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William Hoyle Charity Technology Trust Virtual Money CFDG Conference – April 2005

William Hoyle Charity Technology Trust Virtual Money CFDG Conference – April 2005. Contents. Virtual money. Facts & Figures Internet use & e-Commerce What are charities doing? Virtual Payment services – what is available? Mobile as an online donations channel. Payments Market Place Today.

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William Hoyle Charity Technology Trust Virtual Money CFDG Conference – April 2005

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  1. William Hoyle Charity Technology Trust Virtual Money CFDG Conference – April 2005

  2. Contents • Virtual money. Facts & Figures • Internet use & e-Commerce • What are charities doing? • Virtual Payment services – what is available? • Mobile as an online donations channel

  3. Payments Market Place Today • Plastic cards are the most heavily used non-cash payment method in the UK, with around 123 million multi-function payment cards in issue at the end of 2002. • There were a further 23 million cards whose sole function is to withdraw cash and 22 million store cards. • Approximately 90% of adults hold one or more cards. • The number of transactions on UK-issued cards increased by 9% in 2003 to reach 7.2 billion. • Total plastic card spending was £211 billion during 2002, or £86 per adult per week. Source: Association For Payment Clearing Services APACS

  4. Payments Market Place Today • Card Fraud in the UK reached £505m in 2004 up 20% on 2003. Fraud is growing rapidly in many countries around the world, highlighting the importance of a global card security system • Chip cards provide the basis for this as they are built to an internationally-agreed standard, with many countries around the world already implementing chip systems. • Chip technology uses highly sophisticated processing to identify genuine cards and make counterfeiting extremely difficult and hugely expensive. • Over the next two years all debit and credit cards in the UK will be reissued with embedded microchips, identifying cardholders using a personal identification number (PIN).

  5. Card Payments Processing how it works

  6. Internet Use • There are now nearly 60% of UK households with access to the internet.* • 66% of adults have used the internet at some time and of these 85% are regular users and half use the internet every day * • Broadband take-up in the UK is around 6m connections and speeds of 2-4mb are now available at around £40 per month* • Broadband connections should overtake dial-up by mid 2005 • Internet & email traffic levels over Christmas 2004 were similar to that of a normal weekend ** • Beyond web browsing, the fastest growth in internet use is in the e-commerce arena* *Ofcom ** Ofcom/LINX

  7. Internet Use

  8. Internet Use e-Commerce • 46% of adults spent over £200 on the web in the three months prior to Oct 2004* • £3.5bn spent online in the UK over Christmas 2004, an increase of 40% on 2003** • 10% of all UK credit card spending now takes place online • tesco.com claim to have taken 750,000 online orders for Valentines Day roses in 2005! • 18% consumers do at least part of their banking on the internet*** • A growing proportion of 16-44 year olds prefer self service facilities*** *NS Omnibus Survey **Source IMRG ***NFP Synergy/nVision

  9. Card Payments Processing via the Internet

  10. Online Payments - What are charities using? • 55% of charities accept online credit card donations • Over half of these charities outsource this function • 70% of charities not accepting online donations, plan to develop this function in the future. • Back office processing often handled separately • Only 19% of charities offer an online direct debit donation facility. Source:Giving (in) to the Internet - Jan 2005 - Goatman.

  11. Direct Debits • 35 million people in the UK now use Direct Debit • People pay an average of five bills by Direct Debit • Since 1990 the proportion of people who actively prefer to pay their bills by Direct Debit has risen from 11% to 48% • In 2004, over 2.6 billion Direct Debits were processed by the high street banks and major building societies • 48% of all regular bills are paid for using Direct Debits. This is the most popular method compared to cheques (16%), cash (11%), credit cards (4%) and debit cards (2%). Source: BACS

  12. Online paymentsCharity Sector Trends Website Purpose Mean Scores & Ranked Order Source : Giving (in) to the Internet, Goatman 2004

  13. Charity Sector Trends Differences Between Website Purpose Mean Scores (Fundraising Income) Source : Giving (in) to the Internet, Goatman 2004

  14. Virtual Money – What is available? • online card donations systems • online direct debit payments systems • combined online and back office processing, administration and collection management systems for: • credit and debit cards (single and repeat donations) • - direct debits (combining paper and paperless)

  15. Virtual Money – What is available? online Card Donations systems

  16. Virtual Money – What is available? online Card Donations systems

  17. Virtual Payment Services - What is available? online Direct Debit systems

  18. Virtual Payment Services - What is available? online Direct Debit systems

  19. Virtual Money - What is available? Integrated Administration and Management systems -Cards

  20. Virtual Money - What is available? Integrated collection management systems - Direct Debits

  21. Mobile Payments • There are more mobiles in the UK than people • More interesting perhaps is the growth of mobile data • 2.5bn text messages in January 2005* • 133bn WAP pages in 2004* • 72% of women prefer to text than talk!** • One third of over 65’s with a mobile use text on a regular basis** * Source: MDA 2005 ** Source :ICM

  22. Mobile Payments • Traditionally viewed as high cost, low ticket. i.e. SMS • High Speed Mobile Data networks ‘3G’ create a new payments channel • Colour screens, higher bandwidth, compelling content • Wireless protocols will enable ‘proximity payments’ • Major inhibitor is consumer perception of security • Individual schemes already in place • Vodafone m-pay • Standards the key to acceptance • Mobile Payments Forum • Simpay

  23. Mobile Payments- typical transaction

  24. Summary • E-Commerce is growing rapidly and accounting for a significant element of consumer purchasing • Charities are slowly catching up with the exception of online direct debit • There are tools available that enable these services, simply and efficiently • Growing consumer acceptance of interactive services will have wider implications for charities over time • E-Commerce will extend to the mobile channel (m-commerce) as 3G rolls out and will cease to be a low value/high cost option

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