1. Philip Yen
Group Head, Emerging Payments
Asia Pacific, Middle East & Africa
A World Beyond Plastic:
Mobile Payments
August 8, 2012
©2011 MasterCard. Proprietary.

2. Agenda
• Types of Mobile Payments
• Developed Markets
• Developing Markets
• Mobile as Point of Sale Device
• Observations
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3. Digitization of Money and Payments
Payments via mobile is occurring worldwide along several axes
Consumer Merchant
Carded
Smart phone Mobile at POS
Mobile NFC + Remote + P2P Card Acceptance
Non Carded
Mobile Money Mobile Money
Make SMS Text Payments Accept SMS Text Payments
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4. Smart Phone Growth
Smart phones are now mainstream and have laid the foundation for e-commerce
Numerous e-commerce and banking
Dramatic growth over the past four years services are already available to consumers
■ E-commerce on mobile
■ iPhone released June 2007
Internet device
■ 85 mil smart phones sold
■ Mobile banking
across Asia Pacific in 2011
AP smart phone sales expected to increase to ■ First level of interaction
with physical stores
165 mil units per year by 2015
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5. Mobile Commerce is Developing Rapidly...
2014 Market Growth = $375bn*
(2014 Actual = $664bn)
Money Transfer Mobile NFC and Proximity Payment
KEY DRIVERS TO SUCCESS: $42bn KEY DRIVERS TO SUCCESS:
1. Secure, simple and convenient (2014 = ~ $60bn 1. Secure, simple and convenient
$48bn)
2. Easy way for cash-in/out for (2014 = $60bn) 2. Merchant and consumer adoption
3. Regulatory challenges and hurdles 3. Handsets with appropriate hardware
4. Support for multiple handsets 4. VAS e.g. personalised and real-time offers
5. Multi-currency ~ $153bn 5. Working ecosystem between all partners
$120bn
(2014 = $408bn)
(2014 = $148bn)
Commerce – Physical Goods Commerce – Digital and Virtual Goods
KEY DRIVERS TO SUCCESS: KEY DRIVERS TO SUCCESS:
1. Multi-channel platform (e- and m-)
2. One-Click Payment Mandatory 1. Simple and quick experience for consumer - one click
3. Multiple settlement options - card, PayPal account, bank or 2. MNO take 25-35% margin - needs to trend down
mobile operator bill 3. Settled against mobile bill, paypal or handset app stores
4. Use phone details as authentication (i.e. Number)
(* Forecast volumes provided by Juniper Research a business intelligence analysis group focussed upon the communication sector)
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6. Mobile Commerce is Developing Rapidly...
Consumers spend is expanding across multiple channels. It is critical to
support all access points to facilitate e-commerce
PC Web: Mobile (Web & App): Mobile NFC at POS:
Expecting continued growth Expecting strong growth Expecting explosive growth
($B GDV) ($B GDV) ($B GDV)
2,000 2000 2000
+9% 1678
1566 1600 1600
1500 1442
1310
1178
1200 1200
1000
800 800 707
+269%
500
400 +58% 266
400 283
171
72 110
43 15 52
2
0 0 0
2012E 2013E 2014E 2015E 2016E 2012E 2013E 2014E 2015E 2016E 2012E 2013E 2014E 2015E 2016E
Source: Glenbrook, internal data/financials, Gartner April 2010, IEMR, Euromonitor, analyst reports, BCG analysis
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7. The future for mobile payments in developed
markets is…
Flexible consumer app which allows consumer to:
■ High value tap and pay
– Authenticated against Secure Element
NFC@ POS
■ 1-click internet purchase from the phone
– No re-entry of card or shipping details
– Using the phone for ‘easy/strong’ authentication
Mobile Browser
Payments
■ 1-click internet purchase on the desktop
– No re-entry of card or shipping details
– Using the phone for ‘easy/strong’ authentication
Desktop Internet
Payments
Multiple Payment Channels – One User Experience
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8. With over 30 global deployments and partnerships, we have
commitment and expertise in mobile space
iZettle Mobile POS commercial
Deutsche Telekom, MasterCard
launch in Sweden in Nov 2011
partnership on secure mobile
payments
Barclaycard, EE and MasterCard T-Mobile, Telenor, FHB Bank and
launch the first Commercial mobile MasterCard launch MasterCard
NFC deployment in the UK Mobile in Hungary
Google, Citi and MasterCard
introduce the Google Wallet
Turkcell and MasterCard launch Cep-T Smart and MasterCard introduce Mobile
Cϋzdan mobile wallet service open to Payments Gateway, an m-wallet platform
banks in Turkey linking MasterCard cards
Telefónica and MasterCard form JV to
provide mobile payment solutions to Airtel, Standard Chartered, and MasterCard Commonwealth Bank of Australia
unbanked consumers in Latin America launch first virtual payment card on and MasterCard launch NFC
mobile money in Africa payments using iPhone sleeves
in Australia
MasterCard and StarHub teamed
up to introduce wallet with credit
card, prepaid, transit, and coupons
in Singapore
Proven
Experience and ©2011 MasterCard.
