Please find here the presentation I've realised for VISA EUROPE for my 2d interview of the hiring process :
Initial subject : What position would you recommend to allow Visa to maintain its leadership in payment e.commerce?
Context : 7 days to realize it with my current job
Visa's conclusion of my presentation :
- Presentation was not enough VISA centric (sorry that eCommerce is not focus on Visa)
- I was supposed to explain more the V.me solution which is not yet released/official in Europe : V.me = Paypal copycat (this was not the subject !)
Very good exercise, but very disappointed with Visa methodology and behavior.
Anyway, the presentation is not perfect, but I should have charge VISA Europe.
Because, I 'm not a Visa collaborator, I can share this presentation I've realised.
Don't hesitate to contact me if you have any questions.
2. AGENDA
• eCOMMERCE & PAYMENT INTRODUCTION
• VISA: STATE OF THE ART
• eCOMMERCE: SCOPE & STAKES
• ePAYMENT: GROWTH DRIVER & ECOSYSTEM
• VISA CENTRIC: RISK & MITIGATION
• RECOMMENDATION & CONCLUSION
3. INTRODUCTION: eCOMMERCE SCOPE
• e-Commerce’s definition by the US department of Commerce:
" e-commerce is the online transaction of business, featuring linked computer systems of the vendor, host,
and buyer. Electronic transactions involve the transfer of ownership or rights to use a good or service."
• e-Commerce market & evolution:
- Global e-commerce sales are growing at
more than 19% a year
- Worldwide retail web sales will reach
nearly one trillion by 2013
Source : Goldman Sachs, Sales in billion of dollars
4. INTRODUCTION: ePAYMENT SCOPE
• e-Payments are online payments dedicated for eCommerce activities
• e-Payment is divided into two main categories:
- Bank payment
- Alternative payment : 10% in transaction volume of Bank market Share (Capgemini analysis 2011)
• But e-Payment has to be approached ‘locally’ (by country) to understand
specificities:
FINLAND Vs FRANCE
ONLINE PAYMENT REFERENCE
Source : CyberSource Global Payment options 2011
5. AGENDA
• eCOMMERCE & PAYMENT INTRODUCTION
• VISA: STATE OF THE ART
• eCOMMERCE: SCOPE & STAKES
• ePAYMENT: GROWTH DRIVER & ECOSYSTEM
• VISA CENTRIC: RISK & MITIGATION
• RECOMMENDATION & CONCLUSION
6. VISA EUROPE: STATE OF THE ART
LEADER ‘THE’ TRUSTED PAYMENT
INNOVATION SYSTEM
• Everyday €1 of every €5 is • 26 millions of contactless cards • 11.4 Bn processing transactions:
expended on a Visa Card issued issued, cleared & settled
• 100 millions invested in R&D in • 99,999% service quality and
• 438 millions of debit & credit
2011 accelerate the 100% availability
cards in circulation in 2011 for
contribution of electronic
1.14 trillions expended in PoS
payment in Europe
•Target: increase
brand and
• Target: increase eCommerce, Card • Target: develop and simplify :
consumer awareness as the safest
& PoS market share mobile, online & contacless
payment system
payment
7. VISA INNOVATION: ONLINE & MOBILE
• Online: V.me
- Make online payment with VISA expertise with or without a Visa card
- Multi-platform solution: available on computer, mobile and tablet
- Competing now with Paypal (soon in France)
• Contactless:
- Visa payWave is the easiest way to pay for low-value
- Nice city experimentation
- Currently building an ecosystem with local actors of transport, ticketing, etc...
• Mobile & partnership:
- Google Wallet involvement
- Visa Wallet integrated in the V.me solution
- Expansion of V.me to mobile an in-store payment using near field communication
8. VISA’S POSITION IN eCOMMERCE
Consumer workflow: PSP
Client Support Search eMerchant Flow Bank Delivery
Alternative
eWallet
presence:
direct or indirect solutions:
Partnership SMS, alert
Partnership
Olympic games
9. AGENDA
• eCOMMERCE & PAYMENT INTRODUCTION
• VISA: STATE OF THE ART
• eCOMMERCE: SCOPE & STAKES
• ePAYMENT: GROWTH DRIVER & ECOSYSTEM
• VISA CENTRIC: RISK & MITIGATION
• RECOMMENDATION & CONCLUSION
10. eCOMMERCE: FOCUS ON EUROPE MARKET
• 40% of the European population buy on-
line, but already 70% in some countries
(France, Germany,...)
