1. Mobile Money in latin america Jesper Rhode Head of Marketing Ericsson Latin America and Caribbean 2. User trends Market Insights Asbanc Project Future trends 3. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 3 Ericsson ConsumerLab The Voice of the Consumer 4. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 4 Key Take-aways Convenience a key driver for m- commerce for both strugglers and achievers. 1 Safety and control is essential for Latin Americans. 2 Consumers lack overall trust in institutions and network performance. 3 There are three conclusive consumer take-aways from this m-commerce study in Latin America: 5. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 5 Method and purpose of study Method 4080 online interviews 30 expert interviews 50 in-depth interviews Diaries and shop alongs In home interviews 6. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 6 Regions of study The markets in focus for the study were chosen to achieve a mixture of geographical location, sociocultural factors and level of maturity of the telecom and financial sectors and consumer markets BRAZIL ARGENTINA COLOMBIA CHILE MEXICO 7. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 7 Barriers for not using mobile payments 8. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 8 Payment for goods 9. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 9 Transferring money 10. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 10 Paying bills 11. General market insights 12. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 12 Financial Ecosystem Source: World Bank, Measuring Financial Inclusion Report, April 2012 13. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 13 Middle class growth 14. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 14 Steep growth in buying power in the middle class (brazil) Source: Data Popular 15. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 15 The power of the middle class (Brazil) 16. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 16 Credit cards in the middle class (BRAZIl) Source: Data Popular 17. M-commerce: drivers & barriers 18. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 18 Drivers to m-commerce Achievers Independence No queuing Safety Mobility Control Prerequisites Source: Ericsson ConsumerLab M-Commerce in Sub Saharan Africa, Consumer Insight Report 2012 Education Trust Transparency Strugglers Safety No queuing Mobility Independence Control 19. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 19 Barriers to m-commerce Achievers Network reliability Lack of transparency User interface Security Accessibility Prerequisites Source: Ericsson ConsumerLab M-Commerce in Sub Saharan Africa, Consumer Insight Report 2012 Strugglers Lack of knowledge Service fees Security Network reliability Lack of transparency Accessibility Affordability Support User friendly 20. Relationship: Banks & operators 21. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 21 Preferred provider Question: Which type of organization would you prefer provides the ability for your products and services with your mobile phone? (single code) Base: User or interested in Mobile wallet Please note different sample characteristics see appendix for details Source: ConsumerLab Analytical Platform 2012 A bank A bank credit card provider A mobile network provider/ carrier A mobile handset brand A large retail store 22. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 22 Banks vs. Operators OperatorsBanks Banks are the most trusted institution to handle money Operators trusted as a facilitating intermediary More secure than handling cash Control Convenience Possibility to get loans High fees and interest rates Minimum deposit amounts Bank cards may lead to spending more money Constant queuing to perform services Poor customer service + - Accessibility, anywhere and anytime Almost like cash, quick and easy Sense of safety Connected to additional services, like top-up Network quality Unreliable coverage and performance Bad customer service experience Hidden charges and additional fees + - 23. M-commerce WITH ASBANC PERU 24. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 24 Asociacin de Bancos de Per (ASBANC), was founded in 1967 The union brings together banks and private financial institutions in Peru Principal objective: promote the strengthening of the private financial system, providing services, information, advice and consultation to its members on matters of general interest ASBANC OVERVIEW MAJOR ASBANC MEMBERS BANCODECREDITODELPERU INTERBANK CITIBANKDELPERUS.A. SCOTIABANKPERUS.A.A. BBVABANCOCONTINENTAL BANCODECOMERCIO BANCOFINANCIERO BANCOINTERAMERICANODEFINANZAS BANCOFALABELLAPERUS.A. MIBANCO,BANCODELAMICROEMPRESAS.A. BANCORIPLEYS.A. HSBCBANKPERUS.A. BANCOSANTANDERPERUS.A. BANCOAZTECADELPERU DEUTSCHEBANKPERU FINANCIERATFC FINANCIERAEDYFICAR CREDISCOTIAFINANCIERAS.A. AMERIKAFINANCIERA FINANCIERAUNIVERSAL FINANCIERACONFIANZA FONDOSSURASAFS.A.C. Source: D. Navarro Input 25. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 25 ExEMPLO de Soluco Carteira mvel Switch Channels ASBANC Wallet Platform Switch Bancos Rede de Agentes Operadora 1 Operadora 3 Operadora 4Operadora 2 Agentes Financeiros Cartes de crdito Switch Switch Ericsson Wallet Platform Canais Register / Cash in / Cash out / Airtime 26. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 26 HOW TO CREATE SUSTAINABLE M-COMMERCE ECOSYSTEM? Stage 1 Basic connectivity Critical mass of mobile coverage and penetration among rural poor Stage 2 Digital remote payments Poor people adopt and use digital for person-to-person transfers and government payments Stage 3 Full range of digital financial services Poor people adopt and use digital for savings, credit and insurance services Stage 4 Digital in-store purchases Poor people conduct a majority of transactions (including small in- store purchases) digitally. Inclusive digital Economy 27. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 27 supporting financial inclusion in peru Mobile coverage Connecting local partners Financial Training People Development Socio-Economic growth Enable baseline and socio-economic impact measurements Educate the population about their rights and duties, regarding to financial and insurance system and also the private pension funds Promote better access and use to financial services to the population, so it will lead an increase in the well Connect local partners (NGOs) that will train communities for m-Commerce and others Partners receive free training in financial literacy and have the opportunity to transmit this knowledge and experience to the community The ecosystem Alignment is needed from all parties involved in the mobile banking ecosystem for these services to reach more people 28. The Future of payments 29. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 29 Integrated payment 30. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 30 Integrated relationship 31. M-Commerce Latam | Ericsson Internal | 2014-11-03 | Page 31 Disruption I the horizon