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Reinventing mobile payments
Prepaid closed loop mobile payments schemes
Miha Culiberg Warsaw, 31.10.2013Business development director
We are the largest transaction automation vendor in S.E.E. / C.E.E.
25+ years of Experience in the Transaction Automation and Systems Integration area
Partners to the leading vendors in the industry The most integrated portfolio of services, through
500+ engineers and 90+ service centers in 15 countries
Client portfolio includes almost all of the leading financial institutions as well as some of the largest retail, petrol and telco players in the region.
Our footprint spans 15 markets
We are a multinational technology firm, operating in S.E.E. / C.E.E.
We provide 8 families of products, services, and solutions
Flexible and effective organization
Printec corporate profile
ATM
Network
Value Added
Solutions
EFT/PoS
Network
Value Added
Solutions
Self Service
Kiosks &
Branch
Automation
E-Payments
& Banking
Software
Retail &
Emerging
Industries
Telecom
Solutions
Information
Security
Solutions &
Services
Enterprise
Solutions
Printec is a privately held company, 100% owned by its Chairman & CEO
High-caliber professional management team
Matrix organization, promotes effective monitoring and communication
Transfer of knowledge and effort/load through global staffing practices and centers of excellence
Established corporate governance procedures
Ukraine
Slovakia
Czech Republic
Slov eniaCroatia
BosniaHerz. Serbia
Romania Moldova
Bulgaria
FYROM
Alba nia
Greece
Cyprus
2
Reaching the customer in mobile payments
Mobile payments? Do they need to be mobile?
MNO’s as a payment providers
Closed loop mobile payment scheme vs. open loop
Whom do we need first: end users or merchants
How to reach the customers
Key success factors
Mobile payment is an alternative payment method.Instead of paying with cash, check, or credit cards, aconsumer can use a mobile phone to pay for a widerange of services and digital or hard goods.Source: mobile payments on Freebase, licensed under CC-BY
Juniper Research has a simple definition of a mobilepayment as “payment for goods or services with a mobiledevice such as a phone, Personal Digital Assistant (PDA),or other such device.
One definition is talking about the access channel theother about alternative payment method
Mobile payments? Do they need to be mobile?
Mobile payments as an alternative payment method in Africa
Example:M-Pesa (M for mobile, pesa is Swahili for money) is a mobile-phone based money transferand microfinancing service for Safaricom and Vodacom, the largest mobile networkoperators in Kenya and Tanzania. Currently the most developed mobile payment systemin the world, M-Pesa allows users with a national ID card or passport to deposit,withdraw, and transfer money easily with a mobile device. Source: Wikipedia
BUT, most of us are living in Europe not Africa
Financial services and access to credit/debit/prepaid cards, bank accounts are more than available
In Europe mobile payments are just another payment access channel
Example: Apple, iTunes
Mobile payments are nothing more and nothing less then e-payments
Mobile financial services – mobile banking or e-banking on a mobile?
Example: Personal experience from CEE markets
Mobile payments? Do they need to be mobile?
Again we are not living in Africa
In Europe MNO‘s are facing strong entry barriers, due to:– Regulatory issues– Maturity of the market– Strong competition from banks
MNO‘s in Europe are more or less infrastructure providers in a collaboration mobile payment scheme
MNO‘s generate revenues from their core business
MNO‘s are going into Mobile financial services BUT then they usually become a financial institutionExample: Telenor Group & Telenor Serbia
Mobile payments are all about the business not the technology
MNO’s as a payment providers
Closed loop mobile payment scheme vs. open loop
Gartner defines mobile payment as transactionsconducted using a mobile phone and paymentinstruments that include:– Banking instruments such as cash, bank account or
debit/credit card, and– Stored value accounts (SVAs) such as transport card, gift
card, Paypal or mobile wallet
Open-loop cards: A general purpose card carrying theVisa, MasterCard logo that can be used anywhere thosecards are accepted.
Closed-loop cards: A card or account that can be usedat a select store or group of stores
Whom do we need first: end users or merchants
Mass adoption of mobile payments requires mass adoption bymerchants and consumers - no middleman is required
Merchants & consumers – condition sine qua non for atransaction to take place
Banks, processors, MNO‘s are optional in the transactional chain
Large merchants are reinventing themselves keen to enter newprepaid/postpaid schemes
Closed-loop systems give value to the to parties in the paymentprocess that count the - most merchants and consumers
Mobile payments are just a technological upgrade andadditional access channel
Closed loop prepaid cards from a Merchant perspective
9
CUSTOMER LOYALTY
MARKETING
COST SAVINGS
Closed loop prepaid cards from a Merchant perspective
– Simplifying the purchase user experience by offering their own system– Seamlessly integrating loyalty and payments schemes– Regaining ownership of their own customers– Extending payments scheme to cross merchant payments and loyalty schemes
(e.g. Retail+Petrol+Telco)
10
CUSTOMER LOYALTY
SOURCE: ROAD TO INCLUSION A look at the Financially Underserved and Excluded across Europe Awhite paper prepared by Ipsos MORI for MasterCard Worldwide 16th September 2013 where thequantitative intercepts consisted of n=631 interviews split over 6 markets: Poland, Italy, UK, Russia,Spain and France in July 2013
Closed loop prepaid cards from a Merchant perspective
– Closed loop systems minimize transaction costs by avoiding processing fees– Cash in advance, no credit line, predictable income– Utilizing existing EFT POS infrastructure without additional investments– Minimizing cost associated with issuing of loyalty cards– Additional savings by replacing card with a mobile
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COST SAVINGS
Closed loop prepaid cards from a Merchant perspective
– Closed loop system gives merchants the ultimate access to consumer data trackingtheir habits and spending's in order to provide them with targeted offers
– Extending branding into customized statements, plastics, point-of-sale materials, etc.– Marketing through the SMS/WEB channel
12
TARGETED MARKETING
SOURCE: ROAD TO INCLUSION A look at the Financially Underserved and Excluded across Europe Awhite paper prepared by Ipsos MORI for MasterCard Worldwide 16th September 2013 where thequantitative intercepts consisted of n=631 interviews split over 6 markets: Poland, Italy, UK, Russia,Spain and France in July 2013
How to reach the customers?
What do different types of merchants (Retailers, Petrol, MNO‘s) have in common?– Significant customer base– Strong brand and brand awareness– Wide network of stores/petrol stations
Daily face to face interaction – Cash in for the prepaid - at the stores, – Direct Debit enrolment - at the stores – Direct marketing for prepaid cards - at the check out– Simplified enrolment for the prepaid - at the check out
Loyalty incentives for the closed loop mobile payment system users (due to reduced transaction costs)
Bundling loyalty and payment schemes Payment flexibility (prepaid, postpaid, card, mobile, NFC,
QR code)
Key success factors
Merchants need to recognize the value of the closed loop schemes
Consumer needs to recognize the value of loyalty and prepaid cards
Mobile needs to be just additional access channel in addition to a prepaid card
Subscription should be simple and straight forward
Technology should enable the utilization of existing POS infrastructure
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