ibsview e-wallets in malaysia banktechasia ’17, kuala lumpur · 2020. 9. 29. · new york chicago...
Post on 28-Mar-2021
3 Views
Preview:
TRANSCRIPT
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
1
IBS Intelligence, a division of Cedar Management Consulting International LLC Confidential Document
IBSViewE-Wallets in Malaysia
BankTechAsia ’17, Kuala LumpurJuly 2017
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
E-commerce payments dominated by cards (debit and credit); digital wallets catching up
2,372
3,518
0500
1,0001,5002,0002,5003,0003,5004,0004,5005,000
2016 2020 (F)
$ B
n
Global E-Commerce | Turnover value
2
E-Commerce Market | Global trend
Source: Worldpay Global Payment Report 2016
30%
24%
17%
10%
7%
10%
e-Wallet Credit Card Debit Card
Bank Transfers Cash on Delivery Others
Payments split by mode of payment (2015)
▪ E-commerce payments growing at a rapid pace and is expected to overtake traditional payments
▪ Cards dominate e-commerce payments especially in developed markets
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
China dominates e-wallets market in Asia; low uptake in western markets
Source: Worldpay Global Payment Report 2016
71%
19% 26%
73%59% 57%
3%
60%
8%
9%20% 22%
20% 6%
23%
7% 6% 4%
3%7%
26%
6%4% 9%
3% 8% 17%5% 11% 8%
0%10%20%30%40%50%60%70%80%90%
100%
Malaysia China India Singapore USA UK
% s
har
e o
f p
aym
ent
mo
des
Cards E Wallets Bank transfer Cash on Delivery Others
Bank Penetration
3
E-Commerce markets| Asia
Asian peers Developed economies
▪ Slower acceptance of wallets in markets with high bank penetration
▪ China is an exception due to strong influence of ecommerce giants, Alibaba and Tencent
▪ E-wallets based payments growing in volume due to large up-take in China
81% 79% 53% 96% 94% 98%
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
4
Definition
Secured online account where an individual can load money, and use it online or transfer money to other person or to a merchant
e-Wallet | Overview
Sign into merchant website using email address
Select e-wallet option during payment stage
Complete payment using balance in e-
wallet account
Transfer money to e-wallet account using
online transfer or debit/credit card from
Bank
In case of shortage in e-wallet account balance,
traditional payment options can be used to pay shortfall
Network
Payment Request
Payment Receipt
Request for confirmation
Verification
Confirmation
Processing- Debit PA
Pay
ee
Paye
r
E-w
alle
t Secured online account for person to person payment or merchant payments
Setu
p Downloade-wallet mobile
application
Sign up using following details:
email address, mobile no. & National ID
Me
rch
ant
Pay
me
nts
1 3
2
4
5
6
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Bank Services
▪ Link M-Wallet to bank accounts and transfer funds between them
▪ Easy access to bank statements and transaction history
▪ Ability to register for M-Wallet account via ATM, Internet & M-Banking and IVR
▪ Ability to Top-up & Cash out funds via M-Banking , Internet, ATM & IVR01
5
▪ Fast customer on-boarding to M-Wallet online account
▪ Ability to link Debit/Credit and Online billers to the M-Wallet
▪ Ability to view account details , online offers from retailers & merchandizers
Account Management
Payment Services
▪ Ability to make payments via P2P, NFC enabled POS terminals and Payment Gateways
▪ Ability to make scheduled and on demand utility payments
▪ Extend payment services to support loan, tax & other payments.
▪ Allow Users to make Domestic and International Remittances
e-Wallet | Services
User & Transaction
Management
▪ Improved Digital security via remote wipe, passcodes and auto lockout
▪ Customizable Alerts and preferences
▪ Convenient viewing of transaction history and filing of transactional requests
Source: IBS Research
02
03
04
Service Features designed for ubiquitous payment and transaction
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
UbiquitousBanking Access
▪ Mobile solution for ubiquitous banking access
▪ Ease of on-boarding
▪ Digital authentication and no-paper
Paper-lessAnytime
Anywhere
▪ Mobile solution paper-less anytime, anywhere cash-less
▪ Online merchant ecosystem
▪ Offline merchant acceptance
▪ Lower cost of merchant on-boarding and transaction
Mobile Solution for
Micro-payments
e-Wallet | Solution Requirement
▪ Interoperability
▪ Single national merchant authentication form factor
▪ Appropriate legislation and policy from Central Bank
Source: IBS Research
Requirements for the success of a single mobile payment solution offering
6
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Infrastructure
▪ Leverage existing national payment infrastructure
▪ Open API to build additional services
▪ Standard XML interface for Banking integration
▪ Dedicated people infrasture to build services
Customer & Merchant
▪ Ease of sign up and no paper work
▪ Leverage existing bank account and KYC
▪ Offline merchant ecosystem to driver usage
▪ Lower cost of merchant on-boarding and transaction
Regulation
e-Wallet | Key Success Factors
▪ Interoperability regulation
▪ Single national merchant authentication factor
▪ Pragmatic regulatory, policy planning & operations
▪ National payment scheme; less dependency on cardassociation
Source: IBS Research
Cost effective operating model with pragmatic policy planning and regulations
7
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
8
Benefits | Banks, Merchants and End Users
Benefits to Banks Benefits to Merchants Benefits to End Users
▪ Privacy – Share only Virtual Address and no other info
▪ Multiple Utility – Cash on delivery, split bill, merchant payments etc.
