Microsoft PowerPoint - Breakout_Session_2_-_Mobile_Payments_June

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					                        Is C
                        I Canada
Moderated by
Mo Jansons
Director of Interbank

                        Ready for
Operations & Industry
Royal Bank of Canada

                        P      t ?
Mobile Payments
Mo Jansons

             The Economist (Feb 2007) - cover story

             Digital Money: the end of the cash era

             “…cash, after millennia as one of mankind’s most
               versatile and enduring technologies, looks set
               over the next 15 years or so finally to melt away
                                 y                y            y
               into an electronic stream or ones and zeros.”
Mobile Payments
Mo Jansons

            Scope – What are Mobile Payments?
            • Not mobile banking
            • Not using online banking remotely
            • Not just mobile shopping/ordering
                  j              pp g         g

            Might be:
            • Cell phone used as debit/credit card
            • Cell phone used to transfer funds to another cell
              phone & holding funds
              Cell h          i funds in background “
            • C ll phone moving f d i b k                       t ”
                                                     d “accounts”
              including Telecom biller
Mobile Payments
Mo Jansons

             Basic rules

             • A Payer & A Payee
             • Variations made to a balance administered by a
               third party
             • Uses a “form factor” or mobile device to initiate,
               activate and/or confirm the transaction
Mobile Payments
Mo Jansons

             Common Technologies
             • Near Field Communication (NFC)
                    (Tap & Go, PayWave)
             • Short Messaging Service (SMS)
                (Text message – Zoompass)
             • Wireless Application Protocol (
                  e ess pp cat o                )
                                      otoco (WAP)
                   (PayPal – most iPhone apps)
Mobile Payments
Mo Jansons

             Walter Volker, CEO, Payments Association of
             South Africa

             Oscar van der Meer, Chief Technology &
             Payments Officer, Central 1

             Paul Birkness, Vice-President, Strategy &
             Innovation Moneris Solutions Company
Walter Volker
Payments Association   Mobile
                       M bil
of South Africa
June 18, 2010
                       Payments: SA
Mobile Payments
SA Perspective
Walter Volker
                  Setting th S
                  S tti the Scene:
                  Mobile Banking vs. Mobile Payments

                   Mobile                 Mobile
                  Bankingg               Payments
                                     •   Bill payments
          • Marketing Messages       •   Remittances
          • Notifications            •   P 2P payments
                                     •   E Wallet payments
                                     •   Registration
                                     •   Balance Enquiries
                                     •   Statements
                                         St t       t
                                     •   Intra portfolio transfers
Mobile Payments
SA Perspective
Walter Volker
                  Defining the Mobile Payments Landscape
       CATEGORY                      DESCRIPTION                                   COMMENT

                           Telephone Banking                     Mere connection mechanism to Contact
                                                                 Centre - eft credits
                           Cell phone Banking                                             g
                                                                 Access for basic banking transactions
                                                                     ft dit
                                                                  - eft credits
                                                                 Purchase of goods and services
                           Cell phone payments (“Virtual POS”)   Emulate “internet” or online eMerchant –
                                                                 require bandwidth – WAP, 4G
                                                                  - credit cards
ALTERNATIVE                Cell phone payments (Physical         Credit Card – CNP
                                                                 Debit Card/Credit Card - with a magstripe
CHANNEL                    POS)                                  reader, chip reader or contactless
(CELL/MOBILE               AMT card payments
                                    p y                          Secure debit and credit card payments for
                                                                 limited range of service offerings
                           Money transfer to ATM’s               Cash Send
                           eWallet payments                      Money transfer – ATM cash out
ALTERNATIVE                                               p
                           “Contactless Card” Embedded Chip      Considered an EMV card transaction
FORM FACTOR                in Cell Phone
IDENITIFICATION/           Instead of Card and PIN               Various options
SEPARATE CELLULAR          Independent providers solution or     Closed or semi-open loop with additional
PLATFORM (“MOBILE BANK”)   interface with banks                  features for participants
Mobile Payments
SA Perspective
Walter Volker

              Setting the Scene: The SA Payments Landscape
               SA AT A GLANCE                                                 DATA
               TOTAL POPULATION                                               48m
               NUMBER OF ADULTS (ECONOMICALLY ACTIVE)                         32m
               POPULATION BANKED                                              21m
               NUMBER OF BANKS OFFERING CELL PHONE PAYMENTS                   7
               NUMBER OF CELL PHONE USERS                                     43m
               ADOPTION RATE                                                  10%

                      • Mix of 1st and 3rd world cultures & technologies
                          g y p
                      • Highly sophisticated banked p ppopulation, as well as an under
                        banked and unbanked population
                      • Service offerings ‘fit’ spectrum of market needs
                      • Mobile payment offerings successful across the spectrum

