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PREPARING FOR FUTURE PAYMENTS Why the payment interface should be considered twice by merchants

October 2015

Jan Lundequist, Senior Vice President, Nets Merchant Service

The payment universe undergoes radical changes and many new

technologies are tested

Overview of some of the mega trends in the payment industry:

CONTACTLESS

CARDS

END USER VAS,

E.G. eRECEIPTS

NEED FOR

FLEXIBILITY (”PAY

AS YOU WANT”)

Alt. Payments

MOBILEPAY /

SWISH / VIPPS

NFC MOBILE

MERCHANT VAS,

E.G. BI OR

LOYALTY

DIGITAL

WALLETS

NEED FOR

SECURITY

NEED FOR

RELIABILITY

NEED FOR

SIMPLICITY AND

SPEED

…with many vendors and initiatives but some vendors are mastering the entire system and can create simplicity for merchants

It is a complex “eco system”…

How to deal with emerging front-end POI services?

Complex environment for a merchant & wallet providers wanting to focus on core business

How to serve digital consumers?

What digital services and applications to provide?

How to provide seamless payment experiences?

What digital loyalty services to provide?

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All contactless enabled POS

terminals from Nets are ready to

accept all of the new “Pay” solutions

Same procedures for cashiers

regardless of payment mechanism

Nets saw the first Apple Pay

transaction on a POS in Norway on

the day Apple Pay was launched

OEM wallet solutions can be handled easily on Nets’ contactless

terminals through the EMV NFC standard

The power of the POS terminal.

NFC is the foundation – are there other solutions?

Mobile acceptance going forward

• Global standard (controlled by

global schemes)

• Established and proven – growing

acceptance base

• Robust & secure

• Based F2F card acceptance

• Requires NFC mobile (and NFC

controller access)

NFC

• Growing interest around the world (and in

Nordics)

• Easy to implement for wallet providers

• Cloud payment (rather than F2F

transaction model)

• No firm standards available, will require

terminal upgrade

• BLE superior to QR (but QR is easy to

deploy)

Alternative technologies

(BLE, QR)

Nets perspective : Both models likely to co-exist to accomdate

future mobile payment needs

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Merchants need one payment facilitator that enables acceptance

of all payment methods

… and Nets is developing an ”open” infrastructure for all cards and wallets.

Nets’ ambition is to reduce complexity with integrated solutions for

all payment methods and to be your single settlement partner

• Cards (Dankort, BankAxept, Visa, MC,

AmEx, Diners ...)

• Contactless (NFC cards, NFC phones,

Apple Pay, Samsung Pay ...)

• Non-NFC mobile wallets (e.g.

MobilePay, Swipp)

• Other funding sources: Invoice,

prepaid, vouchers

No matter how your customers

want to pay

• Physical stores, at the POI

• Webshops (e- & m-commerce)

• Mobile in-app payments

• Pickup points

And where they pay

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Nets is launching a product suite that will enable merchants to

accept non-NFC mobile payments

Easy implementation – already integrated in existing infrastructure

Cost efficient – Leverage existing POS infrastructure

Future proof – handset and terminal agnostic

Open solution – not linked to one wallet-issuer

Roadmap

Bluetooth BLE solution in H1 2016

(optional) QR-based solution for Nets terminals in Q1 2016

Suite of value added solution and acceptance partners being worked on

Nets is launching an acceptance solution for alternative non-NFC

mobile payments

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The new acceptance solution in detail

• Open solution, not linked to a single wallet

• One acceptance solution handles all

payments, handset and terminal agnostic

• One merchant integration for all payments

To point of interaction From point of sale

• 100 % consumer penetration

• Tested and proven technology and processes

• Limited ability to communicate with

consumers, one way solution

Nets payment terminal

Mobile NFC

Contactless cards

Plastic cards

Point of sale

Nets core infrastructure

Merchant backend

Nets payment terminal

Mobile NFC Contactless

cards Plastic cards

Point of sale

Nets core infrastructure

Merchant backend

Bank wallet Merchant

wallet 3rd party wallet

Consumer handset

Existing solutions Existing solutions New solutions

Cloud

payment

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One acceptance solution handles all payments, handset and terminal

agnostic – QR codes first, BLE support coming up

OR

Swipe

The A-Shop:

DKK

48,50

Connected via Nets acceptance Solutions

Tap

Payment terminals will evolve to become a “point od interaction” in the future

From POS to POI

1979 2015

The payment terminal is not just for card payments anymore, it is

becoming a point of interaction with your customers!

Opening up for opportunities to cross sell complementary services,

recruitment tool for your loyalty scheme and offer a variety of

different payment choices!

57.0.0.0.0/20_99v1.0/2014

What we know

• Payments will increasingly become a

seamless part of the overall customer

experience

• Terminals will still be relevant and go

from POS to POI

• Loyalty services will be more digitalized

and connected to the payment

experience

What we don’t know

• Which payment methods will be

mainstream in the future?

• Global brands vs local players - who will

own the wallets?

• Which Mobile F2F solution will prevail

and what is convergence going to look

like?

12

What we know, what we don't know

and what we don't know we don't

know

What we don’t know we don’t know

….expect the unexpected…

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