Mobile Payments Evolution

mobile payments

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there are different companies, industries and

technologies involved in

mobile payments

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Money rendered for a product or service through a portable electronic device such as a cell phone, a smartphone or a wearable.

3

what exactly are mobile payments?



Today, evolution is accelerating exponentially

because of increased consumer interest coupled with a trend of companies investing in transaction friction reduction.



This means that these advances in mobile payments are going to continue to happen, and at a faster pace than we have seen before.



Right around 2014, yearly gaps are becoming

monthly gaps for new technologies to be invented.

New companies are constantly getting involved.



1997 Coca Cola Vending Machine via text messages

1998 First downloadable ringtones

1999 Integrated payments with i-mode

2012 Apple Passbook introduced

2011 Google Wallet with NFC debuts

2014 Apple Pay introduced

2004 First text to donate system

2006 Paypal P2P via text messages



there are 4 categories of mobile payments



Point of Sale (in person) Apple Pay

Google Wallet CurrentC Starbucks

Samsung Loop Microsoft (rumor)

Peer 2 Peer (P2P) Facebook

Paypal Venmo

Chase Quickpay Square Cash

Credit Card Enhancer Coin Plastc Stratos Wocket Walla.by

mCommerce Paypal Checkout Amazon 1-Click

Paypal One Touch Visa Checkout

Apple Pay Android Pay



Google Wallet: 4% of mobile payments market (source: ITG)

Apple Pay: 1 - 1.5%of mobile payments market (source: ITG)

Launches Samsung Pay in 2015

right now, there’s no clear leader



why is that?

Many players Many use cases Divergent goalsDiverse consumer base



F I N A N C I A L S E R V I C E S R E TA I L G I A N T S S TA R T U P S



Merchants and retailers can still have

an impact

why is it important now?

Mobile is still new

The omnichannel experience

Non traditional players can and have an impact

Mobile wallets will eat up

physical wallets market shares.. sooner or later



source: McKinsey

new checkout experiences

Conveniently paying with points

Custom offers and promotions

what’s in it for the users?


15

of Millennials Prefer Non-Traditional Payments (source: FICO)

Millennials Distrust financial

institutions: 71% would rather go to

the dentist then talk to a banker (source: Scratch)


of Millennials have already used mobile payments (source: Accenture)

of mobile payments are made by millennials (source: Nielsen)

52%

millennials leading the way

45%

55%



In order to succeed in mobile payments, , you have to combine both the merchant and the shopper.



what’s in it for the providers?

Harness the power of data

Lock into services Revenue Loyalty


www.solstice-mobile.com18source: Forrester

mCommerce $42.5 Billion

In-person payment $3.7 Billion

Peer-to-peer transfer $5.25 Billion

$51 billion market in 2014



Business Intelligence

2018: $750

Billion

2017:

$718 Billion

Gartner

2018:

$707 Billion

Juniper

worldwide united states

2019: $142

BillionForrester



M-Pesa is used by 92% of Kenyans

54% of transactions on Alipay are on mobile in

Paytm is used my 50 million

individuals in India

mobile payments are already wildly popular in other parts of the world



● Host Card Emulation - Google Wallet, Samsung Pay

● Virtual Card - Google Wallet

● Tokenization - Apply Pay, Samsung Pay, Android Pay

technology used by the leaders in the industry



overview of card payments



google wallet



tokenization - apple pay



samsung pay

MST (loop pay) Works at more than 90% of existing terminals



FOR PHYSICAL MERCHANTS: ● POS terminals that support NFC and tokenization

FOR APPS: ● Use PassKit framework ● Physical goods and services only, otherwise use In App Purchases (IAP) ● Need to use a payment processor or gateway. ○ Some processors have Apple Pay SDKs

integrating apple pay



● API to allow developers to integrate payments. ● Google Wallet will use it. ● More details will likely be revealed at Google I/O on May 28 ● Will offer tokenization

here’s what we know so far about android pay



Pay with Wearables

Apple Pay

Facial Recognition

CurrentC

Voice Purchase

Technology Trigger

Peak of Inflated Expectations

Trough of Disillusionment

Slope of Enlightenment

Plateau of Productivity

Maturity

Vis

ibili

ty All emerging technologies go through a hype cycle. As soon as

new technology triggers ‘never been done before’ experiences, the hype begins to build. The end of the hype cycle, like pay with wearables, will be moving into the mainstream

mobile payments hype cycle



so why aren’t mobile payments taking off?



On-Demand Services

mobile payments enable new experiences



digital physicalMobile, beacons, IoT, and wearable technologies are blurring the lines between

physical and digital experiences.



This means omni-channel journeys need to be seamless and more engaging as customer’s

tolerance for clunkiness plummets.



You will see consumers switch to whatever brand

or service offers them best experience, even if that

means abandoning their previous brand loyalty.





what’s next?

DEVICES INTERNET TV MERCHANT METRICS CULTURE SHIFT



what’s next?DEVICES• The devices people own will play a larger role in their payment. • Payments are constantly evolving - the lines are “blurring” between digital and physical. • Digital interactions will require less and less action on your part to achieve your goal,

whether that goal is opening a bank account or buying lunch.



what’s next?INTERNET TV• Internet TV hardware, such as Apple TV and Chromecast, will enable

payments over your TV • When you see an ad for something you are interested in, you will be able to

buy it then and there.



what’s next?MERCHANT METRICS• Merchants will continue to contend with chicken and the egg problems for

constantly implementing software and hardware solutions on their end to play with these emerging forms of payment.

• The right strategy for merchants is to experiment on a small-scale and rollout larger deployments based on key success metrics, however they choose to define that success.



what’s next?CULTURE SHIFT• There is a cultural and psychological issue that mobile payments are

contending with, and winning. • Millennials are very wary of bankers — a lot of startups in the mobile banking

space are keenly aware of this and building their products accordingly. • Some people and cultures rely more heavily on cash because they trust it. • Subscription services are gaining prevalence because they appeal to busy

people, and time is becoming a resource just as much as money. • People’s thought process around payments is shifting from “Is this the lowest

price” to “Will this save me the most time.”



how frictionless is too frictionless?Do we want brands or services automatically buying things for us

based on predictive analytics past on our past history?

The answer is that it will be different for everyone.



the digital & physical worlds are merging in

new and exciting ways



Technologies are being cross-fertilized and pollinated across all industries, and unlocking brand new customer experiences that

we have never thought of before.



“The best type of payment is the payment you don’t see. You want it to be invisible.” - John Lunn, former Global Director of Paypal


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