Digital Wallets Executive Briefing Michael Bradley Managing - - PowerPoint PPT Presentation

11-June-14

Digital Wallets Executive Briefing

Michael Bradley Managing Director, NorthCard Inc. mike.bradley@northcard.com 416-929-0422

Digital Wallets Executive Briefing

Digital Wallets Executive Briefing

I. Digital Wallets 3 II. Stakeholder Positions / Profiles

A. Financials: Defending the Fortress 16 B. Telecoms: Chasing the Promise 22 C. Retailers: Uncertain Times Ahead 28 D. Internet Giants: Seizing the Future 40

• III. Who will Win?

46 Appendix - Key Issues: Security, Privacy & Costs 54

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Digital Wallets Executive Briefing

How did we get here? Commerce 3.0

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Commerce 1.0 1950s

• Bigger, self-service stores
• Mass media/advertising
• Packaged goods driven

Commerce 2.0 1990s

• Data-driven marketing / loyalty programs
• Internet ordering and fulfillment
• Global mega-retailers

Commerce 3.0 2010

• Technology enabling new experiences
• Smart devices blurring channel lines
• Data-based relevant, personal marketing
• Living in the virtual world

Digital Wallets Executive Briefing

What’s in Your (Digital) Wallet?

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Payment Credentials Loyalty / Membership Data Electronic Cash (Prepaid) Receipts

Mobile E-Commerce Face-to-Face

Functioning across converging channels…

Location Preferences Profile

…integrated into the customer’s context…

Keys Offers Alerts

…and delivering added value.

Digital Wallets Executive Briefing

Big players and start-ups are entering a frenzied market.

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Postioning

• In-store, e-com or

mobile?

• Data, transactions or

currency?

• Add-on or standalone?
• Segment or mass?
• Selling to whom?
• Buyer (consumer)
• Seller (retailer)
• Enabler (Bank,

telco)

• Local, regional or

global? Perhaps most importantly:

• What problem are you

solving?

Digital Wallets Executive Briefing

Digital Wallets: A simple, compelling vision…

 Which phones does it work

• n?

 How does the card get on the

phone?

 How is it stored? Securely?  What payments does it work

with?

 Where does it work?  What else does it do?

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Digital Wallets Executive Briefing

…that requires a complex operating environment.

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Credential 1 Credential 2

Secure Provisioning of Payment Credentials (Trusted Service Manager) Credentials: Multiple banks/ payment products NFC Enabled Phone: Multiple manufacturers, devices and

• perating

systems

Wallet 1 App Wallet 2 Wallets or Apps may be provided by Bank, Mobile Operator or independent developer Credentials stored securely in Secure Element on phone

• r in cloud

Digital Wallets Executive Briefing

There are many hurdles to Mobile Wallet adoption.

Consumer Adoption

Utility/improvement Ubiquity of solution

NFC Acceptance

Breadth of deployment Staff training Version Control

Business Enablement

Application Carrier – Bank deals TSM/OTA Personalization

Hardware Enablement

NFC Handsets OS Readiness SE Readiness

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Digital Wallets Executive Briefing

The Case for Mobile Wallets in Canada

Canada is world’s leading contactless market

 75% of major retailers

accept across 3 major card brands

 All major Issuers in

market

 Est. 1 billion transactions

to date Early trials are informing the business model

 Beginning in 2008-09 with

RBC/Rogers/Visa and BMO/Bell/MC

 CIBC/Rogers

launch in Nov./2012

 Multiple Banks

& Carriers now in market

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Digital Wallets Executive Briefing

The Case for Mobile Wallets in Canada (cont’d)

Canada has a good record

• f industry collaboration

 Work on Payments Task

Force incorporated views from mobile operators and retailers

 CBA Reference Model

documented bank perspectives on major issues EnStream has developed enabling infrastructure

 JV of major telcos  Designs to new device

models across carriers

 Facilitates one-stop

credential deployment

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Digital Wallets Executive Briefing

Who’s Making Headlines in Canada?

Launched Nov/12

 First: mobile contactless NFC

payment in Canada (CIBC/ Rogers/Simon Whitfield @ Tim Hortons)

 Separate CIBC Mobile

Payments app

 Additional Android &

Blackberry devices deployed through 2013

 Feb/14 – Added Telus

Launched April/14

 First: Carrier wallet platform in

market

 Available with Rogers Prepaid

MasterCard & Gift Cards

 Other cards “coming soon” –

Rogers Bank, etc.

