1. @Vendorcom Business Strategy: - KYC - DT Fraud Conference - London Thursday 24 th March 2016

2. Connecting Payments@Vendorcom@Paul_Vendorcom Vendorcom

3. Connecting Payments@Vendorcom@Paul_Vendorcom

4. Connecting Payments@Vendorcom@Paul_Vendorcom It’s as easy as 123, KYC Know your customer; Empathy is EVERYTHING.

5. Connecting Payments@Vendorcom@Paul_Vendorcom Getting to know the payments ecosystem Normal people don’t think ‘payments’ Make sure you have the right perspective; Payments is not fintech; Fintech is not payments; Payments is ‘generational’; Payments is relatively dull; It IS an ecosystem; It’s a bubble.

6. Connecting Payments@Vendorcom@Paul_Vendorcom Don’t over-complicate it! Peter and Jane hoped that the shopkeeper would accept Apple Pay.

7. Connecting Payments@Vendorcom@Paul_Vendorcom Regulation PSR Objectives: –to ensure that payment systems are operated and developed in a way that considers and promotes the interests of all the businesses and consumers that use them –to promote effective competition in the markets for payment systems and services - between operators, PSPs and infrastructure providers –to promote the development of and innovation in payment systems, in particular the infrastructure used to operate those systems

8. Connecting Payments@Vendorcom@Paul_Vendorcom The Payments Community Possibly the most pompous statement in the history of payments: If you would like to join the Payments Community, you can register your interest by sending an email with your name, organisation and email address to Forum@psr.org.uk.Forum@psr.org.uk “The PSR established the Payments Community to influence the work programme of the Forum.”

9. Connecting Payments@Vendorcom@Paul_Vendorcom PSF - End User Needs The End-User Needs Working Group has been established to ensure that the UK’s Payments Strategy will fully meet the needs of individual and organisational users https://www.paymentsforum.uk/working-groups/end-user-needs

10. Connecting Payments@Vendorcom@Paul_Vendorcom PSF - Simplifying Access to Markets The Simplifying Access to Markets Working Group has been established to examine whether and how payment systems can be developed in order to simplify access and participation in the markets for PSPs. https://www.paymentsforum.uk/workinggroups/simplifying-access-markets

11. Connecting Payments@Vendorcom@Paul_Vendorcom PSF - Financial Crime, Security and Data The Financial Crime, Security and Data (Financial Crime) Working Group has been established to engender user trust in safe and certain payments through collaboratively preventing financial crime. https://www.paymentsforum.uk/workinggroups/financial-crime

12. Connecting Payments@Vendorcom@Paul_Vendorcom PSF - Horizon Scanning The Horizon Scanning Working Group has been established to research and present a regular horizon scanning report to the Forum. The report will identify key regulatory and technological developments and suggest how these might be relevant to the Forum’s work. https://www.paymentsforum.uk/workinggroups/horizon-scanning

13. Connecting Payments@Vendorcom@Paul_Vendorcom Payment Industry Trends

14. Connecting Payments@Vendorcom@Paul_Vendorcom It’s not a trend when… …innovators use meaningless predictors of success when they have no idea what they’re doing but think they can talk things up to the point where you might be fooled into helping them to deliver their fantasies…

15. Connecting Payments@Vendorcom@Paul_Vendorcom We already have 20,000,000 customers We have access to 30,000 retail businesses We’re talking to big brands We’re confident we’ll be profitable next year We’ve spent more than $100m We’ve had 10,000 downloads It’s going to go viral …

16. Connecting Payments@Vendorcom@Paul_Vendorcom We’ve heard it all before… The future is… –Prepaid –Alternative payments –Contactless payments –NFC –Mobile payments –HCE –eWallets –Bitcoin –…

17. Connecting Payments@Vendorcom@Paul_Vendorcom Here we go again… The future is… –Blockchain –Tokenisation –Apple Pay –Wearables –Regulated innovation –Fee free –Password free –Biometrics –…

18. Connecting Payments@Vendorcom@Paul_Vendorcom Dynamics - Buying Cycles

19. Connecting Payments@Vendorcom@Paul_Vendorcom Dynamics - Noise

20. Connecting Payments@Vendorcom@Paul_Vendorcom Contactless Mis-sold Over-hyped Confused consumers Competitive TfL dependent London / City-centric Impact of Apple Pay?