▪ One Click functionality – Authorize Transactions by entering only the PIN
▪ Works across Various Interfaces
▪ Available 24x7x365, customer does the transaction on his own device
▪ Seamless fund collection from customers – single identifiers
▪ No risk of storing customer’s virtual address like in cards
▪ Tap customers not having credit or debit cards
▪ Suitable for E-Com and M-Com
▪ Single click Facility
▪ In App Payments
▪ Universal App for Transactions
▪ Leverage existing infrastructure
▪ Secure
▪ Payments Basis Single / Unique Identifier
▪ Tap C2B Segment & E-Com / M-Com Transaction
Source: IBS Research
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
9
e-Wallet | Revenue Stream
Bank & teleco partnership products and revenue streams
Source: IBS Research
Service Type Product Revenue Stream
Mobile Money
Mobile Insurance
Mobile Savings
Mobile Credit
▪ Domestic Remittance▪ International Remittance▪ Merchant payments▪ Bill Payments
▪ Health Insurance▪ Vehicle Insurance▪ Life Insurance▪ Agri Insurance
▪ Savings deposit▪ Daily committed savings
programs (recurring deposit)
▪ Handset funding▪ Payday loan▪ Short-term microfinance loan▪ Umrah loan
▪ Transfer fees▪ Interchange fees▪ Bill collection fees
▪ Reseller premium
▪ Net interest income (Liability)
▪ Net interest income (Asset)
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
10
Digital profile| Malaysia
76% | Urban
144%
68%
67.7%
80%
Population (Urban vs Rural) 24% Rural
Mobile penetration
Internet Penetration
Social Network penetration
Banking penetration
Government and bank initiatives have led to significant growth in e-commerce market
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
20142000 2007 2012 2013
BNM allows banks to offer online banking, Maybank unveils 1st online portal
1
Mobile wallet M-moneylaunched
2
Value of Internet banking transactions reach RM 8.2 trillion
3
Celcom AirCashlaunched
4
5
Online payments evolution | Malaysia
2015
6 Launch of JOMPayandePIF fund
Maybank introduces first mobile wallet
8
BNM charges for chequeusage, reduces cost of Internet banking
11
Source: Cedar Research
20172016
Alipay enters the market
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
12
Digital bankingPayment System
operators Gateway Providers
E- money Issuers -Banks
E-money Issuers-Non-Banks
Digital Payments | Key Players
E-wallets
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
13
Touch N Go
▪ Pilot testing stage in March 2017
▪ To be launched in Q3 after getting BNM’s approval
▪ CIMB Bank is a key stakeholder
▪ Alipay can now be used in all 2,100 7-Eleven stores
▪ Service to be extended to other Berjaya Group merchants in the coming months
▪ Resorts World Genting is the first hospitality merchant to introduce Alipay in Malaysia
AliPay MasterCard
▪ Tie-up with Cyberview & Malaysian Global Innovation & Creativity Centre (MaGIC)
▪ Pilot programs to test smart city applications by Q3 2017
▪ Committed to transformCyberjaya- technology hub with focus on cashless initiatives
▪ Existing collaboration with Maybank and major payment networks Mastercard and Visa
▪ CIMB, Citibank and Standard Chartered have joined as partners
▪ Hong Leong Bank coming on board soon.
Samsung Pay
E-wallets | Key Partnerships
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
14
Overall Prerequisites
▪ BNM’s approval pursuant to the Payment Systems Act 2003
▪ Comply with the Anti Money Laundering and Anti-Terrorism Financing Act 2001.
▪ Issuers with both e-money & remittance license can offer international e- wallet remittances
Compliance Measures
▪ Submit monthly statistical data to Payment Systems Policy Dept of the Bank
▪ Prudent management of funds, to ensure safety, reliability
▪ Sufficient liquidity for their daily operations.
▪ Separate records & accounts for e-money activities from other activities
▪ Risk management infrastructure and processes for e-money operations.
Central Bank Regulations
Regulations by Bank Negara Malaysia for e-money issuers
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Consumer Adoption I Digital Payment
15
Low
High
Low High
Transition(Limited Acceptance)
▪ Progression along acceptance development cycle
▪ Electronic payments not yet used for everyday payment
Electronic
▪ Electronic payments are “top of spend”
▪ Specific niches of cash payment remain
Cash-centric
▪ Heavily dependent upon cash payments
▪ Early stage of economic payments ecosystem
Transition(Limited Consumer Adoption)
▪ Consumers resistant to electronic payments
▪ Need to demonstrate utility of electronic payments
Acceptance Penetration
Co
nsu
me
r A
do
pti
on
Market readiness can be classified according to levels of
▪ Acceptance Penetration
Number of accepting merchants
Number of acceptance points (per population)
▪ Consumer Adoption
Access to electronic payment methods
Frequency of usage
Malaysia payments assessment
Merchant eco-system creation and use case critical to drive usage of wallet
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
16
# Cash Centric Economy Transforming Economy Banked EconomyBusiness
ModeTeleco centric Bank Centric Licensed Disruptive Payment Players, Banks
Service Domestic Remittance,, Top Up, Bill PaymentPayments, Offline Merchant Payment, P2P
Transactions, Int. Remittances (Inwards)P2P Transactions, Online Merchants, Int.
