The Future of Payments: bringing consumers on board ©TNS 2013 1 Irene Ierardi Senior Research Executive TNS Finance Webinar, 16 Gennaio 2014, Milano
The Future of Payments:
bringing consumers
on board
©TNS 2013 1
Irene Ierardi
Senior Research Executive TNS Finance
Webinar, 16 Gennaio 2014, Milano
The roadmap
Payments today:an ecosystem in evolution1
Taking a closer look at consumers’ trends2
How TNS responds: a UK case study3
Activating insight to bring consumers on board
Looking to the future:pay your way5
4
TNS can take you
©TNS 2013 2
TNS can take you through the detail to unlock growth
A range of providers have harnessed technology to create a range of payment solutions
Apps
Smartphones
Laptops
Tablet
Mobiles
Devices
Cards
©TNS 2013
PAY
5
PAY
Telcos
Technology
Retailers
Banks
Software
Providers
Purchasing and payment behaviours are changing due to emerging trends
1. Technology Digital technologies, mobile, emerging retail models marrying virtual and physical environments
2. The shift in Reassurance, value for money, convenience,
©TNS 2013
PAY
PA
8
2. The shift in consumer expectations
money, convenience, simplicity, time saving
3. Social economic change
Social-economic change: Senior, Millennial, Migrants
Technology is pervasiveDigital facts and figures
European Internet users (% population*) European Facebook subscribers (% population**)
63%
518.512.109
31%
250.934.000
©TNS 2013 9
European E-ShoppersEuropean smartphone ownership
Source: *Internetworldstats, June 30, 2012; **Internetworldstats, December 31, 2012;*** TNS Digital Life 2011; **** Ecommerce Europe , 2012
45% (% population***)
52% % Internet users among
mobile owners
31% (% population****)
€311,6bn (turnover****)
85%
InternetPenetration
40% 80%
62%Go online daily
Are brand
CHINA FRANCE
Technology is pervasive Are you on Facebook? Twitter? Pinterest?
% of Internet users that: % of Internet users that:
©TNS 2013
23%
29%
88%
33%
74%
91%
Are brand fans on SN
Write about brands online
Research brands online
10
Source: Digital Life 2011
The digital empowered consumer impacting on Corporate Reputation
Trust and transparency are key words: social media is hugely influential, more so than a brand’s own voice
Disagree
10
11
63
68
Agree
“What other people say about brands can be trusted more than what brands say themselves”
France
Poland
©TNS 2013 11
11
23
16
68
40
62
Poland
Brazil
South Africa
Source: TNS Digital Life 2011; I11; Comment reading attitudes Base: Online comment readers (all categories); 1167, 896, 1423, 184
Mobile bankingChecking bank accounts and using online payment mechanisms through specific apps or dedicated websites on your mobile phone
22%
New devices are changing behaviours: mobile and the financial world
©TNS 2013 12
of mobile users globally have performed banking activities on their phones
22%
Source: TNS Mobile Life 2013
Consumers’ needs: at TNS, we speak about 3 currencies
Money
When you employ and activate technology, ask yourself: does it help my customers save money, time or angst?
