Visa: Innovations for a Cashless World

INNOVATIONS FOR A CASHLESS WORLD INNOVATIONS FOR A CASHLESS WORLD The 2017 edition of INNOVATIONS FOR A CASHLESS WORLD illuminates five trends shaping the future of commerce, seven research findings, nine Visa viewpoints, and an overview of how Visa approaches innovation all based on insights gleaned from Visa’s third annual Future of Payments study—now made public for the first time. The Future of Payments study collected 9,200 online surveys Consumer Desire and across 16 countries; USA, Canada, UK, France, Poland, Germany, Mexico, Brazil, Argentina, Australia, China, India, Japan, South Korea, the Future of Payments Russia, and UAE between July 27th and September 5th, 2017. The research reflects the views and opinions of online populations 2017 EDITION in the 16 countries studied.

001 The Transformation The last few years have witnessed dramatic changes in our industry with the rise of digital of Commerce payments. These changes are going to accelerate as more people around the world use contactless cards and smartphones to pay each day. In fact, they are already transforming the face of commerce—as not just every person, but every device that a person interacts with, becomes a commerce opportunity. With approximately $5 trillion dollars in payment volume each year, 15,000 issuers, 40+ million merchant locations, and 3.2 billion cards in market, Visa pays a lot of attention to these changes. In fact, every year Visa runs dozens of payment studies to inform and guide issuers, merchants, acquirers, and other stakeholders on the future of payments. These studies are also used to influence Visa’s own innovation, product, strategy, and marketing decision-making. Here, for the first time Visa is sharing a single comprehensive study conducted in partnership with GfK across 16 of Visa’s largest markets, with the goal of identifying trends, needs, behavioral patterns, and growth opportunities for the future. Throughout this book, you’ll also find viewpoints from experts in the Visa network who offer perspective on the findings uncovered in the data, as well as five trends shaping the future of commerce and an overview of how Visa approaches innovation. We hope this study will move the conversation forward on payment innovation and the tectonic shifts taking place in our industry. We believe that it is not enough to study consumers and how they approach payments. It is also important to share how we are responding to these shifts to better serve the needs of consumers, issuers, merchants, acquirers, and other stakeholders.

002 003 Table Trends Findings How Visa Innovates of Contents From Card to Cloud 6 A Global Assessment of 24 Innovation at Visa: 54 Everything as a Point of Sale 9 Payment Evolution A Unique Approach VIewpoints: Transforming the 10 A Deeper Look at Payment 26 Visa’s Payment Stack 56 Point of Purchase Maturity & Innovation Readiness Building What’s Next 58 Paying in Messaging Platforms 12 Consumer Needs Vary 28 Partnering with the 60 Dramatically by Country Startup Community Transactions without Borders 14 Think Locally with Payment 30 The API Economy 16 Technologies Visa Ventures 62 VIewpoints: APIs Unlock 18 Viewpoints: What the World 32 Visa Ready 63 Digital Payment Ecosystems Can Learn from a Billion-People for Consumers Economy Going Cashless VIewpoints: What Will It Take to 20 Viewpoints: Europe Leads 34 Get to a Post-Plastic World? Digital Payment Expansion Conclusion Viewpoints: Innovating 36 Payments in Latin America 7 Lessons for Bringing 66 IoT Possibilities Are Intriguing 38 Innovations into the Marketplace but Mysterious to Many IoT Technology in the City 40 of the Future Viewpoints: Payments and 42 the Internet of Things: How Appendix 70 Will This Space Mature? Trusted Experiences Are 44 Driving Mobile Adoption Security Is Table Stakes 46 Viewpoints: Keeping Payments 47 Secure in a Changing Ecosystem Transform the Experience, 48 The content provided herein is for informational purposes only and not to be relied upon for professional, Own the Relationship financial, legal or tax advice. Benefits, results or cost savings may vary depending upon your business considerations and implementation details. All information and content is provided “AS IS” and “WITH ALL Viewpoints: Electronic Payments 50 FAULTS” and without an warranties express or implied. Are Approaching “Peak Plastic” in Asia Pacific

04 05 01 Five Trends Transforming Commerce

006 007 TREND #01 From Card to Cloud We’re quickly moving toward a world where seamless payments work securely, anywhere on any device or with any form factor. Innovation in commerce has always been about reducing friction and providing a better consumer experience. As technology evolves whether it be to Seamless digital contactless cards or wearables, payment payments only need security and convenience must evolve with it. account information Consumers spend approximately to enable commerce 11 hours online every day, enjoying anywhere, anytime. the power of “instantism” at their fingertips (Nielsen, June 2016). When they can find anything they need within seconds, the payment experience slips into the background and becomes part Visa has enabled the growth of merchant- And now, for merchants eager to harness of the overall experience—rather than QR Codes Everywhere presented QR code payments in 15 countries the power of QR code payments, the Visa an additional step they need to seek around the world with its innovative mobile Ready Program has adopted interoperable QR out and complete. payments solution, mVisa, which allows standards to develop tools and capabilities consumers to pay for goods and services that help ease generation and deployment of In this new world, think of consumer by scanning a QR code on a smartphone or QR codes and merchant numbers by banks, credit not in terms of cards, but in entering a merchant number into their processors, and merchant aggregators. Once terms of accounts. The question is no feature phones. enrolled, merchants can accept payments from Payment goes straight from the consumer’s any country or bank, knowing that Visa will longer where Visa is accepted, but Visa account into the merchant’s account and efficiently process transacations in accordance how it’s accepted: via any device, Usage of online and mobile- with Visa's security standards. pponly banks has increased 7 pp provides near real-time notification to both meeting consumers in their existing 7 (or percentage points) since 2016. parties. mVisa is completely interoperable, digital hangouts. bringing the same convenience, security, and reliability provided by the trusted Visa brand.

008 009 TREND #02 Rewarding Everything as Consumers, a Point of Sale Seamlessly Uber riders in participating Software and services turn almost any markets can now earn credits for shopping and dining under locale or any device into a potential POS. the Visa Local Offers with Uber rewards program. Riders with an issued Visa card Today, the line between face-to-face Retailers around the world are on file in the Uber app and upon signing up receive Uber and remote payment environments also demanding more of their POS Credits that can be applied has become so blurred in some to support their daily business toward future Uber rides. markets, it essentially no longer exists. operations, beyond single-purpose Riders can use the same Visa The era of single-purpose transaction payments capabilities. New form card on file with Uber to factors—like multifunction devices shop or dine at any of over terminals is coming to a close. running on open platforms—present 5,000 qualifying merchants, Software turns any locale, any device, new opportunities to displace cash. and the credits are triggered into a point of sale. A transaction automatically. can now take place at any point in The new POS is more than just a As credits add up in the Uber a shop-and-buy time line; it can be place for checkout—it’s a launchpad app, riders can redeem their Uber physical or digital. What this means is to offers that can build relationships credits on their next ride or save them for later—an effortless way that the point of sale is challenged to and reward customer loyalty. to claim their rewards. do more than process transactions. Everyday Transactions, 40 A.1 by Payment Channel Merchants can 30 accept payments Global Leading Edge Consumers* in a multitude of Generation Z** Millennials*** 20 ways, including Included here are the technologies used among surveyed consumer scanning a QR code, segments for their past 10 transactions. contactless credit * A proprietary population segment developed 10 by GfK based on a consumer’s propensity to be an early adopter, passionate enthusiast, cards, wearables, and influential in a given category. ** 14- to -17-year-olds who own and use a (%) and digital wallets. smartphone and a tablet or computer *** 18-34 and own a smartphone, have a savings e er or checking account, own/use a tablet or or ons odes vice tless ther n-St ransf e O computer, own a credit or debit card I yments yments a a QR C ontac Other Online Buy Butt P2P T obile P essenger Apps t Home D n- app P ther M obile M ther I Smar earables/C O M O W

010 011 VIEWPOINTS Transforming the Point of Purchase By Mark Jamison Commercial viability of new SVP, Innovation & Strategic Partnerships, Visa technologies also enables new point-of-purchase experiences. Market tests of While "visionary" pundits have best of digital (e.g., search, browse, registers will soon be a distant new technology combinations using biometric authentication, been predicting the death of brick- find, and customize according to memory legacy. Apple retail stores facial recognition, geolocation, the customer’s digital profile) with don’t have checkout lines, and order- artificial intelligence, and the best of the physical world (e.g., ahead apps such as Starbucks’ allow various sensors show what and-mortar retail since the beginning will soon be mainstream. feel, try, experience, and validate). customers to customize their order, of the Internet in the late 1990s, The purchase journey is nonlinear, set default payment, and simply walk a paradox has emerged. Today, the spanning multiple channels even in and pick up their coffee with zero SQUARE while the consumer shops in-store, friction or wait time. The payment The mobile payments company proof point of success for digital- and mobile point of sale and apps are process for Uber? Get out of the car recently relaunched its Card on shifting payment away from checkout and walk away. As a result, consumers File merchant offering, which counters. Consumers are offered more are now trained to expect personalized allows retailers to check out a native companies is a retail location. customer based on a profile engaging and seamless purchase experiences, automatic loyalty picture and default payment. experiences at the times when they recognition, and seamless default are ready to pay, which can now be payments in the background. before, during, or after shopping. AMAZON Using cameras and sensors An Evolving End State along with a default Amazon Why Now? Prime profile, the Amazon Go The leading companies in today’s mortar retail since the beginning of the checkout-free store are all proof points grocery store in Seattle will The digitally empowered consumer enable customers to pick up the marketplace understand that Internet in the late 1990s, a paradox that consumers inherently value social A popular exercise among Silicon is in charge, and in this new world of items that they want and simply their future success is increasingly has emerged. Today, the proof point interaction and the ability to physically Valley venture capitalists is to ask seamless payments there remain some walk out of the store. software defined. Both digital-native of success for digital-native companies experience products during their not only “Why?” but also “Why now?” significant issues around consumers’ companies and legacy enterprises is a retail location. purchase process. Does the minimum viable ecosystem attitudes toward security and privacy. that aggressively underwent radical exist for the new product/service to However, we are confident that WALGREENS digital transformations have focused In Visa’s work across 40+ million be successful? For in-person retail, the benefits of convenience and The pharmacy chain is running a on omni-channel delivery of their A Software- merchants around the world, we it is increasingly clear that 2017 personalized experiences will drive multiple-authorized-users card-on- products and services, resulting increasingly see that consumers file pilot at selected pharmacies, Enabled Future have growing digital expectations has reached its “Why now?” escape retailers to ultimately discern the right designed to deliver both speed in excellent user experiences. And velocity. The purchase experience is mix of technologies and protections and convenience by completely while “visionary” pundits have been Warby Parker, Minted, Birchbox, Kate for in-person retail. Leading in-store radically transforming. The days of that will allow for mass adoption of removing the payment process Hudson’s Fabletics, and even Amazon’s experiences are now blending the from in-store transactions. predicting the death of brick-and- queues leading to a bank of checkout a radically new point of purchase.

