Mobey Forum Member Meeting Las Vegas Taking Prepaid

Mobey Forum Member Meeting Las Vegas: Taking Prepaid into Account Mobile Wallet Workgroup May 7 th 2014 Amir Tabakovic, Head of Market Development, Post. Finance, Chairman of Mobile Wallet Workgroup, Mobey Forum

Most important first prepaid is a major driving force in the near future of mobile wallets

PRI VAT E LA BEL Prepaid is… D E S P O O L C ‘a container into which valuables can be stored and retrieved using specific methods’ H S A C S T N OU ACC RT UA L S D R A C T GIF PH YS ICA LC AR D OPE VI NL CA OO P RD R O T S L A V ED C C A UE S T N OU

Source: Master. Card / partners in prepaid

Past: simple but effective tool Merchants • means of increasing the brand loyalty of customers • anticipation of future purchases in exchange for store discounts Transport and ticketing services • Prime examples: Hong Kong’s Octopus prepaid travel card or London’s Oystercard MNOs • Airtime • fewer contractual obligations • PAYG accounts have eclipsed their pay monthly counterparts

Mobile Future: plenty 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 Digitization of 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 for the producing physical cards anymore - is there?

Benefits of mobile prepaid Customer side • Lower entry barriers • More control • More functionalities • Perceived security Business side • Lower entry barriers • Lower operational costs • More flexibility • Business agility • Less restrictive regulatory environment

Mobile Wallets 1. 0: digitizing leather wallet • different stakeholders - each of them holding a peace of puzzle (control points) • Each of them vying to establish a commercially influential position in the value chain àdeadlock and market fragmentation àreduced integrative potential and market adoption

Mobile Wallets 2. 0: reinventing commerce • strengthening the brand loyalties of customers • uniquely pleasurable shopping experience • minimizing the inconvenience of payment àprepaid, a way to minimize payment disruption àfocus on unique advantages to conventional commerce

Examples: reinventing commerce Starbucks (US, Canada, UK) At. B (Norway)

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 àprepaid as a model for personal mobile banking àprogressive banking customers and NOT underbanked

Examples: reinventing banking T-Mobile Money Google Wallet Amex Bluebird

Side-stepping banks with prepaid • Customer centric model • Experience • Simplicity and flexibility

Limits of prepaid (mobile or not) • mobile or otherwise, 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

Prepaid options for banks • Option one: Deploy an invisible prepaid infrastructure in support of a new service • Option two: Establish a prepaid agent network and resell the products of high profile merchants • Option three: Use prepaid openly and actively • Option four: Play a supporting back-end role to new players in prepaid

Examples: options for banks Option 1: Danske Bank Option 2: Post. Finance Option 4 Moven CBW Bank

Looking to the future • prepaid - a major driving force in the near future of mobile wallets • problems with regulations, operating procedures and legacy systems integration are no good excuse for missing the momentum • more engagement with the merchant sector • paying attention to possible disruption of current account and customer relationship • questioning the own role in the ecosystem

Special thanks to the core team! • • Hans S. Ildstad Thor Ragnar Klevstuen Sarah Kocianski Kasper Sylvest Olsen Ville Sointu Kristian Thure Sørensen Anne K. Shreiner André Zölch EVRY Monitise Danske Bank Ericsson Nets American Express Post. Finance

Enjoy the dinner, hosted by Amir Tabakovic, Head of Market Development Post. Finance Member of the Board of Directors at Mobey Forum amir. [email protected] ch @TABAKOVIC ch. linkedin. com/in/tabakovicamir