TSM perspective on future of mobile payments

1. TSM perspective on future of mobile payments Mobey Forum June 18, 2010, Helsinki Lauri Pesonen CEO, Venyon

2. Topics for the presentation • Enablers and drivers for Mobile Financial Services • Role of TSM in the Mobile Payment Ecosystem • Where are we now, future outlook • Questions & Answers Mobey Forum 18.6.2010 Page 2

3. Consumers carry multiple credential for their daily services Mobey Forum 18.6.2010 Page 3

4. Mobile phone consolidates consumer’s credentials as the ultimate device to use and conduct servicesMobile Financial Services are an essential part of this evolution Pay Communicate Identify Mobey Forum 18.6.2010 Page 4

5. … supporting mobile financial services • Payments at point-of-sale • Online payments • Person-to-person, money transfer • Account management, bill payments Common mobile enablers supporting Mobile Financial Services Common mobile enablers • Mobile subscriber penetration • Consumer acceptance of new services • Stickiness, mobile phone always with you • Advances in mobile technologies • IP convergence Mobey Forum 18.6.2010 Page 5

6. Advances in mobile technologies cater for implementation of compelling Mobile Payment services Online Application Life-Cycle Management Mobile Wallet Multiple Applications Branding IP channel Network Bandwidth SMS channel Rich Application Environment Online Services Secure Element Multi-application Smart Card chip: - Secure storage and processing of credentials - Compatibility with existing infrastructure ISO 14443 NFC Proximity Services Mobey Forum 18.6.2010 Page 6

7. Mobile Payments is new playing field for established and new schemes • Established payment schemes • Plug into the existing infrastructure and extend to mobile • Acquire new users for payment service -> more transactions • Leverage the mobile channel to introduce new services • More efficient operations • New payment schemes • Establish a new payment service leveraging the existing mobile subscriber base, such as mobile money services for unbanked • Develop a suite of mobile financial services • Merchant involvement • Mobile will play an important role as a new channel to drive consumers to merchant outlets & sites ESTABLISHED PAYMENT SERVICE PROVIDERS ACQUIRER ISSUER PAYMENT SCHEME MERCHANT CONSUMER NEW ENTRANTS Mobey Forum 18.6.2010 Page 7

8. NFC is an essential part and driver for Mobile Payments and other contactless services TRANSPORT OPERATORS MOBILE OPERATORS CONSUMERS • Leverage existing contactless ticketing infra to introduce mobile ticketing • Cost efficient OTA ticket issuance • More customers, less free riders • Mobile channel – new and convenient services to commuters • Role of multi-application Secure Element issuer • NFC as a new channel to existing operator services • New NFC based services • New customer acquisition, retention of existing customers with NFC phone MERCHANTS BANKS • Leverage existing contactless acceptance infra to introduce mobile payments • Mobile channel – portfolio of mobile financial services supported by frequently used payments • New customer acquisition, retention of existing customers • Leverage the investments in contactless acceptance • Mobile loyalty and CRM programs – enhanced consumer profiling with opt-in usage • More customers, more transactions • Always with you • Online connected • Proximity interactions • Customized UIs • Multiple services Mobey Forum 18.6.2010 Page 8

9. Mobile environment is fragmented • Multiple mobile phone platforms • Symbian, Android, iPhone OS, Windows Mobile, RIM OS, Maemo, Series 40, different Java implementations, … • Multiple Secure Element products from different vendors • SIM, microSD, embedded SE, SE/NFC accessories, passive and active stickers, … • Multiple service schemes and service providers • Applications from different schemes and service providers are to “co-exist” in the consumer’s mobile phone, with distinctive requirements and features of their own This complexity needs to be managed for all consumer services using secure credentials, such as Mobile Financial Services Mobey Forum 18.6.2010 Page 9

10. TSM’s primary role is to provide post-issuance SE application provisioning and life-cycle management services as a neutral and trusted service aggregator Transit SEI TSM MNOs Secure Element Issuers Banks, FIs TSM for SPs Service Providers Other SE Issuers SEI TSM Retailers Other Over The Air + Consumer’s Devices Mobey Forum 18.6.2010 Page 10

11. TSM and Mobile Payments • TSM provides the following core services to Mobile Payment schemes • Secure OTA provisioning and personalization of payment applications • Secure OTA life-cycle management of payment applications • GlobalPlatform type of LCM services – lock, unlock, delete • Application specific LCM services, such as OTA counter reset, PIN management, top-up etc. • Notifications between Secure Element Issuers and Banks / FIs • To support different schemes and service providers TSM service must be • Highly flexible to support different business process and interface requirements • Technology agnostic to support all mobile devices and secure elements • Secure, proven by relevant payment industry standard certifications • Scalable to grow with service ramp-up • Future-proof • Not only for Mobile Payments • TSM support for Mobile Payment applications should not be done in isolation from other services (e.g. loyalty, transit), as consumers will demand and use applications from all verticals with their mobile phones Mobey Forum 18.6.2010 Page 11

12. Where are we now with Mobile Payments? Mobey Forum 18.6.2010 Page 12

13. EVERYBODY HAS IT MANY SERVICES STRONG GROWTH ALREADY HAPPENING How does the future of Mobile Payments look like? Mobey Forum 18.6.2010 Page 13

14. Questions & Answers lauri.pesonen@venyon.com www.venyon.com Mobey Forum 18.6.2010 Page 14