 Passcode / wallet security  Communicate directly to users  Will come pre-installed on

Rogers phones

 Other carriers may follow

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Digital Wallets Executive Briefing

Who’s Making Headlines in Canada?

Announced Nov./2013

 First: Open wallet combining

multiple payment & loyalty

 Single Tap to pay, earn and

redeem points

 Loblaws backing

initiative of PCF with retail integration Launched Jan/14

 First: Cloud-based credentials

(Patent Pending)

 Requires Applet on Bell NFC SIMs  Sent encrypted to phone (handles

expiries)

 Loyalty & payment, transfers,

• ffers & gift cards

 Will flex to bar codes & QR

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May/2014

• First: Three big carriers
• TD mobile app enhancement

Digital Wallets Executive Briefing

Who’s Making Headlines?

April/2014 – PayPal Wallet Launch

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2013-14 – Square Canada Growth

Digital Wallets Executive Briefing

The Buck Stops Here: Keys to Consumer Adoption

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Add significant new value

• Compelling

benefits

• Vision that

resonates Integrate into today’s experience

• First reason
• Easy to find
• Easy to adopt

Deliver on promise

• Ubiquity of

usage

• Layer new

functionality Acceptable downsides

• Costs
• Security
• Privacy

You are here

Digital Wallets Executive Briefing

Digital Wallets Overview Stakeholder Positions

Financial Services

• Banks / Issuers
• Card Networks
• Acquirers / Processors

Telecoms

• Network operators
• Aggregators
• Manufacturers

Retailers/Merchants

• Retail-centric payments networks

Internet Giants

• Search
• Social networks

 Key players jockeying for

position in emerging business models

 Sectors have different

approaches to problem

 No player does it all  Hurdles include: trusted

brand, reach and scale, execution

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Digital Wallets Executive Briefing

Digital Wallets Overview Stakeholder Positions

Financial Services

• Banks / Issuers
• Card Networks
• Acquirers / Processors

Telecoms

• Network operators
• Aggregators
• Manufacturers

Retailers/Merchants

• Retail-centric payments networks

Internet Giants

• Search
• Social networks

 Banks/card networks

concerned about disintermediation

 Primary position in wallets

today drives lucrative payments business

 New revenue opportunity:

capture and monetize customer data

 Need to deliver better

service and protect fraud in new channels

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Digital Wallets Executive Briefing

Banks have a strong strategic position in the battle for Digital Wallets

 Banks developing own wallets, leveraging

success of mobile Banking Apps

 70 % of Canadian Smartphone Owners

Use Financial Apps (2013 BMO Mobile Banking Survey)

 Mobile is overtaking Web Banking!  Separate apps are being developed

to drive payment

 CBA Reference Guide is a stake in the

ground on framework

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Primary payment accounts Primary role in Authentication Trust (data and privacy) Electronic distribution channels Bank Position with Consumers Is this where you will go to pay?

Digital Wallets Executive Briefing

Card Networks are natural catalysts and enablers for Banks

Factors in play:

 Merchant Fatigue  Regulation  Direct-to-Customer  Focus on Canada  EMV in USA  Tokenization  Control the end-point

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Scale

Global players Deep pockets Model to support Banks

Acceptance

Brands Tech Standards Liability rules Incentives

Structural Advantages

Digital Wallets Executive Briefing

Key Player Profile v.me by Visa

 Strategic priority is remove friction from e-com shopping

 Playspan ($190MM) and Cybersource ($2 billion)

 Out of the gates strong in 2012, with Bank partnership

model to integrate/distribute wallet:

 U.S.: PNC/US Bank/B of A  Canada: RBC, TD, Scotiabank

 Developer center launched  E-tailer acceptance developing:

 buy.com, Overstock.com

movietickets.com, 1-800-FLOWERS

 Parallel NFC plans emerging

 payWave enablement/certification; HCE standards

 V.me launched in Europe (2013)

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Digital Wallets Executive Briefing

Key Player Profile MasterCard

 2011 – Google Wallet partnership with Citi, Sprint

 Heavy focus/investment in NFC / PayPass acceptance

 2012 – PayPass Wallet Services launched

 E-commerce focus, set up for cross-channel convergence

 2013 - MasterPass Checkout Services announced

 Multiple interfaces (NFC, QR) for POS  Grocery Gateway, Porter Airlines & WagJag

 2014 – MasterPass Connected Services

 Enable Banks, Merchants & Partners to

• ffer wallets

 Major telco partnerships (Telefonica,

Orange, Rogers) driving PayPass

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Digital Wallets Executive Briefing

