Megatrends and their impact on payments.

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The Next Decade

The Small print.

• I can not predict the future. These opinions are solely my own. They are potential outcome scenarios that may or may not materialize.

• I would like to take you on a short journey with me for the next few minutes on what the future may look like.

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Fasten your seat belts please..

Acceleration

The last decade was exciting. London got tapping… New York, Hong Kong, Seoul.

Oyster was born in June 2003.

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NYC Taxis in 2008.

We got liking… the definition of a friend expanded.. exponentially.

Facebook born in 2004. 5

Tweetingpresent participle of tweet (Verb)Verb1. Make a chirping noise.

2. Make a posting on the Twitter social networking site.

Twitter launched in 20066

We got tweeting… and conversations got shorter

So, what is next?

In our world.. Just 10 Years Ago..

─ There was no FaceBook (2004).

─ There was no Twitter (2006).

─ There was no iPhone (2007) or iPad (2010)

─ There were 53MM mobile phone connections in Africa.

─ The average GDV per capita of Brazil was $2,900

─ Travel/mileage/points collection was the dominant payments loyalty strategy.

─ Nokia was the #1 Handset provider globally with 35% share.

─ This year mobile devices will outnumber human beings.

─ Yes, digital mass adoption and convergence has arrived.

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Unprecedented connection to information, education, ideas goods, services. Every device becomes a commerce device.

CommerceDemocratization

Create a commerce device anywhere

…activate collaborative bargaining & purchasing power...

.. commerce will accelerate everywhere in this new global marketplace..

.. Enable access to global markets

…Allows wide spread competitive analysis

.. Create new digital sellers…

Trend 2: Commerce Democratization

─ Provides access to commerce for billions of people to easily sell and to buy across devices, locations, currencies.

─ Convergence of identity, payments and connectivity. The wallet and the purse go truly digital.

─ Connectivity backlash will spur “anonymity seekers” and “disconnect value proposiitons” Anonymous platforms continue to emerge.

─ The GC (global connectivity) creates greater transparency and competition on supply chain pricing, focusing more on the non-commoditized value. Ie. Local, socially or community relevant.

─ Empowered, informed and demanding consumers will want to determine the brand experience and the value that is relevant to them. Brands compete on the consumer experience pushing technology platform development.

─ The global commerce platform requires device-agnostic solutions. The device choice stays with the consumer.. phones, tablets, wearables, glasses, electronics, “refrigerators that shop”, “cars that talk”

─ A shared freedom of speech/opinion/reviews environment continues to be top influencer in buying decision.

─ Increased customer power will evolve the brand experience, the brand offer and the brand profit segmentation. Highly relevant and highly loyal customers become brand ambassadors.

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Convergence of platforms, data and technology create a shift in traditional loyalty and brand engagements.

Micro Engagementaka

It is all about ME

Trend 3: Micro vs. Macro Loyalty

• The new empowered customer expects you to know them on a personal basis, they have all their life on the web.

• In this new paradigm of open-ness and transparency… Loyalty moves away from large scale one size fits all programs

• Loyalty converges with big data and to deliver highly contextually and highly tailored offers

• Loyalty is earned by the brand upfront versus the consumer after xx purchases or xx spend – Consumer potential is fully recognized and accurately forecasted.

• Ongoing self-service retail environments will utilize the consumer connection to check-out, to pay and tailor the shopping experience. Personal coupon.

• Individual consumer understands their worth and wants an enhanced experience in return for loyalty

• Brands become reliant on social media and aggregate individual experiences to attract like-minded consumers

• Consumer empowerment may move to a feeling of consumer ownership in the loyalty / offer experience. Will they trade behaviors, preferences, social network recommendations for greater value and brand relevant access.

• Brands will become more reliant on strategic analytics in concert with social media to determine segment investment for existing and new customer attraction.

The global middle class is coming and they will change everything.

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Next 2 Billion

.. Provide a new lens to the world...

… Connects to new people, creates new communities…

.. a better future for their children …

..Inspire new passions, ignite new dreams..

Trend 4: The next 2 Billion…

─ There are roughly 2B people outside of the financial and payment system.

─ Current financial inclusion initiatives both public and private are targeting 500MM.

─ They will form the new global middle class of the next 15-25 years.

─ They have enormous swarm buying power.

─ They will have recognized access to financial dignity with national identity programs.

─ They will demand new products and services currently not available to them from large scale consumer brand providers.

─ They will be able to educate their children through their internet devices regardless of location, and have greater aspirations for them.

─ They will expect both clean water and a smart phone.

─ They will better understand their role in the value chain which will impact market pricing..

─ The world will never be the same with unprecedented poverty reduction, educational achievement, and access to healthcare.

─ For the first time, the majority of the world will be middle class and poverty as we know it will disappear.

─ Payments is key to the new Global Marketplace: Global networks, brands, technology enablers are driving at lightening speed to this new future.

Embrace the change.Embrace the now and the new.Go create the future.