Finpro advisors present a growing business opportunity regarding mobile payment solutions in the United States.

1. Mobile Payments in the United States
Perry Le Dain
Neera Jokitalo
15.04.2016

2. Market Demand & Drivers
• Anywhere-anytime banking is becoming more and more common and expected by consumers. Consumer
awareness of mobile banking and payment options is increasing.
• Business Insider forecasts that by 2019 mobile payment volume will reach 808 billion USD
• The number of people who make mobile payments at least once a year is projected to grow from 8% in 2014 to
65 % in 2019
• Major players at the moment are Apple Pay, Google Wallet, CurrentC, Samsung Pay. A continuously increasing
amount of these providers will drive mobile payment adoption in consumers
• The widespread proliferation of smartphones and tablet PC’s is further driving the adoption of mobile payment
solutions
• There are numerous regulatory influences in the United States under way in order to make the transition to
mobile banking and payments easier. These are being driven by the realization that cashless transactions will
help boost tax receipts, as well as improve transparency in the financial system and reduce costs associated
with transactions
• Disruption of banking and new technologies provide many opportunities to the companies working in
cybersecurity & data protection, analytics, and mobile payments
• Retailers are also realizing that mobile payment solutions have the potential to increase their revenues, reduce
operating costs, and improve customer satisfaction
• The widespread propogation of 4G/LTE networks will further drive the adoption of mobile payment solutions
by both retailers and consumers
• The time window to act on the opportunity is NOW!
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3. Opportunities in the USA
• Payments infrastructure is still antiquated (about 50% of B2B payments are done with checks). Finnish Fintech
expertise can help transform the payments infrastructure in the United States.
• Due to the fragmented banking and crediting industry in the United States (>6500 banks, >6500 credit unions),
integrating new payment technologies can be challenging. Finnish know-how can offer a solution to this
problem.
• The market entry process takes time and is different to Europe. The companies need to invest time to study the
market and opportunities closely.
• The Association of Financing Professionals is an important organization to follow http://www.afponline.org/.
Other industry alliances and industry collaborations are being formed continuously: Smart Card Alliance
Payments Council, Merchant Customer Exchange, Electronics Transactions Association, NFC Forum, Mobey
Forum, GSMA, Global Platform, and ITU.
• The Federal Reserve is developing a plan entitled "Strategies for Improving the U.S. Payment System," which
presents a multi-faceted plan for collaborating with payment system stakeholders, including large and small
businesses, emerging payments firms, card networks, payment processors, consumers and financial institutions
to enhance the speed, safety and efficiency of the U.S. payment system.
(http://www.federalreserve.gov/newsevents/press/other/20150126a.htm)
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4. Opportunities in Mobile Payments
• No mobile wallet service provider to date has managed to change consumer behavior to the extent that mobile
payments are accepted as a mainstream form of paying. In order for mobile payments to become a part of
every-day life, systems must provide:
– Security
– Privacy
– Conveniance
• Product and service offerings in conveniance:
– Interoperability of multiple payment platforms i.e. Universal Acceptance
– P2P
– Account aggregation and account-to-account interaction
– Data collection and storage of consumption and payment habits
– Mobile ticketing
• Product and service offerings in security and privacy:
– Electronic signatures
– Secure Element Implementation
– Tokenization technologies
– Trusted Execution Environments
– Host Card Emulation
– Biometric authentification, Audio-visual biometrics
– Mobile fraud detection and prevention technologies
– Mobile ID / Bank ID implementation
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5. Why Finland?
Relevancy for Finnish companies
• Finland has a very forward-looking banking industry and extensive ICT know-how in key
market segments, including mobile banking and payments, interoperability platforms, and
fraud detections technologies
• 87% of Finns use online banking services, which are among the most secure in the world, and
Finnish mobile operators have a jointly developed mobile payment service
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Mobile payment solution providers
which combine conveniance and security
Wone – Connects international mobile
payments and wallets using state of the
art smart contracts and block chain
technology
Moni – P2P payments, spending tracking,
invoicing
Pivo – Finnish mobile wallet
PayIQ – Mobile payments and ticket
service
Uniqul – Face recognition payments
Mobiwallet – Frictionless mobile payment
solutions for retail
Security providers for financial
institutions or retailers:
Crosskey Solutions – Internet banking
platform
Jetico – Data protection software
Movial – Secure mobile, embedded, and
cloud application development
Ariki – Biometric identification systems
for smart access
MePIN – Banking-grade security for
online identities and payments (already
in USA)
Companies with solutions for retailers
adapting to mobile payments
Holvi – Online bank account for SME’s
and organizations (acquired by BBVA)
Riskpointer – Creates mobile payment
applications for retailers, including data
and transaction analysis
Nordledger – Invoicing platform for
retailers/businesses based on block chain
technology
eTasku – Electronic receipts
Frosmo – User interface design
Techila – Middleware

