The Evolution of Social Payments

Transcription

1 The Evolution of Social Payments Michael Marion Senior Vice President, Digital Product Manager, Citi Consumer Banking Tom Roberts Senior Vice President, Marketing, Electronic Payments, Fiserv

2 Agenda Consumers don t necessarily think about social payments, but in the United States, they conduct nearly 16 billion P2P transactions each year. Prepaid Accounts Payment Cards In this session, we ll discuss: Social payments evolution in context Recap of recent developments What we re learning Social Networks The view ahead Bank Accounts Pricing 2

3 What Are Social Payments? Consumer Payments Household payments Individual payments Group payments Small Business Payments Invoicing Vendor payments Employee payments 3

4 Where are We in the Social Payments Journey? 4

5 Social Payments Competitive Landscape We re Quite Popular of Late 5

6 We Welcome Some. Others Lack Conviction. Contenders Curiosities Prepaid Accounts Pricing 6

7 Is Gmail a Catalyst? Maybe. Maybe Not. Prepaid Accounts Payment Cards Social Networks Bank Accounts Pricing 7

8 Why Square is a Social Payments Curiosity 8

9 Recap of Recent Developments

10 The Network is Growing We ve added three more top banks, making it 15 of the top 30. New New New Over 700 new financial institutions have joined the past 12 months! 10

11 Social Payments Are Becoming More Mobile Financial institutions offering social payments through mobile banking Many top 30 banks are creating customized P2P experiences in their mobile apps 11

12 What Are We Learning? 12

13 Demographic Cohorts Make Sense Transactions by Age of Sender Millenials DAHP s 13

14 Who P2P Attracts and For What Purposes How does your household pay bills? 43% 40% 55% 46% 31% 35% Payment Cards 12% 6% 4% Millenial Gen X Boomer I pay - Others pay me back Someone else pays - I pay back Social Networks Bank Accounts n = 2534 Pricing 14

15 Who P2P Attracts and For What Purposes I m concerned about combining my finances with my significant other 49% 27% 37% 18% 32% 17% 22% 19% 15% Millenial Gen X Boomer Strongly Agree Agree n =

16 More Than Just Splitting the Dinner Bill % of Send Transactions Rent Shared Bills Gifts Vacation / Travel Dinner / Food Childcare Tickets / Ent

17 Average Transaction Size Has Increased Average Transaction Amount 2011 to YTD 2013 $430 $395 17

18 18 P2P Payments at Citi

19 Citibank Online Industry-leading digital offerings for money movement Early provider of Popmoney services in web and mobile Significant growth of Popmoney since launch Important component of our overall Easier Banking strategy for digital 19

20 Citibank Provides Industry-leading Digital Offerings for Money Movement 20

21 Early Provider of Popmoney in Web and Mobile Citibank Popmoney User Growth Desktop Popmoney users up 85% YOY Citi app Popmoney users up 290% YOY Payment limits were also increased this year. Significant growth of Popmoney since launch 21

22 Important Component of our Overall Easier Banking Strategy for Digital 22

23 Television Daughter in College 23

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25 Digital

26 In-Branch and Out-of-Home

27 Citibank Online Below the Line 27

28 28 The View Ahead

29 The World is Moving More Rapidly Consumers are trained to expect immediate gratification. Who? What? Delivery of online ordered goods Delivery of produce and groceries On demand purchases of music, apps, movies How Long? 1 3 days hours Immediate 29

30 Consumers Want Faster Delivery According to Javelin, 67% of online banking users want expedited payments at their financial institution s website. 1 67% Fiserv research shows that financial institutions should see a 20 percent higher adoption rate if a real-time premium-priced option is offered. 2 20% Western Union s Money in Minutes has been successful priced at $10 per domestic transaction. $10 1. Source: Javelin Strategy & Research, Fiserv P2P pricing study

31 Making Social Payments Instant Today ACH Network Available Business Days Not Weekends Nor Holidays 8:00 p.m. ET Cut-Off Next Day 1:00 a.m. ET Cut-Off Three Days Instant Payments Debit Card Networks Available 24/7/365 No Cut-Off Times Delivered in One to Three Business Days Delivered in Seconds 31

32 We Expect Mobile Volume to Increase FIs have only recently integrated Popmoney into their mobile experiences. As availability and awareness of Popmoney via mobile apps increases, overall transaction volume will increase. Transactions by Channel (%) 19% 25% 24% 24% Strong Mobile P2P Adoption Since launch, nearly 25 percent of volume has come from the mobile channel Web Mobile Transactions by Channel (#) Overall Transaction Growth Total transactions grew nearly 3X faster at FI since the launch of mobile relative to overall base Web Mobile 32

33 We Expect Business Services to Increase Today, services account for about 10% of send transaction volume. Payments for small and micro businesses are a segment we are attracting and expect to capitalize on going forward. Breakdown of Business Services using Popmoney 22% 5% 4% 37% 32% Childcare School/Tuition Repairs/Services Pet Expenses Babysitting 33

34 Take Aways Making great progress, but still at an early stage Attractive and surprising demographics and uses Devices, delivery speeds and uses will expand Very little sells itself need to market 34

35 35 Questions?