Joanna Erdman Director, Card Business Development...NFC payment HCE based NFC SIM-centric model of NFC payments is more complex for the customers and for the banks and is less efficient

mBank’s mobile payments journey

Joanna Erdman

Director, Card Business Development

| mBank’s mobile payments journey

The agenda of the journey

| mBank’s mobile payments journey | 2



Will 2015 be the next „Year of Mobile Payments”?

This year we can celebrate anotherfirst year of mobile payments in

media…


Multichanneluniversal bank

First virtualBank in Poland

Fast adoptionof innovation

From internetto mobile

Re-Invention(New mBank)

2000 2007 2010 2013 2015+

Launch of mBank

Best internet

bank in CEE

The bank of first choice

3rd biggestretail bank in Poland

The most innovative

bank

The icon of mobility

Each journey starts from the first step…

EMV MIGRATION

MAG-STRIPE CARDS

2004

NFC

MOBILE NFC

HCE


| 6

Polish market is ready for the next step to take

Smartphones in Poland

0

100000

200000

300000

400000

500000

600000

2012 2013 2014 2015 2016 2017 2018

80% POS

100% POS

0%

10%

20%

30%

40%

50%

60%

70%

80%

0

5

10

15

20

25

30

35

40

45

2012 2013 2014 2015 2016 2017 2018

all smartphones (in mln)

NFC smartphones (in mln)

POS terminals with NFC mBank NFC offer

New software

Change of SIM

MNO


NFC technology has become a standard, because customers appreciate conveniance

| 7

Share of contactless cards and transactions in mBank is higher than the market average

mBank customers are even more willing to use contactless cards than the standard Polish customer. The potential in our data base of debit cards is an opportunity for the next steps in a mobile journey to HCE

mBank NFC PaySIM card

mBank HCE solution

32%

*Source: Visa Europe, June 2015




mBank has implemented three different models of NFC payments

1. PREPAID CARD ON MOBILE SIM 2. DEBIT CARD ON MOBILE SIM 3. MNO FINANCIAL SERVICES

CUSTOMER EXPERIENCE:

• Sale of prepaid card by MNO together with SIM card

• Self directed model, no additionalbanking services

• Balance and last transactionsonline

• Dedicated mobile app Orange Cash• NFC Payments


• Sale of card as a part of currentaccount package

• Multichannel customer service including full history, card balance

and limit mgmt

• Mobile App T-Wallet/mBank Walletfor paymentss

• NFC Payments


• Complex offer: mobile offer + mobile banking

• Additional benefits for payments

• Branch technical suport + multichannel

customer service

• Mobile Banking integratedwith mobile payments

| 9| mBank’s mobile payments journey

Each model has different impact on business case

1

2

3

PREPAID CARD ON MOBILE SIM

EASY TO IMPLEMENT, NOT EASY TO MANAGE

BUSINESS IMPACTNFC PRODUCT

MNO FINANCIAL SERVICES

COMPLEX INTEGRATION OF BANK AND MNO, IMPACT ON CUSTOMER EXPERIENCE WITH SIM

DEBIT CARD ON MOBILE SIM

MEDIUM INTEGRATION, MEDIUM CONTROL

CUSTOMER EXPERIENCE

BANK RELATION

CUSTOMER EXPERIENCE

BANK RELATION

CUSTOMER EXPERIENCE

BANK RELATION



| mBank’s mobile payments journey| 11

Customer experience is a crutial part for the service adoption

Application

Mobile access

Easy acceptance

Everyday usage

Additional benefitsand control

Loyalty to mobile

Payment

Post payment

Pre-payment

Customers want to buy things not to make payments. Therefore we take care about:- Pre-payment experience - Post payment added value- Simple and secure payment

Customer Experience

Barriers of adoption:- Security of mobile app- Application process- Acceptance problems

| mBank’s mobile payments journey| 12

| 13

Previous application

process

Newapplication

process

Multichannel proces – secured but difficult for the customer

Fully mobile process - better customer experience, higher conversion rate

Lesson1 - Do it yourself is the best way!


Lesson 2 - All in one mobile application

NFC cardpayment

Accountbalance

Transactionhistory and

PFM

Special offersmOkazje

Card securityfeatures



Lesson 3 – Take control over the customer journey

SIM-centricNFC payment

HCE opens new opportunities for the bank and added value for the customer

HCE-basedNFC payment

Start of sales

Bank offer

MNO offer

Process participants

MNO Bank

Dedicated debit card Debit/credit/virtual card

Customer’s choice Bank’s choice

Bank

Processor

Paymentscheme

MNO

MNO’sTSM

Bank’sTSM

Bank

ProcessorPaymentscheme

Lesson 4 – Simplify the process to reduce barriers

| 16

SIM-centricNFC payment

HCE-basedNFC payment

SIM-centric model of NFC payments is more complex for the customers and for the banks and is less efficient from the adoption perspective.

Client’s decision making process

MNO

NFC phone/OS

MNO’ssoftware

SIM NFC

Bank

NFC phone/OS

Bank

Complexity of the processHIGH LOW


Lesson 5 – Leave the choice to the customer

| 17

mBank co-branding with MNO MNO’s banking services

Play did not start to offer NFC Payments on SIM


HCE PAYMENTS

Will 2015 be the next „year of mobile payments”?

This year we can celebrateanother first year of mobile

payments in media…

The revolution has already startedand it will continue pretty soon


| 19

Thank you

Joanna Erdman

E-mail: [email protected]


Documents

Joanna Erdman Director, Card Business Development...NFC payment HCE based NFC SIM-centric model of NFC payments is more complex for the customers and for the banks and is less efficient