Mobile Payments 2013-2017

Mobile Remittance

According to data published by the World Bank, international remittances are growing annually at the rate of 10 percent for the last couple of years. From USD 534 Billion during full year 2012, volumes of international remittances are expected to cross USD 780 Billion during full year 2017. More than three-quarters of these volumes are destined for developing countries across the world. International remittances to developing countries will exceed USD 500 Billion in 2015 and USD 600 Billion in 2017. This is shown in the figure below

Figure 41: International Remittance Volume – Worldwide (In USD Billion, 2010-2017F)

Source: World Bank & Portio Research Ltd.

F – Forecasted

The top countries for inward remittances are shown in the figure below.

Figure 42: Inward Remittance Volumes – Major Markets (In USD Billion, 2010-2012)

Source: World Bank & Portio Research Ltd.

98 99 102 128 137 132 151 161 173

316 341 381 406 438 483

534 572 612

76% 78% 79% 76% 76% 79% 78% 78% 78%

0%

16%

32%

48%

64%

80%

0

150

300

450

600

750

2009 2010 2011 2012 2013F 2014F 2015F 2016F 2017F

Con

tribu

tion

(in P

erce

nt)

Inte

rnat

iona

l Rem

ittta

nce

Volu

mes

(In

USD

Bill

ion)

Year

Developed Countries To Developing Countries Share of Developing Countries

44 49

26 19

49 49

22 20

55 51

23 21

64 62

24 23

70 66

24 24

0

20

40

60

80

India China Mexico The Philippines

Inw

ard

Rem

ittta

nce

Volu

mes

(In

USD

Bill

ion)

Country

2008 2009 2010 2011 2012

46 © 2013, Portio Research. All Rights Reserved

Mobile Payments 2013-2017

Brazil Recent Developments

• In January 2013, two major Brazilian MNOs (TIM and Vivo) started trials of NFC based mobile payments. TIM joined hands with Itaú, MasterCard and Gemalto for its pilot project; Vivo collaborated with Bradesco and Cielo. Itaú and Bradesco are two of the largest financial institutions in Latin America.

• In Q1 2013, TIM Brasil and BMG bank entered into a partnership to launch a mobile banking service across the country. The service offered SIM based access to banking services that includes balance inquires and credit applications and was primarily launched for TIM’s prepaid plans - Infinity Pre and Cost Control

Mobile Payments Around five million customers were using mobile payment services by the end of 2011, and that figure led to reach 10 million over2012, taking the total penetration to five percent. The number of users is expected to reach 16.4 million in 2013, and 41.5 million by the end of 2017. This implies a population penetration of roughly eight percent and 20 percent respectively in the corresponding years. The figure below highlights the mobile payment users and penetration for the period 2010-2017.

Figure 114: Mobile Payment User Base & Penetration – Brazil (In Million & Percent, 2010-2017F)

Source: Portio Research Ltd.

F – Forecasted

1.9 5.0 10.0 16.4

23.4 30.3

36.4 41.5

1% 3%

5%

8%

12%

15%

18% 20%

0%

5%

10%

15%

20%

25%

0

10

20

30

40

50

2010 2011 2012 2013F 2014F 2015F 2016F 2017F

Mob

ile P

aym

ent P

enet

ratio

n (In

Per

cent

)

Mob

ile P

aym

ent U

sers

(In

Mill

ion)

Year Mobile Payment Users Mobile Payment Penetration

114 © 2013, Portio Research. All Rights Reserved

Mobile Payments 2013-2017

Figure 135: Starbucks US Mobile Payment Transactions Per Month (In Million, January 2011E - March 2013E)

Source: Portio Research Ltd.

E – Estimated

The figure below shows the various mobile payment transaction count milestones achieved by Starbucks US cumulatively. The first 50 million transactions took 16 months, and the next 50 million a mere 5 months.

Figure 136: Starbucks US Cumulative Mobile Payment Transactions (In Million, January 2011E - March 2013E)

Source: Portio Research Ltd.

E – Estimated

0

5

10

15

20

25

M1 M2 M3 M4 M5 M6 M7 M8 M9 M10M11M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10M11M12 M1 M2 M3Mob

ile P

aym

ent T

rans

actio

ns

Per M

onth

(In

Mill

ion)

020406080

100120140160180200

M1 M2 M3 M4 M5 M6 M7 M8 M9 M10M11M12 M1 M2 M3 M4 M5 M6 M7 M8 M9 M10M11M12 M1 M2 M3

Cum

ulat

ive

Mob

ile P

aym

ent

Tran

sact

ions

(In

Mill

ion)

2011E 2012E 2013E

2011E 2012E

August 2011: Crossed 10 Million

Transactions

December 2011: Crossed 25 Million

Transactions

April 2012: Crossed 50 Million

Transactions

September 2012: Crossed 100 Million

Transactions

2013E

February 2013: Crossed 150 Million

Transactions

© 2013, Portio Research. All Rights Reserved 135

Mobile Payments 2013-2017

• Security Provisions: There are a few steps which ensure the safety of the transactions made and the confidentiality of data stored:

Details of Credit Cards synced with Google Wallet are encrypted. A 4-digit PIN is required to access Google Wallet on a handset and a password is required

for online usage. The NFC antenna only works when the screen is on. When users buy items using their handset, only the virtual card number Google uses on the

user’s device is passed to the merchant – the user’s credit or debit card number isn’t involved at that stage of the purchase.