Remittances (Outward)
Regulatory Environment
Basic KYC, AMC, low account penetration, Agent Banking
E-Money regulations being formulated,Digital laws enacted, medium account penetration
E-KYC, E- money & e-contracts legislation ,HIgh account penetration
NeedSecurity of cash,
transfersLow cost merchant payment system,
elimination of cashConvenience, banks to defend the turf from
challenger payment companies
IssuesLimited Interoperability, high cost of
transactionsEvolving Interoperability Framework ,
Evolving payment InfrastructureMonopolistic restrictive practices,
AML/FACTA
Nigeria Sri Lanka
Kenya
Brazil
India
USA
Singapore
Payment Driven Ecosystem
Financial Inclusion Driven Ecosystem
Developing Economies Developed Economies
Maturity Matrix I e-Wallet
Philippines
South Korea
16
UAE
Malaysia
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Singapore
▪ Promoted by National Switch owned by all Banks .
▪ Wallet , POS and NFC based
▪ 7.3 Mn NFC card issued
▪ Unified POS terminals
India
▪ National Payment switch with Online Instant transferand payment application
▪ Payment interface 10 Mn downloads
▪ Instant transfer transaction volume of ~26 Mn/ month
UK
Summary | International Case Study
▪ Promoted by Vocalink
▪ Focused on P2P payments
▪ Secured digital token architecture
▪ 4 UK high street banks potential 18 Mn customers
Source: Cedar Research
Cost effective operating model with pragmatic policy planning and regulations
17
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
KEY OFFERINGS
▪ The Pay by Bank app lets consumers make real time payments direct from their tablet or smartphone
▪ The app uses the bank’s own security methods to verify the user.
▪ Payments work through secure digital tokens hence customers’ financial details are safe
▪ Customers will be able to see their account balances before they pay
IMPACTS
▪ Retailers and businesses will benefit from the Pay by Bank app simplicity which deliver better conversion at a significantly lower cost
▪ 60% of the UK merchant base including Asda, Thomas Cook, Clarks etc.
▪ Reduce frauds and lower the cost of cash to the economy
▪ Backed by four UK high street banks : potential 18 million customers
18
Vocalink UK| Case Study
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Beam
▪ Founded in 2010 under parent company One97 communications in New Delhi
▪ Key partners include Ant Financial (AliPay), SAIF Partners, Mediatek, Sapphire Venture & Silicon Valley Bank
India’s largest mobile payments and commerce platform
19
Paytm | Case Study
Who Did It
▪ Diversified offerings – Paytm currently provides the most offerings in terms of bill payments shopping, travel offerings etc. in the entire Indian e-Wallet market with close to zero transaction costs.
▪ Entry into Canada- In 2017 Paytm began its global expansion by offering utilities and tax payment services in Canada
Offerings
Source: Company Website, Cedar Research
▪ Fastest growing e-Wallet app in India with over 200 Mn users over 1.5 years
▪ License received from the Reserve Bank of India to start India’s first payments bank.
Impact
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
20
E-wallets| Bank-backed vs 3rd party
Source: IBS Research
Bank backed wallets
Third party retail wallets
The e-wallets competition is expected to intensify with banks entering the competition
Brand recognition
▪ Relatively unknown due to latemarket entry
Security infrastructure
Omnichannel
▪ Strong brand recall due to early mover advantage popularity of cash backs
▪ Perceived as relatively more secure due to banks’ security infrastructure
▪ Perceived as less secure due to being viewed as a startup and not associated with large institutions
▪ Offers 360 degree view of all theaccounts and financial instrumentsheld by customer through a single
▪ User can only view wallet related transaction data
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Partner led strategy
▪ Important to identify the right partner to maximize the reach and adoption of the digital wallet
▪ Critical to choose the right card association which has a wider reach such as Visa or Master card and the right digital wallet enabler who has the most robust platform01
21
▪ Banks have an edge over third party e-wallets due to existing relationship with customers in the form of savings accounts, etc.
▪ Banks must leverage this by offering an integrated app that enable customer to managing all subscribed products including wallet transactions
Integrated offering
Own branded wallets
▪ Own branded wallets have a higher sustainable success potential than replying on third party branded wallets
▪ Better control and ability to customize application
E-wallets strategy | Key imperatives for banks
Technology▪ E-wallets are popular due to the speed and convenience of using the technology
▪ Banks must be mindful of this and ensure to use the latest technology platforms that is easy to scale up and upgrade in the future
Source: IBS Research
02
03
04
NEW YORK CHICAGO LONDON DUBAI MUMBAI www.ibsintelligence.com
Independent Perspective on Financial Technology
22
top related