behaviors – Movement to digital channel and mobile payments – Creates a conduit for new competitive entry at the POS

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

Interchange Wars: Outcomes

• Alternative payment acceptance providers gain traction in retail locations

• Merchants drop the surcharge banter

• Merchant MCX network formed

• Merchants will try to take control of the digital wallet environment

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

Payments Revenue

SO

UR

CE

: FD

IC =

Com

mer

cial

Ban

king

; Fi

rm P

aym

ents

Map

= P

aym

ents

; B

EA

= A

gric

ultu

re, H

otel

s, A

irlin

es, I

T, F

ilm/M

usic

1 Payments revenues are from 2011

Consumer DDA Profit Margins Down

SO

UR

CE

: McK

inse

y U

S P

aym

ents

Map

, Q3-

11 re

leas

e, B

ase

Cas

e sc

enar

io

Regs Cut $120B in Revenue thru 2016

SO

UR

CE

: McK

inse

y U

S P

aym

ents

Map

, Rel

ease

Q1

2012

; Bas

e C

ase

scen

ario

1 Lost revenue assumes pre-regulatory interchange rates and NSF/OD occurrences

next

Can’t Close Rev Gap w/ Tweaks SOURCE: McKinsey US Payments Map, Release Q1 2012; Base Case scenario

Exemption Spawns Innovation

What class of payments networks were specifically exempted from Durbin?

Name the three companies who’ve made the biggest headlines in payments innovation in recent months.

• Visa’s PIN-Authenticated Visa Debit (PAVD) • Fixed Acquirer Network Fees (FANF) • EMV • Credit Card Surcharging • $7B “Swipe Fee” Settlement • Merchant Customer Exchange (MCX) • PayPal at the POS (via Discover partnership) • Discover in the News

– To power Facebook Gift Card; MCX? – Offer Checking Accounts?

Headwinds and Wildcards

Mobile Payments?

Evolution and The End Game

Mobile Banking

Mobile Payments

Mobile Marketing

Things We Know

Mobile Bankers Open to Mobile Wallets

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

10%

25%

21%

38%

31%

27%

14%

6%

24%

4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

All mobile consumers

Mobile bankers past

90 days

Percent of Mobile Consumers

Very likely Somewhat Likely Neutral (neither unlikely nor likely) Somewhat Unlikely Very unlikely

Q29_B: If a mobile wallet were made available to you, how likely would you be to adopt this technology in the next twelve months?

June 2012, n= 872, 3,492.Base: A consumers who have mobile banked in

the past 90 days, all mobile phone owners.©2012 Javelin Strategy & Research

Mobile Buys of Physical Goods Triples

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

Purchasing Pattern on Mobile Devices

Mobile POS to Grow 25% Annually

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2 Mobile POS Purchase Dollar Volume Forecast, 2011–2017

Financial, mobile, and retail ecosystems are converging…

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

Note: The trust, innovation, and privacy scores for Isis were derived from averaging the scores for the three mobile network operators involved in the project, AT&T, T-Mobile and Verizon.

Physical and virtual worlds are converging…

Mobile Converges Physical & Virtual

Physical Virtual

Physical & Virtual Collide!

Physical Virtual

Preference for Wallet Providers

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

1%1%1%

2%2%

3%3%3%3%

4%4%4%

5%5%

6%6%

8%9%

13%15%

0% 10% 20%

FacebookCitibank

MicrosoftWal-MartU.S. Bank

AmazonDiscover

GoogleSprint

T-MobileApple

American ExpressWells FargoMasterCard

Bank of AmericaChaseAT&T

VerizonPayPal

Visa

All Mobile Phone Owners

Q29_A: If you were choosing a mobile wallet provider, which of the following would you be most likely to choose?

June 2012, n=3,492.Base: All mobile phone owners.

©2012 Javelin Strategy & Research

Consumer Use of PayPal Grows

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

47%

52%

0% 10% 20% 30% 40% 50% 60%

2010

2011

Percent of Consumers

Q38. Which of the following types of alternative payments have you used for an online purchase? PayPal

August 2011, n=2,304, 4,998.Base: All consumers.

©2012 Javelin Strategy & Research

Things We Don’t Know

Which mobile payments techs, channels, and functions will prevail?

CU’s Role in Mobile POS?

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

FIs Play Different Roles in Different NFC Solutions

PROBLEM 1: Most likely NFC models

do not put CUs in control.

