Innovation in Payments Samee Zafar Director Mobey Day

Innovation in Payments Samee Zafar, Director Mobey. Day; Barcelona, 11 June 2013

Edgar, Dunn & Company (EDC) is an independent global financial services and payments consultancy. Founded in 1978, the firm is widely regarded as a trusted advisor to its clients, providing a full range of strategy consulting services, expertise and market insight. From offices in Atlanta, Frankfurt, London, Paris, San Francisco, and Sydney, EDC delivers actionable strategies, measurable results and a unique global perspective for clients in more than 35 countries on six continents. Global Experts in Payments Consulting Europe: London, Paris, Frankfurt USA: San Francisco, Atlanta Asia: Sydney 2

Mobile cellular connections are outstripping the world’s population Billions 9 Cellular connections 8 7 Population 6 Mobile phones installed base 5 4 3 2 Tablets installed base 1 0 2007 2008 2009 Source: EDC; CCS Insight; GSMA 2010 2011 2012 2013 2014 2015 2016 3

The payments marketplace is already congested. Few will become successful Successful Globally Market Specific Success Stories Emerging Players Extinct / Life Support 4

Combining payments with loyalty, rewards, incentives and other services the most widely considered service – is the mobile wallet Payment cards, loyalty cards, reward cards, coupons… all in one place Source: Feedblitz; new media now; Apple; tecnoish 5

Mobile wallets - Convenience through aggregation. Loyalty / Rewards Aggregation Payment Aggregation Travel / Event Aggregation For Visa Europe Internal Use Only Source: Provider Visa Mobile Money Workshop / 05 June 2021 websites 6

The traditional retail payment eco-system revolves around payment cards is highly successful and stable. . But can it support the mobile channel beyond payments? Payment Companies Card Acquirers Merchants Consumers Card Issuers 7

The mobile payments eco-system is more complex and evolving because payments is one of many moving parts Alternative Players Payment Companies ACH / Retail Banks Internet Innovators Card Acquirers Social Players Merchants Consumers Trusted Services Managers Gateways / PSP’s Digital Content Managers Source: EDC; Provider and Other Sites Card Issuers Mobile Operators Device Providers 8

Established payment providers face losing their customer relationships to new players – their roles reduced to “junior partners” providing infrastructure not products to end customers Payment Innovators Account on File Mobile P 2 P Online Via Internet Banking Mobile as POS “New” Mobile Wallets Emerging Markets Payments Infrastructure Providers 9

Pay. Pal leads in mobile wallets payment volumes but provides payments aggregation only (though virtually non-existent at POS) § Highly successful online and now mobile § Wide acceptance online § Connects to both existing cards and bank accounts § Challenge: POS; complete wallet Source: EDC Advanced Payments Report 2013 10

Card companies understand payments and associated risks – but struggling to provide complete wallet solutions § Dominant in retail payments – across all channels § Customer familiarity with cards § Driving to “payment aggregation” § Challenge: complete wallet Source: EDC Advanced Payments Report 2013 11

Google is banking on technology (NFC) and deep pockets New kid on the block Past experience not good Deep pockets and commitment Attempting complete wallet and all channels § Challenge: Acceptance § § Source: EDC Advanced Payments Report 2013 12

MNO’s “own” mobile but are new to payments (and associated risks) § § Source: EDC Advanced Payments Report 2013 Investing in payments and wallets Successful in developing markets Developing partnerships Challenge: wide acceptance; risk management 13

The winner will make it easy / convenient for buyers and economical for merchants Source: EDC Advanced Payments Report 2013 14

Thank You Samee Zafar Director Edgar, Dunn & Company Candlewick House 120 Cannon Street London EC 4 N 6 AS Tel +44 207 283 1114 Mobile +44 7825 027 526 Fax +44 207 283 1007 samee. zafar@edgardunn. com © 2012 Edgar, Dunn & Company 15