Slide 1
MOBILE PAYMENTS AND FINANCIAL EMPOWERMENT
Image of Rev Worldwide logo
CASH, CHECK OR CELL PHONE?
PROTECTING CUSTOMERS IN MOBILE FINANCE WORLD.
FEDERAL RESERVE BOARD’S DIVISION OF CONSUMER AND COMMUNITY AFFAIRS
February 22, 2010
Slide 2
Agenda
- Introduction
- Global context
- Key Trends
- Customer / Product Alignment
- Opportunities
Slide 3
MPOWER Ventures Overview
- To date, MPOWER Ventures has made over $60 mm worth of investments in the following areas:
- Prepaid Debit / Retail Banking Networks: REV Worldwide, with subs across LAC, A/P, Europe and North America.
- Mobile Payments Applications: MPOWER Mobile, developer of mobile payments solutions
- Asset Development: Gratio Capital, double-bottom line mutual fund mgmt. company
- In addition, the MPOWER Group has also been active in the support of international development strategies through the following initiatives:
- Empowerment Lab at Harvard University: Created by a multi-year endowment from the MPOWER Foundation
- Clinton Global Initiative: 5 year, $30 mm commitment
- World Economic Forum: Co-Chair for the Global Agenda Council for Financial Empowerment
Slide 4
MPOWER: Portfolio of Companies
Images of serveral MPower Ventures investment capital for mpower group of companies. For example, Mango (retail financial services company), MPower Foundation (social investment initiatives), MPower Mobile (mobile software payment solutions company), Gratio Capital (investment products and services company), MPower (Labs for USA, Mexico, and Europe)
Slide 5
Integrated Approach REV
Image of mobile phone and debit MasterCard
- Totally Integrated. Convenient.
- Fully integated with prepaid platform
- P2P transfers
- Remittances
- Bill payment
- SMS technology
- Loyalty platform
- Traditional mobile banking access
- "Applets" compatible
Image of YAP Mobile payments service mark
©Copyright REV 2009 -CONFIDENTIAL
Slide 6
YAP Functionality
Image of YAP SEND
Sending & Receiving Money Domestic and International
- Person to person domestic transfers
- International Money Transfers
- Transactions debited/credited to pre-paid card
Image of YAP BUY
Making Purchases
- Purchase via mobile with charge to pre-paid card
- Great for direct to consumer catalog orders
- Enterprise solution for placement and payment of orders (procurement)
Image of YAP ACCEPT
Receiving Payments
- Credit and debit card acceptance for payments of goods and services
- Payments to merchant are credited to pre-paid card
©Copyright REV 2009 -CONFIDENTIAL
Slide 7
YAP Functionality
Image of YAP COLLECT
Sending a Bill
- Person to person, instant mobile "collections"
- Transactions debited/credited to pre-paid card
Image of YAP GIVE
Donating to Charity
- Person to person, instant mobile "donations"
- Transactions debited from pre-paid card
©Copyright REV 2009 -CONFIDENTIAL
Slide 8
REV and MPOWER Mobile Programs
Countries where they have Mobile Programs:
United States
Mexico
Ecuador in Quarter 1 of 2010
Spain in Quarter 2 of 2010
Brazel in Quarter 2 in 2010
Romania
Ukraine in Quarter 2 in 2010
Kosovo
India
Vietnam in Quarter 2 in 2010
Australia
Slide 9
Prepaid/Mobile Customers
Potential to generate modest excess income, yet mostly consumption driven
- Asset poor
- Short term financial strategies
Cash-based
- Little or no record of transaction history
- Unable to leverage capital
- High transaction cost
- Time
- Money
- Quick adopter of new technology
- Access to mobile phone
- Rapid understanding of transaction-based financial services
Slide 10
Key Trends:
- Retail Banking
- Retail Strategy: from branches, to cards on a j-hook.
- Delivery Barriers:
- Cost
- Time
- Documentation
- Customer Demographics
- Geographic and Economic Mobility: Concentration of GDP in Urban Centers
- Demographic: Younger communities with high adoption of technology
- Mobile Communications
- Global Adoption: 2bn to 3bn in 4 yrs.