6. Value Chain
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Device
Network
Providers
Traditional
Payment Portals
Mobile Payment
Technologies
Mobile Payment Systems
Card Providers
Financial Institutions
Merchants
Wifi, mobile network, LTE
Retail Point-of-Sale
Smartphone, tablet, watch, etc.
NFC, EMV, QR-codes, Bluetooth Low Energy, HCE,
barcodes, cloud technology
Online banking, Platforms, Mobile wallets, Transit
payments, Retailer loyalty schemes, Apps,
mCommerce
Banks, loyalty cards
Banks, payment processors
Retailers, P2P, B2B

7. Value Network
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Value-
added
features
mDevice
manufactur
ers
Wireless
network
and telco
providers
Traditional
payment
systems
mPayment
service
providers
Financial
institutions
Traditional
card
payment
networks
 Apple
 Samsung
 Microsoft
 Huawei
 Xiaomi
 Lenovo
 Verizon
 At&t
 T-Mobile
 US Cellular
 Sprint
 Verifone
 Single-point
 POS-
terminals
 Single-
swipe
devices
Found on
slide 9
 Citibank
 Barclays
 Usbank
 Wells Fargo
 Capitol One
 PNC
 HSBC
 American
Express
 Bank of
America
 JPMorgan
Chase
 Visa
 Mastercard
 American
Express
 Discover
 Maestro
 Unionpay
 Interlink
 Star
 Shazam
 Data
Security
 Transaction
Tracking
 Customer
Loyalty
features
 Online
Invoicing
Ret-
ailer
b2b
p2p
End
User
Payment Processors
Independent sales organizations
and merchant service providers

8. Competitors
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App
Developers
for Retailers
LevelUp
Ingenico Group
Carta Worldwide
BlueRocket
WalmartLabs
Mobile P2P
Venmo
TransferWise
SquareCash
Facebook
Google
SamsungPay
ApplePay
AndroidPay
WalmartPay
NFC Mobile
Payments
Mobile
Terminals
Square
UniPay Gateway
MistralMobile
PayPal
OpenTable
BBVA
Cortex MCP
Poynt
Security
Service
Providers
Cybera
Veridu
FIS
Bell ID
Gemalto
Device Authority
Jumio
InAuth
WiseSec
ValidSoft
Payfone

9. Alliances and Industry Cooperation
• Smart Card Alliance Payments Council:
– Focuses on facilitating the adoption of chip-enabled payments and payment applications in the U.S.
through education programs for consumers, merchants, issuers, acquirers/processors, government
regulators, mobile telecommunications providers and payments service providers. The group is
bringing together payments industry stakeholders, including payments industry leaders, merchants
and suppliers, and is working on projects related to implementing EMV, contactless payments, NFC-
enabled payments and applications, mobile payments, and chip-enabled eCommerce
• Merchant Customer Exchange (CurrentC)
– A retailer-led initiative, including major retailers such as Walmart, Target, 7Eleven, Best Buy, CVS,
Darden Restaurants, Hy-Vee,Shell, Sunoco and HMSHost, Alon Brands, Hy-Vee Inc, Lowe's Cos Inc,
Publix Super Markets Inc, Sears Holdings Corp, Shell Oil Products US, Sunoco Inc.
• Electronic Transactions Association
– A Mobile Payments Committee (ISIS) including industry player such as AT&T, Verizon Wireless, Sprint
and T-Mobile USA, but also Google, Isis, VeriFone and PayPal, in addition to financial institutions
Wells Fargo and Capital One plus credit card giants American Express, Discover, MasterCard and Visa.
http://www.electran.org/about/2013-committees/#mp
• Mobey Forum
• NFC Forum
• GSMA
• GlobalPlatform
• ITU
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10. • Challenges & Barriers:
– Implementation is expensive in the finance industry, which will be a challenge for mobile payment
service providers. For example, NFC systems implementation is expensive for retailers, causing many
of them to not embrace mobile payments at all
– Major banking groups have complex legacy systems and are governed by strict legislative and
political policies, which may hinder mobile payment adoption services that are connected to banks
and financial institutions
– A change in consumer behaviour is required, which can be a slow and challenging process
– Regulation is very fragmented at the moment and will be a challenge until a nationwide consistent
regulatory environment exists
• Enablers:
– A rapidly growing market, plenty of room for new innovations
– Various market segments = many opportunities
– The convergance of remote and proximity mobile payments
– There is constant effort to change the regulatory framework
– Cryptocurrencies will offer new and unforeseen opportunities
– Fewer bricks and mortar retail banks will drive a need for mCommerce
– Higher retail bank competition will drive advanced customer care and customer experience solutions
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Potential for Finnish Offering
- Market entry barriers, challenges and enablers

