Mobile Payments Now entering mass adoption phase transactions mostly for traditional point of sale (¢â‚¬“POS¢â‚¬â€Œ)

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  • Mobile Payments Now entering mass adoption phase

    APRIL 2020

    YOUR ASSET MANAGEMENT COMPANY

    www.atonra.ch • sales@atonra.ch • +41 22 906 16 16 • 7 rue de la Croix d'Or, 1204 Geneva, Switzerland

  • 2

    MOBILE PAYMENTS

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

    • Infrastructure and Services are in place — Mass adoption of mobile payments is now.

    ◦ Better user experience, enhanced security, enhancedv alue-added services better ergonomics.

    • Covid-19 acting as addition catalyst for digital payments.

    ◦ Fears of contamination from bank notes and coins, mobile-money as a public-health tool.

    • Governments pushing for a cashless society.

    ◦ Cash limits are increasing across the world, better oversight of money flows.

    • Total addressable market expands thanks to new forms of mobile payments.

    ◦ In-car payments, personalized shopping (including VR) experience, financial services.

    Investment Case

    JPMorgan Chase Bank

    XS1668108845

    JMLNARMP

    USD

    1.50% management fee + 15%

    performance fee, HWM

    Issuing bank

    ISIN

    Ticker

    Currency

    Fees

    Issuing bank

    ISIN

    Ticker

    Currency

    Fees

    SG

    CH0239657494 (USD Retail)

    IND1AMPU

    USD

    2.00% management fee+ 15%

    performance fee, HWM

    Share classes in EUR for retail (CH0239656603) and institutional (CH0239656462) available

    Mobile Payments Certificate details

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    MOBILE PAYMENTS

    The Ecosystem of Mobile Payments

    v ir

    t u

    a l &

    a u

    g m

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    t e

    d r e

    a l

    it y

    tech giantsprocessors & net works loyalt y progr ams

    biometrics & securit y

    processors & net works

    hardware vendors

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

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    MOBILE PAYMENTS

    • The Global Payment industry generated revenues of $1.9tn in 2018. It is expected to generate $3.0tn by 2025 (CAGR of 6%)!

    ◦ Non-banking revenues account for more than 60% of this huge pie.

    ◦ Asia-Pacific is the largest region in terms of revenues (45%), fuelled by commercial clients.

    • All revenue verticals of the payment industry are today disrupted by the use of smartphones and dedicated apps.

    Overview of the Payment Industry

    Revenue breakdown as of 2018 SOURCE: McKinsey, AtonRâ Partners

    AtonRâ Mobile Payments universe: a $1.8tn total addressable market (2025)

    40%

    Net interest income & Overdraft

    24%

    Credit cards revenues

    24%

    Domestic transactions

    12%

    Cross-border transactions

    GLOBAL PAYMENTS REVENUE BREAKDOWN

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

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    MOBILE PAYMENTS

    A $162bn Market by 2025 growing at 22% p.a. (2020-2025)

    ¹Based on transactions volume of $4.5tn SOURCE: Nester Research, IHL Group, Market Research Future, McKinsey, AtonRâ Partners

    DRIVERS

    • Reduced transaction costs • Surgein E - & M - commerce • Improved experience thanks to APIs and apps • Rewards revolution • Impulse from the largest tech players • Gen Z, the largest population cohort globally

    RISKS

    • Security & fraud • Data privacy • Regulatory compliance

    Mobile payments processing ($90bn¹) 25%

    21%mPOS/hardware ($21bn)

    17%NFC chips ($48bn)

    12%mPOS software ($3bn)

    14%Payment cards ($560bn)

    4%Loyalty programs ($220bn)

    TOP DOWN ANALYSIS Industry experts internal quantitative market analysis

    Related markets

    BOTTOM UP ANALYSIS Public and Private companies’ guidance internal qualitative and quantitative companies’ analysis

    CAGR 2020–2025

    AtonRâ Mobile Payments

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

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    MOBILE PAYMENTS

    By 2022, 1/3 Of Smartphone Users Will Use It For Mobile Payments

    SOURCE: Statista

    • Mobile payments refer to all payment transactions made from or via a mobile device and debited either on a bank account or on a mobile operator bill.

    ◦ At the end of 2019, there were approx. 3.2bn smartphone users worldwide. By 2022, 1.1bn people will use their smartphone to make payments by 2022.

