The Global Rise of Smartphonatics

The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adoption in the Americas, EMEA and Asia-Pacific

Confidential

Michael Grillo Ron Shevlin ACI Worldwide Aite Group Senior Product Marketing Manager Research Analyst USA USA

Agenda

Research Approach The Global Rise of Smartphonatics – Americas About ACI Worldwide Questions & Answers

20 June, 2012 Confidential 2

Research Approach


About Today’s Speaker

Ron Shevlin, Senior Analyst, Aite Group [email protected] 1.617.338.6045 Specializing in • Retail banking • Customer and marketing analytics • Loyalty management • P2P lending • Personal financial management • Social computing • Online banking • Customer experience and consumer behavior

Aite Group (eye-tay) is an independent research and advisory firm focused on business, technology and regulatory issues and their impact on the financial services industry.


The Global Rise of the Smartphonatics: Americas


© Copyright 2012, Aite Group, LLC www.aitegroup.com 6

Mobile payment adoption

Source: ACI Worldwide study of 4,200 consumers in 14 countries, Q1 2012

13% 15%

21% 21% 23%

28% 30% 30%

35% 37%

45% 45%

48% 64%

66%

France Canada

Germany Australia

U.K. Italy

Sweden U.S.

AVERAGE Brazil

Singapore U.A.E.

South Africa India

China

Percentage of Consumers That Used Mobile Phone to Make a Payment in the Last Six Months


Mobile payment importance


7% 9%

12% 16%

18% 21% 23%

28% 28%

39% 39%

42% 51%

65%

Canada France

Germany Sweden

U.K. Australia

U.S. Italy

Singapore China Brazil U.A.E.

South Africa India

Percentage of Consumers That Consider Mobile Payments "Very Important" To Them


Mobile wallet interest


27% 35% 36% 38% 41% 41%

44% 67% 67%

71% 72%

75% 76%

81%

Canada Australia Sweden

U.K. Germany

U.S. France U.A.E.

Singapore South Africa

Italy Brazil China India

Percentage of Consumers That Would Use Their Mobile Phone Instead of Carrying Payment Cards


Global Smartphonatics

No Yes

Very important 4%

24%

Somewhat to not important

41% 31%


Mobile payment

importance

Smartphonatics



Smartphonatics by country


Are you a Smartphonatic?


Polling Question: Do you consider yourself a Smartphonatic?


@jane r u going to drink your OJ?

@jane r u going to drink your OJ?


Theme

Smartphonatics will lead the demand for mobile payments and commerce

in every country


Agenda

•  Who are the Smartphonatics? •  What differentiates the Smartphonatics? •  What does the rise of Smartphonatics mean

to banks and retailers?


Smartphonatics in the U.S.

No Yes

Very important 3%

20%


56% 21%


Mobile payment

importance

Smartphonatics



Smartphonatics in Brazil

No Yes

Very important 10%

37%


15% 38%


Mobile payment

importance

Smartphonatics



Smartphonatics in Canada

No Yes

Very important 12%

7%


61% 21%


Mobile payment

importance

Smartphonatics



Smartphonatics generational split


Percentage of Each Generation that are Smartphonatics

44%

46%

28%

13%

Gen Y

Gen X

Boomer

Senior

6%

12%

3%

5%

Gen Y

Gen X

Boomer

Senior

41%

21%

11%

6%

Gen Y

Gen X

Boomer

Senior

United States Canada Brazil


Mobile payment and banking adoption


81% 84%

17% 27%

Has used mobile phone to make a payment in the last six months

Has used mobile phone for banking in the last six months

(Country: United States)

Smartphonatics Other consumers




(Country: Brazil)

64% 73%

21% 32%







(Country: Canada)

58%

76%

12% 14%





Smartphonatics (smart-fa-NAT-ics)

•  How they pay


Use of cash


65%

13% 23%

46%

33% 21%

Less Same More

Q. How does your current use of cash compare to the amount of cash you used three years ago?




Mobile payment preferences


13% 12% 9%

0% 0.5% 0.5%

Low - value goods (e.g., coffee, snacks)