11. Key Messages of Opportunity
• The market demand for mobile payment solutions is high in the United States, and expected to
keep increasing. The key drivers influencing the increase in demand are: an increasing consumer
awareness, propogation of 4G/LTE networks, regulatory influences, smartphone proliferation, and
the clear benefits to banks, retailers, and consumers
• The opportunity lies in security, privacy, and conveniance. Mobile payments which provide all
three of these features will be winners in the sector: Finland can provide this!
• Banking and mobile payments markets are both quite fragmented in the United States, providing
numerous pathways for market entry. The mobile payments market is still developing, therefore
the time to act is now.
• Finland already has mobile payment expertise: Mobile payments are quite standard in Finland
and we have a high user rate of mobile banking. Finnish companies have proof-of-concept
advantage over their competition. The finnish ICT sector combined with the start-up boom has
launched us to the forefront of mobile payment and fintech solutions development
5/16/2016 © Finpro11

12. Prospect List – Finnish Companies
• Wone – Connects international mobile payments and wallets using state of the art smart contracts and block chain
technology
• Moni – P2P payments, spending tracking, invoicing
• Pivo – Finnish mobile wallet
• PayIQ – Mobile payments and ticket service
• Uniqul – Face recognition payments
• Mobiwallet – Frictionless mobile payment solutions for retail
• Crosskey Solutions – Internet banking platform
• Jetico – Data protection software
• Movial – Secure mobile, embedded and cloud application development
• Ariki – Biometric ID systems for smart access
• MePIN – Banking grade security for online identities and payments (already in USA)
• Holvi – Online bank account for SME’s and organizations (acquired by BBVA)
• Riskpointer – Creates mobile payment applications for retailers, including data and transaction analysis
• Nordledger – Invoicing platform for retailers/businesses based on block chain technology
• eTasku – Electronic receipts
• Frosmo – User interface design
• Techila – Middleware
5/16/2016 © Finpro12

13. Activity Plan - Team Finland
• Supporting activities:
– A Fintech Seminar was held in Helsinki on January 26, 2016 by Perry Le Dain and Hartti
Suomela, with a focus on opportunities for Finnish companies in the Fintech sector across
various markets
• Roadmap and suggested activities:
– Continue research and determine the current mobile payments environment and more in-
depth evaluation of the value network in the USA
– Activate finnish companies and provide training for entering into the US market
– Determine capabilities of companies for entering the market
– Engage in networking activities
• Attend trade fairs and events (Mobile Payments Conference, Interactive Customer
Experience Summit, eCommerce Show USA, Mobile Payments Innovation Summit, Bank
Customer Experience Summit)
• Become members of key alliances and associations
– Define and establish key partnerships with merchants/retailers (Gain merchant support),
and determine B2B opportunities
– Define and establish key partnerships with financial institutions, banks, and card providers
– Work through regulation and legalities and prepare for market entry
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14. 5/16/2016 © Finpro14
Source Date Title Key points Hyperlink
PYMNTS September 28th, 2015 Experts Cast Doubts on Mobile
Payments Security
- New services and
technologies are welcomed in
order to make mobile
payments more secure
http://www.pymnts.com/in-
depth/2015/experts-cast-
doubt-on-mobile-payment-
security/
Fortune October 29th, 2015 How mobile payments will
grow in 2016
-Value added features are
welcomed, as well as
customer loyalty plans and
coupon systems
-Adding value before, during,
and after transactions opens
a market opportunity
http://fortune.com/2015/10/
29/mobile-payments-grow-
2016/
Business Wire December 9th, 2015 The European Union Helps
Merchants and Consumers
by Reforming Its Credit-Card
Market While the U.S. Lags
- Why policies are projected
to change in the USA
- Further supports the growth
of mobile payments to
reduce ’’swipe costs’’ for
merchants
http://www.businesswire.co
m/news/home/20151209005
330/en/European-Union-
Helps-Merchants-Consumers-
by%C2%A0Reforming-Credit-
Card
Supportive Articles

15. Thank You!