Networks and banks are anxious to avoid “another PayPal”

Addressing merchant-side gaps:

 Small merchants, Risk

Meeting consumer needs:

 Authentication/security & Prepaid

Leveraging eBay customer base Business model leveraging ACH to expand retail base E-commerce giant

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Revenue $6.6B (+19%) Volume $180B 143MM users

(eBay 2013 Financial Results)

+ + = +

…with today’s de facto Digital Wallet Leveraging the beachhead in-store…

Digital Wallets Executive Briefing

Digital Wallets Overview Stakeholder Positions

Financial Services

• Banks / Issuers
• Card Networks
• Acquirers / Processors

Telecoms

• Network operators
• Aggregators
• Manufacturers

Retailers/Merchants

• Retail-centric payments networks

Internet Giants

• Search
• Social networks

 Telecoms seeking to add

value to customers and increase stickiness to device

 Interest in leveraging

location-based data with new customer data to create value

 Revenue through (in

some cases) entry to payments business

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Digital Wallets Executive Briefing

Cellcos are still at the heart of the Consumer’s relationship with their Phone…

• Equipment subsidies well entrenched
• Carriers pre-load and distribute phones
• Robust authentication layer: Control secure

element (UICC/SIM), authenticate phone & IP add.

“Own” the Phone

• Enstream provides “one stop shopping” for banks
• n hardware solutions. New device cycles will

reinforce the need

• Suretap: Opportunity for Wallet standardization

Working together

• Leverage security model & infrastructure
• Leverage location knowledge and data
• ID? Keys?

Permissions Beyond Payments

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Digital Wallets Executive Briefing

TSYS Mobile Wallets Study (Apr/2014)

 Awareness high @ 78%  Must contain top items

from physical wallet

 Driver’s license (47% top)  Payments cards (22% top)  Insurance cards, loyalty cards, coupons lower

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Digital Wallets Executive Briefing

The player relationships are complex…

Mobile Operators Handset Makers Operator Enablers OS Providers

 Value chain can be

strained

 Exploding ecom /

mcom market

 Multiple models to

enable secure payments on phone

 Standards still

developing in some areas

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Digital Wallets Executive Briefing

Telecoms: Implications for Mobile Wallets

 Cloud-based credential models are developing

 Higher flexibility vs. reliability and response time

 Bar codes, QR are distractions (in Canada)  Equipment manufacturers pursuing alternative, global

strategies

 Visa & MasterCard licensing contactless specs to OEMs

 Expect closed ecosystem players (Apple, Google) to offer

end-to-end solution

 Business model gridlock may emerge with either banks or

manufacturers

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Mobile Wallet adoption may be slow and models are still developing

Digital Wallets Executive Briefing

ISIS: Slow & Steady wins the Race?

 2010 – AT&T, T-Mobile USA and Verizon Wireless

 Initial model (Barclaycard, Discover) abandoned post-Durbin

 2011 – Visa/MC license contactless applications to Isis  2012 – Adds participating Issuers, pilot goes live

 Chase Credit, Amex and Capital One  Est 1500 merchants in SLC & Austin, TX

 Nov/2013 – Nationwide roll-out

 40 Isis-ready smartphones  Promos at Coke / Jamba  Amex / Serve prepaid  Chase/Wells in, Cap One out

 May/14 – Avg 20K activations/day

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Digital Wallets Executive Briefing

Digital Wallets Overview Stakeholder Positions

Financial Services

• Banks / Issuers
• Card Networks
• Acquirers / Processors

Telecoms

• Network operators
• Aggregators
• Manufacturers

Retailers/Merchants

• Retail-centric payments networks

Internet Giants

• Search
• Social networks

 Retailers seeking to

access new data/channels to make customer offers

 Backdrop is broader

changes in environment

 Must manage new costs,

• perational and strategic

risks

 Collective challenge is

presenting a coherent proposition that customers will adopt

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 28

Digital Wallets Executive Briefing

Retail is anything but homogenous.

