©2012 MasterCard. Proprietary and Confidential
January 18, 2012
Mats Taraldsson Head of Market Development, Nordic and Baltics MasterCard Europe
©2012 MasterCard. Proprietary and Confidential
Changing Consumer Experiences
Established Emerging
Internet connected devices PC-based e-Commerce
Card at Point of Sale
Cash
PayPass at Point of Sale
Mobile Money Services
January 18, 2012 Page 2
©2012 MasterCard. Proprietary and Confidential
Mobile Payment Technologies can be Distinguished in Three Dimensions – P2P, m/e-commerce and Mobile Contactless Overview Mobile Payment technologies
mobile e/m-
commerce payments
mobile P2P
payments
mobile NFC POS payments
• The integration of all three dimension into one mobile phone is what is known as mobile wallet
• A mobile wallets sits “in the phone” and enables the consumer to use the phone for P2P, POS and e/m-commerce payments
January 18, 2012 Page 3
©2012 MasterCard. Proprietary and Confidential
0
200
400
600
800
1000
1200
1400
2009 2010 2011E 2012E 2013E
Total Global Unit Shipments (MM)
Tablets
Smart Phones
Notebook PCs
Desktop PCs
Remote Payments Connected Devices for Remote Payments
MasterCard providing interoperability and connectivity
Source: KPCB Top Mobile Internet Trends, Feb 2011
Easier to Use
More Secure
New Transactions
January 18, 2012 Page 4
©2012 MasterCard. Proprietary and Confidential
Proximity Payments PayPass NFC Payments for Smart Phones
Source: BCG Research & Analysis 2011
64%
48%
0%
10%
20%
30%
40%
50%
60%
70%
2010 2011 2012 2013 2014 2015 2016
% of Total U.S. Phones
Smart Phones
NFC-Enabled Enhanced Information
Speed and Convenience
Smart phone growth is transforming shopping and will accelerate PayPass adoption and expand merchant acceptance
Offers and Redemption
January 18, 2012 Page 5
©2012 MasterCard. Proprietary and Confidential
Proximity Payments PayPass Quickly Spreading Across the Globe
*Footprint and statistics are as of Q2 2011. ** Figure approximate.
Indicates PayPass Global Footprint
• 96M Cards/ Devices**
• 37 Countries
• 341,000+ Acceptance Locations
January 18, 2012 Page 6
©2012 MasterCard. Proprietary and Confidential
Creating new ways to pay for existing MasterCard cardholders and addressing the needs of 2.5 billion global consumers1 who are underserved
Mobile Money Mobile Money Accelerating Globally
107 199
326
499
684
807
2011 2012 2013 2014 2015 2016
Number of Mobile Money Accounts (MM)2
+40%
Sources: 1) Gartner 2010, Ovum, World Bank, EIU, BCG analysis. 2) Gartner and Ovum research and BCG estimates for growth
Reaching Banked and Underserved Consumers
January 18, 2012 Page 8
©2012 MasterCard. Proprietary and Confidential
Integrated, turnkey mobile payment processing to support consumers and merchants; value-chain enabler based on defined value propositions and go-to-market models
Account Wallet
Prepaid Processing
Merchant Processing
Payment Routing
Consumers
Mobile Network Operators
Customer Web Access
Commercial, Government Institutions
EFT
Merchants
Billers
Mobile Top-up, Other Merchants
Banking Systems
MasterCard Network
Payments Domain Mobile Domain
Mobile Money Mobile Payments Gateway
Mobile Payments Gateway
©2012 MasterCard. Proprietary and Confidential
MasterCard networks carry transaction data
Goods & Services
Proximity Payments Mobile Payments Ecosystem
Cardholder Merchant
Issuer Acquirer
Telco / TSM
The mobile proximity payments eco-system includes the traditional incumbents of the four party payment system plus additional entities that add value to a mobile payment transaction.
January 18, 2012 Page 11
©2012 MasterCard. Proprietary and Confidential
SIM (UICC) Based
Secure Element location • SIM/UICC card
Access to Secure Element
Mobile Handset • NFC Smartphone
Secure Element owner • MNOs
1 O.S. based
• Handset Embedded chip
• NFC Smartphone
• O.S. providers
2
Access to Secure Element Drives a Critical Partner Choice
Sustainability • Long term • Long term
External device based
• Micro SD
• Smartphone or NFC Smartphone
• Banks
3
• “Bridge” solution
In the Mobile Ecosystem, Access to the Secure Element Drives the Balance of Power & The Future Business Model
January 18, 2012 Page 12
©2012 MasterCard. Proprietary and Confidential
SECURE ELEMENT
CONTROL USER EXPERIENCE
VALUE ADD SERVICES
SIM based
Telco Wallet
Bank
Telco as Issuer
Bank
Bank
Telco
Telco
Bank
DISTRIBUTION CHANNEL
Bank MVNO
Bank Bank Bank
Telco
Bank MVNO
Bank Payment App
Telco Wallet
Telco Payment
BUSINESS MODEL
3
2
1
4
Retailer Bank Retailer Bank Retailer Retailer MVNO Retailer MVNO 5
External device based
Bank Bank Bank (?) Bank Payment Device 8
O.S. based Apple/iTunes
Other
Bank
(?)