The financial crisis gave permission to people to look for valueShoppers are better informed, partly as a result of digital and social media, about deals and about whether they represent good value
©TNS 2013
Time
Angst
13
Need of reducing the emotional and mental clutter in life so to make space for the important things
Consumers are looking to simplify: brand touch points (shop, online, mobile, tablet) have to guarantee a seamless experience
Social-economic change: the “Grey Age” getting real
01
By 2050 2 billion “seniors” globally–over 60 years
02
Europe today:65 or more years old: 17.5 %
©TNS 2013 14
03
Europe 2025: 65 or over more than 20%
04 Rapid increase in no. of over-80sin the EU-27’s population: is projected to almost triple between 2011 and 2060
EU-27 - Median age: 1990 - 2010 - Eurostat
The “Millenials” have grown up as "digital natives“this will probably lead to greater demand for payments to be instantaneous or 24/7
LIMITLESS CONNECTIVITY:
The ability to operate in a multimodal, trans-media world is a baseline for Millennials
REAL-TIME INTERACTION:
Millennials live on-the-go, and their
©TNS 2013 15
Millennials = born between 1979 and 1997; ages 16-34 in 2013
Millennials live on-the-go, and their mobile devices ensure they are always connected and living in real time
LIVING LIFE THROUGH TECHNOLOGY:
For Millennials, digital isn’t just about bringing the offline online, it is about creating new spaces and behaviors to create, play, share and consume
Migration has started to pick up again
Migration has started to pick up again, driven largely by people moving within the European Union, after 3 years of continuous decline during the crisis (OECD, International Migration Outlook 2013)
Remittance flows to developing countries are expected to reach $414 billion in 2013 (up 6.3 percent over 2012) and $540 billion by 2016 (The World Bank, Migration and Development Brief, October 2013)
©TNS 2013 16
Continuing to help immigrants to integrate will ensure they can play their part in driving growth
The new “Payment Services Consumer”: an active Stakeholder who contributes to choose his own payment way
A new Stakeholder, who acts as a pro-sumer, who decides which payments best meet his needs and who is aware of the
©TNS 2013 17
needs and who is aware of the inclusive service the Electronic Payment System supplies
3How consumer responds: a TNS UK case study
TNS can take you through the details to unlock growth
©TNS 2013
a TNS UK case study
The TNS UK case study
Requirements How current
Identify opportunities for payment methods to better serve consumers
©TNS 2013 19
Requirements on payment occasions
Consumers ideal needs
How current payment methods meet those needs
Sample size: 1,706 Fieldwork: May 2013
Personalised & intelligent
26Service & in-control
Budget planning
14
Consumers have three “core” needs which account for 41% of their spend; three further needs in financial planning and personalisation define a huge opportunity
o
No-hassle, quick & easy10
©TNS 2013
19
21
n
Fraud-protection & benefits
16
Recognised & accepted
15
The six ideal needs are complementary and fit with different parts of the market landscape Currently no payment methods meet ‘personalised & intelligent’ need
CashDebit cards
Credit card w/o
benefits
Credit card with benefits
Online bank
account
Online 3rd
party
Tech enabled payments
No-hassle, quick and easy 10%
Recognised and accepted 15%
©TNS 2013 22
Fraud-protection and benefits 16%
Budget planning 14%
Service and in-control 19%
Personalised and intelligent 26%
Less is more...
but the consumer wants more from less
There are many opportunities to meet
needs better
No payment method meets consumers
biggest need
©TNS 2013 23
There are two key drivers of consumer attitudes and behaviours; in relation to payments methods, there are 5 segments of similar sizes (of population)
+
Technologically engaged
Tech savvy best deal seeker
Tech loving with limited budget
©TNS 2013 25
+-
-
Technologically disengaged
Financially involved
Financially uninvolved
Wealthy traditionalist
Risk averse conservative
Financially disengaged
Less is more...
but the consumer wants more from less
There are many opportunities to
meet needs better
No payment method meets
consumers biggest need
Opportunities exist within
each consumer segment
©TNS 2013 26
Optimising the ideation processPersonalised & Intelligent: Insight into action
Example of how learning can be used to start process of developing growth ideas
Example idea(*)
pai.com
Consumer insight
I want an integrated
Need gap
A “Personalised and intelligent” payment
Target consumer
Tech savvy best deal seeker
©TNS 2013 28
I want an integrated shopping and payment
experience. With today’s technology it’s
ridiculous that I have to go through a
series of disjointed steps
payment method
Rewards connected to the purchase experience
(*) New APP for payments that does not exist in reality, it is just an illustrative idea
Less is more...
but the consumer
wants more from less
There are many opportunities to
meet needs better
No payment method meets
consumers biggest need
Opportunities exist within
each consumer segment
Happier consumers
and opportunities
for all stakeholders
©TNS 2013
from less
30
Thank you
©TNS 2013
Thank you
Irene IerardiSenior Research Executive
TNS Finance tel. +39.02.270721
31