012 013 TREND #03 Popular messaging platforms like With interest growing in peer-to-peer WeChat, Facebook Messenger, (P2P) payments, messaging apps offer Interest Interest 34% 33% Paying in WhatsApp, and Line reach billions an easy way to meet demand. P2P Gap Gap of people—and give them a new payments still too often rely on analog 18% 13% Messaging commerce ecosystem. Many platforms processes, even as online and in-store allow consumers to make a purchase payments become more electronic without leaving the app they’re in— and seamless. Usage and do so as easily as sending a 20% Platforms There are benefits for merchants Usage text message. 16% Messaging platforms as well: They can use messaging A messaging app is a natural fit with platforms to display inventory, Trended Usage and enable e-commerce, e-commerce: It’s personalized. It has manage shopping experiences, and Interest in P2P Payments peer-to-peer payment, your contacts. By leveraging social engage with consumers by offering (Global Total) A.2 Frictionless, Real- data, it can provide rich context and augmented support. When driving and more. recommendations. And it runs on loyal buying behavior, these features While adoption of P2P payments Time Payments a broad spectrum of hardware. can be just as important as the increased between 2016 and 2017, there remains a significant gap between payment itself. current usage and interest. 2016 2017 With an experience that’s moving closer to what consumers are used to on messaging platforms, Visa Direct is improving the speed, convenience, and security of sending and receiving payments among people, governments, and businesses. The platform enables P2P payments between more than 200 million Visa debit cards in the US, including payments to non-Visa branded debit cards. In the future, PayPal and Venmo will also leverage the Visa Direct network to enable real- time funds transfers. Funds can be transferred directly into the customer’s bank account linked to a debit card—a convenience that can also be seen as more secure by the consumer. Real-time authentication enables the sender and the receiver to instantly validate the status of the payment. Using Visa Direct can also enable the next generation of payments for shared economy platforms such as Uber, Lyft, Airbnb, and TaskRabbit, getting money into the bank accounts of service producers instantly, regardless of where they bank, via their debit cards. Pictures shown are for illustration purpose only.

014 015 TREND #04 Transactions Without Borders Distributed ledgers can ease the transformation to low-friction, digital cash payments. A shared, networked digital ledger, also known as a "blockchain," can record transactions as they occur. The transaction data is shared but not copied, making it a useful platform for new kinds of currencies and payments. First employed to support Bitcoin and other cryptocurrencies, blockchain technology will be expanded if consumers accept it, and if it can generate value on a larger scale. The use cases for blockchain will span commercial, as B2B Beyond Visa recently partnered with With Visa B2B Connect, Visa aims Banks and their corporate clients well as consumer, applications. Chain, a blockchain enterprise to significantly improve the way receive near real-time notification Borders company, to develop Visa B2B international B2B payments are and finality of payment. Signed The distributed ledger protocol Connect, a new near real-time made today by offering clear and cryptographically linked provides a secure, borderless / transaction system designed costs, improved delivery time, transactions are designed to 23 for the exchange of high- and visibility into the transaction ensure an immutable system mechanism on which to build value international payments process—ultimately reducing the of record. And all parties in the complex transactions and value of companies surveyed by Juniper between participating banks, investment and resources required network are known participants on exchanges. With central banks Research said that they expected the on behalf of their corporate by banks and their corporate a permissioned private blockchain technology to be integrated into their clients. Managed by Visa end clients to send and receive architecture, operated by Visa. seemingly poised to start issuing systems by the end of 2018. digitally minted currencies, to end, Visa B2B Connect will business payments. facilitate a consistent process distributed ledgers will help accelerate to manage settlement through the shift to a cashless future. Visa’s standard practices.

016 017 TREND #05 The API Economy APIs make it possible to plug into and build from of bankers agree that their organization’s Enabling %API strategy is instrumental to their brand, and 73% believe that in five years’ time Financial others' innovations. ecosystems will have shared responsibility for a brand, according to Accenture’s 70 Banking Technology Vision 2017 report. Inclusivity Through APIs APIs (application programming interfaces) are the digital world’s connective tissue. They’re the In July 2017, Visa expanded standard by which companies its mobile payment platform, mVisa, to include Nigeria. exchange data and build smart, Designed for both smartphone seamless, omni-channel experiences and feature phone users, the customers demand. mVisa platform promotes financial inclusivity. To make a purchase, Now, it’s no longer necessary to smartphone users scan a QR code available at the point of aspire to own the entire value chain. sale and then input the amount Companies can focus on one link in to be deducted. Feature phone the chain, and plug into existing users will be able to do this using APIs to create the bigger picture. alphanumeric codes. Multiple building blocks combine One of the major barriers to act as a single proposition that to the progress of mobile adds value for the consumer. In this payments in Nigeria is the general misunderstanding of way, APIs deconstruct traditional and lack of trust in electronic value-chain thinking. payment systems. mVisa will help consumers feel more in control of In commerce experience design, the process and their money. APIs expand opportunity for And the system is cost-effective innovation. A company can combine and easy for merchants to set up. its own APIs with externally So now they no longer have to available building blocks to create worry about spending $400 on POS systems—or passing transaction a new solution more efficiently. fees onto their customers. APIs can also be viewed as a more The mVisa implementation in efficient, more scalable distribution Nigeria has benefited from the channel. A good API platform allows Visa Developer Platform, which allows participating partner a company to deliver the most- banks to integrate the mVisa needed capabilities of more APIs directly into their mobile comprehensive products. banking apps.

018 019 VIEWPOINTS APIs Unlock Digital Payment Ecosystems for Consumers Beyond the banking industry, Visa By Paul Walsh is also ideating with a top HSA SVP, Platform Strategy & Innovation, Visa provider and national drug retailer in healthcare. These companies are seeing more employees establishing FSAs/HSAs as patient out-of-pocket costs rise. The Exceptional customer experience their commerce experiences using our HSA provider, with millions of productized APIs in part (à-la-carte) employee benefit accounts, wants is critical to the success of online or in full (end to end). For example, to provide enhanced services to brand engagement with digital National Australia Bank (NAB) was able FSA and HSA cardholders and help to empower its Visa cardholders by consumers make better real-time transformation at the core. building a best-in-class interface within healthcare purchasing decisions. its mobile app that lets consumers With a substantial percentage of set card controls and indicate when cardholders’ annual spend at drug they are traveling to avoid fraud and stores and pharmacies where Today’s consumers are just as Every business will become a digital frustration over unnecessary declines. targeted communication is priority, comfortable transacting with new winner or loser. Visa believes that the These card controls tie to an Australian Visa is working with both the drug payment options from contactless Visa Developer Platform and our API market first—where consumers will retailer and healthcare company to cards to Venmo, and in new forms offering will enable businesses with a be able to instantly use (and set provide cardholders with healthcare including mobile and IoT devices. Yet digital presence to establish controls on) new digital credit cards information through APIs that is they are still facing challenges and themselves and be a catalyst of digital as soon as they are approved. This relevant and actionable the minute are unsatisfied with options around innovation across multiple industries new and improved NAB app is fast they walk into the store. online transactions such as shopping, and market segments. APIs are now and seamless, gives customers more hotel reservations, or booking a ride- common and ubiquitous. Sabre makes control over their everyday banking, Visa understands that our clients are sharing service. Over time, frustration, 1.8 billion API calls a day to provide and was designed to make banking relentlessly seeking to become the best fatigue, and dissatisfaction will affect digital reservations for major hotels as convenient and easy as possible. imaginable provider to their customers. brand loyalty and, ultimately, lost and airlines around the world. Netflix To deliver these changes, NAB The core ingredients, both now and revenue for brands. makes 5 billion API calls a day to leveraged its innovation partnership in the future, are personalization and stream the videos we all know and with Visa to incorporate Visa Consumer context through APIs. Visa’s unique To address these challenges, love (Netflix Techblog). Transaction Control and Travel position as the network within the exceptional customer experience Notification Service API, and estimates four-party model gives insight to deep is critical to the success of online Visa’s APIs, available on the Visa that by working with Visa Developer it customer intelligence that is invaluable brand engagement with digital Developer Platform, enable our clients eliminated six months of development to our clients and enables them to be transformation at the core. to implement, extend, and customize time (2015 Sabre Press Kit). digital winners.

020 021 VIEWPOINTS What Will It Take to Get to a Post-Plastic World? By Sam Shrauger SVP, Digital Solutions, Visa As we become more global, travel is increasing and there will be a need for our payments to be interoperable and work anywhere and everywhere. Digital wallet adoption has risen The bigger dynamic at play currently the rise of phone-based payment For all of these economies, the digital and credit cards, along with the rise of interoperable and work anywhere and significantly in the last couple of years is the various paths to digital wallet systems. PayTm in India operates 200 wallets are trusted by consumers, online payments between individuals everywhere. The high level of trust that due to better, faster smartphones adoption, driven by two distinct million wallets, making it the largest and in the case of Alipay and others, facilitated by PayPal and Venmo, consumers have in payment brands, and fast mobile data connections. factors: Local markets and consumer mobile payment service platform in they fulfill a regulatory function, consumer need for digital wallets is to facilitate payment, as opposed to Consumers find digital wallets need. Local markets tend to be quite the country (The Economic Times). Its making sure that consumers receive less urgent. Yet as we become more other consumer brands means that convenient because they are freed distinct from one another due to success is due to the demonetization what they purchase and merchants global and travel more, there will the dominant providers of digital from the burden of currency, coins, differences in regulatory frameworks, of the 500 and 1,000 rupee notes, receive their payments. be a need for our payments to be wallets will likely include credit card and last-minute trips to the ATM. technological infrastructure, and which created a dire need for digital But the trend has not taken off companies. They also make it easy for shoppers to the domination of a phone network currency. M-Pesa in Kenya, which in the US, where only 13% of We believe that anchoring the redeem coupons, loyalty points from or merchant provider. In every case lets people transfer cash using their adults have a digital wallet on future of digital wallets—in our case, stores and banks, and airline miles. where digital wallets have taken off, phones, is in use by 67% of the adult their phones (Gallup). American Visa Checkout directly in consumer We know that the future holds some consumers have had a pressing reason population (over 17 million), and a consumers are also hesitant to % needs and reducing payment friction form of integration for these online to transact digitally, and their options quarter of the country’s GNP flows adopt one-click payments online— will drive digital wallet development wallets into our household devices are relatively frictionless and easy through it (CNN). Alipay has reached they prefer to slow down and 67 and use. and wearables, but whether it’s the TV to access. dominance in China with 450 million receive acknowledgment of their or the fridge that ultimately becomes In global emerging markets, a lack users and is processing almost half of transactions (Gallup). Because of the of the adult population in Kenya uses most successful is still a question. all online payments (TechCrunch). M-Pesa, a service that lets people of financial infrastructure has led to widespread penetration of banks transfer cash using their phones.