(?)
Open model
Apple (?)
(?)
Telcos/Retailers Apple Wallet
Google Wallet 6
7
Based on the Secure Element, Multiple Mobile Models Likely to Develop During Market Formation
Different technological solutions for the mobile wallet PAYMENT ACCOUNT
January 18, 2012 Page 13
©2012 MasterCard. Proprietary and Confidential Option we retain
E-version of Cards located on smartphone
wallet application
Why The NFC Model is Likely to Succeed
WHY THIS MODEL? • Clients can use their existing bank cards: debit, credit or prepaid • Card branding like physical cards (issuer brand; existing acceptance brands) • User-friendly consumer experience • Not restricted to low-value payment • Full EMV & Secure-code security • Scalable & future-proof investments: uses int’l standards & specs
Mobile money: send and receive money – Enable send/receive function on mobile card
account or mobile wallet – Using the phone for ‘easy/strong’ authentication
Click-to-buy mobile web purchases – No re-entry of card or shipping details – Works on mobile and desktop – Merchant and partner APIs to enable in-App
purchases – Using the phone for ‘easy/strong’ authentication
Mobile PayPass: High value Tap & Pay – Pay with phone on PayPass terminals – Mobile contactless phone as PayPass POS – Authenticated against Secure Element Prepaid card
Debit card
Credit card
1
2
3
January 18, 2012 Page 14
©2012 MasterCard. Proprietary and Confidential
On Nov. 14th 2011, Intel and MasterCard announced a strategic collaboration to further enhance the security and consumer payment experience for online shopping
The two companies are working together to combine MasterCard’s PayPass and Intel’s Identity Protection Technology (IPT):
Intel and MasterCard agreed to enhance eCommerce payment experience
• Intel IPT enables consumers to use strong two-factor authentication and hardware-based display protection
• MasterCard PayPass enables consumers to pay at enabled terminals by simply “tapping” their card on the contactless reader
• In the future, when shopping with an Intel IPT capable computer (e.g. the new Ultrabook devices), consumers will be able to pay for online purchases with a simple tap of their PayPass-enabled card, tag, or smartphone on their computer
©2012 MasterCard. Proprietary and Confidential
MasterCard Mobile Platform
Cardlet Mobile M/Chip
application
MOTAPS TSM & OTA
services
Midlet Standard API , UI, guidelines
“Certification“ Handset, TSM
and App
Mobile PayPass
terminal spec
Mobile POS 1 click check-out Couponing
Rules
January 18, 2012 Page 16
©2012 MasterCard. Proprietary and Confidential
MOTAPS
MasterCard Over-the-Air Provisioning Service facilitates real-time, over-the-air, provisioning and management of payment accounts directly on the mobile phone. Personalization data is delivered within seconds and the handset is then immediately enabled for contactless payments.
MOTAPS – TSM service
It’s a service No software needs to be installed; leverages MasterCard core network
Integrated offer End-to-end service, including Banking TSM and lifecycle management of payment app
Single interface Simple web service point integration for all card brands to multiple Secure Element TSMs
January 18, 2012 Page 17
©2012 MasterCard. Proprietary and Confidential
DNB and Telenor (Norway)
• DNB, Norway’s largest bank launched a trial in November 2009 the first fully Over The Air provisioning service.
• Using the MasterCard Mobile Over-the-Air Provisioning Service DNB cardholders were able to trial the service that allowed them to use their Near Field Communications (NFC)-enabled mobile phones to make payments wherever MasterCard® PayPass™ is accepted.
• Bank’s consumers self-registered via a MasterCard hosted website to access the service.
“By partnering with MasterCard, we have been able to implement a simple program with minimal infrastructure investment that gives our cardholders the ability to make PayPass payments with their mobile phones.” said Peer Theien, General Manager, Group Payments and Infrastructure, DnB NOR Bank ASA.
January 18, 2012 Page 19
©2012 MasterCard. Proprietary and Confidential
• MasterCard partnered with Barclaycard and Orange (sub. Everything Everywhere) in the UK to launch the first commercial deployment of Mobile PayPass.
