September 8, 2017

Advania Mobile – The dawn of mobile business The dawn of mobile payments

YOUR WALLET? HOPE NOT! MY WALLET EXAMPLES OF MOBILE PAYMENTS SERVICES IN EUROPE

Present & past POSITIONING – RETAIL PAY

The Emergency of “Brand” Pay PROVIDERS – NORDIC (1/2)

Sweden ■ , 6M users, 12B SEK in tx January 2017 ■ SEQR (by Seamless), 4000+ merchants/8 countries (100k+ downloads) ■ Bambora Mobile (eg. Espressohouse. Sold summer 2016 to Leeroy), EH has 15k tx/day pay via app ■ Masterpass ( by Swedbank, Nordea, SEB, Resurs), today only for online purchases ■ PayPal (eg. an e-wallet), by PayPal not in ■ Klarna Bank is launching their ewallet to be used instore (in pilot) ■ launched March 9.

■ WyWallet (by PayEx), formerly serviced by the 4 MNO’s ■ PayEx Mobil, start 2009, service stopped 2016 ■ Close Pay (by Accumulate/Svea Ekonomi), stopped 2016 ■ BART (QR & by Swedbank), closed spring 2014, one year after launch and at 20k consumer accounts.

Denmark ■ MobilePay, 3,5M users, 30k merchants, 5,2B in tx May 2017 ■ Bokis (by Nets and backed by above 70 banks) have agreed to coop with MobilPay. ■ Launch of mobile Dancard by Bokis banks (March 2017)

■ SWIPP (former 4T former Paii by the MNOs sold to SWIPP 2014, 800k users, 13k shops). Was backed by 70 financial inst. in DK. Nordea decided to leave for MobilePay in Oct-16, now the rest have taken’ same decison. Service will close Feb 2017. MOBILE PAYMENT PROVIDERS – NORDIC (2/2)

Norway ■ , 2,2M active users, 204k tx per day (Feb-17) ■ MobilePay, 300k downloads, 1200 merchants (Feb-17) ■ Retail Payment, new mobile pay platform by Coop & Norgesgruppen and more (to be launched 2H 2017) ■ Masterpass (digital wallet by DNB, Sparbanken 1, Eika, Resurs), today only for online purchases ■ Klarna Bank is launching their ewallet to be used instore (in pilot)

■ ValYou (by DnB/Telenor + more), service closed Nov 30 - 2015 ■ mCash (Sparbanken 1), 530k users, 10k merchants. Closed down and moved to Vipps (info Feb 13). ■ Snapcash, P2P (only for send/receive accounts in EIKA). ■ EIKA Safe (only for Samsung S6 & S7), closed down and be moved to Vipps (info Feb 13).

Finland ■ Siirto (Swish/Vipps “alike”), P2P mobile pay service to start in March 2017. By ATM operator Automatia — a company owned by three of the country’s banks including OP Bank Group, Nordea Bank and Danske Bank. ■ Aktia Wallet (formerly Elisa Lompakko), relaunched Nov-2016, 10k + downloads ■ Pivo (by OP bank), 100k + downloads ■ MobilePay (by Danske Bank) ■ SEQR (by Seamless) MOBILE PAYMENTS – COMING 2017? (1/2)

Sweden ■ Enabling of NFC payment terminals during 2017. Estimate, 50% enabled YE 2017. ■ Swish on POS. Rollout via integration per POS vendor. ■ Klarna Payment app (now in pilot). ■ Loyo Pay (by Resurs Bank), in pilot (awaiting NFC at POS). ■ SEQR will enable its payments to ALL NFC enabled terminals (Mastercard supported) ■ will be launched before year end 2017. ■ No signs on Android Pay.

Denmark ■ Extensive enabling of NFC payment terminals during 2017. Estimate, 70-80% enabled YE 2017. ■ Verifone has launched mobile payment support (eg MobilePay) in new terminals. ■ Mobile Dancard. Via Nets approved digital wallets. NFC for Android and BLE/QR for iPhone. Rollout to start “beginning” of 2017. ■ Apple Pay will be launched before year end 2017. ■ No signs of Samsung (rumour before year end 2017) or Android Pay. MOBILE PAYMENTS – COMING 2017? (2/2)

Norway ■Extensive enabling of NFC payment terminals during 2017. Estimate, 70-80% enabled YE 2017. ■VippsGO, pre-order & pay. SPAR, micro savings account, transfer via Vipps. ■Verifone launch mobile payment support (eg. Vipps, MobilePay) in new terminals. 2H-2017. ■Mobile BankAxept (NFC & Android only) to be roll-out via mobile wallet services during 2017 (Eika Safe first). ■Retail Payment. To launch payment gateway service (and processing?). Backed by 60-70% of POS in Norway (Coop/Norgesgruppen, Reitan, Rema, Warner Group). Start in Norway 2H-2017. ■Nets to launch mobile payment support (via BLE & NFC?) in 2017? ■No signs of Apple, Samsung (rumour says launch Nov-2017) or Android Pay.

