BBVA Innovation Edge. Mobile Payments (English)

NOVEMBER 2012

4

Mobile Payments Paying with a mobile device mPayments (quick overview) Elevator Pitch Smartphonatics Cashing in on the opportunities

also in this issue

Trending issues Technology trends

contents mPayments.................................................................................................4 Elevator Pitch............................................................................................ 11 Global Snapshots................................................................................17 BBVA & Mobile Payments.......................................................22 SmartPhonatics....................................................................................24 Cashing in on the Opportunities....................................28 Innovation Forecast.........................................................................31 In Depth....................................................................................................... 34 Sections........................................................................................................36 Trending Issues.............................................................................36 Technology Trends.................................................................. 43 Mobile Payments & Banking event..............................47 BBVA Innovation Center Open Day............................48 Credits............................................................................................................50

mPayments quick overview

The mobile payments trend, undoubtedly, is on its way of becoming a mainstream phenomenon. It will change how society thinks about monetary transactions. Let’s take a look into mPayments, meet the main actors and gain a basic understanding of this fast moving trend.

04

Definition Mobile payments are payments made using a mobile device.

Generally, there are two ways to pay by mobile: online payments and proximity payments. “mPayments will transform customers’ lives”. See video

Online Payments

Main Actors

Mobile payments for digital or physical goods. Digital goods payments refer to products/services consumed on mobile devices, such as app purchases or digital content. Also, person to person (P2P) payments may be considered as online payments.

Physical goods payments refer to products/services delivered physically, but purchased via a mobile device.

Banks & Card Companies Incumbents who are currently dominating the general payment landscape; as the overall leaders, they are generally taking a wait & see approach, looking for the right product at the right time.

Proximity Payments Mobile payments for products & services purchases on-site via a mobile device (short range radio technologies, such as NFC).

Generally used at POS terminals, transit, etc.

Example of wallets VISA ISIS (AT&T, Deutsche Telecom & Verizon) Google

06

Mobile wallets Mobile wallets are platforms that bundle together products and services from several providers. In general, mobile wallets offer: A prepaid account (equivalent of cash in real wallets) ■■ Credit, debit & charge cards (payment instruments) ■■

Loyalty programs & offers (coupons) ■■ Transit (public transportation) ■■ Other (ID, electronic key, etc.)

■■

November 2012 | MOBILE PAYMENTS 07

Retail Companies New entrants who are disrupting the payments business with mobile technologies, such as Starbucks and Amazon .

Technology companies The financial services market is a new area for growth for these aggressive players. Armed with the latest and greatest in technologies, they are very active in experimenting with new value bundles and business models.

Companies include Google eBay company).

, Facebook

, and PayPal

(an

Also, the mobile device is being used to process transactions. Retail stores may now enable payments with a mobile device functioning as a POS, such as Square or PayPal Here .

Mobile Operators (MOs) Looking for new avenues for growth, MOs are looking to mobile payments as a way to make their relationship with clients stickier by offering payment services, as a part of the overall voice & data portfolio.

08

November 2012 | MOBILE PAYMENTS 09

Mobile Payments Mobile Payments mPayment & Value Bundles “The smartphone is simply an enabler — not a driver — of changing behavior.”

Ron Shevlin, Aite Group

elevator pitch Let’s take visual journey through the mobile payment space. We’ll look at the users and usage, deployment scenarios, business models, and take a peek into the future and the market.

“Mobile payments on their own are not sufficient to drive consumer adoption but the value bundle — payments together with incentives and offers — has a higher chance of persuading consumers to change their behavior.”

Advanced Payments Report 2012, Edgar, Dunn & Company

Therefore, each actor is using or will use mobile payments to design and build the “best” value bundle for a given customer segment. Lots of collaborative models are emerging, such as ISIS and Boku which are collaborations between mobile operators and other entities.

See video (Boku)

10

November 2012 | MOBILE PAYMENTS 11

Mobile Payments Users

Deployment

What is happening with mobile payments?

18%

39%

Young Boomers (40-50)

Millenials (18-26)

In the next five years, insiders expect a majority of brick-and-mortar retail transactions to take place on mobile devices. That is a big change-up for a $5.5 trillion marketplace. Meanwhile, mobile devices users who utilize mobile payments are expected to swell from 6.8 percent in 2009 to 21.3 percent in 2012.

How is the mobile payment industry shaping up?

Mobile carriers

9%

Old Boomers (51-61)

31%

Gen-xers (27-39)

Seniors (62+)

3%

Who is using mobile payments?

