1.
The Consumer Side of NFC and Mobile Payments
Mobile Convention Amsterdam (22 May 2013)
Dan Armstrong (dan.armstrong@takashimobile.com)

2.
marketplaceMCI (1994-96)

3.
marketplaceMCI (1994-96)

4.
1-800-MUSiC-NOW (1996)

5.
 Speed & efficiency
 Global markets
 Products & choices
 Comparison, reviews
 The long tail
 Social media
 Viral movements & news
 Monetising clicks
 Spam
 Porn
The e-commerce shake out

6.
… 2 fundamental types of transaction players?
Transactions are the
Channel
”I have a pipe and/or network and I want to monetise the
investments I made in creating it.”
”I want as much to get through that pipe and the (mobile)
phones accessing it as possible.”
Transactions via the
Channel
”I have stuff I want to do via channels. Enable my consumers to
control their bank account, make a payment, get a ticket, see an
ad, save or use loyalty points, etc.”
”I need as many (cost effective) channels and pipes to do it.”

7.
How shall we define “transaction”?
Bank Account Value
Transfer, Payments
Value Depletion,
Prepaid, Wallets,
Transportation
Loyalty, Points,
Coupons,
Transformation
Moments
Eyeballs, Trust,
Engagement, Action
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8.
 50% of consumers will pay more for products they trust
 78% of consumers will look first to trusted brands when
in need of products or services
 78% of consumers are willing to give trusted brands a
chance, even if unsure of what value the product or
service will bring to them
 82% of consumers will choose to use a trusted brand’s
products or services frequently, rather than move
between brands
 83% of consumers will recommend a trusted brand to
others, often un-prompted
Trust?
Concerto Marketing Group, Vancouver BC, Canada / Ontrack Advisory, Singapore (April 2013)

9.
“Mobile” Banking & Payments Space: 1 View
CallCentre Banking
IVR Banking & Payments
SMS & Calling Alerts
(spending, ATM usage, fraud, etc.)
Transactions with Teller or
Agent using Mobile Devices
Mobile Banking & Payments Remote Payments &
Electronic Wallets
Mobile Contactless /
Proximity Payments
MNO “Mobile Money”
Mobile Remittances Advertising-led Models
= banks deploy = bank-led models = cooperative models
= mobile operator-led models = mobile operators deploy = third-parties deploy
= public transportation-led models
Mobile Contactless /
Proximity Payments

10.
2 Popular Starting Points for Mobile Proximity Payments
Card Emulation Bypass Card Emulation
 Phone takes the place of a
physical card to transact at a
physical merchant location
 Consumers are comfortable
with card operating models
 Standardisation and ubiquity
of acceptance points a must
for economies of scale
 Requires compatible
card/mobile acceptance
infrastructure
 Trigger remote payment with
phone (apps, other manner)
 Confirmation can be pushed to
merchant, but how to localise
the payment location without
NFC?
 Receipt can be printed at POS
 Latency in making payment
this way vs. cards
 EMV / secure PIN keypad
 Card acceptance still required

11.
Proximity Payments
OfflineCounter
EnablesPayment
value on the card value in “the cloud’
Mobile
Authentication
EnablesPayment
card-emulationbypasscard-emulation
Card
Authentication
EnablesPayment

12.
Mobile NFC PIN Emulation Trial @ C1000 (2007-2008)

13.
Mobile NFC for Low-Value Payments in Vending (2007-08)

14.
NFC Mobile as Retail Shopping Tool, Issued Device & Acceptance
Point @ AH To-Go (2008)

15.
What do we expect from a wallet?
 A place to store cash?
 A place to store payment
tokens?
 A place to store other tokens?
 A personal object?
 A private object?
 Something small enough to
be portable/mobile?
 … but … do we need a
physical object?

16.
Then, what do we expect from a transaction device?
 Identification of myself, my
rights and capabilities,
memberships.
 Identification of myself, an
authentication tool for
payment.
 Secure, multi-factor
 Tamper-resistant/evident
 Personal and private
 Easy to use
 … but … do we need a
physical object?

17.
 Consumers seem to love and trust it
• But who will pay for it’s implementation … merchants, banks, mobile
operators, handset manufacturers?
 Given the “app revolution” in so many of our markets,
what value does NFC bring to payments?
• Convenience?
• Put all cards in one apparatus?
The phone-shaped wallet ..
• Addiction to mobile phones, but
not to our wallets?
• Leave cards at home?
• Add value to transactions?
The Consumer’s Perspective on NFC?

18.
 Cards seem to be entrenched in many markets (like NL),
and are likely to remain in play for the foreseeable
future, simply increasing the issuer and acquirer costs.
 But, is NFC is fundamentally different from previous
steps forward in functionality .. ?
The Consumer’s Perspective on NFC?
SMS Mobile Data
Apps
Online Shopping
& Payment

19.
Virtualisation benefits are clear, from the business POV ..
0
50
100
150
200
250
300
350
400
450
500
1980 1985 1990 1995 2000 2005 2010
*1million
Contacts via
devices (e.g. web
browser/internet, m
obile phone, IVR)
Total Customer Contacts
Contact via a
bank
advisor, bank
branch

20.
 The case is clear for our creativity to make virtualised
ecosystems work.
 But it will take a lot more creativity, usability and value
to become a real business driver.
 And for banks, they also need to achieve this without
sacrificing trust, security, longer-term relationships,
and (a certain degree of) transparency.
Virtualisation benefits are clear, from the business POV ..
Information
Some Branches
or a Website
Trust

21.
For your consideration .. impulse purchase / spam

22.
For your consideration ..

23.
 Although you could still easily pay with a card when
you get to the POS …
For your consideration ..

24.
 Limited smartphones
 Limited (& expensive)
mobile data
 Limited (& expensive) fixed
internet & electricity
 Limited literacy
 Limited trust in banks
 High cost of ATMs & bank
branches, limited in-country
IT capabilities
 Limited amount of people
with official IDs
 Everyone wants a card
anyway, it’s modern
 Limited cards issued &
limited acceptance points
(esp. NFC)
Leap-Frogging Card Acceptance Infrastructure in Africa

25.
Bank Branch: Rwanda
No power, internet connectivity

26.
Bank Branch: Rwanda
Waiting for teller cash withdrawals

27.
Bank Branch: Rwanda
Teller

28.
Bank Branch: Rwanda
Teller

29.
BPR Simbuka

30.
BPR Mobile Road Shows & Sign-up Success

31.
BPR Mobile Road Shows & Sign-up Success

32.
Thank You!
Dan Armstrong
Takashi Mobile | Financial Services
Rapenburgerplein 81
1011 VJ Amsterdam
The Netherlands
www.takashimobile.com
dan.armstrong@takashimobile.com
+31 652 085 071
skype: dd.armstrong