Finland ■ More banks will join Siirto ■ Apple Pay will be launched before year end 2017 ■ No signs of Samsung (rumour before year end 2017) or Android Pay. MOBILE PAYMENTS S + N RETAIL WALLET APP’S

Starbucks Nordics ▸ 1.6B $ in “flow” (stored account in USA) ▸ Espresso House, 1/3 of tx via mobile ▸ 15M monthly active users (USA) ▸ ICA Handla ▸ 25% mobile in-store payments (USA) ▸ AE, 500k accounts PSD2 AND PAYMENTS

Payment Service Directive 2 (PSD2)

■ Valid in all EU from January 1st 2018 ■ Contribute to a more integrated and efficient European payments market ■ Improve the level playing field for payment service providers (including new players) ■ Make payments safer and more secure ■ Protect consumers ■ Encourage lower prices for payments

The directive is part of a legislative package that also included a regulation on multilateral interchange fees. Together, the regulation and the second payment services directive, ■ Limit the fees for transactions based on consumer debit and credit cards ■ Ban retailers from imposing surcharges on customers for the use of these types of cards PSD2 AND PAYMENTS

Means ■ Third Party Providers (TPP) access to user account ▸ Payment initiation service providers (PISPs) ▸ Account information service providers (AISPs)

■ No agreement need for TPP to account holder (bank/FI) ■ TTP need ok from account owner (consumer)

Concerns ■ Authentication ■ Certification of TPP, how & by whom? ■ Banks readiness? (APIs, security instructions, etc.) MOBILE/DIGITAL PAYMENTS – AFTER PSD2?

Big five (or six)? New players ■ Most likely “direct account” or card based. ■ .. or stored account. But.. ■ .. or invoice based. But.. ■ Inapp/online payment (eg. SJ, NSB, SL and #Ruter alike)

New services, examples ■ Cross border payments – starting with P2P ■ Cross border loans ■ “My financials”, aggregation services

Hurdles ■ Local adoption & local regulations ■ Integration to local players (examples; POS, acquirers) ■ Focus on local market to get local/regional reach ■ Ownership of data & consumer integrity USA: SAMSUNG PAY, APPLE PAY OR NOW WALMART PAY?

New - Walmart digital credit card and for instant use.

“By bringing together all of the conveniences of Walmart — great stores, convenient pickup, easy checkout and a top-notch app – we know that we’re delivering one seamless shopping experience for customers in a way no other retailer can.” CHINA: – THE SUPER LIFE STYLE APP

■ Chinese users, 520M active ■ 70%+ of all instore payment is via mobile ■ Alipay is going abroad following 120M Chinese travellers ■ Sweden pilot launched Sept-2017 (Cervera shops) NORDIC: SAMSUNG PAY, APPLE PAY OR NOW KLARNA PAY?

■ Will be bank by June 19, 2018…latest! ■ Sebastian Siemiatkowski: ▸ ”We want to be the Ryanair of banks” ■ First services; payment card & savings account.

ADVANIA ONE-STOP-SHOP OF MOBILE SERVICES IN THE NORDICS

ADVANIA MOBILE IN A NUTSHELL ■ White-label mobile wallet solution ■ Payments include in-store, in-app, online, p2p, vending ■ Complementary mobile services such as:  Loyalty & membership  Stored cards, coupons, gift cards & vouchers, stamp cards, ticketing, event info  Digital receipts and expense handling  Mobile Point of Sale (mPoS)  Mobile Pre-order (order & pay)  Other services such as ticketing, mobile ID & security solutions, beacons & wearables, workforce management CASE STUDY – HH FERRIES CASE STUDY – HH FERRIES

■ Workshops (business & tech) ■ Redesign of HH app ■ Adding functions ▸ Buy tickets, coupons, receipts ■ Integration to backend systems ■ Next steps; offers, loyalty, pre-order and more.. CASE STUDY – SÍMINNPAY LOYALTY CARDS

■ Merchant‘s loyalty cards. ■ Members onboarding. ■ No need to present the loyalty card upon purchase, tied to the payment process. DIGITAL RECEIPTS

■ Itemized digital receipts stored in the cloud. OFFERS

■ Personalized offers. ■ Merchants can target specific demography. ■ Offers and payments combined. REPORTS & ANALYTICS

■ Management reports. ■ KPI. ■ Gives management insights into customer‘s demography. ■ GDPR.

SUMMARY: MOBILE WALLET – IT’S NOT ONLY ABOUT PAYMENT

Success factors

Consumer Merchant ■ Must have features beyond payments ■ Conversion (less drop-outs at onboarding & ■ Convenience checkout) ▸ Easy onboarding & use ■ Control and use of own data ▸ Fast ■ Fast and direct market communication with ■ Secure customers ■ ■ Trust Loyalty ■ Coverage (where to use) CONCLUSION – ONE MOBILE WALLET OR 1000 APP’S?

We will have ■ 1-3 “general” mobile wallets for local & global coverage ■ Many “my favourite” retailer app’s with offers, loyalty and payment

Consumers are ready, technology is ready. Merchants, get ready!