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The Evolution of the Mobile Payments Landscape

The Evolution of the Mobile Payments Landscape. August 2013. A Technology that is Moving at Light Speed. The Mobile Device as Pivotal Driver to a Dynamic Market Aligns competitors as collaborators Expands the possibilities of new products/services

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The Evolution of the Mobile Payments Landscape

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  1. The Evolution of the Mobile Payments Landscape August 2013

  2. A Technology that is Moving at Light Speed The Mobile Device as Pivotal Driver to a Dynamic Market Aligns competitors as collaborators Expands the possibilities of new products/services Has already introduced unique qualities such as: Multimedia services GPS Internet Access Mobile telephony SMS/MMS Camera Social Media All of which have the potential to impact how we pay for goods and services both physically and virtually In Retail, it’s already happening

  3. Driving Innovation with Retail Payments Mobile and digital wallets NFC and cloud-based POS Solutions Mobile apps QR and 2d Barcodes Merging these technologies modifies the landscape with use cases that include: POS, online and other remote payment methods Uses that include C2B and P2P New payment methods inclusive of virtual prepaid, ACH debiting and Direct Carrier Billing (DCB) Cross-industry players in the sandbox together Large banks and MNOs with card networks, retailers, mobile solutions providers and well-funded start-ups

  4. Fragmentation remains; Developments gain An ‘open model’ could stabilize developments for an interoperable mobile payment system But would stifle innovation, which is where we are today New solutions don’t wait for the stability promoted by having an open set of standards So the eco-system challenges new entrants in their ability to achieve scale and sustainability; while technology drives innovation and improved efficiencies. Where have we been and where are we going? What’s happened over the past 2 years? What might happen between now and 2015? And after that?

  5. Eco-system participants and their evolution MNOs partnered with banks, card networks and technology providers to pilot mobile payment networks ISIS – using the SE Google Wallet – putting the SE in the cloud and then modifying their approach MNO powers over the apps ameliorated by Apple’s and Google’s app stores Smartphone/terminal manufacturers

  6. Eco-system participants and their evolution Smartphone/terminal manufacturers – Handsets Embedded NFC or SIM-based SE? Will MNOs begin to activate NFC in their handsets? If so, we should begin to see more POS devices installed by retailers, despite the software and operational challenges imposed by contactless payments

  7. Eco-system participants and their evolution Merchant implementation of contactless readers has been slow to date, but is expected to accelerate due to: March 2011, VeriFone announces all new POS terminals are shipped with NFC-enabled technology In March 2012, ISIS cuts deals with VeriFone, Ingenico and Equinox to ensure the ISIS technology works with the vendors’ POS equipment In the cloud, payment credentials stored in remote server, not the SE, so it by-passes the MNO’s ability to limit app deployment but requires internet connectivity to work Not good in the subway NFC embedded in the SIM allows the MNO to control the SE and what is stored there

  8. Summary – what will drive mobile payments Banks will be players and consumers trust the payment form factors their banks give them (while not actually trusting the bank itself) POS terminals with NFC-enabling technology will be deployed Payment applications will proliferate using top-of-wallet and top-of-mind initiatives such as transit MNOs will share control of the SE to ensure they remain a player and are not by-passed in the evolutionary process Value loads will use the ACH to move $ from bank account to phone MCX will fail for lack of QR security OR MCX will have limited success with closed loop-like environment

  9. AND FINALLY EMV WILL CREATE THE NEED FOR NEW PLAYERS, NEW POS INFRASTRUCTURE AND NEW OPERATING MODELS WHERE MOBILE WILL BE THE FORM FACTOR OF CHOICE!!!

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