Everyday

Grocery Drug Gas C-Store

Big Box

Department Home Building Discount Office Books & Music

Specialty

Electronics Sports Toy / Hobby Clothing Wine/Liquor Accessories

Food & Drink

Fast Food Casual Dining Fine Dining Bar/Tavern

T&E

Airline Hotel Taxis Transit Resort/ Casino

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Each category and sub-category has distinct economics, business drivers and customer interface models.

Digital Wallets Executive Briefing

Commerce 3.0 enables… Virtual Fitting Rooms

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Clothing

Digital Wallets Executive Briefing

Commerce 3.0 enables… Order Preferences & E-Menus

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Stand in Line Order Food Special Requests Pay Receive Food

Fast Food Fine Dining

Digital Wallets Executive Briefing

Commerce 3.0 enables… Contextual / Location-Based Offers

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Digital Wallets Executive Briefing

In every case, Retailers desire deeper (direct) relationships with consumers

Priority investments include:

 Proprietary loyalty cards  APPS! Location finder, offer delivery  Sales customized to new channels

(tablets, mobile)

 Better customer information capture  Experimentation with social media

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April 2013 Artisan Retailer Research:

• 72 percent indicated that a native app is

among their top three priorities for 2013.

• 71 percent said that native apps were likely

to become the single most important consumer touch point.

Digital Wallets Executive Briefing

Key Player Profile Starbucks: Mobile done right!

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Finding: Choosing: Paying: Rewarding Loyalty:

14% Penetration!

Howard Schultz Starbucks’ CEO 2014 Earnings Stmt

Digital Wallets Executive Briefing

Witnessing a (slow) POS Revolution

 Today’s POS expensive

and cumbersome

 Multi-purpose device

adds new functions

 Line-busting enhances

retail delivery model

 Standard, low cost

devices open new markets and new players

 Apps, apps, apps leverage

the cloud

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Digital Wallets Executive Briefing

Square: Defining the MPOS Market

 May/2010 - Well-funded start-up first with new vision for

acceptance: simple pricing (2.75%), free reader

 SBUX investment & roll-out  2013: Square Stand, Market, Cash  Jan/2014: Est. valuation $5 billion  Canada: Significant marketing &

$100 million / transactions

 2013 Waterloo office opened

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Square Order replaced Wallet in Apr/14.

Digital Wallets Executive Briefing

Retailer’s Investment Dilemma

Investment Timing POS Systems Payments Processing Inventory Systems Loyalty Program

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Opportunity

Sizing Impact on sales Margin impact Customer Strategies

IT Marketing

Chip / Contactless Digital Wallets Commerce 3.0 Changing POS

Digital Wallets Executive Briefing

Retailers: Implications for Mobile Wallets

Price / Margin Pressure Cost of Payments Disintermediation New channels / data to enable

• ffers

Infrastructure costs Over-investment Reduce delivery costs

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Strategic Threats Opportunities Operational

Digital Wallets Executive Briefing

Merchant Customer Exchange (MCX): Digital Wallet Wildcard

 2012 – MCX formed “Wal-Mart, Best Buy, others gang up

• n Google Wallet”

 Coupons, rebates & loyalty

programs

 Exclusivity clauses in charter

 2013 – Announce technology

base of bar code (1D or 2D) and cloud-based credentials

 2014 – Paydiant named mobile partner:

“Integrate to retailer apps” “Avoid sharing sensitive customer data”

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70 brands 110K locations $1T sales

Digital Wallets Executive Briefing

Digital Wallets Overview Stakeholder Positions

Financial Services

• Banks / Issuers
• Card networks
• Acquirers / Processors

Telecoms

• Network operators
• Aggregators
• Manufacturers

Retailers/Merchants

• Retail-centric payments networks

Internet Giants

• Search
• Social networks

 Looking to deliver

advertising and content in new channels

 Most capable of

developing “ecosystem” play across channels, devices and products

 Aggressively playing IP

game

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Digital Wallets Executive Briefing

Key advertisers are moving down the value chain

Live Browse Buy Fulfill

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Objectives:

• Capture purchase data
• Connect ads / offer with payment
• Enter lucrative new business

Digital Wallets Executive Briefing

e-Tailer headaches

Face-to-Face “CNP” Issuer Merchant CVV/Mag Chip/PIN Neural Nets 3-digit Code VbV/SecureCode Neural Nets

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Hard

“Card-data-on-File” powers most on-line merchants Tablet / smartphone purchases (est. at 10%+ of e-com) exacerbates the problem.