DEPLOYED

16%

READY TO DEPLOY

16%

NO INTEREST SO FAR

17%

9% 38%

25% 5%

Merchants 8%

13% 39%

TRIAL STAGE PLANNING STAGE

Usage

Financial institutions

28%

28%

36%

3%

19%

FOCUS 53%

66% 70%

47%

43%

HIGH MODERATE LOW

Handset manufacturers DEPLOYED

27%

20% 22%

10%

12%

Retail purchase

Fast food

12

37%

8% Mass transport

35%

10%

READY TO DEPLOY

18% Digital downloads

Online purchase

NO INTEREST SO FAR

29% 3%

22%

24%

37%

PLANNING STAGE

Application providers

19%

20%

TRIAL STAGE 16%

Payment service

37% 45%

11% 1%

30% 10% 1% November 2012 | MOBILE PAYMENTS 13

Mobile Payments Business models

The market (1)

What is the most viable business model?

By 2014, an estimated 13 percent of all smartphones will have built-in NFC capabilities.

20%

43%

Mobile-financial institution partnership

Third-party intermediation model

*common platform shared by alliance of carriers and financial institution.

7%

26%

Open federation model*

Global E-payments: number of transactions (billion), 2009-2013F Most payments are not mobile. Alternative payments, which includes mobile, will account about for 8% and 9% in 2013 of e-payments transactions.

Mobile carrier going solo Financial institution going solo

4%

CAGR ‘09-’13F 19.1% 32.1%

Total Alternative Payments Non-banking competition

Debit, credit, prepaid cards

The future

13%

What will be the most popular mobile payment app in the near future?

Global M-payments: number of transactions (billion), 2009-2013F Banks are still in charge, but the competition is growing faster. By 2013, the new entrants will have taken about 8% of the mPayment business, from a base of 0.5% in 2009.

10%

As merchants, financial institutions, and mobile carriers work together to figure out the future of the mobile payment system. People should not be surprised if their phone starts to replace the contents of their wallet over the next few years.

Mobile carrier going solo

27%

NFC-enabled payments Java-based payment application SMS-based payments

16%

Embedded credit cards

Other

USSDbased payments 1%

Percentage of respondents 14

15.1 0.9

14.2

2009

17.9 1.2

16.8

2010

30.3 21.3 1.5

19.8

2011F

25.4 2.0

23.4

2012F

2.7

27.6

2013F

Source: Capgemini I World Payments Report 2011, September 2011

The market (2)

14%

19%

18.1%

Number of transactions (Billion)

Source: Deloitte.com

Total Non-bank providers Bank providers

CAGR ‘09-’13F 48.8% 67.3% 27.6%

15,284 1,223

Number of transactions (Million)

3,120 156 2,964 2009

4,587 272 4,315 2010

9,814 785 6,756 473

14,062 9,029

6,283

2011F

2012F

2013F

Source: Capgemini I World Payments Report 2011, September 2011

November 2012 | MOBILE PAYMENTS 15

Mobile Payments The market (3)

Mobile Payments is a dynamic trend; and, as such, is drawing a lot of attention from around the world. This section takes a look at selected banks & card companies, retailers, mobile operators and technology companies and see what they are up to.

The market In 2010, the total volume of global credit card payments totaled

The number of mobile payment users will reach

We are forecasting a market with

million in 2012, up from 160.5 million in 2011

million users by 2016

$6.2 212.2 448 trillion dollars

Global

snapshots Source: Gartner, May 2012 16

November 2012 | MOBILE PAYMENTS 17

AT&T, T-mobile and Verizon Wireless: Isis The Mobile Operators led consortium is offering a mobile wallet platform. The Isis mobile commerce network will be available to all merchants, banks, payment networks and mobile carriers.

Fuente: Pay with Isis

Mobile Operators

Banks & Card Companies

Telefonica: O2 Wallet

Retail

Barclays: Pingit Users can send and receive money by using just a mobile phone number.

Commonwealth Bank: Kaching

See video

Chase: Investments & Partnerships ■■ Square, ■■ ISIS

GoPago (investor) (partner)

Source: GoPago

WyWallet, the mobile wallet joint venture from Telia, Tele2, Telenor and 3 has been launched with support for person-to-person money transfers, SMS transit and ticketing payments, and online shopping. Live tests of POS payments using NFC are set to start in July, with full-scale roll-out scheduled for 2013.

