IBM mobile payments and online banking. Integration with smarter commerce. Presentation at CFIR/NETS mobile payment lab @ NETS Denmark.

1. mCommerce @ IBM – Converging
mbanking, mpayments, retail and
value chain visibility
+ =
© 2012 IBM Corporation

2. Let’s build a smarter planet
Mobility is here and making a difference
– 8x Faster Adoption than internet
and if tablets included, even faster Morgan Stanley
Adoption of The year mobile platforms surpassed
mobile banking
will reach 50% • 2011 traditional platforms IDC …Which happened 4 years
earlier than predicted in 2009
in 2016
eBay expectation to be transacted
• 2 Billion via mobile — up from $400 million in 2009.
Forrester
Smart Phone Users
50% + • 48% <30 yrs
Are SmartPhones today
— GMUs outpacing 1st world countries
• 39% 30-49 yrs
2 © 2009 IBM Corporation
2012

3. Let’s build a smarter planet
The transaction value in Mobile Payments globally is $86B growing to $426B by 2015.
2011 Global Mobile Payment Users are 141M 2011 Global Mobile Payment Transaction 2011 Global Mobile Payment Transaction
Growing to 349M in 2015 (CAGR 35%) Volume is growing at CAGR 47% Value is growing at CAGR 49%
The image cannot be displayed. Your computer may not have enough memory to open the image, or the image may
have been corrupted. Restart your computer, and then open the file again. If the red x still appears, you may have to
delete the image and then insert it again. Mobile Payment Transaction Volume
Mobile Payment Transaction Value
16,000
$450,000
14,000 $426B
$400,000
12,000
The image $350,000
cannot be
2010: 185M
10,000 $300,000
Millions of Dollars
Millions $250,000
8,000
$200,000
6,000
$86B
$150,000
4,000
$100,000
2,000
$50,000
0
$0
2008 2009 2010 2011 2012 2013 2014 2015
2008 2009 2010 2011 2012 2013 2014 2015
Mobile Payment Users by Region Mobile Payment Transaction Value by Region
2015 Mobile Payment Transaction Volume by
Technology 2015 2015
Latin Asia Pacific Latin
Western SMS dominates, at
America, dominates, NFC, America, Western
GMU Markets
4.8% Europe, 53% of volume. 1.8% Europe,
representing 15.2% dominate at
EMEA ,
21.2% NFC is only 15% 22.9%
36% of Global USSD, EMEA, 62% of Value.
23.2%
users 5.4% 32.7%
North SMS,
America, 53.4% North
14.4% America,
WAP/Web
14.7%
, 25.9%
Asia/Pacifi Asia/Pacifi
c, 36.6% c, 27.9%
The image
cannot be Source: CGAP: “The State of the Branchless Banking Sector” May 2011
3 Source: Gartner “Forecast: Mobile Payments, Worldwide, 2008-2015”; Pub May 2011 displayed. Your
© 2009 IBM Corporation
2012
Note: EMEA does not include Western Europe

4. Let’s build a smarter planet
Mobile banking usage characteristics
2. Mobile bankers are
balance checkers
1. Mobile bankers are mainstream consumers
Many of customers check
Unlike online banking, mobile banking won’t need their card balance using a
10 to 15 years to scale to mass‐market adoption. mobile device before a
transaction, after a
transaction, and even
during a transaction.
IBM Point-of-View
Mobile is the ultimate multi-channel device
supporting anytime and anywhere self- 3. Mobile bankers are electronic coupon-clippers
service, alert, speech and offline with The shift in coupon use from paper to electronic among
extreme personalization. mobile bankers emphasizes the need for banks to be able to
reach customers and prospects on their mobile devices.
4 Source: Aite Group, The Impact of Mobile Banking: A Case for Mobile Marketing, April 2011 © 2009 IBM Corporation
2012

5. Let’s build a smarter planet
Functionality unique to mobile banking on smartphones
Integration with Social
Checkbook
Location-Based Services
Bill Reminder Expense Tracker
Multiple Ways
To Contact Bank
(Call-out, call-back,
social, etc)
5 Source: Bank Systems and Technology, Apr 2011 © 2009 IBM Corporation
2012

6. Let’s build a smarter planet
Functionality unique to mobile banking on smartphones
Chase’s P2P “QuickPay” Chase’s RDC
Developed in-house “QuickDeposit”
Vendor: Mitek Systems
Early adopters of RDC report very high customer satisfaction, positive ROI and negligible fraud.
Mobile RDC works best for banks with large % of customers living outside of its branch network.
- Tower Group, Setting US Mobile Banking Priorities for 2011: Opportunities Attainable in the Short Term, Nov 2010
6 © 2009 IBM Corporation
2012

7. Let’s build a smarter planet
Functionality as rich as those on internet banking
Cards &
Reward Investing
Program
Market
Info
Corp Banking Handy Tools
7 Source: Bank Systems and Technology, Apr 2011 © 2009 IBM Corporation
2012

8. Let’s build a smarter planet
Functionality unique to mobile banking on smartphones:
Mobile + Social + P2P Payment
IBM Point-of-View
Banks need to have a
business model that takes
advantage of the fact that a
smartphone may be the only
thing many people keep
within arm’s reach all day.
For example, expense
tracking combined with
mobile payment and bill-pay
is a very “sticky” feature.
Commonwealth Bank of Australia allows users to pay Facebook friends
8 © 2009 IBM Corporation
2012