- International Convergence: 10x growth in Africa and Asia.
- Exponential Growth in Applications:
- From voice to sms/photos, to smart phone apps.
- Prepaid as a preferred payment method
- From Long Distance Cards to Debit
Slide 11
The Urban Millennium
- Since 2008, more than half of the world’s human population, greater than 3.3 billion, live in urban areas. This number is expected to grow to almost 5 billion people, by 2030.
- Young people in young cities
- Estimated that 60% of all urban dwellers will be under the age of 18 by 2030.
UNFPA. State of the World Population 2007. Unleashing the Potential of Urban Growth. www.unfpa.org
C. Mayhew & R. Simmon (NASA/GSFC), NOAA, /NGDC, DMSP Digital Archieve.
Slide 12
GDP Density
Image of a world map showing GDP Density per square kilometer. Range is from lowest ($0 to $499) to highest ($442,000-$546,000,000), with levels between. The concentrations of high GDPs per square kilometer worldwide are shown to be in Central and Western Europe, the British Isles, Japan, parts of Eastern Asia and parts of the United States, while the concentrations of lowest GDPs per square kilometer are shown to be in Northern Canada, parts of the Western United States, Northcentral South America, Saharan Africa, Northeast Asia, and much of Austrailia.
Link for image is http://blog.andthensome.nl/wp-content/images/2007/01/sachs.png.
Notes: Most people are poor
Slide 13
Access to Bank Accounts
Image of a map showing countries that have access to bank accounts
Scale is percent of households, with the lowest category being less than 20%, and highest category being greater than 80%. The conclusion given is that "in many developing countries, 50 to 80 percent of the population has limited access to finance, measured as an account with a financial institution."
Sources: Beck, Demirguc-Kunt, and Martinez Peria (207b); christen, Jayadeva, and Rosenberg (2004); Peachey and Roe (2006); and Honohan (2006). See also box 1.4.
Link to information is http://psdblog.worldbank.org/psdblog/2007/11/finance-for-all.html
Slide 14
Convergence in banking?
Chart entitled "Convergence in banking?", with line chart of 5 series. Line graph showing the y-axis of Share Bankable Households from 0 to 100 and x-axis the years 1990 to 2010. First Series: United States (about 90%), Second Series: Brazil (between 20 and 40%), Third Series: Philippines (about 5%), Fourth Series: Japan (near 100%), and Fifth Series Pakistan (about 3%).
Slide 15
Convergence of Mobile Adoption
Chart entitled "Convergence of mobile adoption" with line chart of 6 series. Line graph showing the y-axis of Mobile subscribers per 100 people and x-axis years 1990 to 2010. First Series: Pakistan, Second Series: Kenya, Third Series: Brazil, Fourth Series: Vietnam, Fifth Series: United States, and Sixth Series: Japan. Values in 1990 are all near zero. By 2008, values range from over 80% (Japan and Brazil), to about 50% (Kenya and Pakistan).
Slide 16
Customer / Product Alignment
Image of pyramid showing market of convenience for 2 billion mobile users without a bank account
Key Considerations:
- Universal Access
- Funding and Fungibility
- Simplicity
- Scalability
- Cost Efficiencies
- Time to Critical Mass
International Money Transfers:
$300 billion in International Remittances
Domestic Money Transfers:
$2.7 trillion, mostly transfers from urban centers to rural communities.