Fuente: WyWallet

See video

See video

Allows customers to make payments to email, to Facebook, to mobile, and to PayPass (MasterCard) contactless terminals.

A deal with Facebook, Google, Microsoft, and RIM allows a Telefonica subsidiary customers (O2) to pay for digital goods and services directly through the mobile phone bill.

Telia, Tele2, Telenor and 3 (the Swedish Big 4 MOs): WyWallet

Starbucks: announces deal with Square The coffee giant chooses Square to process payments in all of its stores and also takes an equity investment. “The focus is on the experience, and putting that above everything else,’ says Square founder Jack Dorsey about Starbucks’s stores.”

FastCompany added, “Square treats payments a lot like Starbucks treats coffee: by focusing on the experience around a product that is more or less a commodity.”

Source: Starbucks

Chase: QuickPay Allows customers to make P2P payments to emails or mobile phone.

Source: Chase

MasterCard: PayPass Wallet It’s a digital wallet service that makes online shopping safe and easy by storing payment and shipping information in one convenient and secure place. With PayPass Wallet, customers simply shop, click and checkout faster online.

Amazon MPS Amazon allows its merchant partners to accept mobile payment with its Amazon Mobile Payment Service (Amazon MPS). On the other end, Amazon offers its customers to make payments via mobile devices.

Additionally, Amazon facilitates P2P, sending money to an email or a mobile number.

Source: Payments. Amazon

Source: PayPass 18

November 2012 | MOBILE PAYMENTS 19

amount of buzz as Facebook continues to grow and the company is uniquely positioned to completely revolutionize commerce.

Source: Thedailybeast l June 2012

Other notable companies

Square

Technology Companies Google Wallet Fast and easy payments, with any card. Google Wallet now supports all major credit and debit cards, from Visa, MasterCard, American Express, and Discover.

Google Wallet stores cards online so they’re available wherever customers go in the real or virtual worlds.

See video

Apple: Passbook With the iOS 6, Apple introduced the “Passbook,” a mobile app which manages boarding passes, tickets, store cards, and coupons. The leading mobile technology company is expected to further pursue its “iWallet” strategy. The company launched Passbook with it newest OS, the iOS 6. “Apple controls the hardware and the mobile OS, and now with Passbook, it provides brand app developers the ability to link their products to a centralized and easy management.”

Source: Forbes | What CIOs Need to Understand about Apple’s Passbook Service, October 2012.

With Square, small business owners and merchants can accept card payment using an Android phone, iPhone, or iPad. Also, the company offers “pay with Square,” allowing customers to pay with their mobile device at the POS.

Banks & Card Companies (Technology providers to banks)

Source: Squareup

PayPal Here Keeping up with its competitor, PayPal recently launched PayPal Here, allowing customers to accept cards and also checks. Also allows users to invoice and track cash payments. Of course, PayPal continues to win mindshare as it facilitates payments, including mobile devices. Recently, a survey revealed that 8 of 10 consumers would use PayPal’s wallet, if it were to be available.

Source: PayPal

■■ Telepin

Software Engagement

■■ Charge

■■ Corfire

■■ VeriFone

■■ MChek

■■ InTuiT

■■ First

■■ Roam

Data ■■ Braintree ■■ JMango

Mobile Operators (in App purchases, bill to mobile companies)

Anywhere

GoPayment Data ■■ RedFin network ■■ Moneris Solutions ■■ Corduro ■■ Handpoint Loyalty Programs

■■ Bango

■■ Foursquare

■■ PayOne

■■ Mogley

■■ Mopay

■■ Swagg

■■ Dimoco ■■ BilltoMobile

See video

Pos solutions

■■ Customer

LevelUp A new mobile payment network, LevelUp provides a QR code pay-by-phone application for consumers and a terminal system for merchants. Recently it raised $21 million ($9 million coming from the venture capital arm of Deutsche Telekom) in a 2nd round funding.

Technology Companies

NFC ■■ DeviceFidelity

Mobile Wallets

■■ Giesecke

■■ Serve

■■ Ingenico

■■ Magtek

■■ Oberthur

■■ MasterCard

■■ Vivotech

■■ MobilePay

■■ Xius

& Devrient Tecnologies

Innovate Lead

■■ Cimbal ■■ Tabbedout

iZettle

■■ NoMoreCards

Europe’s answer to Square, iZettle allows businesses to take card payments using an iPhone or iPad. See video

Dwolla Facebook Facebook has scrapped its Facebook Credits and has everyone wondering what they will do in the mobile payments arena. There is a tremendous 20

The company’s product allows anyone with an internet connection to safely send money to friends or businesses.

