1. How do banks position themselves in
e&m channels and payments
EPFSF/EIF joint event April 1 2008
European Parliament, Brussels
Dag-Inge Flatraaker
General Manager, DnB NOR
Chairman EPC Standards Support Group and EPC e&m Expert Group

2. e&m payments
-
How do banks position
themselves in e&m
channels and payments
Agenda
- Internett banking – the Nordic
case
- eInnvoicing
- EPC/SEPA – e-commerce &
mobile channel approach
Dag-Inge Flatraaker – DnB NOR
2

3. DnB NOR –
- By far the largest financial group in Norway (40 % market share)
- Third largest in the Nordic market (total assets >200 billion Euro)
- One of the largest shipping banks in the world
- A main international bank in Energy
Helsinki
Copenhagen
Shanghai
Branches Chennai Vilnius Singapore
Hong Kong
Monchebank,
DnB NORD Murmansk
Subsidiary Luxembourg
New York
Rep.offices Houston
Copenhagen
Asset Santiago
Management Helsinki
Rio de Janeiro
Stockholm Hamburg Warsawa
London
Tallin Riga
Dag-Inge Flatraaker – DnB NOR
3

4. The Nordic and Baltic countries are well
positioned for the future. Example Norway
• Early adopters of new technology and high penetration in technology use:
• 3 mill persons above 13 years with Internet access
• 2 mill people use the Internet daily
• 100 % mobile penetration (40% in 1997)
• Fixed line penetration 73%
• The most dynamic mobile internet market outside Japan
• The highest use of mobile content services
• Almost all households and corporates are using e-banking services
(internet banking)
• Electronic multi-channelling and holistic approach has paved the way for
a very efficient payment infrastructure
Dag-Inge Flatraaker – DnB NOR
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5. Payment infrastructures and channels in
Norway
Bankgiro and ATMs
1972
National Giro system and ATM scheme
National card scheme
1980’s
EFTPOS Cashback introduced
Interbank clearing and settlement
1990-95
NICS (clearing) and NBO (RTGS)
1995 Cash-back offered as a separate service
1996 Internet Banking introduced
E-invoicing
2000
eFaktura (EBPP)
2001 Bank in Shops (BiB) introduced
BankID (PKI)
2003
Trusted Services
Mobile banking
2006
Mobile access to financial services
Dag-Inge Flatraaker – DnB NOR
5

6. Payment infrastructures and channels in
the Nordic countries – an example
Dag-Inge Flatraaker – DnB NOR
6

7. NORWAY SEEMS TO HAVE A HIGHLY FAVOURABLE PAYMENT MIX, WITH LOWEST RETAIL CASH USAGE
Cash
Source: McKinsey
Check
Cards*
Number of retail transactions per household (percent) Direct Debit
Transfers
100% 1 758 1 970 1 505 1 702 1 467 1 515 985 991 1085 1 403 1 237 1 068 1 184
1 0
2 1 1
0 2 1
0 1 2 3 3 3 3 4
5 5
2 7 2 1
0 5 3 5
9
0 1 12 1 7
6
2 13 17
3 17 15
0 13
4 25
0 0 13
0 0
0 5 8
0
98 93 93 87 86 82 82 79 78 75 72 71 70
PL SP IT PT GE AT SE CH BE NL UK FR NO
Dag-Inge Flatraaker – DnB NOR
7 *Including E-Purse