If the phone is lost or stolen, the Google Wallet account can be disabled via online account. All the purchases are backed by Google’s Fraud Protection Policy. Malicious apps can’t access any data stored in the Google Wallet cloud. It is secured at the

hardware level Google Wall. Key Strategies

Customized Offers: Google provides a variety of location-specific offers tailored to customer location. Google provides offers and incentives to the users and ensures that they are useful, through a program called ‘Single Tap’. This program allows users to redeem targeted offers while making payments in-store. Moreover, Google Wallet users can still enjoy Bonus Points on their credit cards, thereby ensuring double the benefit for customers.

Open Platform: Google Wallet is open to all major credit and debit cards including Visa, MasterCard, American Express and Discover. The service can be used at around 200,000 merchants across the US. Also, the wallet can be used for both offline and online purchases.

Benefits for Merchants: Google does not charge any fees from merchants for accepting payments via Google Wallet, both for in-store and online purchases. Merchants are allowed to use their existing payment processors, or can use the Google network for a small fee as elaborated in the table below. Google also offers merchants an Insta Buy variant that allows sellers to process transactions quickly by fetching relevant details from Google Wallet, rather than asking the buyers to fill in the information on their portal.

Closing Google Checkout in favour of Google Wallet: Google will be retiring its Google Checkout service on November 20th, 2013 in order to focus its efforts on other areas of the payments space, most notably Google Wallet.

Table 3: Google Wallet – Transaction Fee

Monthly Sales Fees Per Transaction

Less than USD 3,000 2.9% + USD 0.30

USD 3,000 to USD 9,999.99 2.5% + USD 0.30

USD 10,000 to USD 99,999.99 2.2% + USD 0.30

USD 100,000 or more 1.9% + USD 0.30 Source: https://checkout.google.com/seller/fees.html

Way Forward • Google Wallet may offer a transit card option soon. iOS and Windows Phone users will be offered a

Wallet card using which consumers can use a non-NFC version of the Google Wallet app. • Google plans to add a person-to-person payment capability, and will allow users to save credentials

other than payment cards such as transit tickets, boarding passes and personal IDs etc.

© 2013, Portio Research. All Rights Reserved 143

Mobile Payments 2013-2017

Monitise

Headquartered in the UK, Monitise offers M-commerce solutions. The company offers services to more than 300 financial institutions worldwide, spanning more than 20 million consumers. Monitise has strategic partnerships with Visa Inc., Visa Europe, RBS Group and FIS to develop and deliver Mobile Money services worldwide. Products & Services Monitise offers mobile banking, payment, and commerce solutions largely to financial institutions worldwide. Its customer list includes RBS Group, HSBC, Lloyds TSB, 5 of the top 10 US banks. Visa Inc and Visa Europe are both customers and shareholders in the company. Currently, the company is working with Hong Kong’s ATM network Jetco to connect consumers to mobile banking. In addition, in Indonesia Monitise is working with Permata Bank, Astra, and BlackBerry on the Blackberry Messenger Money solution. In India, Monitise entered into a joint venture with Visa Inc to offer a mobile commerce service named ‘Movida’ in February 2012. The figure below depicts some of the key solutions that Monitise offers to its customers worldwide.

Figure 151: Monitise – Product Cluster

Source: Company Website

Monitise - Business Model Monitise offers on-premise or hosted software solutions to its customers on a per-user-per-year basis. In addition, the company also charges professional services revenue for customization, and shares m-commerce revenue streams with its customers.

Bank Enquiry Check Deposit Personal Financial Management Business Banking Account Managemet Services

Bill Payment Peer-to-Peer transfer International Remittance NFC Payments Solutions Mobile Point of Sale Mobile Phone Top-Up

Instant Mobile Checkout Mobile Marketplace Mobile Marketing Online Checkout

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Mobile Payments 2013-2017

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Mobile Applications Futures 2013-2017 Analysis and Growth Forecasts for the Worldwide Mobile Applications Market The apps business has finally ‘come of age’ and this worldwide success story is now growing fast. Apps generated an impressive USD 12 billion in full-year 2012, and in total 46 billion apps were downloaded in the year, taking the cumulative all-time total downloads since the app game began, to 83 billion. That is certainly a market in rapid growth, just look at those numbers again. The all-time cumulative total number of downloads stood at 37 billion at the end of 2011, but reached 83 billion by the end of 2012, more than doubling in one year. So in 2012, more apps were downloaded that in the previous 5 years all added together. Please click here for more details.

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Mobile Messaging Futures 2013-2017

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