See video November 2012 | MOBILE PAYMENTS 21

BBVA &

Mobile Payments BBVA Bancomer recently launched ‘Mobile Money’, a new service that allows customers to send money anywhere in the country using a mobile phone. This service will provide access to banking to 1.5 million users, contributing to their financial inclusion.

22

The Channel Director of BBVA Bancomer, Mauricio Pallares, highlighted during the presentation that the company is turning to electronic banking to lead it’s strategy to bank the unbanked and promote financial inclusion. With ‘Mobile Money,’ the group intends to extend banking services to 1.5 million customers and reach a volume of 19.5 million transactions in the first year of operations.

BBVA Bancomer Mobile Money results from an interest in developing a modern and innovative bank that offers alternatives that facilitates access to low-cost, financial services while ensuring safety, proximity, availability, time savings, and convenience. The new service launched by BBVA Bancomer is also available in Spain under the name, “dinero móvil.”

November 2012 | MOBILE PAYMENTS 23

Smartphonatics Are a group of consumers who are driving the demand for mobile payments. They aggressively change the way they shop and pay for products and services.

Importance of mPayments smarphonatics!

“smartPhonatics” The rise of the mobile class Customer surveys always seems to facilitate understanding. In this section, we’ll take a look at the recent survey results related to mobile payments and some insights they reveal.

24

Very important

4%

24%

Less important

41%

31%

Low

High

Interest in

mPayments ussage

Based on a global survey of 4,200 consumers (realized in Q1 2012), Aite Group’s research reveals leading mobile payment consumers, the Smartphonatics.

Source: Aite | The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adoption in the Americas, EMEA, and Asia-Pacific, May 2012.

November 2012 | MOBILE PAYMENTS 25

Smartphonatics / Key Findings

Where are they?

11% Sweden

7% Canada 20% U.S

16% UK 8% France

10% Germany

31% China

27% Italy 34% U.A.E

60% India

24% Singapore 37% Brazil 16% Australia

Are twice as likely than non-Smartphonatics to adopt mobile payments.

42% South Africa

Are driving mobile payment adoption around the world .

Offer clues to creating and meeting demands for mobile payments (albeit at different rates across the globe).

Who are they?

Mobile payment usage 36% 32%

Represent a country’s mobile maturity level.

Smartphonatics

18%

70% 6%

Do not necessary use smartphones (it’s all about the behavior).

Others consumers

Will continue to use a myriad of payment options, including mobile.

23% 23%

Senior

Boomer

Gen X

Gen Y

Has used mobilephone to make a payment in the last six months.

Source: Aite | The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adoption in the Americas, EMEA, and Asia-Pacific, May 2012

26

November 2012 | MOBILE PAYMENTS 27

Cashing in on the

opportunities Whoever creates the most meaningful financial value bundle for a given customer segment will win marketshare. The walls between industries are beginning to breakdown and the market is turning into a free for all. Can the banks be competitive?

New business models

B

e part of someone else’s value bundle! Banks can collaborate with platform providers for value delivery. For example, Chase, CapitalOne and Barclays are part of ISIS mobile wallet, a consortium of mobile operators.

November 2012 | MOBILE PAYMENTS 29

Meaningful Value Bundle For banks, mobile payments are not an end to itself. In a world of customer experience as the new value proposition, products by themselves do not offer a competitive advantage. Together with other building blocks of the business model, banks can leverage mobile banking and put together a value bundle that can delight customers and regain their

trust and confidence, such as offering value added financial products/services; such as helping customers to save, to invest, and to borrow. In other words, banks are positioned to provide a meaningful experience to customers when it comes to addressing their financial needs/wants, including the ability to pay for purchases via mobile devices.

Mobile G BANKIN

+

Mobile T PAYMEN

+

Mobile S WALLET

+

d financial Value-adde/SERVICES TS UC D O PR

=

GFUL MEANIN VALUELE BUND

Innovation

forecast

Mobile Payments is a trend that is gaining a lot of momentum and, as such, banks and other financial services companies are watching it closely. In this section, we’ll take a quick look how banks should understand mobile payments and how to approach it.

30

November 2012 | MOBILE PAYMENTS 31

Insights

Suggestions

Take the Long View

B

etween the seemingly imminent domination of mobile payments as seen in the news and knowing that they represent a small percentage of total payments lies the true relevance this trend.

Mobile payment is a business opportunity for banks... it’s just a matter of timing.