022 023 02 Findings

024 025 STRONG, TRUSTED BRAND RELATIONSHIP CUSTOMIZATION The Payment EASE & CONVENIENCE B.1 Maturity Metrics FINDING #01 1. 0 SECURE 2.0 CONSUMER CENTRIC 3.0SEAMLESS CHANNEL ALLOCATION: E-Commerce P2P Payments Messaging Apps A Global Assessment PAST 10 TRANSACTIONS Buy Buttons Mobile Wallet Smart Home Devices of Payment Evolution QR Codes Wearables / Contactless METHOD ALLOCATION: Cash Debit Cards No Cash PAST 10 TRANSACTIONS A new formula to determine Checks Prepaid / Gift Card country-specific payment maturity Wire Transfers Credit Card and readiness for innovation. BANK INTERACTION In-Person Banking Online Banking Mobile Banking The Payment Maturity & B.2 Innovation Readiness Innovation Readiness Continuum Payment Maturity PAYMENT 3.0 Most consumers are ready for payment We’ve mapped 16 countries surveyed 2.2 2.26 innovation to have a greater impact into one of three “stages of maturity” on their lives. —as defined by consumer needs, 2.0 There’s an emerging shift as consumers technology adoption rates, move from a focus on security to a need government regulations, and the 1.8 for more human-centered experience availability of new technologies. design—and positioning. Supported The payment maturity framework 1.6 by consumer-driven value propositions shows a country’s stage of maturity and strong brand relationships, this based on the current usage of payment 1.4 move will create relationship-based technologies. Innovation readiness payment experiences that drive reflects consumers’ willingness, by consumer usage. country, to accept and use new 1.2 However, as we’ve seen, consumer forms of payment technologies. 1.0 attitudes vary from market to market E Y O A as different countries navigate different AN UA AN UK US ANCE INDIA AZIL ALIA OREA JAP ANAD BR RUSSIA K CHINA FR MEXIC POLAND C . phases of the payment revolution. GERM USTR S ARGENTINA A

026 027 Canada UK PAYMENT MATURITY France Low Mid High Germany INNOVATION Poland READINESS Darker shades of yellow indicate greater stages of maturity. Increased density of dots indicates greater stages of innovation readiness. Japan A Deeper Look at US Payment Maturity & S. Korea B.3 Innovation Readiness In our survey of 16 countries, we calculated payment maturity in three stages, based on payment channels and methods used, the importance Brazil of security for payments, and predominant banking channels. While no countries has reached the Payment Australia 3.0 stage, each has varying degrees of maturity and readiness within the Argentina 1.0 and 2.0 range. US Mexico UK Russia UAE India China Australia Contactless cards show the most The Central American country Along with some of its neighbors, The eastern nation has one of the The UAE has one of the biggest In November 2016, the With 1 billion+ population, The most ready for innovation— opportunity in the US, as long as has one of the biggest the UK has a big opportunity for biggest opportunities for growth opportunities for growth in government took 86% of paper the country is aggressively has a big opportunity for wearables consumers trust in the protection opportunities for growth in contactless payments via phone— in contactless payment technology wearables, if consumers perceive currency out of circulation—in just adopting a mix of electronic and provided consumers know more of their privacy and personal data, biometrics, if consumers learn assuming this method always via phone, if consumers trust that it to be compatible with their four hours (See page 32). mobile-first payment technologies. about how this method works, and trust the product will always how the technology works. does what consumers want it to their data will be protected; the current technology mix. that it saves them time, and that do what it should. do, and it saves them time. technology will save them time it offers something better than and address an unmet need. existing alternatives.

028 029 Top 5 Global Consumer Needs by Country (Priority l Rank) B4 TOP 5 NEEDS Rank between 1-6 Since security is perceived as a table stake, we see Rank between 7-12 consumer-centric needs driving payment decision- Rank 13+ making. In a list of 18 needs (see Appendix for full graph), spending control, universal acceptance, and ease and convenience rank highest in importance. More control Convenient to Accepted Frictionless Works over spending have with me everywhere process instantly Global Rep 1 2 3 4 5 Global LEC 1 8 3 9 12 Global GenZ 3 2 12 1 10 Global Millennials 2 1 3 4 5 US 3 4 6 7 1 Canada 1 5 8 3 4 Mexico 3 1 13 5 8 Brazil 1 2 3 4 9 FINDING #02 Argentina 2 4 1 6 5 Consumer Needs Vary UAE 6 2 9 14 1 Russia 7 2 4 6 5 Dramatically by Country Australia 4 1 11 6 5 South Korea 4 6 1 2 7 Japan 18 8 1 3 5 China 1 11 3 5 10 Habits, behaviors, For the first time, control over suggesting that for consumers, India 1 2 9 12 3 spending rose to the top of the list swiping a card is no longer enough. desires, and growth of priorities in nearly every country, They’re looking for a contactless UK 2 1 14 5 3 patterns vary greatly followed by convenience and experience, whether that’s a card, France 5 2 15 1 3 acceptance. Frictionless processes a biometric-driven solution, or by country. and those that work instantaneously something else. Poland 2 3 1 7 5 also have surfaced as new priorities, Germany 1 16 11 6 4

030 031 FINDING #03 Think Locally with Payment Technologies Opportunities for Growth: B.5 A Country-by-Country Breakdown Consumers express 65 65 a powerful appetite for 60 60 60 55 55 innovative payment 50 50 50 technologies. 45 45 40 40 40 35 35 As the world ticks toward a cashless 30 30 future, consumers are gaining interest 30 25 25 in the emerging technologies that G 20 20 ap will enable more seamless, invisible 20 15 15 transactions—but their interest varies 10 10 by country. For instance, consumers & & in China express greater interest in 5est 5 er nt Usage & usage interestI usage interest wearable technology than those in the 0 0 Brazil Argentina Brazil UAE ArgentinaRussia UAEAustralia Russia Australia India UK IndiaFrance UKPoland FranceGermany Poland Germany US. The graph here provides an analysis US Canada US Mexico Canada Mexico S. Korea Japan S. KoreaChina Japan China 0 0 gapap gap of consumer adoption compared to G 5 5 interest in innovative solutions for 10 10 10 the technologies with the biggest 15 15 opportunities. 20 20 20 25 25 30 30 30 35 35 40 40 30 32 36 38 32 Biometrics p Contactless with card ga Biometrics Contactless via Phone Wearables Wearables While biometrics are still rarely in use In the UAE and Russia, usage of In both India (32) and China (38), consumers expressed Contactless via phone in places like Mexico (30), consumers contactless payments via mobile higher interest in using wearable technology such as usage interest are highly interested in seeing these phones are continuing to increase. smartwatches to make payments in the future, suggesting technologies implemented in their Still, interest is outpacing usage by both countries would benefit from building the day-to-day transactions. 32 and 36 points, respectively. infrastructure that will facilitate these technologies soonest.

032 033 VIEWPOINTS What the World Can Learn As India’s cash supply tightened, payment card usage increased from a Billion-People Economy exponentially and digital payments initiated by mobile devices shot up. Going Cashless There are more than 920 million payment cards issued in India, but By Matt Dill the vast majority had been dormant SVP, Innovation & Strategic Partnerships, Visa or used primarily to withdraw cash at bank machines (MediaNama). This all changed on the night of November The East is becoming a hotbed for 12, 2016, when Central Bank circular 247 took 500 and 1,000 rupee notes digital innovation and economic out of circulation. There have been experimentation on a breadth and scale terrible stories of cash-crunched small businesses caught in the middle that is unprecedented in the West. and incredible disruption to daily life (as captured eloquently by our Mumbai sign writer), but out of the We could lean back and say this is the turmoil has risen a large-scale digital most large-scale ambitious swing to transformation compressed down % digital payments ever undertaken, but from decades to days. oddly enough we’ve been here once The hand-rendered sign hanging of the world’s most closely watched network with the end goal of plastic Daily trade in the world’s most 23 before—in China. Another 1 billion+ haphazardly above the bank digital currency experiments. cards in the pockets of one-third of populous nation continues, of consumer population weaned from branch entrance in Mumbai says, the world’s population. His real vision course. Cash is still a significant part is the usage of contactless cash is moving aggressively toward payments via phone in India. a potent mix of electronic payments “You can smash, mash, crash, and What happens when cash goes away? was a global network that connects of commerce, but tens of millions of trash, but there is still no cash.” It’s a The answer, it turns out, isn’t that hard buyers and sellers anywhere and payment cards have been activated. and mobile-first experiences. scribbled reminder of India’s massive to imagine. It’s happening around the moves payments around the world at Point-of-sale terminals have begun Paytm, following a global regulatory demonetization program, which globe—and particularly in Asia—at the speed of light. He was spot on. popping up at merchants of all trend of institutionalizing payments to More and more, the East is becoming was initiated by the Narendra Modi an unprecedented pace, due to the sizes. Mobile phone-based payment protect against systemic risk. Payment a hotbed for digital innovation government in November 2016 and proliferation of mobile. applications, which were built in the networks like Visa, MasterCard and and economic experimentation took 86% of paper currency out of cloud largely for online commerce, are RuPay are aligning around standards on a breadth and scale that is circulation in just four hours. Digital currency got an early start in returning to terra firma and providing to facilitate the movement of value unprecedented in the West. Where East While demonetization highlighted the West in the 1960s with the early % Indian consumers with phone-first at the “speed of light,” as imagined meets West, digital-first experiences the entrepreneurial ability of roughly marriage of mainframe payment payment at retail locations. by Hock. India will soon introduce are leapfrogging infrastructure and 1.3 billion Indians to just “work it processing platforms and the initiation 86 a new merchant payment system delivering electronic payments out” with a bit of wry humor, it also of open-loop payment instruments. The Indian government has called IndiaQR, a scannable bar code everywhere you want to be. jumpstarted what has become one Visa’s founder, Dee Hock, didn’t build of paper currency was taken out of accelerated “payment bank” licenses for mobile devices, donated to India’s Visa into the world’s largest payment circulation in just four hours in India. for mobile wallet applications like payments industry by Visa.