• eCommerce in 2012: 16% growth expected
in Europe, 22% in France
• eCommerce in Europe is worth over €307
billions
Source : Nielsen Online, December 2011
11. eCOMMERCE: EUROPEAN GROWTH
PERSPECTIVES
• eCommerce in Europe currently limited to
3.4% of retail sales
• Only 57% of Europe’s internet users buy on-
line vs 66% in the US and 94% in South
Korea
• Only 14% of European companies sell their
goods or services online
• eCommerce is still a local industry: only 6%
of European businesses sell cross-borders
eCommerce in Europe has still a great potential of growth
Europe is currently the largest eCommerce market in the world
Source : European Commission January 2012
12. eCOMMERCE: SWOT ANALYSIS
• Companies expand their customer base to a global level
• The target consumer has huge possibilities
• Direct consumer communication
• Customer & eCommerce need to trust each other
• Web retailers live and die by organic search engine placement
• The closer consumer is of payment, the acquisition cost increases
• Take orders around the clock on every day
• Retail sales have seen double digit growth each of the past 8 years
• Sell products to a global market
• Hard competition due to a relative easy entry into the market
• Some consumers are leery of doing business online out of concerns of fraud
• Some consumers prefer not to give any personal information
13. AGENDA
• eCOMMERCE & PAYMENT INTRODUCTION
• VISA: STATE OF THE ART
• eCOMMERCE: SCOPE & STAKES
• ePAYMENT: GROWTH DRIVER & ECOSYSTEM
• VISA CENTRIC: RISK & MITIGATION
• RECOMMENDATION & CONCLUSION
14. ePAYMENT: ALTERNATIVE PAYMENT
& LOYALTY PLAN
• The entry of prepaid (non-bank) specialists into the payment ecosystem will improve
and satisfy the overall quality of service for the customer experience
LIMONETIK SOLUTION FOR EMERCHANTS
• Main alternative means of payment are:
- Pre paid & loyalty cards
- eWallet
- P2P transfer
ALTERNATIVE PAYMENT PERSPECTIVES
• Alternative payment market will reach 70 Billions€
in Europe in 2015
• Mastercard Europe & Accor have created a specific
company to target this market: PrePay Solutions
Source: Limonetik 2011
15. ePAYMENT: SOCIAL PAYMENT
• 901 millions members
• Facebook credit have been launched in 2009
and recently Facebook gave up this credit
system
• Simplify the consumer experience is the
leitmotiv of this change, Facebook will
accept local currency
• A new solution of subscription will be soon
be settled
• Is it a first step to anticipate lower value
payment & NFC/eWallet ?
16. ePAYMENT: NFC MARKET
GLOBAL NFC HANDSET SALES: % OF TOTAL
Source: Strategy Analytics 12 2011
PROS CONS
• Benefit from an ecosystem and its
branding (e.g., Cityzi logo)
• Very limited audience
‒ phone, sim card, and subscription are all specific
- High level of security on payment
• Cannot be done rapidly
• Similar to traditional smart cards ‒ dependence upon consortiums/partnerships
• Risk of confusing users (tap to pay vs tap to get info)
• Technology cost quite elevated
17. ePAYMENT: NFC PERSPECTIVES
1- USER SUBSCRIBES TO CITYZI 2- USER SUBSCRIBES
TO INDIVIDUAL SERVICES
THROUGH HIS OPERATOR
• Operators (Orange / SFR / Bouygues) • ST2N: buy tickets and validate
Payments above 10 euros need a subscription too
• Provides specific NFC phones
• Banks: payment applications similar to traditional
• A preinstalled Cityzi app allow access to debit card
services CIC m-carte Visa
BNPP « KIX »
• Provides specific SIM card • Couponing / Loyalty programs
• Charges small expenses on telephone bill Collective scheme (e.g. Carte Magique)
Chains (e.g. La Croissanterie)
18. ePAYMENT ECOSYSTEM
C
M
O
E
N
R
S
C
U
H
M
A
E
N
R
T
S
S
Source : Payfirma Payment ecosystem 2011
19. AGENDA
• eCOMMERCE & PAYMENT INTRODUCTION
• VISA: STATE OF THE ART
• eCOMMERCE: SCOPE & STAKES
• ePAYMENT: GROWTH DRIVER & ECOSYSTEM
• VISA CENTRIC: RISK & MITIGATION
• RECOMMENDATION & CONCLUSION
20. VISA: GEO/DEMOGRAPHIC RISK
• A major risk is to underestimate the
growth of eCommerce in emergent
markets
• This increase is strongly correlated to the
penetration of PC/mobile
• Example :
UnionPay (China) is now the largest