For now, most banks are dipping their toes to see how the water is... and don’t seem to be in a hurry to dive in. In this context, the Boston Consulting

32

The Long View Group in their recent article, How Banks Can Take the Lead in Mobile Payments, offers some insights for banks:

The article also offers suggestions for banks on how to seize the moment: ■■ Invest

■■ The

value will be in deals and offers, not in payments.

■■ Cards will not disappear anytime soon.

■■ mPayments are not yet superior to traditional payment methods.

■■ Banks are the masters of their own destiny.

to gain experience. a “house view” on the m-wallet.

■■ Preserve the attractiveness of cards.

■■ Establish security protocols.

■■ Form

Sources: BCG | How Banks Can Take the Lead in Mobile Payments, June 2012

November 2012 | MOBILE PAYMENTS 33

In depth

On the Web Amazon | Amazon Mobile Payment Service Barclays | Pingit

A list of sources to other useful tools and resources that you may find useful as a supplement to the information offered on the ‘Mobile Payments’ report.

Books & Publications Aite | The Global Rise of Smartphonatics: Driving Mobile Payment and Banking Adoption in the Americas, EMEA, and Asia-Pacific, May 2012.

Capgemini | World Payments Report 2011, September 2011.

Capgemini & EFMA | 2012 World Retail Banking Report, April 2012, May 2012.

Celent | Preserving Merchant Relationships When Mobile Comes to the Retail POS, January 2012 presentation Deloitte | Cell me the money: Unlocking the Value in the Mobile Payment Ecosystem, 2011.

Forrester | 2012 US Mobile Banking Functionality Rankings, April 2012.

Forrester | Consumers Bankers Association Survey, June 2012.

Deloitte | Mobile Payments: a Deloitte Analysis -Managing change in the “mobi-payscape.”

Edgar, Dunn & Company | Advanced Payments Report, March 2012.

34

EFMA | EFMA Global Yearbook 2012, May 2012.

Ernst & Young | Global Banking 2020: Foresight & Insights Gartner | Forecast: Mobile Payment, Worldwide, 2009-2016, May 2012.

IDC Financial Insights | Consumer Payments Survey, July 2012.

Juniper Research | NFC Mobile Payments — No Contact Required, June 2012.

KPMG | 2011 KPMG Mobile Payments Outlook, July 2011.

KMPG | KPMG Banking Outlook Survey, June 2012.

KPMG | Monetizing Mobile: How banks are preserving their place in the value chain, July 2011.

MasterCard | The Mobile Payments Readiness Index, May 2012.

Pew Internet & American Life Project | The future of money: Smartphone swiping in the mobile age, April 2012.

Brandon McGee | Mobile Banking Blog (covers mobile payments as well) Mobile Money

Boku | Introducing Boku Accounts. Smarter phone, smarter payments (Vimeo), February 2012.

Mobile Payments Today

Boston Consulting Group | How Banks Can Take the Lead in Mobile Payments, June 2012.

New York TImes, Technology | PayPal Here is More Than a Square Imitator, July 2012

Business2Community | Facebook Credit Card As Your New Universal Payment Solution?, July 2012

NFC World

Chase | QuickPay

Pymnts.com: What’s next in payments

Commonwealth Bank | Kaching

PayPal Here

Daily Beast | Universal Wallet: Facebook’s Very Bright Future

PayPal | PayPal’s Global Mobile Solution Unveiled: Merchants Around the Globe (YouTube), May 2012.

Dwolla

PayPal | PayPal Here: How It Works (YouTube), March 2012.

FinExtra Google | Google Wallet Google | Introducting Google Wallet (YouTube), August 2011.

GoPago Intuit | The Marketplace in Your Hand, 2012 ISIS ISIS (PayWithIsis) | The Isis Vision (YouTube), February 2012. iZettle

Payments News

SapientNitro | The Future of Money and Mobile Payments (YouTube), June 2012.

Square | Boccalone Gets Paid with Square (Vimeo), December 2011.

Square | Pay with Square Starbucks | Mobile Apps Starbucks | New! Starbucks iPhone Apps (YouTube), September 2009.

TechCrunch | Apple Announces New Passbook App To Store Movie Tickets, Retail Cards, And Boarding Passes, June 2012

Lafferty | QR code to boost mobile payments dramatically, September 2011 (subcription article).

Telefonica (O2) | Mobile Wallet

LevelUp

Visa | Visa Digital Wallet (YouTube), May 2011.