034 035 VIEWPOINTS Europe Leads Digital Payment Expansion By William Gajda SVP, Innovation & Strategic Partnerships, Visa POS could disappear altogether, When customers enter participating payments only on a specific device, stores, they check in with the Go which is activated by the owner’s % moving to the cloud. smartphone app. As they add items to biometric authentication. Plastic just their baskets, the prices are tallied on can’t do any of this! 59 the shopper’s Amazon account and The growth of “token on file” solutions deducted when the shopper exits the will accelerate this year with merchants of consumers surveyed used their store using through computer vision, looking to make their data more mobile devices to transfer money to sensor fusion, and deep learning friends or family in 2016. technology. No checkout needed. secure from hackers. By replacing sensitive consumer account data with tokens, merchants effectively payments will continue to grow, but Tokenization “desensitize” the information they keep the key driver will come from sharing on file. If digital thieves steal this data, economy platforms such as Uber, Lyft, Behind-the-scenes payments will it is useless. They can’t employ it with and Airbnb, powered by innovative Europe is in a key position to drive throughout Europe. Visa also launched mobile tech—as well as the expected continue to grow during 2017. any other merchant, nor can they payment startups like Stripe and the digital payment revolution along the Digital Enablement Program to expansion of services like Square Tokenization makes mobile payments use it to reverse-engineer primary Square. In these propositions, the with the US. Internet usage in Western make it faster and easier for banks to and iZettle—means that mPOS will simpler, safer, and more secure by account information. customer uses tokenized card-on-file Europe is on par with that of the use the Visa Token Service to join these become increasingly popular for small substituting a series of numbers for services to pay the company, which US (a median of 87% usage) while third-party payment services. In 2017, to medium-sized businesses, many of sensitive payment details. Currently, then distributes payment to the smartphone penetration in Germany, mobile tech will continue to play a which lose up to 25% of their footfall tokenization is supporting Apple Pay, Push Payments providers of the services (e.g., the Spain, and the UK is also equal to that crucial role in the development because they don’t accept payments, Android Pay, and Samsung Pay, as Uber driver or Airbnb host). of the US (89%). Europe also leads the of digital payments. according to a Visa consumer survey well as a number of payment services Outside of the retail environment, we world in contactless card and mobile (Pew Research Center). expect to see the continued uptake With all of these new technologies payments, with more than 5 billion offered by banks. Tokenization will of push payments. In this year’s getting solidly off the ground, Europe Visa transactions in 2016 (Pew Point of Sale mPOS isn't the biggest revolution, also become a crucial supporting Digital Payment Study of more than is poised to lead in their continued Research Center). however. POS could disappear, moving technology for authentication. 42,000 consumers in 22 countries, integration. At the London Innovation At the top of the list of trends in 2017 to the cloud. Last year, Amazon Creating the ability to safely manage Visa found that 70% of the millennials Center, we welcome major merchants, Last year Visa successfully enabled is acceleration of POS payments, announced its Go app, which is the use cases and limit the payment surveyed use their mobile device acquirers, and technology companies millions of cardholders to take particularly on mobile. Growth in prime example of how retail is moving permissions attributed to a tokenized to bank online, and 57% to transfer to co-create the future of payments advantage of the expansion of Apple acceptance should also increase from check out to check-in. account makes it possible to execute money to friends or family (Pew together. Pay and Samsung Pay as they launched notably. The expansion of affordable payments only if certain conditions Research Center). Person-to-person are met. A token will work for mobile

036 037 VIEWPOINTS The technology is available, though: fintech companies very actively by platforms that facilitate commerce Innovating Payments mPOS, QR, and other terminal- connecting with promising startups, interactions. With Aeroméxico, the less acceptance infrastructure are securing partnerships with established biggest Mexican airline, we merged in Latin America attractive options. Most every phone players, and participating in the AI and conversational commerce on can become a point of sale, offering community with mentorships and Facebook Messenger to help travelers By Ruben Salazar Genovez a massive opportunity to serve sponsorships. Our largest interest is spontaneously book their next trip SVP, Head of Products & Solutions, Visa underserved niches across the entire to connect ideas from fintech with in a nontraditional user interface region. The aggregated value of execution at the banks. We are also for airlines. Travelers can chat in the adding one new merchant in Latin looking toward becoming a point Messenger app with Aeroméxico to In the coming years, there will be America is many times greater than the of reference between the regulatory get flight times and prices. They can value of adding one new cardholder. agencies, the banks, and the emerging even initiate ticket booking and buy an uptick in the adoption of mobile Latin America is heterogeneous fintech sector. directly within the app for themselves and digital payment options as in terms of the different operating At the Visa Innovation Center in Miami or others as they are interacting with models that exist due to regulation, and the Co-Creation Studio in São friends and colleagues. penetration reaches more consumers ownership structures, and processing Paulo, we focus on providing a creative Participating in the digital economy for and geographies. capabilities. One size doesn’t fit all, space and methodology for companies a region like Latin America will define and when it comes to gaining scale looking for new avenues of commerce other human development indexes, in innovative platforms, flexibility in and consumer experiences. Our potentially having a positive effect on adapting to market realities is key. engagement may span from defining the participation of more and more critical problems to providing partners individuals in the formal economy; In Latin American and Caribbean We have yet to see the rise of an payment options as penetration with prototypes they can leverage to alleviating poverty; expanding access countries, smartphone penetration has alternative digital payment system, reaches more consumers and A Small but Growing build the new generation of payments. to banking; and allowing commerce been much less than in other regions, such as Alipay in China, PaytM in India, geographies, particularly among the Fintech Community We’ve assisted the integration of will reach small and micro enterprises. but that is changing quickly. or M-Pesa in Kenya, operating outside millennial generation. Bradesco and ShopFácil with chatbot Our Innovation Centers in every region the four-party model. The fintech community is emerging become catalysts for new ideas that As with all markets and regions, each The biggest innovation challenge in strong but underinvested. Several help the banks, merchants, fintech operates in a unique and evolving a region with these dynamics is publications indicate investment companies, and governments shape payment ecosystem, and Latin Mobile Adoption driving acceptance across urban and below $600 million USD, from a global Fintech Investment the future of commerce and payments. America is no exception. Cash is Is Growing rural areas that are still dominated investment pool of $24 billion USD predominant in countries that have by small, local commerce. The (CB Insights Inc. Fintech Scan as of June a widely spread informal economy, payment ecosystems are still highly 2017). In many ways, Latin America is therefore only a small percentage of In 2016, 50% of mobile sales were dependent on wired infrastructure not receiving the right attention given consumer purchases—just 27% of made on smartphones, while small merchants; mom-and-pop shops its size and potential. In other regional transactions—are processed on credit e-commerce grew faster than face- and merchants operating in remote markets like Asia, there are already big and debit cards. Furthermore, an to-face transactions (Americas Market locations depend on wired terminals fintech companies that have set up a enormous amount of the population Intelligence. The State of Electronic to secure connectivity. This model serious, competitive environment. (almost 70%) is unaffiliated with a bank Payments). It is likely that in the becomes economically unsustainable $600million $24billion (Americas Market Intelligence. The coming years, there will be an uptick to reach long-tail merchants. In Latin America and Caribbean in the adoption of mobile and digital countries, Visa is starting to engage Local investment in Latin America Global investment in fintech State of Electronic Payments).

038 039 B.6 Global LEC Global Interest in IoT Capabilities Leading Edge Consumers are a proprietary For both leading-edge consumers and population segment developed by GfK based millennials, while the data suggests high interest, on a consumer’s propensity to be an early these technologies are still relatively unknown. adopter, passionate enthusiast and influential in a given category. FINDING #04 Global Millennials 18-34 and own a smartphone, have a savings or checking account, own/use a tablet or IoT Possibilities computer, own a credit or debit card. Are Intriguing but 65 - 85 Mysterious to Many (%) 20 40 60 100 USE PUBLIC TRANSIT AND YOUR PHONE WILL AUTO- PAY FOR YOUR RIDES Consumers express interest in the potential of IoT payment experiences— PARK YOUR CAR AT A GAS PUMP AND HAVE IT AUTOMATICALLY once they discover it. FILL UP AND PAY USE MOBILE WALLET TO WITHDRAW CASH FROM ATM A PARKING METER WILL AUTO-FILL Around the world, consumers express However, the data suggests that GET A CREDIT ON YOUR CARD WHEN YOU REACH A HEALTH real interest in potential IoT-driven consumers may not fully understand GOAL THAT’S TRACKED ON payment experiences. Home, auto, IoT payments. For this reason, A WEARABLE FITNESS MONITORING DEVICE and retail IoT innovations draw the transformative IoT solutions may have greatest interest, with transit solutions less adoption potential at this moment ORDER AND PAY FOR THE DELIVERY OF FOOD/DRINKS a potential early opportunity. than fresh payment experiences. TO A CERTAIN LOCATION FROM YOUR CAR In more developed markets, connectivity via central internet hubs ORDER FOOD OR SHOP —such as kitchen appliances that ONLINE AND HAVE YOUR order and pay for household items PURCHASE DELIVERED TO YOUR DOOR VIA DRONES OR ROBOTS for you—will fuel adoption. ORDER GROCERIES/HOME GOODS, AND PAY FOR THEM FROM YOUR HOME APPLIANCES.

040 041 IoT Technology in “ The connected car is quickly becoming the new mobile the City of the Future phone, as vehicles evolve into platforms for entertainment, commerce-and socialization. Car shows are now more about what drivers experience inside the chassis than what the vehicle looks like whizzing down the freeway.” Avin Arumugam, 3 SVP, Internet of Things, Visa $ $ $ $ $ $ 8 $ $ $ $ 1 $ $ $ $ 4 4 6 7 2 5 1 Digital/Mobile 2 Peer-to-Peer 3 Distributed Ledgers 4 Chip Cards 5 In-Car Payments 6 Wearables 7 Messaging Apps 8 Biometrics Wallets Payments Pay for your coffee Services like Venmo Digital currencies If plastic still exists, As car dashboards Smartwatch Services like Facebook While chip implants or meals with a tap allow friends to are evolving into chips will continue become more technology will Messenger and seem far off, of your phone. immediately pay virtual ledgers like to replace swipes, intelligent, payments advance further to WeChat will continue fingerprint and facial each other back. blockchain. securing more from vehicle to facilitate one-touch to facilitate peer-to- recognition are transactions. businesses such as transactions. peer transactions in already in use. gas stations will occur conversation. without having to leave the vehicle.

