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Mobile Point of Sale

Payment Acceptance Solution

Visa Confidential

Agenda
Cash displacement opportunity
Why mPOS and merchant adoption
mPOS partners and business models
mPOS activity across APCEMEA

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Challenge and Opportunity


Vietnam PCE US$62 B

Debit card
spend

81%

Credit
card
spend

Cash and
other
payment
type
usage

Source : Euro monitor Market Sizing Study 2012

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Vietnam Card Penetration by Segment


Opportunities to open card acceptance

BILL PAY

SMALL TICKET
EVERY DAY
SPEND

LARGE TICKET

Vietnam

Philippines

Indonesia

Thailand

Malaysia

Singapore

HK

Utilities

0%

0%

0%

1%

15%

4%

2%

Insurance

1%

16%

39%

9%

62%

4%

26%

Telecom

1%

19%

6%

8%

3%

12%

1%

Health care

1%

17%

15%

4%

46%

28%

82%

Fast food

0%

1%

13%

1%

1%

3%

7%

Food Retailers

4%

11%

21%

15%

47%

34%

39%

Fuel

2%

16%

14%

22%

63%

51%

74%

Full-service restaurants

1%

23%

8%

10%

55%

36%

83%

Discounters

0%

0%

0%

4%

0%

0%

0%

Clothing

2%

27%

20%

17%

36%

36%

78%

Furniture

2%

10%

47%

59%

77%

41%

70%

Department stores

2%

17%

32%

43%

72%

44%

91%

Durable Goods

2%

14%

27%

60%

44%

47%

91%

DIY

0%

12%

52%

27%

87%

22%

65%

Travel Agents

13%

12%

12%

24%

59%

72%

93%

3%

21%

17%

33%

39%

65%

68%

1%

26%

59%

39%

47%

76%

65%

21%

47%

58%

64%

47%

26%

91%

Air Travel
TRAVEL &
ENTERTAINMENT Auto Rental
Hotels/Motels

Penetration Rates

Source : Euro monitor Merchant Segment Study 2012

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>50%

25%<>50%

10%<>25%

<10%

Standard Acquiring Business Model


eCommerce and Physical POS

Large corporations with


international presence
Enterprise
Large companies with
domestic presence
Lower volume
outlets
Individual
sellers /
agents

Mid-tier
Small to Medium
Enterprise (SME)
Sub-Small to Medium
Enterprise (Sub-SME) or
Prosumer

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Mobile Phones : A New Frontier in


Card Acceptance

90
million

127
million

Source: Euromonitor 2012


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What is Mobile POS?


Definition

mPOS (mobile Point Of Sale) uses consumer mobile devices


(smartphones, tablets, PDAs) owned and operated by merchants,
allowing merchants to accept customer cards

Technical description
Mobile devices
(feature phones,
smartphones, tablets)

Example: Credit Call (UK)

Acceptance
hardware

An mPOS consists of a mobile device and


hardware accessory, which can be connected via
audio-jack, mini USB, Bluetooth or other

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Credit Call provides Thyron mobile


card reader, connected via
Bluetooth

Blackberry and Android


compatibility; soon on iOS

Fixed per month & % fee on every


transaction, compatible with all
major payment cards

Currently 4 pilots in the UK (100400 units between 1-3 months)

Distribution partners are acquirers

Mobile POS

Ezetap

Ezetap

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Sample of Devices and Providers


EMV + PIN + MSR:
PayLiquid
(UK)

EMV + PIN + MSR (new PIN entry):


Creditcall
CardEase

Thumbzup
(SA)

(UK)

Ingenico iSMP

HandPoint

(FR)

(UK)

VeriFone

emerit

Payware Mobile
Entreprise (US)

(UK)

EMV only:
iZettle

Swiff

(Sweden)

(Singapore)

Card Not Present:


Circle Payments

iVeri (SA)

(SA)

Magstripe / MSR only:

Rocket Internet
Payleven

(Hong Kong)

CNP

Swiff

SinaptIQ

(Singapore)

(Thailand)
PAX
(China)

M-swipe

Square

(India)

(US)

Appninjas
Swipe (US)

Setcom

Ezetap

Qwickpay

ManagePay

(S. Africa)

(India)

(US)

(Malaysia)

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Different Types of mPOS Solutions


Low cost mPOS Adapters/Dongles
Sub $50 adapter/dongle
Connects through 3.5mm audio jack
EMV+ Magstripe + PIN
Supports Android, Blackberry, iOS and Windows

Mobile Bluetooth Pin Entry Devices (PEDs)


$120 - $200
EMV+ Magstripe
Secure Pin Entry Device
Supports Android, Blackberry, iOS and Windows

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Example of successful mPOS launch in the US