MasterCard | PayPass

WyWallet (Telia, Tele2, Telenor and 3 - the Swedish Big 4)

November 2012 | MOBILE PAYMENTS 35

Trending issues In this section, readers will find summaries of the most relevant news of selected topics that have been published over the course of the month based on its relevance to the Banking industry. The summaries were prepared by the editorial board. Further information is made available for each given topic.

Mobile banking

Which Way to Go?

Core banking platform

Most mobile banking apps in the market today are native apps. That is to say, the kind of apps you purchase from an app store for a particular mobile platform, such as Apple’s App Store, Google’s Play, etc. These apps currently provide the best experiences for customers as it integrates the functionalities of the smart devices into the mobile banking app, such as camera or GPS. However, keeping the mobile banking up to date for each platform can quickly run up the costs. With the coming of html5, banks can “write once, publish in many platforms;” not only html5 can save money, but also decrease time to market. Banks will have more choices regarding mobile banking applications in the post PC era. Which way to go?

Have the need to better understand customers and the value bundle?

Go back into the core.

“Banks need to seriously consider core renovation.

Core renovation allows modern architecture to deliver new functionality like dynamic pricing and product and pricing simulations which help banks to understand, at an enterprise level, the value of customer relationships and the potential of any given product offer or bundle.”

Source: Finextra | Apps, a continuing debate: html5 vs. native, 12 August 2012

Source: Finextra

New formats

30%

The future of bank channels, as seen by Cisco

would not be happy, but would keep the same deposits would switch banks

25% 20% 15% 10% 5%

The old branch is dead; long live the omnichannel branch ■■ Mobile: The promise of embedded banking in consumers’ lives ■■ Social: The potential is here—when will banks be ready?

■■ Video: Seeing is believing ■■

25%

would not be happy and would reduce deposits

7%

0% virtual banking 36

Cisco Internet Business Solutions Group Global Research reveals new ways for banks to prosper in the omnichannel world: the future of the branch.

22%

Source: Cisco

Enterprise 2.0

The Knowledge Economy is coming “The knowledge workers’ revolution will come from a renewed workstation, and it will live in the cloud, whether it is public, private or hybrid,” fueled by Desktop as a Service, Social Desktop or whatever it may be called.

Currently, the challenges enterprises face include: Growing number of communication channels: email, Facebook, Twitter, Skype, RSS, etc.

■■ Dispersed knowledge (internal and external) ■■ Short-term vision of social integration ■■

Source: Forbes | July November 2012 | MOBILE PAYMENTS 37

Trending issues Social Media

Crowd finance

SOCL (Global X Social Media Index Fund) Nasdaq GM. 2 - Aug - 2012 SOCL (Daily) 11.93 Open 12.07 High 12.10 Low 11.84 Close 11.93 Volume 125.4K Chg -0.15 (-1.24 %) 15.8 15.6 15.4 15.2 15.0 14.8 14.6 14.4 14.2 14.0 13.8 13.6 13.4 13.2 13.0 12.8 12.6 12.4 12.2 11.93

The social bubble seems to be bursting A quick look at the Global X Social Media Index Fund pretty much tells the whole story. The fairy-tale story is ending and it’s time for social media companies to begin delivering real value to consumers and businesses.

Put your money where your mouth is Crowd-sourcing is used to fund innovative farm and food projects. ThreeRevolutions.com offers food and farm enterprises an opportunity to raise funds from appreciative consumers who are eager to support and connect with their favorite businesses and really put their money where their mouths are ...

Source: Marketwatch | July

Sep Oct Nov Dec 2012 Feb Mar Apr May Jun Jul Aug

Source: Seekingalpha

Mobile payments

Digital Marketing

20 % of Europeans already make payments with mobile

Interesting digital marketing stats: people use tablets in the evening & interactivity is best in tablets

According a recent report from Forrester, 1/5th of european consumers. “Banks need mobile payments to protect their retail payments businesses from digital disruption.”

Taken from weekly stat monitoring by Econsultancy, a digital marketing firm: ■■ Between 7.30pm and 9pm more people click on tablet ads than on mobile ads ■■ A quarter (25%) of respondents said they would be likely to click interactive ads

Source: Internetretailing | July

Source: Econsultancy

38

November 2012 | MOBILE PAYMENTS 39

Trending issues New Gizmo era

New banking concepts

It’s not a bank; it’s a banking store: The Virgin Money Store

3D printers to go Couple of MIT students developed the first truly portable 3D printer that fits inside a metal briefcase, a “personal fabrication machine.” In a short period of time, consumers will become mobile manufacturers. What could that enable? Time will tell.