payment card company in the world,
issuing three of every ten cards
worldwide
21. VISA: OPERATORS RISK
Initiatives of the operators are varied but bounded geographically
• Internet + initiative in France allow all fixed and mobile
operators to provide inBill payment for low value
amount (under 10€)
• Ireland: Vodafone launched in-bill app payment which
encourages downloads. Mobile operator lets
Nokia,BlackBerry and Android users pay for apps via
their invoice
• Push the SIM centric approach for NFC to keep
customer value by proposing NFC services of third
Service Provider
22. VISA: SECURITY VS USER FRIENDLINESS RISK
The payment procedure has to remain a compromise between the
accepted risk and the user-friendliness
• The process of collecting and processing online payments is
confusing. There are many parties involved and the fees can be
difficult to decipher
• 3D Secure initiative : create an additional client authentication
providing a payment guaranty for authenticated transactions and
blocking chargeBack
• Verified by Visa and MasterCard SecureCode cause higher
abandon rates
23. VISA: THE eWALLET-GATE
75% of ePayment actors are launching their own eWallet
Consumer workflow: PSP
Client Support Search eMerchant Flow Bank Delivery
Alternative
eWallet
eWallet example from payment workflow:
Apple already Apple has recently eWallet will Because banks
Google Wallet is an Clear positioning announced the be released in know their client,
knows 200 app that makes
millions iTunes on ePayment with futur the creation 2012 in eWallet or
your phone your the launch of the of an eWallet in Europe complementar y
users with Card wallet with Citi,
identification kindle iOS6 services are
MasterCard, Sprint launched
& Visa
24. AGENDA
• eCOMMERCE & PAYMENT INTRODUCTION
• VISA: STATE OF THE ART
• eCOMMERCE: SCOPE & STAKES
• ePAYMENT: GROWTH DRIVER & ECOSYSTEM
• VISA CENTRIC: RISK & MITIGATION
• RECOMMENDATION & CONCLUSION
25. BRING STAY DEVELOP
VALUE TO CONSUMER DIVERSIFY mCOMMERCE
eMERCHANT CENTRIC ECOSYSTEM
eCOMMERCE RECOMMENDATIONS
26. MID TERM ECOSYSTEM
To maintain their relationship with customers,
global operators are seeking to become trusted enablers
Content
& Advertising
Services
Trusted
Enablers
Access
&
Traffic
27. LONG TERM
What will be ePayment/mPayment in 5 years ?
What are future authentification means ?
How to handle new Actor / Risk ?
What if the younger generation no longer need bank account ?
28. RECOMMENDATIONS
BRING STAY DEVELOP
VALUE TO CONSUMER DIVERSIFY mCOMMERCE
ECOSYSTEM
eMERCHANT CENTRIC
• Create a one click • Strength relationships
• Push your easy registration • Create partnership or with manufacturers
solution to integrate : joint venture with a
V.me to the market major prepaid European
• Propose more services • Build your ecosystem of
with support & actor (like playSpan services
for consumers acquisition in the US)
communication
• Regularly invest into A &
• Reward consumers for • Climb the value chain
• Propose more B Series fundraise
their adoption and up to delivery with payment solution
guarantees/services for loyalty to use the new
eMerchants partnership (Limonetik)
V.me solution
• Launch as soon as
• Offer more attractive
possible an operation
rates than PayPal with successful
mCommerce eMerchant:
Vente-Privee.com ,
Groupon
31. MARKET OVERVIEW
Classification by the nature of transactions: a wide range of models
• Business to business (B2B)
• Business to consumer (B2C)
• Consumer to business(C2B)
• M-commerce
• l-commerce or location base
commerce
• Business to employees (B2E)
• Collaborative commerce(c-commerce)
• Consumer to consumer (C2C)
32. ePAYMENT MAPPING
TECHNOLOGY
Platform
Central
GLOBALISATION
Peer-to-Peer
Decentral
Bank as trusted party Non-Bank as trusted party
33. FRENCH USER’S: DIGITAL PROFILE
Where they used the smartphone Uses
Source : Oct 2011 Google Source : Oct 2011 Google
34. eBay APPROACH
VIA ITS PLATFORM PLAY
Source: eBay CEO John Donahoe, Innovate Developer Conference, Oct. 12, 2011
eBay generates now about 50% of its business in Europe
its fastest growing region