042 043 VIEWPOINTS Payments and the Internet of Things: How Will This Space Mature? data, which we can liken to merchants displaying their goods online in virtual retail shops. Finally, the IoT devices will By Avin Arumugam become commerce portals, offering SVP, Internet of Things, Visa items for sale with secure payments, similar to the development and IoT will likely follow the flourishing of e-commerce on the web. same evolutionary path Where the trend deviates from Web 1.0 is that IoT foretells a shift from as e-commerce. software to hardware. Because the physical functionality of the device— a watch, a car, a fridge—is crucial, we will see a new influx of engineering and design talent in hardware. Yet the consumer experience will be the priority, rather than the aesthetic The payments world is still trying comes to implementing payments. appeal of the object. For instance, the to understand IoT—that growing That's because consumers have to be .8 connected car is quickly becoming the network of objects able to collect and ready, which takes more time than new mobile phone, as vehicles evolve share data via embedded sensors. simply rolling out new technologies. 20 into platforms for entertainment, According to Gartner, IoT holds the commerce, and socialization. Car promise to make our lives better and Yet manufacturers who are rapidly shows are now more about what taking advantage of this new time that payments to IBM Watson’s IoT platform, innovating in this space cannot be billion connected devices are will enable the consumer to engage which will allow businesses to connect more convenient, with 20.8 billion projected to be online by 2020. drivers experience inside the chassis connected devices projected to be ignored. They too are struggling to than what the vehicle looks like with brands while riding along. Great to billions of connected devices, online by 2020. refine their communication strategies whizzing down the freeway. payment integration will be essential. sensors, and systems around the world and better explain the value of And as less housework is required and then draw actionable insights. After a period of adoption of these implementing IoT to consumers, and We’ve traveled a similar road before in When we project ahead to the rise in the connected home, there will IoT devices in their lives, consumers payment companies must be there to the adoption of the Internet. IoT will of autonomous vehicles, we can be similar opportunities to present For payment companies, IoT presents will then get comfortable enough help. Furthermore, how the payment likely follow the same evolutionary see how the car will pivot from a seamless retail payment options to new opportunities for collaborations, that they will begin making purchases happens is important. In some cases, path as e-commerce. In the first stage, formerly stressful driving console help consumers make purchases from and traversing some learning curves through them. But for this to happen the consumer needs to be aware devices will become connected, which into a roving lounge. We will be able various household devices. as we experiment with diverse new successfully, the payments industry and authorize each transaction. But is analogous to the initial days of users to truly live our lives inside the car, partners in lifestyle and hardware will need to be customer-centric rather payment could also be invisible or in going online in the late 1990s. Then, free from navigation and operation. For example, Visa recently announced manufacturing. than manufacturer-focused when it the background. devices will collect and manipulate Commercial opportunities abound for a partnership with IBM to bring digital

044 045 FINDING #05 Trusted Experiences Are Driving Mobile Adoption Trusting relationships are Consumers are more willing to likely to lead to higher adopt a digital innovation from a provider with whom they already willingness to adopt have a trusting relationship. While variations in top priorities by country innovative technologies. are not major, when trust is already established, consumers are more willing to adopt new services, especially with mobile banking apps. Mobile Banking Transactions B.7 Activities on Bank Among Those Who Mobile App Use Mobile Banking App Check balances 86% Transfer money between accounts 71% Pay bills 63% Transfer money to another 53% person with the same bank Transfer money to another 45% person with a different bank Deposit checks 24% Explore product offerings 20% Triggers to use new 19% 44% 55% 88% 100% Find an ATM 18% B.8 Convenience Reliability Value Time payment methods Trust Chat with representatives 10% The percentage of countries in Other 1% which the trigger ranks in the top 5.

046046 047 FINDING #06 VIEWPOINTS Security Is Table Stakes Keeping Payments In most countries, consumers Secure in a Changing prioritize convenience and control. Ecosystem By Mark Nelsen Consumers take security for setup, frictionless use, control, SVP, Risk Product and Business Intelligence, Visa granted—even when they shouldn’t. and customization. Unlike in 2015, when they stated that Both trust and value-adds security was most important, today, remain crucial for adoption of security has fallen to the bottom half new payment methods. The global payment ecosystem faces broadly visible and damaging. We of consumers’ list of needs. must improve industry coordination While globally, consumers seek out And while consumers may take it persistent and ever-changing threats to increase timely adoption and trusted brands and solutions—in for granted today, even with the from numerous sources. implementation of technology that countries such as Argentina, India, data breaches that may happen, addresses weakness in traditional and France, for instance, security the industry remains aggressively and emerging payments. Most is still driving decisions—they also focused on security. important, we must improve the expect unique features like easy As payments become more digital information is increasingly processed protection of sensitive data (e.g., and threats to payment confidentiality in real time. These capabilities are account information or credentials) and integrity escalate, challenges changing the nature of commerce that can be used to perpetrate fraud, in payment security are increasingly and end-user expectations for including devaluing or eliminating acute. Data breaches, phishing attacks, payment services. The same frictions the need for such data from the spoofed websites, skimming, malware, that shoppers encounter on a laptop payment process. #1 and infiltration of retail point-of-sale or desktop—typing in card numbers, #2 systems are becoming more prevalent shipping and billing addresses—are The card-not-present environment is Security Stated & #4 and costly. In addition, more options simply not tolerated when shopping a key area where the better use of data B.9 Derived Importance for where and how payments can be on a mobile device. can be used to manage fraud. Card- In 2015, consumers stated that initiated are creating growing hurdles not-present has grown steadily since security topped their list of important to authenticate transactions, end users, Technologies such as encryption, its inception a few decades ago and is needs. Looking at current derived #10 and their devices. As new entrants tokenization, and stronger still growing at a strong rate. However, importance findings, security-related bring to market innovative payment authentication can strengthen there is widespread use of strong attributes fall to the bottom half of #13 payment security. However, authentication and fraud prevention the list, showing that security is not solutions, new risks may be introduced the development of standards driving payment decision-making. and must be identified, monitored, methods globally in this space. As #16 and managed. and protocols is not keeping a result, the amount of lost sales, or pace with changes in the threat attempted sales resulting in declined Technology is rapidly changing environment, and adoption is not transactions, is significantly higher 2015 many elements that support the always consistent across payment than instances of fraud. To better Stated Importance Rank payment process. High-speed data participants. Often implementation secure the global payment ecosystem, 2017 networks are becoming ubiquitous, of suboptimal technologies or we must reduce fraud and increase Drived Importance Rank computing devices are becoming improper implementation can PROTECTS MY IDENTITY/ KEEPS PURCHASE LIMITS LIABILITY FOR approved sales. PERSONAL DATA INFORMATION PRIVATE DATA BREACHES more sophisticated and mobile, and expose compromise points that are

048 049 FINDING #07 Transform the Experience, Own 35 30 the Relationship 25 20 15 Consumers love 10 ng i v 5 o transformative solutions L 0 that introduce ease and (%) Facebook Apple Google Amazon PayPal Banks convenience into their 0 l a n 5 o i t everyday lives. c a s n a 10 r T 15 To create more customized payment 20 experiences, the industry must 25 deliver transformative Uber-type 30 solutions to consumers that make transaction mechanics slip into the 35 background and become part of the 40 overall experience. 45 As the data suggests, today’s leading technology companies Consumer sentiment 50 succeed when they are able to go toward banks versus today’s 55 B.10 beyond transactional experiences tech giants and establish an emotional This data shows consumers' relationships with connection with their users. these brands regarding digital payments.

050 051 VIEWPOINTS ElectronicPayments Are information from the transaction, Consumers Are Ready What We Need to Do Approaching “Peak Plastic” including that 16-digit number. to Be Convinced, if to Move Beyond Plastic There’s a parallel here to mobile phone We Can Prove the numbers: How often do you look at the in Asia Pacific digits in someone’s mobile number? Value Is There All the right conditions are in place for It’s not visible anymore—you just card-free electronic payments to grow. By Christopher Boncimino tap on a name in your contact list. SVP, Innovation & Strategic Partnerships, Visa Taking into account the many ways in This will take time, but there are things And now with a few more taps you which payments are changing, what we can do as an industry to Next Year, the Credit Card can send that contact money, matters most is a seamless, intuitive and drive change: without needing to know anything ubiquitous customer experience. Our will Turn 60 Years Old. more than who they are. consumer research shows that the vast Continue to invest in future-proofing majority (over 80%) of consumers across our infrastructure and technology. But a card is just one physical form that card is dipped or tapped on a shop The Technology Asia Pacific are open to trying out new We can’t possibly anticipate what new payments can take in an increasingly terminal is the same one that can ways to pay, such as mobile phones, devices people might want to pay digital world. process an automated payment from Is Available Today wearables or other connected devices with in five or ten years’ time, but we Back in 1958, Visa Today, the industry is approaching peak an internet-connected refrigerator that (Visa/YouGov research). can keep developing standards and plastic. The technology, infrastructure, is programmed to order milk when it A greater number of seamless payment capabilities that can adapt to make became the original runs out. The only difference is that the But there are barriers holding them payments possible in any context. and consumer appetite are all at a point experiences in-store, online, and back from changing their behavior fintech company where payments can evolve beyond plastic card doesn’t necessarily need to in-app are being made available to be part of the transaction anymore. and embracing new forms of payment Maintain a relentless focus when we piloted the the physical card. consumers and businesses. Payments beyond cards. They’re often nervous on the customer experience. The important part that remains is are happening—today—via mobile about whether new technology is BankAmericard with What do we mean by peak plastic? the 16-digit card number. It’s this wallets, QR codes, chatbots, virtual secure, or they feel that the methods Ultimately, customers decide what 60,000 people in We’re not saying that cards are going 16-digit number that makes electronic assistants and IoT-connected devices. they use to pay today are already payment methods succeed by voting away overnight. Anything that’s been transactions possible, not the plastic These new experiences aren’t everyday good enough. There’s a sense among with their feet (or thumbs or facial California. part of commerce for over half a century it’s printed on. But the card number life for everyone yet, but they are consumers that new payment recognition) for the best experience. is so embedded that there will be a long is evolving too; they are slipping into beginning to scale. The Visa Ready technology needs to be proven useful Over the past six decades, the plastic tail of cards still in use for quite some time. Program brings payments to this before they start using it. Don’t innovate just for innovation’s sake. card has become inextricably linked But we are saying that the conditions exist the background, as payments become automatic and invisible. Instead of broader range of devices and services Technology can do anything. But— with the very idea of electronic to support a mass adoption of electronic having to enter a 16-digit card number in a secure, convenient manner, so that It’s the responsibility of all of us in the crucially—that doesn’t mean it has to payments. Visa—and others in our payments that are no longer solely in an app or on a website, people payments can happen on just about payments industry to establish that do everything. It’s about identifying business—became known as “credit dependent on plastic. can use their thumb to authenticate any form factor. utility by ensuring that the payment where technology adds value and card companies.” However, Visa has payments from their mobile phone. experiences beyond plastic are adding moves an experience forward. never defined itself that way. To us, Over time, the proportion of payments value and solving pain points in it’s never been the physical card that Consumers can store their card details that don’t involve a plastic card on file with the merchants they ways the physical card cannot, such At Visa, our role is to create the right actually matters. The Infrastructure compared to those that do will as integrating loyalty programs into conditions for our bank and merchant repeatedly shop with or subscribe to, continue to increase. We’re seeing Fundamentally, Visa is a payments Is Already in Place eliminating the need to enter their mobile shopping experiences or using partners to deliver innovation to their examples of digital issuance: Where a contextual information like location or customers, for any payment form factor. network that connects people or information each time they transact. consumer can apply for a card and be businesses who want to pay and those spending habits to provide targeted We’re excited to enable the future of The electronic payments ecosystem Tokenization makes these invisible issued digital credentials, including their offers, for instance. commerce and payments beyond cards. who want to be paid. For the past 60 doesn’t change even as the form payments possible by creating a layer of 16-digit card number, immediately, years, a plastic card has been a secure, factors keep evolving. The Visa network security that removes sensitive account without having to wait for the physical convenient mechanism to do just that. that processes the payment when a card to arrive to begin transacting.