    • All smartphones currently allow contactless payments via an electronic mobile wallet.

    ◦ They can also become POS terminals for merchants.

    Mobile Proximity Payments

    Web/In-app Purchases

    Person-to-Person Payments

    MOBILE PAYMENTS CATEGORIES

    NFC

    Mobile money (SMS)

    Mobile as a point-of-sale

    terminal

    QR code

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

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    MOBILE PAYMENTS

    Growth To Accelerate In Every Part Of The World

    SOURCE: MordorIntelligence, Statista, eMarketer, Newzoo, AtonRâ Partners

    • The annual transaction volume via mobile payments crossed the $1tn mark in 2019.

    ◦ By 2024, this volume should reach $3.7tn, implying a growth rate of 30%!

    • Disparities between countries are wide but growth is accelerating everywhere.

    ◦ Highest penetration rates in Asia-Pacific, as early adopters of the technology.

    ◦ Growth potential in North America and Europe remain important.

    ANNUAL TRANSACTION VOLUME OF MOBILE PAYMENTS ($BN)

    0

    500

    1500

    2500

    3500

    1000

    2000

    3000

    2015 2016 2017 2018 2019 20212020 2022 2023 2024

    TR A

    N SA

    C TI

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    V O

    LU M

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    B N

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    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    45.7%

    54.2%

    22.9%

    31.7%

    13.8%

    23.1%

    11.0%

    19.6%

    8.8%

    15.7%

    6.8%

    12.4%

    MOBILE PAYMENTS USERS (% OF SMARTPHONES USERS)

    Asia–Pacific North America

    Werstern Europe

    Central & Werstern Europe

    Latin America

    Middle East & Africa

    2017 2022

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    MOBILE PAYMENTS

    Digital Transactions To Overtake Cash Transactions By 2022

    SOURCE: Worldpay, AtonRâ Partners

    • Mobile payments use is increasing at the expense of cash transactions mostly for traditional point of sale (“POS”) transactions, according to Worldpay.

    ◦ Mobile payments and e-wallet transactions will overtake cash and credit cards by 2022.

    ◦ The use of cash varies by region In Europe, approx. 75% of retail transactions are still done in cash.

    GLOBAL POINT OF SALE PAYMENT METHODS (%)

    2018 2022

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    Cash Debit Card Credit Card Wallet/Mobile Payments

    Other

    16%

    28%

    31%

    17%

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

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    MOBILE PAYMENTS

    Best Days of E-commerce are ahead of us

    SOURCE: eMarketer, Statista, Fred, Worldpay, AtonRâ Partners

    • E-commerce, as a percentage of total retail sales, is globally on the rise.

    ◦ In China over 60% of retail sales could be done online by 2022.

    ◦ COVID-19 shock likely to accelerate the online shopping transition everywhere in the world.

    • The switch from traditional POS to e-commerce benefits mobile payments.

    • By 2022, e-wallet and mobile payments will account for 47% of global e-commerce transactions.

    0%

    10%

    20%

    30%

    40%

    50%

    60%

    70%

    SHARE OF E-COMMERCE IN TOTAL RETAIL SALES (%)

    GLOBAL CHINA UNITED STATES

    2015 2016 2017 2018 2019 2020 2021 2022 2023

    0%

    10%

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    70%

    MOBILE PAYMENTS USE FOR POS & E-COMMERCE (%)

    NORTH AMERICA LATIN AMERICA EMEA ASIA-PACIFIC

    POS 2018 eCom 2022eCom 2018POS 2022

    MOBILE PAYMENTS – TOWARDS MASS ADOPTION

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    MOBILE PAYMENTS

    E-Wallets Becoming Mainstream

    Non-exhaustive list of eWallets. Latest data availableas of November 2019. SOURCE: Company Statements, AtonRâ Partners

    • E-wallets in China benefit from high penetration rates of mobile payments in the country.

    • In developed countries mobile payments are approaching an inflection point.

    ◦ P2P digital services like Venmo and Square Cash will reach $574bn by 2023 in the U.S.

    A C

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    ACTIVE USERS ON TOP MOBILE PAYMENT PLATFORMS (MN)

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    A LIPAY

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    STA R

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    MOBILE PAYMENTS – TOWARDS MASS ADOPTION