Mobile Top Up
80% of all mobile subscribers are prepaid
Opportunity for International Top Up
Utility Bill Payments
Reduced lines, ease of billing and payment
Reduce transaction costs
Mobile Catalog Sales
Ability to reduce call center costs
Increase reach to those without Internet access
Copyright REV 2009 - Confidential
Slide 17
Partnership Opportunities
BANKS
STRENGTHS
- Payments, financial service infrastructure
- Incumbent
WEAKNESSES
- Highly regulated, high servicing costs
- Inefficient branch model
- Low innovation, risk aversion
MPOWER PARTNERSHIP BENEFITS
- Immediate, low-risk entry into mobile technology
RETAILERS
STRENGTHS
- Broad reach
- High traffic
- Experience marketing new products
- Customer trust
WEAKNESSES
- Not familiar with financial services
- Not a technology provider, sells phones, not phone service
MPOWER PARTNERSHIP BENEFITS
- Immediate, low-risk entry into mobile payments arena
- Monetize traffic, increase loyalty
MOBILE OPERATORS
STRENGTHS
- Broad reach
- Mobile service provider
WEAKNESSES
- Not interested in additional regulation
- Lack of infrastructure for payments (i.e. No ID validation)
MPOWER PARTNERSHIP BENEFITS
- Immediate, low-risk entry into payments arena
- Increase usage / ARPU
- Reduce churn
SOCIAL NETWORKS, AFFINITY ORGANIZATIONS
STRENGTHS
- Mass reach
- Customer Trust
WEAKNESSES
- Not familiar with payment systems / financial services
- Need money in / money out mechanisms for payments and/or disbursements
MPOWER PARTNERSHIP BENEFITS
- Turnkey solutions that allow them to monetize their franchise.
©Copyright REV 2009 - Confidential
Slide 18
Beyond payments: Inclusion Strategy
Image of REV Payment Networks
- ID Validation
- Savings Accounts
- Other Asset Building
- Credit Products
- Insurance
- Bill Payment Applications
- Income Generation
Inherent Benefits:
- Reduced Cost of Transaction
- LESS TIME
- LESS MONEY
Open yet Reliable Architecture
- Plug-and-play approach
- Universal service standards
Customer Centricity
- Product and channel relevance
Network derived benefits
©Copyright REV 2009 - Confidential
Slide 19
Current Programs Visual Tour of debit card, people and bank images
Slides 20
La Gallina de los Huevos de Oreo
Images of La Gallina de los Huevos de Oreo
Slides 21
La Gallina de los Huevos de Oreo
Images of people
Slides 22
La Gallina de los Huevos de Oreo
Image of Debit Visa Card
Slides 23
Chivas (The most popular soccer team in Mexico)
Image of prepaid MasterCard
Slides 24
Chivas (The most popular soccer team in Mexico)
Photos of people
Slides 25
Chivas (The most popular soccer team in Mexico)
Images of prepaid cards
Slides 26
Chivas (The most popular soccer team in Mexico)
Images of prepaid Master Card
Slides 27
Raiffeisen Bank Romania (A leading bank in Central and Eastern Europe)
Image of Raiffeisen Bank
Slides 28
Raiffeisen Bank Romania (A leading bank in Central and Eastern Europe)
Images of cards
Slides 29
Raiffeisen Bank Romania (A leading bank in Central and Eastern Europe)
Photo image of woman in front of the Raiffeisen Bank
Slides 30
Raiffeisen Bank Romania (A leading bank in Central and Eastern Europe)
Photo image of bank
Slides 31
Raiffeisen Bank Romania (A leading bank in Central and Eastern Europe)
Image of woman with red backpack with a VISA card logo
Slide 32
Raiffeisen Bank Kosovo (A leading bank in Central and Eastern Europe)
Images of VISA cards
Slides 33
IPKO (One of Europe's fastest growing telecoms)
Images of group of people and a woman with a VISA card
Slides 34
IPKO (One of Europe's fastest growing telecoms)
Image of prepaid Visa card
Slide 35
Rev Virtual Card - India
Image of prepaid Visa card
Slides 36
YAP
Images of YAP MasterCard and iPhone YAP app.
Slides 37
YAP
Images of prepaid cards
Slides 38
YAP
Images to show mobile banking
Slide 39
Driver's Card Australia
Image of Visa Driver's Card
Slides 40
Rev Card Brasil
Images of prepaid debit MasterCard
Slides 41
Rev Card Brasil
Image of prepaid debit MasterCard
Slides 42
Rev Card Ecuador
Images of prepaid debit MasterCard
Slides 43
Rev Card Ecuador
Images of prepaid debit MasterCard
Slides 44
Comex (largest paint manufacturer and distributor in Latin America)
Images of prepaid debit MasterCard
Slides 45
Comex (largest paint manufacturer and distributor in Latin America)
Images of debit MasterCard
Slide 46
IDDI Card Dominican Republic (NPO that seeks to eliminate poverty)
Image of debit MasterCard