The first Virgin Money Store opened its doors in July, with plans to open some 70 plus more stores in the future. The “stores” feature free WiFi, iPads and iMacs, and a “no hard-sell policy” adopted by staff.

“Customers can simply come in, take the weight off their feet, enjoy a cup of tea and use our free facilities.”

Source: Arstechnica

Source: Thefinancialbrand

App ecosystem

They’re finally here: enterprise app stores Now big software vendors hope to streamline the searching and buying process by following in Apple’s footsteps. SAP and other enterprise software companies are opening app stores and hoping that they can monetize the app ecosystem, such as The SAP Store.

Sources: PC Advisor / EcoHub.

Join & enjoy

“Only” 1.6% of Facebook users spent money on virtual goods In percentages, it’s pretty paltry. But ... when expressed in dollars, that becomes over 1 billion dollars. Uh, that would be nine zeros. “The newly launched Facebook App Center will spur payments usage. In addition to in-app purchase, app developers (not only social games developers) now have the flexibility to charge users one-off flat fee and/or subscription.”

Source: Forbes | August 2012

40

November 2012 | MOBILE PAYMENTS 41

Trending issues

Technology trends The following section outlines the upcoming technologies that will change everything, with predictions on what may come of them in financial industry.

Smart cities + urban mobility

According to Daimler AG, it’s the best way to get from A to B “Moovel,” brings together entirely different means of travel and presents the options so that they can be seen at a glance – transparently, in a user-friendly way and on an equal footing. The recommendations are based on the offers of the mobility service providers. A pilot program is launched in Stuttgart and another one is planned in Berlin. As of July, the app is available for download in Apple’s App Store.

Source: Media Daimler

Health

Is there a doctor in the phone?

There is an explosion of mobile medical apps, beyond the diet and exercise kind.

The president of the American Academy of Physicians, Glen Stream states, “People want to be empowered to take care of their health” and are asking for apps for help.

Current apps include:

Diabetes monitoring Heart EKG monitoring ■■ Blood pressure monitor (wrists) ■■ Electrocardiogram device ■■ E. coli sensor ■■ Ear infection checker ■■ ■■

Source: USAtoday l August 2012

3D Printing 3D printing is a process of making three dimensional solid objects from a digital file. 3D printing is achieved using additive processes, where an object is created by laying down successive layers of material. In other words, 3D printing turns bits into atoms.

“3D printing makes it as cheap to create single items as it is to produce thousands and thus undermines economies of scale. It may have a profound impact on the world as the coming of the factory did. …

Just as nobody could have predicted the impact of the steam engine in 1750 —or the printing press in 1450, or the transistor in 1950— it is impossible to foresee the longterm impact of 3D printing.

But the technology is coming, and it is likely to disrupt every field it touches.”

Source: The Economist

42

November 2012 | MOBILE PAYMENTS 43

Technology trends

T

he market for 3D printing and related products and services are expected to grow because additive manufacturing essentially makes the cost of complexity free (or almost free). Massive personalization doesn’t mean massive costs. In terms of manufacturing, personalization becomes essentially free.

■■ The

■■ The

3D printing comes in all shapes and sizes. For example, they can go big or go small and everything else in between.

cost of 3d printers is dropping dramatically.

The cost of basic home 3D printer is dropping to about $1,000 and a industrial 3D printer to about $10,000.

Technology as marketing

material base is expanding. Plastics, metal alloys, ceramics, food, etc.

■■ 3D

model creation is being democratized. What was a complex & expensive is now simple & affordable; and readily accessible.

When technology boosts marketing campaigns Building a product is just the beginning. Once in the market, users will evaluate if the application developers have been working on during the last months is good enough or not. It is true that this evaluation depends on a never-ending number of variables - customer satisfaction, needs covered, look and feel, expectations, overall experience - which makes the success almost impossible to predict.

Source: Forbes

3D printed passenger planes

Printing Houses

E Fat, even at nano-scale

44

ven the most simple solution needs a marketing campaign accompanying the launch —it may not be mandatory but it really helps!— Spreading the word can be done in many different ways, but surprising the final users is becoming harder and harder. Google has detected the opportunity and their teams are creating amazing examples about how to take their products to the limit. In other words, Google uses the technology beyond their product as the marketing campaign. Let’s enjoy with a few examples.

