Global Payments Summit
Singapore -- June 6, 2013
eCommerce and the Developing World
Niki Manby
Head of Emerging Product & Innovation, APCEMEA
Visa Inc.
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Notice of Disclaimer
Case studies, statistics, research and recommendations are provided "AS IS" and intended for informational purposes only and should not be relied upon for operational, marketing, legal, technical, tax, financial or other advice. When implementing any new strategy or practice, you should consult with your legal counsel to determine what laws and regulations may apply to your specific circumstances. The actual costs, savings and benefits of any recommendations or programs may vary based upon your specific business needs and program requirements. By their nature, recommendations are not guarantees of future performance or results and are subject to risks, uncertainties and assumptions that are difficult to predict or quantify.
Assumptions were made by us in light of our experience and our perceptions of historical trends, current conditions and expected future developments and other factors that we believe are appropriate under the circumstance. Recommendations are subject to risks and uncertainties, which may cause actual and future results and trends to differ materially from the assumptions or recommendations. Visa is not responsible for your use of the information contained herein (including errors, omissions, inaccuracy or non-timeliness of any kind) or any assumptions or conclusions you might draw from its use. Visa makes no warranty, express or implied, and explicitly disclaims the warranties of merchantability and fitness for a particular purpose, any warranty of non-infringement of any third party's intellectual property rights, any warranty that the information will meet the requirements of a client, or any warranty that the information is updated and will be error free. To the extent
permitted by applicable law, Visa shall not be liable to a client or any third party for any damages under any theory of law, including, without limitation, any special, consequential, incidental or punitive damages, nor any damages for loss of business profits, business interruption, loss of business information, or other monetary loss, even if advised of the possibility of such damages.
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Forward-Looking Statements
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These statements can be identified by the terms “objective,” “goal,” “strategy,” “opportunities,” “continue," “can,” "will" and other similar references to the future. Examples of such forward-looking statements may include, but are not limited to, statements we make about our corporate strategy and product goals, plans and objectives. By their nature, forward-looking statements: (i) speak only as of the date they are made, (ii) are neither statements of historical fact nor guarantees of future performance and (iii) are subject to risks, uncertainties, assumptions and changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from those forward-looking statements because of a variety of factors, including the following: the impact of new laws, regulations and marketplace barriers; developments in current or future litigation or government enforcement, including interchange, antitrust and tax disputes; economic factors; industry developments, such as competitive pressure, rapid technological developments and disintermediation from the payments value stream; system developments; costs arising if Visa Europe were to exercise its right to require us to acquire all of its outstanding stock; loss of organizational effectiveness or key employees; failure to integrate recent acquisitions successfully or to effectively launch new products and businesses; changes in accounting principles or treatments; and the other factors discussed in our most recent Annual Report on Form 10-K filed with the U.S. Securities and Exchange
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eCommerce is fast outpacing traditional Face-to-Face – especially in
developing markets
Source: Euromonitor Retail Data
Growth in eCommerce Volume
-5% 0% 5% 10% 15% 20% 25% 30% 2008 2009 2010 2011 2012
Face-to-Face Payment Volume eCommerce Payment Volume
Payment Volume -- Year-over-Year Growth
2.0x
2.3x
3.6x
2.9x
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eCommerce Volume by Region
Source: eMarketer, July 2012
100 200 300 400 500 600 700 800 900 2011 2012 2013 2014 2015 2016 North America Asia Pacific Western Europe Latin America Eastern Europe Middle East & Africa
$B
ill
ion
s
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Despite rapid Y-O-Y growth, eCommerce share of total payments remains small
Source: Euromonitor Retail Data
eCommerce Share of Total Payments
eCommerce Payment Volume
3% 3% 4% 4% 5% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2008 2009 2010 2011 2012 $275B $520B
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Drivers of eCommerce Evolution
Proliferation of Devices
Convergence of Payment Methods
Consumer Purchasing Behavior
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Proliferation of Devices
Source: Internet connections according to NewMediaTrendwatch 2012; Social Networking accounts according to the Radicati Group Inc. Social Networking Market, 2011 to 2015; Mobile subscriptions according to The International Telecommunication Union – 2012; Internet access data from Euromonitor, Mobile internet access, mobile broadband subscriptions, smartphone penetration, and handsets shipped according to mobiThinking
Number of mobile subscriptions is nearing world population
2.4
billion
Internet connections
2.4
billion
social networking
accounts
6.8
billion
mobile subscriptions
2
million
mobile broadband
subscriptions
21%
smartphone
penetration
1.9
billion
handsets shipped in 2012
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Convergence of Payment Methods
Use of third party trademarks, logos and images does not imply product endorsement
Payment Channels
Multiple Devices
Payment Methods
eCommerce
Mobile
Face-to-Face
Debit/Credit/
Prepaid/Commercial
Rewards
Currency
Alternative
Payments
Visa Inc. Confidential
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Consumer Purchasing Behavior
Consider
Buy
Evaluate
Advocate
1
3
4
2
Consumers are becoming ‘integrated shoppers’, and payments
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Influence of Millennials
1.1 billion strong -- 615 million in Asia Pacific,
UAE, South Africa and Russia
Highly urbanized
Technologically adept, particularly with smart
phones -- "entitled to conveniences”
Comfortable with cashless environment
Expect ability to establish relationships
remotely
Millennials are key influencers in the evolution of omni-commerce
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eCommerce across Market Types
Emerging
Developed
Sophisticated
State of the Market 1
Population 240 million 1.3 billion 23 million Mobile Penetration 104% (250 million) 77% (1 billion) 109% (25 million) Internet Users 48 million 570 million 18 million
Projected eComm Growth
Average Spending 3 $600-700 $490-1,000 $3,500-4,000
Total Sales Volume 3 $6-15 B $100-450 B $36-51B
eCommerce Penetration 2 0.2-0.3% 5.3-10.8% 2.4-3.8%
Online Buyer Penetration 4 23-27% 43-67% 74-79%
eCommerce growth in the future will depend on adaptations for the
‘small screen’
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eCommerce Fundamentals
Setting the foundation for future eCommerce growth requires
investment in fundamentals
Digital Wallets
Card Enablement
Optimized
eCommerce
Fraud
Mitigation
Shipping &
Delivery
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The Future of Omni-Commerce
AUGMENTED COMMERCE CUSTOMIZABLE SHOPPING PREFERENCES SOCIAL NETWORKING INTEGRATION FRICTIONLESS CHECKOUT LOCATION-BASED SERVICES MULTI-CHANNEL SHOPPING
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