The document discusses the battle for supremacy in the mobile payments business between bank-led models and MNO-led models. Bank-led models mainly operate in developed countries as extensions of banking services, while MNO-led models focus on developing countries using airtime and stored value accounts. Partnership models are emerging as both seek to work together. Banks partnering with mobile payment solutions providers can help banks enter negotiations stronger and shape the future of mobile payments. However, challenges remain around regulations, security, and resolving issues between various players in the industry. A blueprint for successful bank-led rollouts includes tailoring approaches to individual countries and leveraging partners' core competencies.

1. Mobile Payments: The Battle for the
Future
Presented by Thomas Bostrøm Jørgensen
From mobile payments solutions provider Luup
26 November 2009
Financial Services Club, London
Mobile Payment Solutions
© 2009 Luup 1

2. Speech focus
• Which contrasting mobile payments business models compete for supremacy?
• Can bank-led models succeed in equal measure in developing and developed countries?
• Which differentiating drivers, challenges and opportunities define mobile payments
markets?
• Why is this business worth fighting for?
• What does a blueprint for future bank-led mobile payments roll-outs look like?
© 2009 Luup 2

3. Luup’s credentials
• Mobile payments solutions developer and operator since 2002
• First company to hold a full European e-money license
• Worldwide growth business with high profile backers
• Partnerships with FIs at the heart
• Full service set for retail banks, corporate banks and money transfer organisations
© 2009 Luup 3

4. P2P Money transfer demonstration
© 2009 Luup 4

5. Battleground and protagonists
• Bank-led models mainly in developed countries offer banking service extensions
• MNOs-led models mainly in developing countries with airtime and stored value accounts
for new market segments
• Partnership models are emerging
• Current demarcations show MNOs are capturing opportunities and revenue ahead of
banks
© 2009 Luup 5

6. A business worth fighting for
CGAP statistics:
• Mobile payments market worth as much as £365 billion by 2013
• 110 million users in Europe alone by 2014
• 364 million unbanked customers to be reached by agent-networked mobile banking
Luup & Evaluserve new statistics:
• 15 million migrant workers in Kuwait, Saudi Arabia and the UAE - 80% without bank
account!
• Migrants remit 50% of salary home, totaling €2.373 billion a month
© 2009 Luup 6

7. MNO-led models leverage agent networks
© 2009 Luup 7

8. Regulators stirring over MNOs-led models
• MNOs weaknesses: from restricted user access to lacking banking knowledge
• Regulators’ concern: from security and impact on financial systems to agent network
management
• M-Pesa led to introduction of Bill to tackle ‘disaster waiting to happen’
• Banks can ride to the rescue, yet time is of essence
© 2009 Luup 8

9. Bank-led models
• Cost-efficient extension of banking services
Banks taking the lead
• Moving beyond mobile banking to lucrative
mobile payments
“Our partnership with Luup will
enable Deutsche Bank to shape the
• Opportunities for Banks push ahead without future direction of the mobile
MNOs payments space.”
Harold Young, Global Head of Payment
Products, Deutsche Bank GTB
• From global transactions to corporate mobile
payments and authorisation
• Beware MNOs muscling in and the impact of
the PSD
© 2009 Luup 9

10. The partnership models
• Entire industry seeks to declare a truce and work together
• Banks tie up with solutions vendors to enter negotiations with stronger assets
• Country specific approaches and focus on partners’ core competencies
• Wide range of contentious issues still to be resolved
• Commitment to ‘first time right’ is needed
© 2009 Luup 10
10

11. Blueprint for bank-led models
• Different countries, different
approaches
• 2 phones per person and unbanked
population in UAE opened
opportunities for NBAD
• Arrow launched; includes first
person-to-person money transfer
service of its kind
• Challenging, bespoke innovations
dominated the implementation
© 2009 Luup 11

12. My questions & Your questions
Thank you
Thomas Bostrøm Jørgensen
From mobile payments solutions provider Luup
26 November 2009
Financial Services Club, London
Mobile Payment Solutions
© 2009 Luup 12