CANADA VS THE USA - THE CONTRAST AND LESSONS FOR MOBILE PAYMENTS

Transcription

1 CANADA VS THE USA - THE CONTRAST AND LESSONS FOR MOBILE PAYMENTS Presented by: Jacqueline Chilton, Founding Partner, Muration Group Catherine Johnston, President & CEO ACT Canada

2 Muration Group Agenda Introductions Comparisons Mobile and NFC Other mobile examples Where are things headed

3 3 Jacqueline Chilton Catherine Johnston Founding Partner Muration Group Affiliate Chieftain Consulting President & CEO ACT Canada Founding Partner Chieftain Consulting

4 Muration Group Card Payments Comparison Payment System Statistics Canada U.S. Spend on Debit + Credit per capita $1,612 $1,687 Debit Cards per capita Credit Cards per capita Debit to Credit Transactions Bank Branches per million inhabitants BIS 2012 Statistics + Muration Group Analysis

5 Muration Group Ready with Smart Phones 77% of all Canadians have a cell phone (CWTA) 56% of Canadians use a smartphone (Ipsos Reid) 21% use a tablet (Ipsos Reid) 90% of American adults have a cell phone 58% of American adults have a smartphone 42% of American adults own a tablet computer PEW Research as of January 2014

6 Muration Group Canadian Mobile Payments Context Canadian consumers are prepared for mobile 27% familiar with shopping the internet from a mobile device 15% of Canadian consumers profess willingness to use a mobile device to buy merchandise at POS A recent survey conducted by PayPal shows that 87% of Canadians wish they could be wallet-free Most mobile payments today are remote payments: E.g. Paying a bill an a bank s mobile app, Internet purchases Canada has relatively high levels of NFC terminals 250,000 contactless card readers out of ~800,000 terminals Canadian banks show strong commitment to NFC 2012 Canadian Bankers Association published the Canadian NFC Mobile Payments Reference Model Source: MasterCard Mobile Payments Readiness Index, Bell Mobility

7 Muration Group U.S. Mobile Payments Context U.S. consumers are prepared for mobile 34% have made a purchase using their mobile phone 37.2% of respondents reported using a mobile payment method of some kind with PayPal Mobile being the most common (58.6%) Most mobile payments today are retailer apps EMV is planned with an October 2015 liability shift NFC terminals are projected to reach 86% by 2016 but still not clear what the numbers really are today U.S. banks show little commitment to NFC Some card issuance is beginning but no mobile NFC announcements Source: DC Financial Insights, IDC Financial Insights 2012, MasterCard Mobile Payments Readiness Index

8 Muration Group MOBILE & NFC

9 U.S. Muration Group

10 Muration Group EMV Migration Canada Number December 2010 December 2013 Comments Payment Cards ~105 Million POS Devices ~800,000 Transactions Chip to Chip ABMS ~17,000 FI-owned ~35,000 ISO ABMS 70% >90% Active cards have been converted to EMV 65% >85% A few significant large retailers have not yet converted to EMV. Interac timelines will drive upgrades into % >75% Consumers perceive they are transacting with PIN most of the time ~90% Minimal 100% >95% Issuers will decline mag stripe transactions at ATMs for Interac Cash transactions GFH Group Inc.

11 Muration Group First NFC Wallet to Market Pay for credit card purchases up to $50 Contactless transaction Store credit card on the chip on the smartphone Need to have a Rogers or Telus account and NFC enabled SIM card

12 Muration Group More NFC Coming Soon Rogers suretap Open to all cards Enstream Infrastructure Desjardin app for their members Bank / Retail Open Wallet Payment and loyalty

13 Muration Group Issuing Landscape Is Not That Different Telcos Similar Too

14 Muration Group WHY ONLY ISIS IN THE U.S.?

15 Muration Group WORKING AROUND THE SECURE ELEMENT

16 Muration Group Google Wallet Moves to HCE Tap-and-pay functionality for Google Wallet is currently only supported on U.S.-based devices Android 4.4 KitKat is on ~2.5 % of the Android ecosystem (Droid-Life) Needs to be an NFC enabled device

17 Muration Group What is Host Card Emulation? HCE is the presentation of a virtual and exact representation of a chip card using only software Does not use the phone s secure element Specific to Android devices KitKat Payment account information is hosted in the cloud

18 Muration Group 2014 What Changes with HCE? Issuer Figure: The UICC Collaborative model in NFC Payments From a MobeyForum Whitepaper edited slightly

19 Muration Group RBC Credentials in the Cloud Showing a path for U.S. banks

20 Muration Group MOBILE SOLUTIONS PROLIFERATE

21 Muration Group Coffee Driving Mobile Payments Tim Hortons has both tap and scan capabilities Blackberry / Android / iphone Everyday spend Merchant centric Driving a better experience

22 Muration Group Starbucks / Square Huge success Proprietary app for closed loop Download Square Wallet for open loop

23 Muration Group PayPal at Physical POS Seen in the U.S. with hands free at Home Depot and a mag swipe card PayPal app new to stores in Canada Targeting hospitality Consumer checks in and server uses face to recognize and checkout customer

24 24 Muration Group 2014 Barcodes, QR codes, BLE mag swipe?... and many more

25 Muration Group WHERE ARE THINGS HEADED?

26 Muration Group Mobile Beyond Payment

27 Muration Group WILL THINGS CHANGE WITH THE OCTOBER 2015 LIABILITY SHIFT?

28 Muration Group WHAT IS HOLDING MOBILE BACK?

29 Muration Group WHAT PROBLEMS DO WE STILL NEED TO SOLVE FOR NFC?

30 Muration Group WILL NFC BE THE U.S. ANSWER?

31 Muration Group 2014 THANK YOU