1 Draft - For Discussion Only 1 State of US Mobile Payments (NFC) Chandra Srivastava Business Leader, Visa SCA Mobile & NFC Council 2013 Payments Summit February 6, 2013 Visa Public (NFC State of the Industry Panel)
1 Draft - For Discussion Only 1
State of US Mobile Payments (NFC)
Chandra Srivastava Business Leader, Visa
SCA Mobile & NFC Council
2013 Payments Summit
February 6, 2013
Visa Public
(NFC State of the Industry Panel)
2 Draft - For Discussion Only 2
State of US Mobile Payments (NFC)
Visa Public
3 Draft - For Discussion Only 3
NFC Solution Launches
NFC handset launches
POS NFC Enablement EMV Migration Mobile POS
Bank Cards in Wallet
Other Mobile Wallets / Apps
Other Initiatives .
Key Recent Industry Highlights in Mobile Payments
Visa Public
Note: Use of 3rd party logos does not imply Visa endorsement
4 Draft - For Discussion Only 4
NFC Payment Ecosystem – progress En
ablin
g In
fras
truc
ture
C
onsu
mer
Cho
ice
CONSUMERS
The first & last say…
Payment Networks
Banks
MNOs
Mobile Wallet
Mobile Operating Systems
Device Manufacturers
NFC Chipset/Secure Element Providers
Trusted Services Manager
Payment Terminals
Visa Public
Note: Use of 3rd party logos does not imply Visa endorsement
5 Draft - For Discussion Only 5
Key Factors – NFC Market Development
NFC market is still in the early stages…
Indicators are pointing in the right
direction, but widespread
adoption seems to be few years away
Mobile Handset Refresh
Mobile Payment
Credential Issuance
Merchant Payment Terminal Refresh
• U.S. consumers replace their mobile handsets every 20-24 months
• Smartphone penetration is increasing • Major OEMs building NFC into new models
• Traditionally, payment terminal refresh cycle is 5+ years
• Payment network EMV initiatives may accelerate refresh/upgrade in U.S.
• Major payment terminal vendors now integrating NFC into most new models
• Isis and Google merchant activity in U.S.
• Isis Wallet – participation by Visa, Mastercard, AMEX
• Sprint: currently supports Google Wallet; • Complexity and friction involved in establishing
commercial and technical integrations with MNOs, TSMs and wallet providers
Visa Public
6 Draft - For Discussion Only 6
Availability of NFC Smartphones is Growing Rapidly
Source: Juniper Research, May 2012
Key Drivers: • 9 of Top 10 OEMs integrating NFC in devices (e.g., Samsung, LG, HTC, RIM, Nokia, Motorola) • 3 of Top 4 mobile OS’es support NFC (Android, Blackberry, Windows)
147 229
389
611
925
1,234
2012e 2013e 2014e 2015e 2016e 2017e
Global NFC Handset Forecast (millions)
NFC Smartphones
CAGR 53%
0%
10%
20%
30%
40%
50%
60%
70%
80%
2012e 2013e 2014e 2015e 2016e 2017e
NFC Smart phones as % of Total Mobile Handsets
North America Western EU
Far East & China Global Avg
Source: Juniper Research, May 2012
Visa Public
7 Draft - For Discussion Only 7
POS Acceptance of Contactless Payments Anticipated to Grow
Source: Berg Insight, June 2012
CAGR 49.4%
Global 53%
US 86%
EU 78%
ROW 38%
Penetration:
NFC acceptance is becoming standard in the majority of current product models from the major card terminal manufacturers (VeriFone, Ingenico, Equinox)
Visa Public
NFC Enabled Product Families
MX 800 Series VX Evolution
Vx 810 QX1000 PINpad 1000SE
Vx 810 DUET R3210
iST150 Telium
iWL Touch iWL200 iCT200
iPP
L5000
POS Terminal Market Share of 93% (Aite Group)
EMV Contact/Contactless Migration key to US Payment Terminal NFC enablement
8 Draft - For Discussion Only 8
Global NFC Retail Payments Expected to Reach $180B in 2017
$23.4 $31.6 $53.3
$84.5
$130.5
$180.5
2012e 2013e 2014e 2015e 2016e 2017e
Source: Juniper Research, May 2012
Global NFC Retail Payments ($ in billions)
Visa Public
9 Draft - For Discussion Only 9
Emerging Mobile Payment Trends
• Emerging and established players are innovating on the existing payments infrastructure
- Solutions aim to address consumer demands for frictionless, cross-channel shopping with rewards and buying tools
- Merchants are playing an increasingly important role (e.g. Starbucks, MCX)
• Competition for access to data access is intensifying - For a number of alternative schemes, payment data, not payment revenue, is
the end game
• Cloud-based credentials combining with mobile form factors to enable new consumer payment services
- Consumer device platform providers moving to control consumer identity and embed payments as a service
• Acceptance ubiquity is critical for consumer value proposition - Open network versus closed networks - Mobile POS innovation is extending reach to new classes of merchants
Visa Public
10 Draft - For Discussion Only 10
Summary
• NFC payments market is in early stage – positive market trends for growth
• NFC Handsets enablement is happening and may not be the big constraint
• NFC POS Enablement @ Retail is key
• Consumer adoption may require multi-party effort for acceptance & provisioning
• Value Added Services (offers, loyalty, etc.) / Mobile Apps may play a crucial role in consumer behavior change
• Alternate Mobile Payments solutions – compete / co-exist
Visa Public
11 Draft - For Discussion Only 11
Smart Card Alliance Mobile and NFC Council • Mobile and NFC Council formed in 2012 – over 70 member
organizations
• Charter – Raise awareness and accelerate the adoption of payments, loyalty,
marketing, promotion/coupons/offers, peer-to-peer, identity, and access control applications using NFC
• Key Activities – NFC Ecosystem webinar (member access only) – Mobile & NFC Standards Landscape paper – New activities being planned for FY13
• NFC Solutions Summit May 15-16 2013, San Francisco
Visa Public
12 Draft - For Discussion Only 12
Thank You
Visa Public