PROBLEM 2: Complexity of NFC

models forestall their adoption.

NFC Requires Complex Collaboration

SO

UR

CE

: Jav

elin

Stra

tegy

& R

esea

rch;

“Bat

tle fo

r Con

trol o

f the

Mob

ile W

alle

t”; S

epte

mbe

r 201

2

© 2012 Javelin Strategy & Research 4

Secure Element(Credentialing)

NFC Chip(SIM or

Embedded)

Wallet(Rewards, Loyalty, Payments, Keys,

Tickets)

Merchant POS

Payment Networks

Issuer TSM

Secure Element

TSM

© 2012 Javelin Strategy & Research

NFC (SIM or Embedded) Model

Transact

Load

Acquiring Bank

Issuing Bank

PROBLEM 3: So what to do

before/while/if NFC arrives?

Mobile Wallet Tech Trajectory

Cloud NFC

The

BIG Question

Who will control and monetize mobile marketing of payments data?

Isis Wallet

Google Wallet

How much is at stake?

$1 Trillion

SOU

RC

E: “

The

Gre

at M

obile

Alli

ance

” by

Ste

ve M

ott;

Dig

ital T

rans

actio

ns; J

uly

& S

epte

mbe

r, 20

12

Mobile Wallet Demand Weak…

Source: Aite Group survey of 1,115 US consumers, Q2 2012

Discover

Facebook

American Express

Apple

Google

MasterCard

PayPal

Visa

Amazon

Very interested Somewhat interested

Q. How interested are you in having a mobile wallet from the following companies?

18%

18%

16%

15%

14%

12%

11%

11%

10%

21%

22%

22%

19%

19%

15%

16%

16%

17% SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

…But Mobile Shopping Demand Strong

Source: Aite Group survey of 1,115 US consumers, Q2 2012

Q. Which of the following mobile shopping capabilities are important to you?

Connects to social networks

Offered by my primary FI

Shows product reviews

Offered by company I know/trust

Offered by stores I shop at

Offered by company I know/trust

Provides very steep discounts

Finds the lowest price 72%

72%

70%

70%

67%

62%

50%

34%

SO

UR

CE

: Aite

; “Tr

ends

in R

etai

l Ban

king

”; R

on S

hevl

in; M

arch

201

3

• 33% of all households and 50 percent of smartphone users are aware of e-wallet products.

• 25% of households hold positive views of e-wallets, 33% are neutral, the remainder are negative — generally due to concerns about e-wallet security.

• 20% of households that were previously aware of the products and 25% of existing smartphone users would use a digital wallet.

• More than 75% of interested consumers would prefer e-wallet services from their primary financial institution.

Digital Wallet Stats

89

SO

UR

CE

: “S

ettin

g th

e S

tage

for t

he M

-Com

mer

ce O

ppor

tuni

ty” b

y D

ebor

ah M

atth

ews

Phi

llips

, AA

P; J

HA

Mob

ile P

aym

ents

For

um; J

anua

ry 1

1, 2

013

Source: Study: Customers want their banks to offer e-wallets Mobile Payments Today

The future of payments is more about data than

payments…

Payments Data = New Revenue

SO

UR

CE

: McK

inse

y P

aym

ents

Pra

ctic

e

What does that future look like?

Beware what happens to your

data.

Google Wallet: Merchant of Record SOURCE: Citi GPS: Global Perspectives & Solutions; “UPWARDLY MOBILE II A

Long and Winding Roadfor Mobile Payments – Eight Crucial Questions,

Answered”; November 2012

PayPal: Merchant of Record

SOURCE: Citi GPS: Global Perspectives & Solutions; “UPWARDLY MOBILE II A

Long and Winding Roadfor Mobile Payments – Eight Crucial Questions,

Answered”; November 2012

Your data uniquely enables you to provide value with

integrity…

…integrity

wins the race…

Who Wins the Mobile/Data Wars?

• Google? – “Here’s a business who sells what you’re looking for.”

• Amazon? – “Buy whatever you’re looking for from us.”

• Merchants? – “Buy, Buy, Buy!!!”

• Credit Unions? – “We’ll help you decide whether, when, and where it

makes sense to buy the stuff you want…in real time.”

Lee Wetherington, AAP lwetherington@profitstars.com http://discover.profitstars.com/leewetherington

http://twitter.com/leewetherington

http://www.linkedin.com/in/leewetherington