       Source: SA Statistics
       Source: Finscope
Mobile Payments
SA Perspective
Walter Volker
                    Comparison: Local SA Offerings
        Functionality     Absa   FNB   SBSA   Nedbank   MTN   WIZZIT
 Balance                   √      √     √        √       √      √
 Statements                √      √     √        √       √
 P 2 P payments            √      √     √        √       √      √
 Bill Payments             √      √     √        √       √      √
 Intra‐portfolio           √      √     √        √       √      √
 Money Transfer (Cash      √      √
 out at ATM)
 E Wallet payments                √
 Card payments                          √                √
 RTC payments              √      ?
 Cellular pre‐paid         √      √     √        √       √      √
 Other Pre‐paid (e.g.      √      √     √                √      √
 Proof of payment via 
 Proof of payment via      √      √     √        √       √
 SMS (“Notify me”)
Mobile Payments
SA Perspective
Walter Volker

             Reasons for Success in SA
               Low cost/free
             • L        t/f
             • Convenient
             • Functionality rich
             • Attractive offerings e.g. airtime top up
             • Real time payments
             • Technology ‘friendly’ consumers, willingness to adopt
                         gy        y              ,      g        p
             • Appropriate marketing
             • Large under banked population (don’t have full access to
                                                  (don t
             • Fully integrated with mainstream payments & across
Mobile Payments
SA Perspective
Walter Volker

             Obstacles to Greater Adoption
               Physical d i limitation
             • Ph i l device li it ti
             • Client ‘unfriendly’ interface
             • KYC/AML requirements
             • Stringent EXCON requirements for cross border
             • Security/fraud concerns
             • Non bank service providers
                 – SARB E Money position paper
                 – No cash out
                 – Mainly closed loop
Mobile Payments
SA Perspective
Walter Volker

             Obstacles to Greater Adoption

             • “Airtime” payments
                – Offered by MNOs and WASPs
                – Beyond ringtones ($0.5 bn)
                – High cost - up to 50% discount
                – No KYC/AML/EXCON restrictions
                – Very convenient
Mobile Payments
SA Perspective
Walter Volker

            Relevance to Canada

            • Mobile payments are here to stay
            • Provides customers with choice
            • May not be the predominant payment option.
              However provides alternative and is very convenient
            • Banks should be involved – get onto the learning
Oscar Van der Meer
Chief Technology &
Payments Officer     Central
                     C t l1
Central 1
June 18, 2010
                     Mobile Banking
Central 1 Mobile
Oscar van der Meer

                 Mobile Banking
                become a success?
Central 1 Mobile
Oscar van der Meer

                        What will
                     Mobile Banking
                      & Payments
                       look like?
Central 1 Mobile
Oscar van der Meer
Central 1 Mobile
Oscar van der Meer
Central 1 Mobile
Oscar van der Meer
Central 1 Mobile
Oscar van der Meer
                     MemberDirect™ Mobile Service -
                     SMS % of Users by Age
Central 1 Mobile
Oscar van der Meer
Central 1 Mobile
Oscar van der Meer

                        What will
                     Mobile Banking
                       look like?
Central 1 Mobile
Oscar van der Meer

             Mobile changing the payment landscape.
              1. Accelerate paper to electronic transition
              2. Continue trend towards lower value
              3. Facilitate integration of payment process
                 into retail experience
Paul Birkness
Vice President,
Strategy & Innovation   Mobile
Moneris Solutions
     p y
June 18, 2010           Merchants
Consumer Interest in Mobile

• Consumers have shown strong interest in using their
  mobile phone when making a purchase

                  Select Purchases US Consumers Are 
                   Willing to Make via Mobile Phone
                           April – May 2009 (% of respondents)

                   Pizza                                              59%
            Hotel rooms                                        43%
                  Music                                      41%
                 Games                                34%
M bil Vid /TV C
Mobile Video/TV  Content                      24%

                                                                            Source: Strawhecker Group, 2009
Mobile Role in Sales Transaction

• Mobile Commerce has a broad range of meanings in
  the interaction between merchant and consumer

                 Mobile                      Mobile           Mobile         Mobile
   Contactless                   Text2Buy
                 Delivery                   Enhanced           Order        Commerce
    Antenae in                     SMS      Purchase           Order          Mobile as
     Mobile      Confirmation,
                             ,   Purchase   Search, Browse
                                            Search Browse,     Online       Independent
     Phone        Ticketing,
                                 of Goods    Comparison,     Pick-Up In
                                                             Pi k U I         Channel
                  BarCodes                    Networking       Store

       Passive                          Support                                Control
                                                                     Source: Moneris Business
                                                                     S       M    i B i
                                                                             Innovation Group
Growth of Contactless

• Card Associations have embraced
  contactless, led by Mastercard
  PayPass and VISA payWave
  Moneris h enabled more th
• M     i has      bl d        than
  1,000 independent merchants for
  contactless and is rolling out
  contactless in several major
  national accounts
Emerging Solutions

• New Mobile offerings are emerging, led by US
• Interesting developments in this space include:

   Verifone              Square                   PayPal
PAYware Mobile       iPhone / Android          Mobile Libraries
iPhone card-         iPhone and Android        PayPal payment
present payment      application that allows   integration available
                                               i        i      il bl
solution for micro   consumers to accept       to third party mobile
merchants            payments                  developers
Moneris Mobile Solution

• Moneris has developed and is currently piloting a
  Blackberry application for mobile merchants

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