November 2012 | MOBILE PAYMENTS 45

Technology trends

Events Mobile Payments

Play the Cube

Mobile payments are on their way to become a mass phenomenon. Analysts believe that on the next five years most of the transactions done in physical commerce will be executed through mobile devices.

PlayMapsCube is a tilt-to-roll marble game using 3D and the Google Maps API. The game is a tutorial for Google Maps but it includes some features that make it an addictive game. Is it really needed to explain how Google Maps works? For most of the people probably not, but it is cool and it will be useful during the maps war for sure.

This payments will shape the way monetary transactions are seen in the future by the society as a whole, and will surely transform the clients’ lives.

Chaos to perfection

World Wonders Project

The Google Cultural Institute has created an amazing 3D virtual tour of the Palace of Versailles. This example shows the true power of Google Chrome navigator working with WebGL for rendering interactive 3D graphics without the use of plug-ins.

Another example created by the Google Cultural Institute to show how Google Street View works.

Google makes world heritage sites available to users across the globe by using the Street View technology including videos, photos and in-depth information. Users can now explore the world wonders just as if they were there.

The Mobile Payments event will be held on November 29th.

From 9.30 to 2.00 pm. BBVA Innovation Center Plaza de Santa Bárbara, 2, 28004. madrid

Videos, pictures and all the info More info

Other events ■ INICIADOR Iniciador Madrid with Enrique Burgos “Keys to developing your personal Brand”.

Iniciador Madrid dismissed the 2012 season with an interview to Enrique Burgos (Chief Marketing Officer at QDQ Media) to discuss the main keys to creating a personal brand.

Date: December 12th, 18.00 in BBVA Innovation Center

■ KNOWSQUARE

Check out the videos and photos of the event in our web www.centrodeinnovacionbbva.com

46

Know Square Workshop: “Creating an optimal present”.

The crisis has led to a further weakness in the already difficult world of channeling emotions. This workshop aims to familiarize and empower main mindfulness, from the standpoint of both theoretical and practical.

Date: December 18th at 18:30 BBVA Innovation Center

November 2012 | MOBILE PAYMENTS 47

Where we are

Open day December 4th at 18:00 December 12th at 10:00 December 19th at 18:00

48

December 3 10 17 24 31

4 11 18 25

5 6 7 12 13 14 19 20 21 26 27 28

gasta

Alonso Martínez

ficie ene

rba

e de

ra

la B

1 2 8 9 15 16 22 23 29 30

Ca

lle

de

za d

eS

ta.

Bá

Call

Just make a reservation the day that want to come

Gé

no va

Pla

BBVA Innovation Center Madrid, is a place where ideas become reality. Would you like to know? You can see the prototypes we created to model the bank of the future, to understand how we crossed the barrier of convention to seek new sources of value for our customers and to observe new forms of work that we have deployed to support our innovation methodology.

The first few days available for the month of December are:

de Sa

ncia

Calle

Plaza de Sta. Bárbara, 2. 28004 Madrid.

www.centrodeinnovacionbbva.com

Follow us: www.facebook.com/centrodeinnovacionbbva www.youtube.com/user/centroinnovacionbbva

twitter.com/cibbva www.slideshare.net/CIBBVA

November 2012 | MOBILE PAYMENTS 49

BBVA Innovation Edge is the first corporate magazine focused on innovation. Innovation Edge aims to explore new trends and technologies that may impact the financial industry, especially retail banking.

BBVA Innovation Edge is the result of a collaborative work done by all the people who are involved in innovation at BBVA Group.

APP: Available on the App Store...

CONTRIBUTORS TO THIS ISSUE: Maria Pilar Álvarez Alfonso Bey Reyes Bolumar Jose Fernández Antonio García Eduardo Gabriel García María Hormaeche Carmen López Javier López Marcos Marrodán David Martín Luz Martín Manolo Moure Marcos Pastor Jay Reinemann Alicia Sánchez Javier Sebastian Luis Uguina Gustavo Vinacua Jose Manuel Villa Sang Gu “Phil” Yim Pedro Francisco Zago

WEB: ... and also on the web: https://bbvainnovationedge.com

PDF: To read off-line

Are you interested in Innovation Edge?

Subscribe to our newsletter and be informed of new issues.

©BBVA2012 No part of this publication can be reproduced or communicate in any form or by any platform electronic o mechanic, including photocopying, recording o any other system of storage and retrieval, without permission of the publisher, BBVA.

DL: M-38720-2012

More info

Produced by Prodigioso Volcán (www.prodigiosovolcan.com)