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9. The Not-too-Future Consumer Experience
Orders and pays for Shares Starbucks Sends funds to Pays for lunch by
coffee online and offer through son’s prepaid card tapping Smartphone
picks up in-store Facebook via Smartphone at MPOS device
7:45am 8:15am 11:00am 12:45pm
A day in the life of MayLei, a consumer in Taipei…
8:35pm 6:30pm 5:50pm 5:45pm 2:15pm
Buys movie on Checks into Carrefour Receives offer Buys online for out Buys while
smart TV using on Foursquare and through of stock item at browsing
PayPass wallet tap phone to pay Smartphone Sogo eMegazine
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10. Wallet value proposition
for consumers for merchants
A better shopping experience Simpler, Safer, Smarter Smart for my business
• Fast, 1 or 2 clicks • Higher conversion rates
• Safe • Consumer friendly
• My funding choice • Positive ROI
Did you know? for partners Did you know?
• 23% of customers abandon • 62% of shoppers abandon
when asked to register a site with a bad mobile
• 45% of repeat customers experience and later
registered multiple times at • Deepen consumer relationships return using a computer
the same site • Conversion rates in the
• 51% were seriously • Lower development & maintenance UK have fallen by 55%
concerned about the security costs over the past five years
of online shopping and online
banking • Better authentication & fraud tools
©2011 MasterCard.
©2012 MasterCard December 7, 2011
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11. PayPass Wallet Video
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12. MasterCard PayPass Online / Wallet Services
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13. Mobile Money represents a sizable opportunity,
but the market is still in its infancy
Significant opportunity …demonstrated by …but the rate of
exists for financial success in a few consumer adoption is
inclusion via mobile… countries… still slow
Global Mobile Money GDV
($ Billions)
72%
CAGR
Kenya
13.5 Million Users
Philippines
8.5 Million Users
45% of Market
2. 1 Billion Unbanked + 130 Programs + ~50 Million ~210 Million Mobile Money
Underserved consumers Mobile Money Users in 2011 Users by 20171
1 2011 Strategy assumed that 800 MMMADVANCING be gained by 2016
Users would COMMERCE ©2011 MasterCard.
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14. MasterCard working with banks and MNOs on
two types of solutions
Connect to Companion prepaid card
Card
1
Interoperability + Money in / out services
Mobile
Ecosystem Salaries Mobile Only
2 International
Remittances
Merchant
Bill Pay
Government
Benefits MNO MNO
#2
P2P
#1
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15. Mobile as Point of Sale Example
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16. Mobile at POS meets the needs of micro-merchants
and traditional merchants
Retail
Past + Present Retail Future
‘Merchant – Centric’ ‘Consumer – Centric’
Pull Consumer to POS Push POS to Consumer Why are merchants interested ?
Micro Merchants
• Convenient way to accept cards
Traditional Retail
• Provide new experience:
catalog, inventory, order, pay
• Pay online in physical store
Winning Mobile
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17. Observations
■ Significant investments in mobile payments will continue
■ There is still a lot of “test and learn”
■ In developed markets, building a NFC contactless
acceptance infrastructure will take time
■ Basic requirements for consumers must be satisfied: safe,
convenient
■ Additional value proposition will accelerate change in
consumer behavior
©2011 MasterCard.
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18. Thank You
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