HP Future Proofing Cards and Payments

1 © Copyright 2012 Hewlett-Packard ©2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice ©2012 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice

Dee McGrath

Vice President, Financial Services

FUTURE PROOFING CARDS AND

PAYMENTS

2 © Copyright 2012 Hewlett-Packard

HP is the world’s largest provider of information technology infrastructure, software, services, and solutions to

individuals and organizations of all sizes.



Bartering

Shells and

Beads

Coins

Paper Money

Checks / Bank Drafts

General Purpose

Charge Cards

600 BC 600 AD 1700

e-purse Gift Cards

Debit Card

s

Virtual Payments

M-commerce

M-Coupons M-Banking

Mobile Wallets

M-POS

NFC

QR Codes

Social Media

Virtual Currency

Digital Wallets

P2P Remittance

Consumer Charge Card

1950 1990 2000 1980 1900

3-D Secure

Branded Contactless

Augmented Reality

Cloud Wallets

An increasing area of importance

Multi-bank Networks

1960


HP solutions make life easer in ways you’ve probably never considered

HP supports more than 5.6 million desktops, 2+ million smart phones, and 15 million IP addresses

We perform 2.4 billion healthcare transactions annually

We detect and quarantine more than 3.1 million viruses annually

We manage more than 100 PB of online data in 60 countries

We process over 13.3 billion credit card transactions annually

13.3 billion credit card transactions

>100 PB online data in 60 countries

2.4 billion healthcare transactions

3.1 million viruses

detected

North America

Cards Accounts 12 million

Merchants 1.3 million

Transactions 3.7 billion

Latin America

Cards Accounts 8.6 million

Merchants 1.2 million


Asia Pacific

Cards Accounts 15.3million

Merchants 530,000


EMEA

Cards Accounts 32 million

Merchants 54,000


HP has become one of the world’s largest 3rd party card processors

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High cost to serve, legacy infrastructure & an inability to innovate

The things that were previously taken for granted are becoming less and less relevant

MARKET TRENDS

• Mobile internet: 10 billion+ units,

(10x the size of the desktop internet)

• Explosion in data stream subscriptions

(premium media, social media, location-aware services, VoIP… )

• 2014: 30 billion apps, $40 billion revenue

(downloads + value-added services + ads)

EXPECTATION Always-connected,

anytime, anywhere DESIRE Seamless experience

and continuous access,

across devices


We are more connected than ever -

global online population is 1.9bn

Today we carry the internet in our pocket.

The web is social. 2012 is about

convergence & big data


Convergence is happening

10 © Copyright 2012 Hewlett-Packard 10 HP Confidential

ATC

Mobile Payments HP IP – Mind Map


Agile Card Framework - Modernization

In 2007 HP initiated a modernisation of its card assets. The use of a SOA solution breaks down product silos and creates discreet services that can be

repurposed and innovatively packaged


Convergence is happening


Innovation

New Product Development

Convergence of student ID card and debit card • Makes the financial provider relevant to their customer • Growth for a ‘mature’ product offering - cards


Consumer sentiment

HP-RFi Australian Payments Research Ask the customer.....

75

80

85

90

95

100

105

110

115

120

125

Mar-2008

May-

2008

Jul-2

008

Sep-2

008

Nov-

2008

Jan-2

009

Mar-2009

May-

2009

Jul-2

009

Sep-2

009

Nov-

2009

Jan-2

010

Mar-2010

May-

2010

Jul-2

010

Sep-2

010

Nov-

2010

Jan-2

011

Mar-2011

May-

2011

Jul-2

011

Sep-2

011

Nov-

2011

Jan-2

012

Mar-2012

Westpac-Melbourne Institute Consumer Sentiment Index


Then we investigated the current state:

87%

49% 47% 46% 46% 44%

34% 31%

7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Cash BPAY Credit card Scheme Debit

Card

EFTPOS card Direct debit Direct transfer Paypal Cheque

Which of the following payment methods do you use in a typical month? Please choose

all that apply.

18-24 25-34 35-44 45-54 55-64 65-80 Total


What are you changing to?

48%

39%

30% 28%

24% 23%

21%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Scheme Debit

Card

Credit card BPAY Direct debit Direct transfer Paypal EFTPOS card

To what payment method did you move the spending for which you

previously used cash?


What do you prefer?

37%

28%

23% 22%

20% 18%

20%

32%

21% 21%

17% 17% 19%

14%

0%

5%

10%

15%

20%

25%

30%

35%

40%

Buying over the

internet

Buying over the

phone

Shopping in a

department store

Paying by mail

order / post

Paying for petrol Shopping at a

supermarket

Paying for a meal

at pub, café or

restaurant

Assuming that you have all of the following payment options available to you, please

select the method you most prefer for each scenario.

Credit card Scheme debit card


HP is a partner who recognises the changes occurring in the payments

world.

Seamless, secure, context-aware experiences for a connected world


Str

ate

gic

Ele

ments

Funct

ional Com

ponents

Customer Experience

Extent to which a user can obtain and use the service to achieve their goals at the time it is needed.

Customer Experience

• Mobility (Mobile Payments and Applications)

• Communications (letters, statements, alerts)

• Portal / User Interface • Data Analytics • Reporting • Social Media

New products, features and capabilities designed to increase usage, enhance customer satisfaction or drive more fee or interest income.

Product extension to additional geographies or schemes.

Internal product improvements to provide easier and more efficient processing, improve operations, and reduce costs.

Product Innovation

Market Reach

Operational Enhancements

Product Innovation

• Prepaid Cards (including Multi-currency / Remittance and Gift Cards

• Loyalty & Rewards • Fraud • Secure Payment

Services • Tokenization • Application Processing • Authorization • Commercial Cards • Data Analytics

Market Reach

• JCB • CUP • Discover • PayPal • Closed Loop • Double Byte • Asian Regionalization

Operational Enhancements

• Exceptions Processing • Technical (SOA, ODS,

BI, Rules Engine, Workflow)

• Plastics Management • Application

Processing • Credit Risk

Management (e.g. Triad)

• Collections • General Ledger


Innovation

New Product Development

Convergence of Accounts Payable with Stored Card • Changes the view of the value chain • Connects with customer feelings with immediacy • Innovative – a bank solving an accounts payable issue!


Technology

HP Future Proofing Cards and Payments