The Future of Mobile Payments

Presented By: Mark Berman, CEO Horsetail Technologies

Introduction• Mark Berman

• Passionate CU Junkie!• Co-Founder & CEO, Horsetail Technologies

– IT services, Managed Services, Cloud Services and Customer Mobile and Software Development.

• Continuous Compliance

– NCUA and State Regulatory Compliance Software Platform

• From Baltimore, MD

• Married all of a week to Tania who you might find around the conference here with me!

What Are We Going to Discuss?

• Why you and all CU’s need to be thinking… mobile.

• The mobile frontier and where it is headed.

• The member’s perspective.

• Potential roles for credit unions in the mobile space.

• Why “real” CU collaboration will be critical.

Mobile Payments, Why Should My CU Care?

• The Growth of Mobile• Millennials • Expected Experience • Growth • Loss of Income • Data

– Reach a broader set of customers with more diverse services

– Reach beyond payments transactions to manage the customer’s entire digital wallet

Growth of Mobile

Transaction HistorySearch HistoryBrowse History

DIGITALCREDIT UNIONS

Transaction HistorySearch HistoryBrowse History

Context

DIGITALCREDIT UNIONS

Growth of Mobile

Millennials

Millennials

Expected Experience

Expected Experience

Loss of Income

$$$ Behind the Swipe

CUMerchant FI

Loss of Income

$$$ Behind the Swipe

CUMerchant FI

Loss of Income

Expected Experience

Growth

Data

Case Study: Level UP

Data

Focus: Level UP

• Application that allows businesses to receive portable payments from any client

• No credit or debit cards

• Vendors use a Levelup terminal to scan a (QR) code on a client’s cell phone.

• Retailers created loyalty programs

• Analysis tools

Data

Focus: Level UPA

NA

LYTI

CS

Data

Focus: Level UPLO

YALT

Y

Data

Focus: Level UPP

ENET

RAT

ION

Mobile Payment Frontier

Fun, Early Stage

Convenience

Monumental Shift

Where Do We Sit on The Frontier

• Bridging the gap between early stage and convenience

• Adoption will rise with convenience but it will take the monumental shift to see mass adoption.

• Why??

Early Stage Convenience

• Apple iPay

• Flint Mobile

• Square

• GoPayment

• ROAMpay

• PayPal Here/Beacon

• Dwolla

• Google Wallet

• Phone Swipe

• ISIS

• MastercardPayPass

• Visa payWave

• GoPayment

• LevelUp

• mPowa

• PayToo

• Boku

• Paymentech

• Payfone

• MCX

• linked2pay

• Innerfence

• Breadcrumb

• PaySimple

• Forte

• Spark Pay

• PayAnywhere

• Swipe

Early Stage Convenience

• Apple iPay

• Flint Mobile

• Square

• GoPayment

• ROAMpay

• PayPal Here/Beacon

• Dwolla

• Google Wallet

• Phone Swipe

• ISIS

• MastercardPayPass

• Visa payWave

• GoPayment

• LevelUp

• mPowa

• PayToo

• Boku

• Paymentech

• Payfone

• MCX

• linked2pay

• Innerfence

• Breadcrumb

• PaySimple

• Forte

• Spark Pay

• PayAnywhere

• Swipe

Don’t Be Blackberry!• The average member interacts with their credit union twice a day

electronically• That’s 80% of the member’s interactions!

If they are coming to you use it! They are on your turf. Don’t take it for granted.

• People used there Blackberry’s everyday, UNTIL they didn’t.• Opportunities for Cross-Selling and Social Engagement abound today.

What’s In it for Me?

• Merchants have no desire, especially those smaller organizations.

• Users may or may not find phones convenient, cards aren't that bad.

• Security benefits of mobile can be misleading or misunderstood.

• Card associations and issuers are now splitting their share. • Just not that different, experience isn’t significantly better. • Technology Support Networks (TSN’s) are honed to today’s

products, not tomorrows

Lets focus on the member

Not technology…

Who Do Members Pay?

Biller

Merchant Individuals

The System Today

• P2P is mature

• Bill pay is mature

The System Today• Not the Merchants…

• Antiquated card payment system today

The System Today

• Left wallet (non payments) needs improvement

• Access to flexible products at POS not available

What Would Improve the Member Experience?

• Monumental shift to the payment system

• Merchant payment options that include lower cost and greater experience

• Cooperative and local experience

• Greater access to lending and data

• Left wallet options with security- CU’s are perfect

Okay, What Should My CU Do?• Go talk to the member

• Go talk to the community and other cooperatives

• Define your ideal member’s desired experience

• Build for flexibility

• Diversify

• Pay attention

What’s Trending

• Starbucks

• Payment systems that integrate data and rewards

• Payment systems that break the mold

• Collaborative consumption

• Cooperation

What is Now?

• Friend Payment Request: Facebook Moving into P2P PaymentsMENLO PARK, Calif.--Facebook has introduced a new application that allows person-to-person payments...

• Fiserv Completes First Tokenized TransactionsBROOKFIELD, Wis.—Fiserv reported that it has completed its first tokenized transactions via its Accel debit payments network...

• Square Launches Square Cash For Businesses; Competes With Apple Pay And PayPalSquare introduces its Cash service to compete in the increasingly competitive mobile payments market

• Samsung Pay can be introduced to Korean market as early as early July

• 85% of iPhone 6 Owners Don't Use Apple Pay: Should Apple Inc. Be Worried?By Leo Sun March 22, 2015

• Alibaba to introduce ‘Smile to pay’ technology that will allow users to pay using SelfieChina’s Amazon teams with Alipay China’s largest online and mobile payments service

The Battlefield• Who’s the

Enemy?– Digital – built for

speed

• Who do you need?– Digital – built for

innovation

• Weaponry –– Armed with deposit accounts,

lending relationships, an enduring reputation for security, and a robust infrastructure for clearing and settling, CU’s are currently THE players with the ability to achieve the scale required for mobile payments.

• Gotta Use It…– CU’s also enjoy huge advantages as

digital-payments service providers, to the extent that they leverage these strengths against digital attackers.

The Swimming Pool and the Cat and the Mouse

Leverage the COOP

• You are a cooperative financial company

• Millennials care!

Cooperate and build – TOGETHER

• What is my CU?

– Fast Follower… Catalyst… Leader

Where Can You Get Involved

• Many places.

• Need to be flexible, nimble and aware of member needs.

• Diversify.

• Focus on creating a consistent experience.

YOU’VE NAILED IT

• When you understand the financial needs of your member

…as conveniently as Square

…as collaboratively as Zipcar

…as intimately as Spotify

Trust through Intimacy

Thank You!

Questions