Bank

Device technology

Square acts as an end to end PSP player, in


charge of distribution, marketing and
merchant acquisition and on-boarding

Square provides a small device to plug into


the audio jack entry

It is currently iOS and Android


compatible

Compatible with all major credit


cards

2.75% fee on every transaction

Merchants

First results and feedbacks

Starbucks has invested $25m in Square and


will be rolling out the technology in 7,000
shops in the US

End of 2011, Square announced :

Other merchants include food trucks, small


businesses, doctors and delivery services
throughout the US

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Monthly merchant acquisition of


30,000-50,000

800,000 card readers shipped and $2


billion in annual processing payments

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Enterprise merchants
adopting mPOS

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Example of successful mPOS launch in Thailand


Bank

Device technology

2 major banks are participating in mPOS


technology
20,000 devices with both Swiff & banks logos
on them

Other banks, show interest and could offer


mPOS with other providers

EMV level 2 certification process completed


(awaiting letter from EMVco)

Merchants

First results and feedbacks

Merchants include direct sales, fast food,


insurance companies, and B2B

Merchants acquisition is on progress for


additional merchants in pilot (e.g. Nok Air)

Some merchants will pilot with banks, e.g.


AIA-BAY and iStudio-Kbank
Direct sales

Fast food

Insurance

B2B

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Sector related use cases


Large, mid-tier & SME merchants
Merchant categories

Large retail &


Supermarket

Delivery
services

Key benefits

Merchant categories

Improves overall instore customer


experience by reducing
queues and/or enabling
cashiers to come to the
customer
mPOS allows card
payment for delivery
services, replacing
cash or online payment
This helps to drive
more delivery services
and pre-ordering

Fast foods

Micro-merchants

mPOS allows micromerchants to accept


card payment

Kiosks, Florists &


Farmers Markets

Taxi
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Helps to boost sales,


allowing customers to
purchase large
amounts without
carrying cash

mPOS allows
Handyman,
immediate payment,
Plumber,
reducing settlement
Electrician,
and fraud risk
Window washers
etc.

Appeals to new
demographics

Direct sales

Key benefits

Invoicing, settlement
and related accounting
processes are more
easily resolved
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Acquirer hardware economics


Months to breakeven for POS for acquirers

Conventional POS
@ $200 takes
>3.5yrs to payback
when issued to
most merchants

Months to break-even for the POS

42

36

mPOS will allow


acquirers to
distribute POS to
smaller volume
merchants and still
recoup their
investment

A traditional POS at
$200 takes >3.5
years to payback
when issued to most
merchants

A mPOS priced at
$70 takes around 1.5
years to recoup,
while a low cost
option at $30 takes
as little as 6 months

30

24

$200
18

12

$70
$30

6
3

10

11

12

13

Merchant monthly card volume [$k]


$200 POS

$70 mPOS

$30 mPOS

MDR @2.0%

MDR @2.0%

MDR @2.0%

(or 1.5%+rental)

(or 1.5%+rental)

(or 1.5%+rental)

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Distribution Models
Marketing and
Distribution

mPOS Platform

Acquiring processing

mPOS Partner

Direct model
mPOS partner
lead

Merchant onboarding

Acquirer

Distribution partner

mPOS Partner

Distribution
partner lead

Acquirer

3
Acquirer

mPOS Partner

Acquirer lead

Acquirer
Acquirer

mPOS Partner

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mPOS activity across APCEMEA

5 Markets are LIVE


Active deployments
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15 Markets
Implementation planning &
certification

XX32
Acquirers
Clients live
Actively engaged and planning
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Acquirer-Provider Recommended Launch Roadmap


Activity

Month1

Month2

Month3

Month4

Month5

Technical

1 Server purchase and setup


Software update
Readers preparation
Testing
Commercial agreements

2 Pricings
Pilot LOI: to define clear roles & responsibility
With 3rd parties

3 Legal/ risk sign-off


Visa assessment of solution
Acquirer(s) sign-off

4 Enrolment & Distribution


Define merchant panel & add merchant category
Merchant enrolment distribution / deployment

Merchants

Software & hardware deployment

panel selection

5 Marketing & communication plan


Corporate message, internal communication
Training material for merchant & end users

Marketing plan

Media budget & plan

agency brief

6 Processes

Press
releases/
conferences

Support backend: help-line/ call centre outsource


Define target market for acceptance

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Pilot launch

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Visas Role
Enable
Modify Visa rules to support new transaction
types and transaction environments
Set standards for security and risk management
Accelerate
Prioritize key markets and focus resources
Work with partners to guide priorities, ensure
compliance, and support deployments
Lead
Unique assets to deliver integrated solutions
Selectively invest/develop for competitive
advantage
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