9. Let’s build a smarter planet
Mobile wallets will change the way we conduct
our daily routines Pay in shops
Get electronic receipts
Register purchases on loyalty program
Use a coupon
Use a Gift card
Present receipt at store and get refund
Pay parking ticket
Smart
Cash Ticketing Use Public transportation – smart ticketing
(Replacement)
Gift Pay online
Cards
Person to Person transfer
Get electronic receipts
Loyalty Register purchases on loyalty program
Programs Receipts
Use use coupon
Buy Gift card
ID Cards
Wallet Use Gift card
Pay congestion charges
Payment
Cards
Scan coupon
Use a coupon
Receive Gift card
Use Gift card
Check in at airport
9 © 2009 IBM Corporation
2012

10. Let’s build a smarter planet
IBM’s mCommerce Appliance Solution Only Industry
Appliance that Provides an End-to-End mobile
experience for bankers, retailers and consumers
10 © 2009 IBM Corporation
2012

11. Let’s build a smarter planet
IBM Smart Commerce for the retailer: Get the information you need when you
need it to help your customer make better decisions and drive more revenue
via efficient data mining – and gaining last mile supply chain visibility.
1 2 3 4 5 6
Customer Customer Relevancy Customer
Customer
Current Context Segmentation Engine Branded
Identification
Identification Guided Selling Collaboration Experiences*
Where else do your
customers shop Opt-in mobile How often do Opt-in mobile
when they presence your customers How much presence
shop at your store do your customers What is your
leave your store?
versus competitors spend at your customer’s
competitors? attitude towards
their spend?
Lots of products
and lots of
customers with “Who” “Who + What” “You + Why” “You + Now” “Right Now”
no real
understanding of Guided sale
who is interested
in what Flash sale Collaboration
Who are you +
Who are you – Who you are +
where are you right now, What are you doing
what do you buy, what are you in the Others like you +
who are you with, right now
how do you buy, process of doing, what can we do together
what do you want to do, what could and
what have you and what can we do right now.
what is going on should happen next.
bought before? to support that?
around you?
End consumer traceability ‘Intent – to – buy’ demand signals
11 *Dynamic temporal customer experiences based on the customer – the shopping experience – the business intent in a moment of time © 2009 IBM Corporation
2012

12. Let’s build a smarter planet
IBM Mobile Shopper: Mobile Screen Layout
• Running Totals
• Running Savings (Note, does NOT include
savings after totals (i.e. Zavers), only shows if
non-zero
• Retailer logo
• “Rolling” Advertisements paid from Vendor
to Retailer. (When touched, expands to
show details of what is scrolling)
• Customer Instructions
• Item Description
• Net Item Price
• Item UPC (or
PLU) • Total Coupon Savings for item
• Item Offers
Button (i.e. • Enable keypad for item entry
upsell, cross sell,
etc. – only • Enable Scanner for item entry
displays when • More Button (Includes buttons for):
offer is available) • Removing an item
• Help
• Cancel Transaction
• Shows list of • “Transaction” Alert • Settings
items entered Indicator • Price Check an item • Etc.
12 © 2009 IBM Corporation
2012

13. IBM Mobile Shopper as an extension to self-service
scales and Point-of-Sales solutions
© 2012 IBM Corporation

14. Let’s build a smarter planet
Security concerns is one of the barriers to adoption of
mPayments
Source: SAP AG, IDC, Forrester, Gartner, Symantec, Research
& Markets
14 © 2009 IBM Corporation
2012

15. Let’s build a smarter planet
Mobile banking is much more than just the app
IBM Point-of-View
Mobile banking is much more
than just apps. IBM has
tremendous capabilities to
help banks and retailers
succeed.
Security
Strategy Ensuring that distributed data
Business model for advanced and access into the enterprise
features such as mobile wallet, NFC from applications is controlled
and P2P payments and cross and secure
industry convergence
Scalability
Delivering the ability to scale with
Manageability unpredictable demand while
Providing customers with the ability to maintaining quality of service and
control who has access to specific experience
applications and updates
Connectivity
Analytics Simplifying the process of
Enabling customers with insight connecting mobile applications to
into who is using their diverse back-end systems and
applications, when they are using enabling two-way communications
them, and how (SMS, web sockets, notifications)
15 © 2009 IBM Corporation
2012

16. Let’s build a smarter planet
Our global payment practice is the largest in the world
ü Global Card and Payment Team – unique insight &
latest industry thinking
§ 400 people in 21 countries representing consulting, Americas and Global Europe
research, security, products, sales
§ Issuer & acquirer clients in over twenty countries
including, Australia, Austria, Brazil, Canada, the
Caribbean, China, Denmark, Germany, Greece, Hong
Kong, Italy, Japan, Korea, Mexico, the Netherlands,
Singapore, Sweden, Thailand, UK, and the US
ü Consulting Offerings - unparalleled depth in
consulting, system design, build & package
integration
§ Vast majority of US card core system rationalization,
feasibility & decommissioning strategies
§ Design & architecture of world’s largest & most highly- Asia
available networks: MasterCard, Visa, American
Express, Discover & China Union Pay
ü Project management, infrastructure & hosting --
world-class competency with large, complex
projects
§ Largest outsourcing service provider in the world
§ 90% of top US issuers rely on IBM infrastructure
ü Conversion Centre of Competency Our client list includes every international card and payment
§ Well-defined, rapid data migration methodology association in the world, 8 of the top 10 issuers, 2 of the top
§ 156 successful, references conversions world-wide 3 processors and 3 of the top 5 acquirers in the US
16 © 2009 IBM Corporation
2012