052 053 03 How Visa Innovates

054 055 HOW WE INNOVATE Innovation at Visa: “ You’re not just creating and A Unique Approach launching an innovation; you’re creating an experience that may lock in your consumers We partner with our clients to for years to come. ” discover, design, and develop the Shiv Singh, future of commerce. SVP, Innovation & Strategic Partnerships, Visa Two-pizza teams (a team Starting to build Deep payment industry The Visa Developer small enough to be fed out ideas, quickly knowledge Platform with two pies) Personas build understanding Short sprints Combined components Immersive Innovation of the pain points and (about six weeks) create plug-and-play Centers opportunities experiences Empathy maps immerse us Low-fidelity outputs to Startup insights and The Visa Ready Program in the consumer’s mindset get feedback quicker partnerships

056 057 Visa's Payment Stack From products to solutions, an API for every payment need. Visa is opening up the network via strategic APIs and extending access to payment capabilities with new partners and new use cases. New Use Cases DIGITIZING PHYSICAL POS TAPPING INTO NEW PAYMENT FLOWS ACCELERATING E-COMMERCE CREATING NEXT-GEN EXPERIENCES Strategic Partners STRATEGIC APIS PRODUCT PRODUCT CORE RISK ECOSYSTEM VALUE-ADD INSIGHTS PACKAGES ENABLED OFFERINGS MANAGEMENT SERVICES VisaNet FOUNDATION VISAVISA DE DEVELVELOPEROPER PLA PLATFORMTFORM VISA DEVELOPER PLATFORM All brand names and logos are the property of their respective owners, are used for identification purposes only, and do not imply product endorsement or affiliation with Visa.

058 059 Capabilities Core Offerings Product Packages Ecosystem Value-Add Services Co-Brand Card Visa Checkout CyberSource Beacons/Sensors Fast Funds Credit Card Visa Direct Geolocation Services Card on File Debit Card Visa Commerce Network Mapping Services Aggregation Prepaid Card Visa Developer Data Visualizers Micropayment Corporate Card mVisa Messaging Platforms Points Private Label Card Visa Token Service Social Media Platforms Recurring Payments Gift Card Auth.Net Android OS Transaction Alerts Proximity Acceptance Verified by Visa Apple iOS Card Controls O2O Acceptance QR Code / Reader WeChat FX Rate Check Remote Acceptance Risk Management Messenger Real-Time Redemption We’re Already Line Digital Receipt Insights Tokenization Blockchain Instant Issue Cardholder Authenticate Internet of Things Amazon Loyalty Building What’s Next Pricing Analytics Real-Time Risk Scoring Data & Analytics Samsung Real-Time Offers AML & OFAC Checks Square Statement Credits Cardholder Analytics ID & Verification Retail Analytics Artificial Intelligence Transaction History Risk-Based Authentication Printed Text Reader Sourced Offers Performance Solutions Biometrics We’re helping our clients And we’re looking beyond Cardholder Retention Digital Wallet Card Link Risk Manager Account Updater build relationships with our doorstop to find what’s Cardholder Acquisition Threat Intelligence Cardholder Segmentation Location-Based Alerts their customers. next in payment technology. Decision Manager Cash Back Risk Replay ATM Locator The strength of those relationships depends on Our innovation starts with the best of Visa Payments Location Confirmation how well clients understand, and can anticipate, talent working in collaboration with clients at Account Attributes Enablement Takeover Protection Travel Notifier customer needs and behavior. So we’re building our Innovation Centers around the world—San Domain Controls new capabilities via the Visa Developer Platform Francisco, Miami, London, Dubai, Singapore, São Swipe Token Controls to transform contextual data—from payment Paulo, New York, Berlin, and Tel Aviv—but Dip Address Verification Stop Payment activity to life events—into predictive intelligence. we don’t stop there. We’re opening up the network Click Fraud Alerts Push Provision With this insight, clients can go beyond transactions via APIs and extending certification to new partners E-commerce Custom Rules to provide more relevant and frictionless experiences. all around the world through the Visa Ready Tap Program. And through Visa’s Everywhere Initiative Stream and Visa Ventures, we seek, partner and invest in Fund promising startups that are solving tomorrow’s Scan business challenges in innovative ways. Push

060 061 Innovation Starts with Fintech funding increases MORE THAN $40 BILLION dramatically around the world MORE THAN $10 BILLION Finding the Best New Ideas LESS THAN $30 BILLION MORE THAN $1 BILLION from Within and in Partnership LESS THAN $10 BILLION with the Startup Community LESS THAN $1 BILLION Visa’s Everywhere Initiative Learn how we leverage the startup community to solve real-world business challenges. Since the program launched in 2015, over 1,500 startups have participated, leading to 60 finalists and 14 winners. Below are some of the winners from Visa’s Everywhere Initiative around the world. Bitemojo Grata Losant Proximit An iOS and Android app tailored wechatconcierge and customer Losant is an easy-to-use and Help companies across Asia for independent travelers to service / chatbots solves powerful developer platform Pacific to get closer to their explore the unique tastes each complex WeChatcustomer care designed to help you quickly and customers with our leading destination has to offer the same implementations for MNCs in securely build complex connected location-based services & analytics way they discover other aspects of China. China 2016 solutions. USA 2017 platform. AU 2016 the city they are visiting. EU 2017 HYP3r Msg.ai Rikai.co Cura HYP3r makes it easy for businesses msg.ai provides turnkey software WeChat Travel Bot- AI Chatbotthat CURA is a leading brand in to engage influential customers for brands to fully manage 1-on-1 responds to travelers in Visa’s Indian Medical Equipment and at specific locations on a personal conversations across the world’s wechatwith automated travel Instruments space with its own and level, in real-time. USA 2016 most popular messaging apps. services, activities and offers. re-engineered solutions. AU 2016 Jude USA 2016 China 2016 Eyebuy Jude delivers an amazing banking Octor Smyte They are built to monetize experience via two of the hottest VizualizingVisa travel service and Smyte protects millions of actions Australia & content and connect brands to trends in technology right now; content through augmented reality a day. Smyte code into any website US Latin America Europe Middle East Asia New Zealand fans (shoppers), turning every item artificial intelligence & messaging. to drive commerce. China 2016 or mobile app, which gives Smyte seen in every frame into a potential Check your balance, pay your bills access to a data feed. USA 2017 TOTAL 57.3 B 543.8 M 11.2 B 1.96 B 27 B 1.47 B sale or engagement opportunity. & stay on top of your finances. Persollo 2016 17.7 B 264.9 M 2.8 B 564.5 M 14.6 B 287.1 M USA 2017 AU 2016 A instant check-out and conversion Stamplay optimization platform that Stamplay is the next-gen 2015 13.3 B 91 M 2.9 B 398.9 M 8.2 B 767.1 M FlyMoney Kompass allows big online businesses, development platform that allows 2014 12.8 B 75.5 M 1.7 B 246.3 M 2.3 B 121.7 M The company aggregates exchange Kompas is an online marketplace media groups and independent to build backend of apps using APIs 2013 4.9 B 36.1 M 2.6 B 101.9 M 891.7 M 176.2 M rates from currency providers where you can get your CV/profile merchants to streamline the as building blocks. USA 2016 2012 3.4 B 49.6 M 270.9 M 28.4 M 179.4 M 79.1 M all around the globe, and allows reviewed by HR professionals, transaction process with an instant Thought- Wired 2011 2 B 23.7 M 491.7 M 66.4 M 246.8 M 34.1 M travelers order currency at the best get feedback regarding their check-out URL. AU 2016 Thought-Wired’s NOUS is a 2010 3.2 B 3 M 437.2 M 554.8 M 655.4 M 6.7 M rates in the market. EU 2017 CVs/LinkedIn-profiles from HR thought-controlled communication professionals before applying. tool for people who cannot move EU 2017 and talk because of severe physical disability. AU 2016 Total Funding and Funding per Year in USD (Crunchbase, KITE and Tracxn 2017).