Usability Liability

Merchant tools for risk decisions:

• Customer profile
• Segment / goods / ticket size

BREACH! For Target, Sony, Heartland and Adobe, the issue is reputation as much as cost.

Digital Wallets Executive Briefing

Amazon.com: The First Digital Wallet

 World’s largest on-line retailer

 Leverage customer / purchase data  Federated merchant base

 Oct/2013: Amazon Payments

 Consumers: Pay on-line / send money  Merchants: Login/Pay or Hosted Checkout

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One-Click

215MM card users; spend $700-1300

Digital Wallets Executive Briefing

Google Wallet: If at first you don’t succeed…

 2006 Google Checkout targets simpler e-com purchasing  2011 Google Wallet launched with Citi MC, Sprint, prepaid

 Checkout folded into Wallet

 Aug./2012 – “Goes cloud”, supporting all credit/debit cards  2013 HCE released in Android 4.4 (KitKat)

 Less dependent on hardware / SE  Feb/14 - Visa/MC specs support HCE

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Google Wallet today… …but Loyalty / Offers …limited content Checkout online …limited acceptance Pay in store Google wallet card? Send Money Is this the driver?

Digital Wallets Executive Briefing

Apple: Piecing the puzzle together?

iBeacon Apple Store Retail offers & payments

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Passbook iPhone 5 (2012) Tickets & loyalty TouchID iPhone 5s (2013) Fingerprint ID (AuthenTec) iTunes: Est. 500 million registered payment card users (YOY growth 60%) Fall/2014 – iPhone 6: Apple ready to make its NFC play? Extensive patent portfolio

• n payments, NFC, wallets

and virtual currency

11-June-14

Who Will Win?

Michael Bradley Managing Director, NorthCard Inc. mike.bradley@northcard.com 416-662-6456

Digital Wallets Executive Briefing

What does winning look like?

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Browser = Search = Payments = Social = Digital Wallet Leadership:

• Customer Perception
• Customer Access
• Brand
• Data Ownership

Will there be a winner?

Digital Wallets Executive Briefing

Scenarios to Consider

 One or many wallets?  Integrated wallet or multiple apps?  Canadian or Global?  F2F, ecom or mobile? Omnichannel?  Niche or ubiquitous?  Transactional or data play?  Consumer-driven model?  Cloud or device centric?

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Over what time horizon? Baby steps or a game-changer?

Digital Wallets Executive Briefing

 Build on your franchise: customer trust & channels  Don’t stretch (too far) beyond brand permissions

 If you are a true believer, be prepared to work across industries

 Don’t try to do it all

 Card networks drive rules and acceptance  Banks distribute securely to customers

 Fix the e-com problem / experience

 Merchant liability for fraud  Multiple / Lost User IDs/Passwords  Sharing card numbers

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 49

(Unsolicited) Advice for Banks and Card Networks

Financial Services

Digital Wallets Executive Briefing

 Maintain the long view: Change will not be easy or cheap  Flex with the tech: NFC, HCE, QR, BLE  Look for sweeteners  Leverage the data:

location, location, location

 Develop position as the consumer’s advocate  Keep a close eye on the global (U.S.) picture

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Telecoms

(Unsolicited) Advice for Telecoms

Digital Wallets Executive Briefing

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 51

 Make the customer experience easier: don’t “digitize” the

same problems

 Proprietary relationships does not mean proprietary

platforms

 The new world could be very expensive – don’t rush it!  Assess viability of a “Canadian way”

(Unsolicited) Advice for Retailers

Retailers/Merchants

Digital Wallets Executive Briefing

(Unsolicited) Advice for Amazon, Google, Apple

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 Payments acceptance infrastructure

are complex, expensive distributed systems

 Roll-out of Chip & PIN took 8 years  PayPal is 15 years old!

 Consumer payment habits run deep

 Today’s wallet works - customers “don’t leave home without it”  Managing parallel wallets requires a compelling benefit

 The banks play very good defense  Security, security, security…  It is going to take time to get it right

Internet Giants

Digital Wallets Executive Briefing

Measuring up: Keys to Consumer Adoption

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Add significant new value

• Compelling

benefits

• Vision that

resonates Integrate into today’s experience

• First reason
• Easy to find
• Easy to adopt

Deliver on promise

• Ubiquity of

usage

• Layer new

functionality Acceptable downsides

• Costs
• Security
• Privacy

11-June-14

Appendix Digital Wallet Key Issues: Security, Privacy & Costs

Michael Bradley Managing Director, NorthCard Inc. mike.bradley@northcard.com 416-662-6456

Digital Wallets Executive Briefing

Digital Identity is a long-standing issue, being brought to the fore again by Digital Wallets.