Higher - value goods Person - to - person payments

Percentage of Consumers Who Prefer to Use Their Mobile Device to Make the Following Types of Payments






11%

6% 9%

2% 1%

2%




(Country: Brazil)





10%

2% 1% 0%




(Country: Canada)


26%

13%


Change in payment preferences

Q. Which payment method did you (do you) prefer when buying low value goods? (Country: United States)

3 yrs ago Today Cash 39% 29% Debit card 34% 40% Credit card 16% 16% Check 5% 2% Mobile phone 4% 13% Prepaid card 2% 0%

3 yrs ago Today 61% 55% 21% 25% 15% 17% 2% 1% 0% 0% 1% 0%





Q. Which payment method did you (do you) prefer when buying low value goods? (Country: Brazil)


3 yrs ago Today 64% 58% 17% 29% 10% 11% 0% 0% 7% 2% 1% 1%





Q. Which payment method did you (do you) prefer when buying low value goods? (Country: Canada)


3 yrs ago Today 71% 67% 16% 17% 11% 12% 0% 0% 0% 2% 2% 1%





•  How they pay •  Mobile shopping preferences


Mobile researching capabilities


9%

10%

8%

17%

36%

40%

42%

46%

Research products online while in a store in order to purchase from a different merchant

Research products online while in a store in order to purchase in the store

Research products online while in a store in order to purchase online

Research products online from home or work

Percentage of Consumers That Consider The Ability to do The Following With a Mobile Device to be "Very Important"

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


Mobile shopping capabilities

28%

45%

57%

66%

68%

65%

61%

67%

60%

72%

82%

87%

89%

89%

89%

92%

Can connect to social networks

Is offered by my primary bank

Shows me product reviews

Is offered by a company I know and trust

Finds the lowest price for product(s) I want

Is offered by stores I most like to shop at

Provides relevant offers

Provides very deep discounts

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




Smartphonatics want offers from banks


27% 36%

11%

34%

Other consumers Smartphonatics

Percentage of Consumers Interested in Receiving Daily Deal Offers From Their Primary Bank

Very interested

Somewhat interested

38%

70%


Smartphonatics are daily deal buyers

3.3

$108

9.3

$203

Number of deals purchased Total dollar amount of deals purchased

2011 Daily Deal Activity





•  How they pay •  Mobile shopping preferences •  Loyalty program impact


Loyalty program participation


23% 31%

47%

27%

11%

26%

U.S. Brazil Canada


Percentage of Consumers Who Belong to Four or More Retailer Loyalty Programs


Smartphonatics on loyalty programs

50% 40%

22% 21%

"I always try to choose retailers where I am a member of

the loyalty program"

"Most or all of the loyalty programs I belong to deliver benefits that

are very important for me"

Percentage of Consumers Who Agree With the Following Statements About Loyalty Programs






62%

38%

34% 27%






(Country: Brazil)





56%

45%

19% 24%






(Country: Canada)




Banks Smartphonatics


Smartphonatic loyalty to banks


9% 14% 14%

26%

Grew relationship with primary bank

Switched primary bank or decreased relationship with

existing bank

2011 Bank Relationship Activity



Theme

Smartphonatics will lead the demand for mobile payments and commerce

in every country


What it means

•  Smartphonatics % represents a country’s evolution towards mobile payments/commerce

•  Smartphonatics are the early adopters – and demand drivers – for integrated mobile banking/commerce/payment


The integrated mobile experience

What can I buy?

How can I pay for it?

What should I buy?


What it means

•  Smartphonatics % represents a country’s evolution towards mobile payments/commerce

•  Smartphonatics represent the early adopters – and drivers of demand – for integrated mobile banking/commerce/payment

•  Smartphonatics will drive more integration and collaboration between financial institutions and retailers/merchants

Questions


More Information

For information on

ACI’s mobile solutions or to download a copy of the Smartphonatics report, visit

www.aciworldwide.com/mobile

Thank you!

20 June, 2012 49 Confidential

The Global Rise of Smartphonatics

Business

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