The Digital Wallet and the Future of Payments

THE DIGITAL WALLET AND THE With increasing availability of broadband networks and mobile FUTURE OF PAYMENTS devices, new payment methods are becoming easier to use than cash or paper check. Will we soon see the end of the traditional credit card? Maybe not right away, but overtime online and mobile payments are expected to replace plastic all together. 1: HOW WE PAY TODAY Debit and credit cards reigned as the top methods of payment for U.S. consumers in 2010. 74% Debit card 67% Credit card 59% Paper check 33% Gift/prepaid card 11% Contactless (non-swipe cards) 5% Mobile 6% None SOURCE: BAI RESEARCH DECLINE OF CASH U.S. consumers' use of cash will decline by a total of 17%, or 4% per year, between 2010 and 2015, dropping to slightly more than US$1 trillion. FORECAST CHANGE IN CASHUSE (US$ MILLIONS) e2011 e2012 e2013 e2014 e2015 $35,413 $36,046 $41,074 $41,925 $45,078 SOURCE:AITE GROUP ALTERNATIVE PAYMENTS ON THE RISE DRIVING FORCES OF ALTERNATIVE PAYMENTS The alternative payments industry is surging. • Increased internet use Online, mobile, and contactless payments • Increased smartphone use • E-commerce adoption are becoming more popular among consumers and businesses. • Mobile commerce adoption • Manufacturer adoption of NFC technology 2010 2015 Alternative Alternative $2.7 TRILLION Payments Payments Industry Revenue Industry Revenue S740 BILLION SOURCE: BUSINESS INSIGHTS THE MOBILE PAYMENTS SPACE Among Consumers Among Small Business SMARTPHONE PROLIFERATION The rise of mobile payments has been spurred by the widespread adoption of smartphones among consumers and businesses alike. 40% of U.S. mobile 37% of small business users own smartphones owners own smartphones SOURCE :NIELSEN, PORTFOLIO.COM THE MOBILE PAYMENTS MARKET Mobile payment solutions are making it fast and easy for small businesses to get paid and for consumers to pay anytime, anywhere. 2011 2015 Global Mobile Transactions Global Mobile Transactions $241 BILLION $1TRILLION SOURCE:YANKEE GROUP 2011 1.8 BILLION 2.5 BILLION 2015 Global mobile phone users making Mobile phone users making payment for digital goods payment for digital goods SOURCE: JUNIPER RESEARCH 9% consider 83% believe mobile payments mobile payments will be mainstream globally within mainstream globally today. the next four years. SOURCE: KPMG CONSUMERS AND THE DIGITAL WALLET MOBILE SPENDING One in four U.S. consumers is willing to pay for goods and services using a phone. Consumers are slowly warming up to using smartphones and eliminating credit card transactions for mobile payments. LIKELY SITUATIONS CONSUMERS SAY THEY WOULD USE MOBILE PAYMENTS IN: 1. Groceries at a supermarket SOURCE: ACCENTURE 2. Clothes at a retailer 3. Phone bill at a local wireless store 4. Coffee at a local coffee shop 5. Sofa at a furniture store 6. Taxi ride SOURCE: COMPETE THE RIPE AGE FOR MOBILE TRANSACTIONS People between the ages of 20 and 44 appear to be most interested in mobile transactions such as mobile banking, payments, coupons, and shopping. PERCENTAGE OF EACH AGE GROUP THAT'S INTERESTED IN MOBILE TRANSACTIONS 24% 24% 21% 18% 12% 10% 9% 3% 1% 13-15 16-17 18-19 20-24 25-34 35-44 45-54 55-64 65+ SOURCE: YANKEE GROUP OBSTACLES TO MOBILE PAYMENT ADOPTION Concerns about security are top obstacles to the widespread adoption of mobile payments. 64% Don't think it's secure 61% Would rather use other payment methods 46% Only use mobile devices for calls or email 32% Don't see the value in using it for payments 11% Fear overdrawing their accounts 10% Don't think mobile or contactless payments are accepted where they shop SOURCE:COMPETE intut. SOURCES: BUSINESS INSIGHTS, JAVELIN STRATEGY & RESEARCH, SMB GROUP, KPMG, ACCENTURE, at&t BẠI RESEARCH, NIELSEN, PORTFOLIO.COM PAYMENT METHOD OWNERSHIP IN 2010 TOP OBSTACLES TO MOBILE PAYMENT ADOPTION क न