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 55

Authentication/ Security

Digital Wallets Executive Briefing

In payments, the risk profile varies significantly by channel.

Face-to-Face Card-Not-Present Channels Point-of-Sale E-Commerce, Mail/ Telephone Order, Card-data-on-file Principle Security built around card-terminal interaction Very flexible payment processing to complete transaction Authent’n / Security Mag stripe / Chip Signature / PIN CVV2 (3-digit code) Address Verification Fraud Risk Bank Merchant

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Authentication/ Security

Digital Wallets Executive Briefing

Improved solutions for “Card-Not-Present” fraud have proven elusive.

User ID & Password Challenge response; Device fingerprinting Consumer device / OTP Two-factor authentication

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Phishing Hacking Data capture Man-in-middle Customer convenience Fallback Device costs Customer support Today Threats Operational Issues

Authentication/ Security

Digital Wallets Executive Briefing

New players are tackling the

• pportunity with innovative solutions.

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• Improved security, leverages

chip technology where possible

• Turns consumer devices into

strong authentication tools

• Exchange model improves

usage and privacy

Authentication/ Security

Digital Wallets Executive Briefing

Payments Industry Fraud Implications for Digital Wallets

 Mobile NFC vs. Mobile Remote – very different Rules

framework / business model

 New data may support fraud management

 “Device fingerprint”  Geo-location

 “Card-Data-on-File” – legacy merchant risk management

tool provide solid basis for customer file

 What security is in the Digital Wallet?

 Does wallet insulate the merchant?  Does the wallet insulate the bank?

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Authentication/ Security

Digital Wallets Executive Briefing

The Holy Grail: Get the Right Offer to the Right Customer in the Right Place at the Right Time

Who Customer Profile

• Past behavior, Life stage,

Preferences, Lifestyle

• Demographic, Psychographic,

Socio-graphic

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What? Product Offering

• Past products purchased
• Self-identified interests, likes,

dislikes

Where? Geo-location

• Location migration patterns

mapped to availability

• Purchase patterns

When? Stage of Buying Cycle

• Real-time inputs, browsing

behavior/links

• Frequency & duration, intensity

Privacy

Digital Wallets Executive Briefing

While a surgical strike is the objective, the result can feel like carpet bombing.

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Privacy

Digital Wallets Executive Briefing

And occasionally, success can lead to absolute disaster.

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• Are Ts & Cs

adequate?

• Do consumers

want us in their wallet?

• Will some want to

“buy back” their privacy?

Privacy

Digital Wallets Executive Briefing

Merchant concerns over escalating costs led to a Payments Code of Conduct in 2010…

• Transparency requirements
• Notice periods
• Cancellation rights

Acquirer/Processor Restrictions

• Bifurcation of credit/debit acceptance
• No negative option acceptance
• Discounts for debit/cash required

Network Restrictions

• No competitive co-badging
• Equal branding
• No credit and debit on same card

Debit Card Restrictions

• Consumers must consent to get debit /

premium cards

Issuer Restrictions

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 63

Payments Regulation

Digital Wallets Executive Briefing

…which is being modified in the context of Mobile Payments (Sept/12)

 Applicability to other entities enabling mobile payments?  Debit acceptance will not be forced via enablement of mobile payments  Competing domestic debit apps can be stored on or accessed by the same

mobile device

 Must be separate payment app and consumers can select which payment app shall

be used for a transaction.

 Equal branding required for all representations of mobile payment apps (i.e.

credit and debit).

 Consumers must have full discretion to establish default preference(s) for

payment options.

 Must be based on a clear and transparent process easily changed.

 Credit and debit card on different apps  TBD whether express consent required for acceptance

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 64

Awaiting results of consultations and publication of Addendum.

Payments Regulation

Digital Wallets Executive Briefing

The “compelling vision” of Mobile Wallets will remain just that until key issues are resolved.

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 65

August 2001 TV Spot for IBM e-business Software "VENDING MACHINE (FOUNTAIN)“

Digital Wallets Executive Briefing

11-June-14 CONFIDENTIAL (c) 2014 NorthCard Inc. 66