Taking Prepaid into Account

1. Taking Prepaid into Account Wednesday, 17 September 2014 CEESCA, Budapest

2. Most Important First Prepaid is a major driving force in the near future of mobile wallets

3. Prepaid is… Private label Closed Loop ‘a container into which valuables can be stored and retrieved using specific methods’ CASH Accounts OPEN Loop virtualcard Gift Cards Stored Value accounts physicalcard

4. Source: MasterCard / partners in prepaid

5. Past: Simple but Effective Tool

6. Mobile Prepaid: A Future Full of Opportunities Enhancing existing physical products via mobile channel • Mobile reload / top up • Additional channel to improve customer value • Interactive channel to get in touch with the users

7. Mobile Prepaid: A Future Full of Opportunities Enhancing existing physical products via mobile channel • Mobile reload / top up • Additional channel to improve customer value • Interactive channel to get in touch with the users Digitisationof existing physical prepaid solutions • Replacement or endorsement of the existing solution • Host card emulation (HCE)

8. Merchant has a Winning Combo: HCE (or) Apple Pay + (Closed Loop) Prepaid Bank MNO Payment Scheme

9. Mobile Prepaid: A Future Full of Opportunities Enhancement of existing physical products via mobile channel • Mobile reload / top up • Additional channel to improve customer value • Interactive channel to get in touch with the users Digitisationof existing physical prepaid solutions • Replacement or endorsement of the existing solution • HCE? Development of new mobile-based prepaid solutions • Launching a new mobile-based prepaid solution • No need to produce physical cards anymore - is there?

10. Benefits of Mobile Prepaid

11. Mobile Wallets 1.0: Digitising Leather Wallet • Different stakeholders - each of them holding a piece of the puzzle (control points) • Each of them is vying to establish a commercially influential position in the value chain Deadlock and market fragmentation Reduced integrative potential and market adoption

12. Mobile Wallets 2.0:Reinventing Commerce • Strengthening the brand loyalties of customers • Uniquely pleasurable shopping experience • Minimising the inconvenience of payment Prepaid: a way to minimisepayment disruption Focus on unique advantages to conventional commerce

13. Examples: Reinventing Commerce Apple / iTunes (Worldwide) AtB (Norway) Starbucks (US, Canada, UK)

14. Mobile Wallets 2.0:Reinventing Banking • Prepaid instead of current account • Challenging the banks at their own game • Integrated cashback, reward and loyalty schemes of high street and online retailers Prepaid as a model for personal mobile banking Progressive banking customers and NOT underbanked

15. Examples: Reinventing Banking T-Mobile Google Wallet AmexBluebird Mobile Money

16. Limits of Prepaid (Mobile or not) • Mobile or not, it must be ‘loaded’ • No credit, prescribe or interests facilities • Not covered by any guarantee scheme (insolvency) • No official board of appeal (customer complaints) • Those that do not operate on the network of a major payment scheme, may be less frequently accepted by merchants

17. Prepaid Options for Banks • Option 1: Deploy an invisible prepaid infrastructure in support of a new service • Option 2: Establish a prepaid agent network and resell the products of high profile merchants • Option 3: Use prepaid openly and actively • Option 4: Play a supporting back-end role to new players in prepaid

18. Examples: Options for Banks Option 1: Danske Bank Option 2: PostFinance Option 3: Use prepaid actively & openly Option 4: CBW Bank ?

19. Looking to the Future – What a Bank Should Consider

20. Special Thanks to the Core Team! • Anne K. Shreiner American Express • Hans S. Ildstad EVRY • Thor Ragnar Klevstuen EVRY • Sarah KocianskiMonitise • Ville Sointu Ericsson • Kasper Sylvest Olsen Danske Bank • Kristian Thure Sørensen Nets • André Zölch PostFinance