062 063 Visa Ventures Visa Ready Discover how we’re putting investing power Visa Ready launched four years ago Competitive business conditions and Token Service Providers, Business behind innovative fintech companies, with as a partner program to support rapidly changing technology has seen Solutions, Biometric Authentications the next generation of third-party the program grow and evolve. It is now solutions and IOT. over 300 considerations and 3–6 investments payment solutions, meeting Visa’s our primary point of contact for payment The Visa Ready program will continue security standards and specifications. technology providers wanting to launch to make the path to certification annually. Notable investments include Square, Partners benefited from a clear path new technology and collaborate with and commercialization of payment Stripe, and Chain. to solution certification; and Visa key industry players. technology hassle free whilst at the from the opportunity to accelerate Current Visa Ready verticals include; same time providing participants in the acceptance and innovation. Mobile Point of Sale, QR Payments, payment ecosystem confidence that if its Visa Ready certified, it’s good to go. Square “makes commerce easy” by Stripe is a software platform for running Third-party Solutions that Meet providing tools that helps merchants an online business, powering payments Visa's Payment Security Standards start, run, and grow their businesses. for hundreds of thousands of companies Square’s ecosystem of online and offline around the world. Stripe works with point-of-sale services offers tools for disruptive startups and innovative global many parts of running a business, from giants to enable new business models accepting cards and tracking inventory, and commerce experiences to flourish. TSP to real-time analytics and invoicing. Tokenization Mobile POS Mobile Payments Biometrics Business Solutions Marqeta is the first modern card issuing Klarna is one of Europe’s leading Chain, Inc. is a technology company and core processing platform, powering payments providers that aims to make that partners with leading organizations prepaid, debit, and credit cards for the payment process simple, smooths to build, deploy, and operate blockchain Visa’s Ready Easy Set Up the world’s top commerce innovators. and safe for customers and its merchant networks that enable breakthrough Marqeta’s advancements represent the partners. Klarna works together with financial products and services. first fundamental updates in the past 70,000 merchants to offer payment 20 years to card issuing platforms, a $30 solutions to more than 60 million users Visa is using licensed software from trillion addressable market covering all in Europe and North America. Chain to build a new bank-to-bank possible cardable spending. global payment ecosystem to capture 1 2 3 large-value payments. CONTACT EVALUATION CONTRACT All logos are the property of their respective owners, are used for identification purposes only, and do not imply product endorsement or affiliation with Visa.

064 065 04 Conclusion

066 067 7 Lessons for Bringing Innovations into the Marketplace By Shiv Singh SVP, Innovation & Strategic Partnerships, Visa Something very unusual happened on March 31, 2016, 01 02 03 when the CEO and founder of Breakthrough Use growth hacking Design products Tesla, Elon Musk, announced innovations should techniques to hockey- that other companies the Model 3, his new all- be launched in stick the adoption yearn to integrate. electric, four-door compact breakthrough ways. of your innovation. luxury sedan. Very little Anyone whose livelihood One of the biggest innovations marketing was done outside is dependent on bringing at the 2017 Consumer of a live-streamed webcast product innovations into the Consumers can become your best Growth hacking is considered Electronics Show was Alexa from advocates if you tap deeply into a murky art, but it’s time it got Amazon—except that Amazon and a few tweets to his Twitter marketplace can learn from their values with innovations that its moment in the sun. The more had no actual presence at the also help them construct their you invest in the growth hacking show itself. Rather, every other followers. But within a week, Elon Musk’s experience. For identities. You’re not just creating techniques for an innovation in its company on the show floor the company had received an industry going through and launching an innovation; very design and development, the was integrating Alexa into their you’re selling what the consumers more likely it is to succeed. That products and promoting it at 325,000 Model 3 reservations, as much change as financial should stand for in the future. includes designing for sharing, their booths. Designing and more than triple the number services, with massive You’re also selling what they virality, creating habits, and social building an incredible product should be telling their friends to rewards based on usage. Does your that enhaces every other product of Model S sedans Tesla had investments in fintech startups buy next. If it is done right (where banking app, retail loyalty app or in the marketplace and builds sold in all of 2015. Nobody in 2016 alone, the lessons you make your innovation not just wearable have enough growth an ecosystem is a win-win; it's technical, but social), you’ll be able hacking techniques baked into an under-leveraged strategy had ever seen, let alone test- are even more perilous. What to shift your marketing budget to its design? Here’s where we can for most companies today. other efforts and spend less on all learn from Facebook and its And that’s exactly why the API driven, this car. follows are seven to consider. promoting the innovations. secretive growth hacking team. economy matters so much today.

068 069 04 05 06 07 We live in the fake Trojan Horses Think about the Don’t get hypnotized news era. But don’t are critical to innovation, product, by the data world let your customers prevent you marketing and — always put your think your business from becoming customer service customers first. is fake. a one-hit wonder. efforts holistically. Yes, companies like Amazon have built incredible businesses by Here’s the strategy: Sell the knowing your exact preferences At Visa, we’re on a journey to constantly improve how innovations are brought Trust in brands across the globe container in which your The traditional boundaries on any given day or even moment. to market. Our recent Connected Car partnership announcement with Honda is at an all-time low. This doesn’t innovation is housed when you between product, innovation, However, the way you gather and sprung from a co-creation exercise in our San Francisco Innovation Center. mean you give up on your brand. launch. This way your future and marketing are artificial. Look use the data is going to get harder That exercise had the goal of making parking toll payment easier. The even Rather, you fight tooth and nail innovations have a home without at SoFi—its product experience in the future and you will need to more recent announcement with IBM was similar but anchored in integrating to make it a truly loved one. If requiring as much investment. is as much a marketing play and depend on artificial intelligence payments into IoT solutions. These are just two more recent examples of Visa your brand isn’t loved, that means Container experiences, like vice versa. Who’d have thought more. Consumers are staging partnering to bring innovations to market as a payments ecosystem player. it’s a transactional one with no mobile banking apps, play that that a financial services firm revolts against form-filling (if you’re Visa Checkout, with its 22 million users, is designed to take form-filling out of preference or loyalty. As our role. That’s why some major banks would offer singles nights, wine a financial institution with lots of the customer experience. The Visa Payment Ring at the last Olympics was a research shows, if you’re loved and in the US are spending millions tastings, and career counseling forms—beware!) and furthermore, perfect example of a product being designed and launched in a Tesla Model 3 trusted, it's much easier to birth and millions of dollars and are as a part of its business? consumers are increasingly wary fashion (USA Today). Still, these are early days for all of us. One thing is for certain: innovations and get traction with leveraging the hottest of media And yes, that gets press and of cyberattacks. To win the trust bringing innovations to market in the future is going to look very different than it them. Those Model 3s got sold placements to promote their apps drives brand love too. Start of your consumers and to deliver does today. What Elon Musk did with the Model 3 was just the beginning. We’re because Tesla was already a loved and not the next card product or by asking yourself how much innovations that they will accept, excited to co-create on new solutions with our partners in the years to come. brand in a way that no other auto mortgage offer. Once you have transparency exists between be extremely mindful of what you manufacturer is even remotely an app on the customer’s phone your innovation, product, ask of your customers before you We hope that the 2017 edition of INNOVATIONS FOR A CASHLESS WORLD close to today.The same applies or a device in their homes, you marketing, and customer service give them something incredibly provides a thought-provoking look into where we are now, and sparks a sense to financial services and to the can push generations of product organizations. Do they even sit valuable in return. It all starts with of the possibilities for the cashless—and inspiring—future. A future that we can merchant ecosystem. innovations through it. near each other? what personal data you request. create together.

070 071 Appendix A.1 From Card to Cloud 006 B.2 The Payments Maturity & Innovation Readiness Continuum 025 “The Total Audience Report: Q1 2016.” Nielson, 27 June 2016, www.nielsen.com/us/en/insights/reports/2016/ 1. How interested would you be in potentially using each of the following in the next 18 months? the-total-audience-report-q1-2016.html 2. How interested are you in having each of the following capabilities available to you for use in your life today? A.1 Everyday Transactions, By Payment Channel 009 B.3 A Deeper Look at Payments Maturity & Innovation Readiness: Reference questions from B.2 026 Please think about the payments you make for everyday transactions (excluding rent, mortgage, or other B.4 Top 5 Global Consumer Needs by Country (Priority l Rank) 029 larger, infrequent payments). Thinking of your past 10 everyday transactions, how many were made in each of 1. Please select the statements that best match the brands, you are free to choose all statements that apply for the following ways? each brand concerning new ways of paying for products and services. A.2 Trended Usageand Interest in P2P Payments (Global Total) 013 2. Please use the following scale to describe your preference to use each of these brands for financial transactions: 1. Below is a list of innovative payment and banking methods. For each method please indicate if you are [(1) I prefer to never use this brand, (2) I prefer another brand, but use this occasionally, (3) Is one of many brands I aware of it and if you currently use it. use, (4) Is my preferred brand, but I also use others, (5) Is the one brand I prefer to use, whenever possible] 2. How interested would you be in potentially using each of the following in the next 18 months? More control over spending, Convenient to have with me, Accepted everywhere, Frictionless process, Works Chip Cards, Online or mobile only banks, Digital/Mobile Wallets, Peer-to-Peer payments, Prepaid reloadable instantly, Others are impressed, Easy to set up and get started, Knows my behavior and habits, Personalized cards, Contactless with card, Contactless via phone, Biometrics, Interactive tellers, Kiosks, Wearables, Financial rewards/benefits, Keeps purchase info private, Simple to use after it is set up, Value-added services/perks, Protects aggregator apps*, Digital Payment Advisors, Crypto Currency, Implants identity/personal data, Customizable to meet my needs, Compatible with current tech, Limits liability for data *Financial aggregator apps was asked in a separate question last wave, potentially inflating 2016 responses. breaches, Limits currency exchange issues, I am Intrigued when others use it APIs Unlock Digital Payment Ecosystems for Consumers 018 B.5 Opportunities for Growth: A Country-By- Country Breakdown 030 Christensen, Ben. “Optimizing the Netflix API.” Medium, The Netflix Tech Blog, 15 Jan. 2013, medium.com/netflix- 1. Below is a list of innovative payment and banking methods. For each method please indicate if you are aware techblog/optimizing-the-netflix-api-5c9ac715cf19. of it and if you currently use it. “Data Solutions.” Sabre, www.sabre.com/our-technologies/data-solutions/ How interested would you be in potentially using each of the following in the next 18 months? What Will It Take to Get to a Post-Plastic World? 020 2. Contactless with card, Contactless via phone, Biometrics, Wearables, Chip Cards, Online or mobile only banks, Variyar, Mugdha. “Paytm Wallet Reaches 200 Million Users.” The Economic Times, ET Rise, 28 Feb. 2017, Digital/Mobile Wallets, Peer-to-Peer payments, Prepaid reloadable cards, Interactive (bank) cashier, Retail Kiosks, 8:55 AM IST, economictimes.indiatimes.com/small-biz/startups/paytm-wallet-reaches-200-million-users/ Financial Aggregator App, Digital Payment Advisors, Crypto Currency, Implants articleshow/57371236.cms What the World Can Learn from a Billion-People Economy Going Cashless 033 Monks, Kieron. “M-Pesa: Kenya's Mobile Success Story Turns 10.” CNN, Cable News Network, 24 Feb. 2017, 9:26 Verma, Sandeep. “India Had 30.86M Credit Cards, 880.03M Debit Cards in May 2017.”MediaNama, 5 July 2017, AM ET, www.cnn.com/2017/02/21/africa/mpesa-10th-anniversary/index.html. www.medianama.com/2017/07/223-india-credit-cards-debit-cards-may-2017/ Russell, Jon. “Alipay, China’s Top Mobile Payment Service, Expands to the U.S.”TechCrunch, TechCrunch, 9 May Europe Leads Digital Payment Expansion 034 2017, techcrunch.com/2017/05/09/alipay-first-data-us-point-of-sale-expansion/ Mitchell, Travis. “Technology Usage Rates Increasing in Emerging Economies, but Still Lag behind Rich Countries.” Yu, Daniela, and Beth Youra. “No One Is Winning the Battle for Digital Wallet Customers.”Gallup News, 8 July Pew Research Center's Global Attitudes Project, 18 Feb. 2016, www.pewglobal.org/2016/02/22/smartphone- 2015, doi:http://news.gallup.com/businessjournal/184034/no-one-winning-battle-digital-wallet-customers. ownership-and-internet-usage-continues-to-climb-in-emerging-economies/technology-report-01-03/ aspx?utm_source=WWWV7HP&utm_medium=topic&utm_campaign=tiles. The Payments Maturity Metrics B.6 Innovating Payments in Latin America 037 B.1 025 “The Global Fintech Report Q2 2017.” CB Insights, www.cbinsights.com/research/report/fintech-trends-q2-2017 1. Please think about the payments you make for everyday transactions (excluding rent, mortgage, or other larger, infrequent payments). Thinking of your past 10 everyday transactions, how many were made in each of B.6 Global Interest in IoT Capabilities 039 the following ways? How interested are you in having each of the following capabilities available to you for use in your life today? 2. Continuing to think about your past 10 everday transactions, how many were made using each of the below Use mobile contactless/touch payments in everyday transactions, Book and pay for additional travel services through forms of payment? your airline's app, Use automatic payments at the gas station without a card or going inside | Park your car at a gas 3. Which of the following best describes how you interact with a banks? pump and have it automatically fill up and pay, Order and pay for the delivery of food/drinks to a certain location from your car, Order delivery to your door via drones or robots (pizza, online shopping) | Order food or shop online and