• The contactless payment service, dubbed Quick Tap, is for purchases up to £15. It works on MasterCard's PayPass system.
• The account on the phone is a MasterCard prepaid account (processing by PPS), which the customer can top-up with funds from one of an Orange co-brand credit card, a Barclays debit or a Barclays credit card.
• Gemalto is providing the payment application and the SIM card. Samsung provided the Tocco Lite handset. The phone is available in select Orange stores in London and via the Orange website. http://shop.orange.co.uk/mobile-phones/contactless/overview.jsp
Barclaycard & Orange launch Quick Tap
Market
Launch
January 18, 2012 Page 20
©2012 MasterCard. Proprietary and Confidential
• Turkcell announced the official launch of the T20 smartphone to enable consumers to use their phone as a mobile wallet using MasterCard's contactless technology, PayPass
• The aim of Turkcell Cep-T Cüzdan, a mobile wallet service from Turkcell, is to transform the physical wallet into a mobile one and provide an easy to use and secure environment for all the daily needs of Turkcell's subscribers.
• With this service, Turkcell also provides a comprehensive end-to-end NFC platform open to all service providers and banks. As part of this platform, Turkcell TSM (Trusted Service Manager) was developed and Turkcell became the first telecom operator in Europe to launch an approved TSM solution by MasterCard. Turkcell, working with MasterCard, is the first mobile operator in the world that presents more than one bank application in Cep-T Cüzdan.
Turkcell Launches Mobile Wallet
Market
Launch
January 18, 2012 Page 21
©2012 MasterCard. Proprietary and Confidential
• Commercial roll out in US in Q4 2011
• MasterCard & Prepaid PayPass
• Compatible with NFC Capable Android Handsets
• OTA provisioning
• Embedded Secure Element
• Large scale launch with large volumes of handsets available
• UK launch targeted 2012
Google Wallet
“Google Wallet Is Not only About Mobile Payments”
Wallet will enable “tap and save” mobile payments, incorporating loyalty, coupons, and digital receipts using NFC capabilities.
Market
Launch
January 18, 2012 Page 22
©2012 MasterCard. Proprietary and Confidential
MasterCard / Google Partnership
Google Wallet
Online & Offline Commerce
Rich Offers
Targeted Consumer Value
Increased Merchant Sales
Consumers Merchants
Wallet – much more than payments
Offers Deliver targeted, local coupons
Loyalty Integrate loyalty
and rewards into every transaction
Tap & Pay Accept contactless payments via NFC
Partners
January 18, 2012 Page 23
©2012 MasterCard. Proprietary and Confidential
North America
Fully-integrated, on-demand person-to-person mobile payment service
Mobile payment pilot in partnership with ViVOtech
First market trial of personalized NFC-enabled mobile phones
Contactless payments trial for MTA
First mobile PayPass pilot in Canada
First large scale deployment of PayPass in a mobile phone (60K
Customer)
First trial in Taiwan to make use of NFC smart posters and m-coupons
First Mobile Pilot in India (Bangalore) using Mobile PayPass
Asia
First trial of PayPass-enabled mobile phones for secure EMV payments
MasterCard PayPass enabled mobile phones
Pioneer mobile phone debit payments in the United Kingdom, using Maestro
PayPass
Enable customers to make contactless payments via phones
with MasterCard PayPass
Piloted a Mobile Payments proposition that focused on consumer convenience
MasterCard PayPass enabled mobile phones
Commercialization of mobile payments using NFC technology
Europe
Alliance will pursue mobile commerce opportunities
MasterCard introduces Mobile Payments Gateway via MPS JV.
South America
Commercialized a mobile platform leveraging the Mobile Payments
Gateway
First-of-a-kind JV to lead development of mobile financial solutions (12
countries) with the Movistar brand Enables unbanked mobile money
customers to engage in ecommerce transactions via virtual cards. Honored at
2011 Global Mobile Awards
Development and impending launch of NFC payment application
VIVO
June 23, 2011 Page 24
©2012 MasterCard. Proprietary and Confidential
1 click internet purchase on the desktop – No re-entry of card or shipping details – Using the phone for ‘easy/strong’ authentication
1 click internet purchase from the phone – No re-entry of card or shipping details – Using the phone for ‘easy/strong’ authentication
High value Tap & Pay – Authenticated against Secure Element
Perhaps Mid-Term is Faster Than We Think… Marrying F2F and CNP in a single consumer experience
Plastic card linked to the phone – Alerts on phone, limited use numbers, link card usage to phone presence – Phone related loyalty (free SMS, call minutes) – Single statement
January 18, 2012 Page 26