Future of Payments 2012 - Stephen Coulter, Founder/Director, Emerging Thought

DrivingPayments Innovation

Stephen Coulter, Managing [email protected]

040.333.8888

©2012 Emerging Thought

Innovation is NOT.....

©2012 Emerging Thought

• Committees, APCA, ABA

• Myopic Process Focus– It’s not just a payment!– Payments are ancillary.

• Regulator Inspired, RBA

Innovation Is

©2012 Emerging Thought

• Customer Focus– Consumer– Business

• Big Picture Need

• Increasingly Global

• Right Culture

• Right People

(with piercings & nose ring recently

removed)

Payments is Communicationpayments are secondary - focus on the context

©2012 Emerging Thought

Banker to Entrepreneur....

©2012 Emerging Thought

Dec 2005

Wouldn’t it be great if customers could set up and manage all their Direct Debits centrally online

And Banks will be really keen to offer the service to capture share of wallet and improve “trust” values

April 2006Lodged Patent Covering USA, Australia & Canada

Our Rationale

Direct Debit under utilised

Remove the pain point while giving control to customer

Around 80 million DD’s in place with 25m new/changed each year

Make it simple for customers, cloud based for billers and banks

No Capex or Back End integration

Simple IdeaFocus on the pain point - “authority management”

©2012 Emerging Thought

Biller

Consumer

Bank

1.Authority Established Authorising Biller to

Debit Customer’s Account

2.Biller Sends Invoice to Consumer of Amount and Due Date Account

Will Be Debited

3.Biller Sends File to

Bank to Debit Consumer’s Account

4.Bank Sends Statement

of Consumer’s Account Reporting

Transactions

Controlabill Focusses on Step 1, All Other Processes Unchanged

Initial Market Focus - Banks

©2012 Emerging Thought

• Lots of Meetings

• Crossed Silos - No clear business owner

• Lots thought it’s a good idea

• No real traction

• GFC starting

• Get a job to pay rising Patent Attorney Bills!

Not Invented Here TrapThink About Strategic Alliances/Investments

©2012 Emerging Thought

• Remember these guys?• Founders of a small start-up in late

1990’s• PayPal!• No Aussie Bank took up an offer to

own 1% of PayPal for a 7 figure amount.

• At least one Bank had an internal project that cost more than potential investment - never launched

Payments is Communicationcommunicate information more useful than the payment

©2012 Emerging Thought

An Entrepreneur’s Life

©2012 Emerging Thought

2010

• Patent investment $100K+• Look for Investors• Finovate San Francisco,

Tech23 Sydney, others• Mint, a hot topic• Controlabill, good fit with

emerging trends

An Entrepreneur’s Life

©2012 Emerging Thought

2010

• Met US Banks, Billers, Tech Leaders, Card Schemes

• Identified US partners, due diligence on targets

• Detailed business plans

• Relationship with FinTech VC’s and investment areas of leading tech companies

• Commercialisation Australia grant investigation

An Entrepreneur’s Life

©2012 Emerging Thought

2011

• US trip to close deal

• Close, but no funding

• Patent investment $200+

• Lots of inspiration & ideas

• Create a new business

• Leverage learnings, cross pollinate both ways!

Payments is CommunicationPayments are data rich - share it with customers

©2012 Emerging Thought

Square’s Services Today

©2012 Emerging Thought

Square’s Doing Alrightso is Jack!

©2012 Emerging Thought

• $8b in payments• Growing Rapidly

• Raised $341m• Valued >$3B• Shareholders include

– Visa

– Citi

– Sir Richard Branson

– Starbucks– Marissa Mayer(Yahoo CEO)

– Biz Stone (Twitter Co-Founder)

– Who’s Who of VC’s

• No Australian investors?

Advance Australia Square

Wouldn’t Square be Worth Aligning With? • Quick to market - for any Acquirer

• Good fit for Tyro?

• Loyalty Operator with many merchants

• CommBank?, CAN’T or CAN?

An Entrepreneur’s Life Today

©2012 Emerging Thought

2012

‣ Working 2 Businesses is more productive!

‣ Australian patent approved, US close, Canada 2013

‣ Successful 1st round capital raising

‣ Account Switching Regulations introduced

‣ Commercialisation Australia grant imminent

‣ Pilot customers projects - still room for more!

‣ Australian product for, billers, direct to consumer brands and banks incl Account Switching service

iSwimtoo beta launched, corporate interest!

Innovation Tips

©2012 Emerging Thought

• Focus on Customer behaviour trends NOT Pure Payments

• Payments is communication - think like a publisher

• Payments is data rich - transform it to wisdom for yourself and customers

• Don’t reinvent - identify, adopt, license/invest

• Protect & Promote Intellectual Promote early - claim ownership and draw out any prior art - Ric Richardson

• Look for distribution in Payment Apps with likely long term wallet leaders, Apple, Google, PayPal, Amazon

‘You Should Not have to Think About the Mechanics of Payments” Jack Dorsey

Questions

Now

or [email protected]

[email protected]@iswimtoo.com

040.333.8888