072 073 have it delivered to your door via drones or robots (pizza, online shopping etc.), Order groceries/household products and pay for them from your home appliances | Order groceries / home goods, and pay for them from your home appliances (refrigerator, TV, Washing machine, etc.), Get a credit on your card when you reach a health goal that's tracked INTEREST IN INTEREST IN on a wearable fitness monitoring device, Park and the parking meter will auto-fill until you leave, Use mobile wallet to INNOVATIVE IOT METHODS withdraw cash from ATM, Use public transit and your phone will auto-pay for your rides. METHODS (E02) Payments and the Internet of Things: How Will This Space Mature 042 Innovation Readiness Eddy, Nathan. “Gartner: 21 Billion IoT Devices To Invade By 2020.” InformationWeek, 11 Nov. 2015, 11:05 AM, www. Inputs and Assignments 2.0 Digital/Mobile Wallets Get a credit on your card when informationweek.com/mobile/mobile-devices/gartner-21-billion-iot-devices-to-invade-by-2020/d/d-id/1323081 Peer-to-Peer payments you reach a health goal that’s Continue from page 25. tracked on a wearable fitness B.7 Mobile Banking Transactions 044 Graph B.1 Each respondent Prepaid reloadable cards monitoring device And what banking activities do you perform using any of your banks’ mobile apps? gets a weighted average for Contactless with card Use public transit and your phone each question based on T3B Contactless via phone will auto-pay for your rides scores. Then their scores for B.8 Triggers to use new payments methods 045 each question are averaged to get a respondent-level 3.0 Wearables Order groceries / home goods, and pay for them from your home Below you will see various statements that others made about using innovative payment and banking methods. score. Respondent scores are Biometrics appliances (refrigerator, TV, Washing machine, etc.) Please think about how much these would influence your decision to use each innovative payment and banking averaged to get a country or Order and pay for the delivery of food/drinks to a certain location subgroup score. Crypto currency from your car (coffee, meals, etc.); this could be using the car’s methods, and select all answers that apply to you personally. Implants digital system or using wearables If I trust in the protection of my privacy and personal data, If it saves me time, If it offers something significantly Order food or shop online and have it delivered to your door via better than existing alternatives I am aware of, If I am confident that it always does what I want it to do, If I already drones or robots (pizza, online shopping etc.) Park and the parking meter will auto-fill until you leave have the infrastructure to support the new technology, If I trust the brands that promote it, If a sufficient level of Park your car at a gas pump and have it automatically fill up and pay service and support is available, If it meets a need I have that is currently unmet, If learning how to use it properly Use mobile wallet to withdraw cash from ATM doesn't take too much effort, If I know more about how it works, If I come across an attractive promotion offer, If I read and hear a lot of good things about it, If I find it exciting to try out, If people I know love it, None of the above would make me more likely to use it B.9 Security Stated & Derived Importance 046 Please select the statements that best match the brands, you are free to choose all statements that apply for each A consumer centric 35 brand concerning new ways of paying for products and services. approach to payments 30 B03, Please use the following scale to describe your preference to use each of these brands for financial transactions: Continue from page 49. Graph B.12 25 [(1) I prefer to never use this brand, (2) I prefer another brand, but use this occasionally, (3) Is one of many brands Consumer sentiment toward banks versus today’s tech giants 20 I use, (4) Is my preferred brand, but I also use others, (5) Is the one brand I prefer to use, whenever possible] Since 15 we’re looking at rankings, need to point out that in 2015 there were only 16 attributes in the list of needs; in 2017, there are 18 attributes in the list. In the 2015 data, not all 16 countries are included. 10 Digital g n i v 5 o B.10 Consumer sentiment toward banks versus today’s tech giants 049 Physcial L Please think about the following brands as they relate to making digital payments (online, mobile, app, contactless, 0 Facebook Apple Google Amazon Paypal Banks etc.). How would you describe your relationship with each of the following brands? 0 l Full List of Choices: Google, Apple, Visa, Amazon, Banks, Facebook, PayPal, MasterCard, AmExpromotion offer, If I read a n 5 o i t c a and hear a lot of good things about it, If I find it exciting to try out, If people I know love it, None of the above would s n a 10 r make me more likely to use it. T 15 B.10 Electronic Payments Are Approaching “Peak Plastic” in Asia Pacific 050 20 Visa, YouGov (an international internet-based market research firm). Respondents: 10,500 adults in 13 countries in AP. 25 B.10 Fintech funding increases dramatically around the world 061 30 Crunchbase, www.crunchbase.com / Kite, https://www.getkite.co / Tracxn, https://tracxn.com 35 7 Lessons for Bringing Innovations into the Marketplace 069 40 Woodyard, Chris. “Tesla Says Model 3 Reservations Hit 325,000.” USA Today, Gannett Satellite Information Network, 8 Apr. 2016, 3:49 PM ET, www.usatoday.com/story/money/cars/2016/04/07/tesla-says-model-3-reservations- 45 hit-325000/82745324 50 55

074 075 Top 5 Global Consumer Needs By country (magnitude | indices) TOP 5 NEEDS Continue from page 29. Graph B.4 Top 5 Global Consumer Rank between 1-6 Needs by Country (Priority l Rank) Rank between 7-12 Rank 13+ vior y o or y o y f ol ed ks enc e e t y beha ed chase o use r igued ed e ts identit ech enient t o set up ivat -added y needs eaches ntr e contr v wher tionless ks essed ws m ds/benefits ec omizable t or e with me y ic or thers ar ot ent t on ccept no eeps pur ust ompatible with r ersonaliz alue r r vices/per v o pr er it is set up er spending er ocess change issues M C A F W O Easy t K P war K Simple t V P C C Limits liabilitLimits cur I am I v v e t o ha e pr instantly impr and get star and habits r inf af ser /personal datameet m cur data br ex when others use it Global Rep 1 2 3 4 5 6 7 8 8 10 11 12 13 14 15 16 17 18 Global LEC 1 8 3 9 12 2 11 6 7 14 16 4 10 5 15 17 13 18 About GfK Global GenZ 3 2 12 1 10 7 4 13 11 5 6 16 9 8 15 14 17 18 Global Millennials 2 1 3 4 5 6 10 8 9 11 13 7 12 14 16 15 16 18 GfK is as global market research firm and the trusted source of smart, relevant and trusted market and consumer information with US 3 4 6 7 1 15 5 16 13 12 2 8 9 10 11 14 17 18 13,000 employees in over 100 countries. Growth from Knowledge Canada 1 5 8 3 4 12 2 17 9 10 6 11 7 14 15 13 16 18 www.gfk.com Mexico 3 1 13 5 8 4 1 11 15 9 2 16 7 6 17 18 14 12 Brazil 1 2 3 4 9 12 13 15 8 5 14 7 6 11 17 16 18 10 Methodology Argentina 2 4 1 6 5 13 7 18 14 3 8 10 9 15 17 16 12 11 UAE 6 2 9 14 1 4 12 17 10 7 11 5 8 15 16 3 13 18 About the survey: The Future of Payments study was conducted by GfK Research on behalf of Visa, 9200 online surveys were collected Russia 7 2 4 6 5 12 3 8 15 13 9 11 14 10 1 17 16 18 across 16 countries; USA, Canada, UK, France, Poland, Germany, Mexico, Australia 4 1 11 6 5 2 3 9 16 10 7 8 12 13 18 17 13 15 Brazil, Argentina, Australia, China, India, Japan, South Korea, Russia, UAE 17 between July 27th, 2017 and September 5th, 2017. All respondents South Korea 4 6 1 2 7 13 5 3 14 10 11 12 9 8 16 18 15 t do not work in Financial Services, Marketing, Marketing Research, Japan 18 8 1 3 5 16 7 4 13 14 9 10 11 2 6 16 12 15 Advertising, or Public Relations; own and currently use a smartphone; have a savings or checking account; own/use a computer or tablet; China 1 11 3 5 10 7 8 6 4 12 13 9 14 15 16 17 18 2 and own a credit or debit card. The research reflects the views and India 1 2 9 12 3 7 6 7 10 4 5 14 11 15 13 16 18 17 opinions of online populations in the 16 countries studied. UK 2 1 14 5 3 4 10 11 13 12 9 8 7 6 17 16 15 18 France 5 2 15 1 3 16 6 14 17 4 9 13 11 10 7 8 12 18 Contact Visa Poland 2 3 1 7 5 9 6 16 10 8 13 17 12 14 4 15 11 18 For more information, please contact your Visa Account Executive or email Visa Innovation & Strategic partnerships at [email protected] Germany 1 16 11 6 4 5 2 13 14 8 15 9 10 3 18 12 7 17 You can visit us at Visa.com or on YouTube.