21. Connecting Payments@Vendorcom@Paul_Vendorcom The Ever Present Smart Phone

22. Connecting Payments@Vendorcom@Paul_Vendorcom Using a Mobile ‘Money’ App

23. Connecting Payments@Vendorcom@Paul_Vendorcom Mobile In-store Payments

24. Connecting Payments@Vendorcom@Paul_Vendorcom 100 people go to the online checkout…. Source: https://www.practicology.com/thinking/blog/measuring-shopping-cart-abandonment

25. Connecting Payments@Vendorcom@Paul_Vendorcom …but only 33 complete a transaction! Source: https://www.practicology.com/thinking/blog/measuring-shopping-cart-abandonment

26. Connecting Payments@Vendorcom@Paul_Vendorcom 100 people go to the smartphone checkout…. Source: Klarna – June 2015

27. Connecting Payments@Vendorcom@Paul_Vendorcom …but only 3 complete a transaction! Source: Klarna – June 2015

28. Connecting Payments@Vendorcom@Paul_Vendorcom Wearables ‘Smartwatch industry will grow in 2014 to $2.5 bn globally. In the years to follow, the smartwatch industry will keep growing at a 3-digit rate.’ ‘Bloomberg report estimates that Apple could see revenues of up to $3.6 bn with a successful smart watch.’ ‘Global wearables market will grow at the compound rate of 38% over the next five years to hit $20.3 bn in 2020.’ ‘Across Europe, more than 100 million Visa cards are contactless as are 1.8 million Visa terminals. Annual transaction volumes exceeded 460 million which is 263% higher than the previous year and the value of those transactions is 283% higher than the previous year.’ ‘In the last quarter of 2014, says MasterCard, contactless transactions in Europe grew by 174% year on year as consumers increased their usage by more than 20% and acceptance at over three million contactless-enabled retailer locations globally, representing a 56% year-over-year increase, it’s also more convenient than ever for everyone to use their contactless card, mobile or other device for purchases’ Sources: http://www.ecommercereport.com.au/rba-survey-shows-two-thirds-of-australians-now-have-contactless-cards/; http://www.computerworld.com.au/article/536949/mobile_payments_australia_state_banks/; http://www.forbes.com/sites/arieladams/2014/03/07/the-size-of-the-smartwatch-market-its-key-players/; http://fortune.com/2013/03/04/how-big-might-the-market-be-for-an-apple-smart-watch/ ; http://venturebeat.com/2015/02/15/how-businesses-are-putting-wearables-to-work/ ; Key figures and achievements - Visa Europe 2014 Annual Report

29. Connecting Payments@Vendorcom@Paul_Vendorcom What Drives Uptake / Adoption / Rollout? Business case Low capex Clear route map Consistency Ubiquity Integration Purchasing cycles Consumer appeal / pull

30. Connecting Payments@Vendorcom@Paul_Vendorcom Apologies for the Inconvenience!

31. Connecting Payments@Vendorcom@Paul_Vendorcom Who’s where?

32. Connecting Payments@Vendorcom@Paul_Vendorcom Most are ‘Intermediate’

33. Connecting Payments@Vendorcom@Paul_Vendorcom Investment decision

34. Connecting Payments@Vendorcom@Paul_Vendorcom Investment decision Desperate / rescue Conservative Daring

35. Connecting Payments@Vendorcom@Paul_Vendorcom

36. Connecting Payments@Vendorcom@Paul_Vendorcom

37. Connecting Payments@Vendorcom@Paul_Vendorcom Best guess… Nothing will be ‘mainstream’ in payments Nothing will die Prepaid will be niche Bank accounts will be main funding source - PayPort Merchants will develop holistic mobile apps inc. payment MIF reduction will impact the value of card payments Tokenisation will obviate wider data-driven benefits Data protection regulations will stifle insight SecuREpay will cause consumer confusion

38. Connecting Payments@Vendorcom@Paul_Vendorcom And there’s more… Authentication will be channel centric and biometric Merchants will take more risk - calculated Static authentication will be point of compromise Mobile payments continues as an artificial construct Blockchain will be exposed as a fantasy Purchasing cycles will lengthen again Acquirers’ merchant relationships diminish Capex in payment systems – consumers and vendors Solutions vendors must provide collaborative route maps

39. Connecting Payments@Vendorcom@Paul_Vendorcom Perspective

40. Connecting Payments@Vendorcom@Paul_Vendorcom Good Luck!

41. @Vendorcom Business Strategy: - KYC - DT Fraud Conference - London Thursday 24 th March 2016