8. e-Invoicing - Streamlining
the corporate value chain
• What's at stake:
- potential huge savings for corporates
- important in the context of the Lisbon Agenda
• Why banks:
- all people and businesses have a relationship with a bank
- the banking industry can enable an environment of all-2-all electronic
interface and communication in payments and electronic document
exchange (e.g. order, order confirmation, invoicing, payment etc)
- As banks we can ensure our clients of the legal validity of sender and
receiver identity
Dag-Inge Flatraaker – DnB NOR
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9. e-Invoicing/EBPP and the Nordic region
• Banks in the Scandinavian countries have for years been running national E-
invoicing Schemes
• The Nordic banks have established a joint Nordic scheme for E-Invoicing
• Entails agreement on standardized formats and format conversion, Rulebook,
Implementation Guideline (MIG) and Governance
• Will enable clients to exchange E-invoices between themselves across banks in
the whole Nordic region (the first regional scheme in the world ?)
• Will, over time, enable huge savings for clients and could be an example to
follow, we are building on international standards and are open for wider
cooperation
The Nordic banks welcomes European/SEPA and/or global solutions, the EU
initiative helps driving this process.
Dag-Inge Flatraaker – DnB NOR
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10. European Payments Council (EPC) and SEPA
• Established in 2002, purpose is to realize one Single Euro
Payments Area (SEPA)
• One organization representing all European banks
• EPC has the authority to bind European banks in common
decisions
• Strong pressure from the authorities (EU-commission, ECB)
• EPC covers the banking industry in all EU countries as well as
EEA/EFTA-countries, which means 31 countries involving more
than 8000 banks/500 mio inhabitants/25 million corporates and
SME's
Dag-Inge Flatraaker – DnB NOR
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11. EPC structure for retail payments
Scheme Management
Plenary * Secretariat
Committee *
Audit
Stakeholder E&M
Coordination Committee ** Forum Expert Group
NGC
SEPA
Programme
Standards Payment Cards Cash Legal
Management
SG Schemes WG WG SG
Forum
WG
* Decision making body
** Process decision making body
Dag-Inge Flatraaker – DnB NOR
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12. The EPC response to mobile channels
EPC Strategy on e&m
• EPC Plenary decision 18 December 2007;
- The Mobile channel for initiating payments is regarded as a priority area
for the industry
- Contactless payments are regarded as the most promising area
to be prioritized first
- The European banking industry will collectively, via EPC, work together
with the mobile operators (and others) on cross industry cooperation
• Goal: Together with GSMA (and EMVCo and others)
explore/establish;
- high level principles and a framework for creating the necessary standards
and business rules so that e.g existing SEPA schemes (SCT & SDD) and
SEPA cards can be leveraged
- minimum requirements, standards and best practises for security for using
a mobile to initiate payments
• SEPA Online Payments (SOP) at web merchants
- EPC has decided to develop standards and a framework to allow for SEPA
online payments at web-retailers
Dag-Inge Flatraaker – DnB NOR
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13. Mobile banking - the next big step ?
• Need for cooperation on standards, security features and business
models across industries (banks, telcos etc)
• Collaboration with Telecom/mobile operators necessary and key !!
Mobile operators dominates today the mobile distribution
(both handset and services)
• For both industries to succeed, business models needs to
encompass both banks and mobile operators
Dag-Inge Flatraaker – DnB NOR
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14. Usage of the Mobile Phone in Payments
(categories)
Mobile Contactless Mobile Banking Authentication
 Proximity payments  Using Mobile network  Security Token
Reduce Cash
 “Tap-and-Go”  On-line Channel  Alternative Channel
 NFC technology
for Authorisation
Dag-Inge Flatraaker – DnB NOR
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15. Mobile Payments Market: some Mobile
Payment initiatives 2007
Belgium: operators and
Banksys launch SMS Norway: Telenor and banks
payment launch BankID for
identification & authentication
UK: Vodafone and
Citigroup announce Netherlands: NFC mobile
remittance venture payment pilots (Rotterdam,
Amsterdam)
Germany: NFC
implementation in public
transport in Frankfurt area
Austria: operator-owned
France: NFC pilots in Paybox grows to 300,000
Caen, Strasbourg, mobile payment users
Grenoble, Paris
Croatia: 50% of parking
fees paid by moble
Italy: card issuer phone
CartaSi launches ski
pass payment service
Dag-Inge Flatraaker – DnB NOR
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16. Mobile financial services – an example
 Mobile services as supplement to other channels Mobile services
(on-line banking, telephone banking, branches)
 Complete bank for clients not using PC's
1. Banking services: Account balances, transfers, bill payments,
dialogue with the bank, alerts and incidents
2. Added services: Real estate, Stock trading, Insurance
3. Payments services: Payment for goods and services in the mobile
channel, PC, TV, Payment instrument at point of
sale ("wave and pay")
4. Trusted services: Authentication
Signing
Dag-Inge Flatraaker – DnB NOR
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17. Mobile financial services
Information
e-ID
Account management
e-signature
Bill payments
login Trust Banking Trading
Services
Alerts
Secure Element
Remote Proximity POS
Tickets payments payments Vending
Top Up Tickets
Fast food
Content
Parking
ATM
Source: Mobey Forum
Dag-Inge Flatraaker – DnB NOR
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