Download a free copy from our website at www.firstpartner.net. Omni-channel commerce is becoming an imperative for retailers as consumers increasingly mix on-line, mobile and in-store product selection & purchasing. As a result, the traditional Point of Sale payment model is transforming. This Market Map summarises the increasing convergence and interchangeability between PoS, m-commerce & e-commerce payment models and the complex value chain facilitating it.

1. Omnichannel strategy
includes a range of
innovative in store
technologies, apps and
early adoption of
Apple Pay
97%
of US consumers aged
18-29 actively use a
smartphone while
shopping in Store 2
Sources:
1) Accenture The Seamless Consumer Retail Survey Feb 2014
2) Thrive Analytics & Local Search Association
3) Alibaba Group satement Oct 2014
4) eMarketer estimate Aug 2014
5) Juniper Research NFC Mobile Payments 2014-2019
Image: Shopkick
Initiatives include apps to
enhance in-store experience &
trials of virtual stores, loyalty
linked mobile payments,
beacons & a Goggle Glass
shopping app
Savvy Consumers Blend Online, Offline & Mobile Purchasing
Retailers Rush to Omnichannel
78%
72% Buy digitally after browsing in
store
516 Million
mobile users of NFC
contactless payment
services by the end of
2019, up from 101 million
in 2014 5
Active Alipay mobile wallet users190 3
Million
estimated US Smartphone consumers
redeeming a mobile coupon for online or
offline shopping in 2014
Concept store to promote
Hointer’s retail platform. Items are
chosen via mobile app & robot
pre-picked to try in- store.
Self-service payment via tablet
based kiosk in the changing booth
Introduction
Omni-channel commerce is becoming an
imperative for retailers as consumers increasingly
mix on-line, mobile and in-store product selection
& purchasing. As a result, the traditional Point of
Sale payment model is transforming. This Market
Map summarises the increasing convergence and
interchangeability between PoS, m-commerce &
e-commerce payment models and the complex
value chain facilitating it.
Examples & Trends
Enriching the Transaction
The Emergence of “Hybrid” or “Online 2 Offline” (O2O) Payments
Engaging the Consumer
Branded Loyalty Shemes
Combining payment choice & convenience with discovery, recommendations & incentives
Proximity Marketing
Transaction Processing
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Richard Warren
Helen Motha
rwarren@firstpartner.net
+44 (0) 870 874 8700
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Copyright FirstPartner Ltd 2015
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Transaction Processing
Card Based
Card & Debit Networks
Acquirers
Retail Banks
Retail banks still
play a key role as
the ultimate
source of
consumer funds in
developed
markets and as
card issuers
Mobile Wallet Platforms
Enablers, Technology & Service Providers
Other
Data Driven Marketing Platforms & Service Providers
Cross Channel Data Tracking,
Analytics & Customer Profiling
Loyalty & Couponing
Industry Standards Bodies
NFC Forum
Sim Alliance
Mobey Forum
GSMA
OMA
ETSI
Mobile Payments
Payment Processing
Mobile Money Platforms
Token Service Providers
Mastercard Digital Enablement System
Visa Token Service
Amex
Most Leading PSPs & Processors
Processing Platforms & Service Providers
4
59Million
Transport as a Consumer Catalyst?
Stored Value
-PayPal
-Skrill
-StarBucks
-M-Pesa
Card on File
- Amazon
- iTunes
- Visa Checkout
Card Linked
- Apple Pay
- Samsung
- Google Wallet
- Vodafone Wallet
-MasterPass
-v.Me
ACH Based/Bank Acc. Linked
-MCX
-Zapp
-WeChat
-iDeal
-Bancontact/ Mister
Cash
Virtual/Crypto Currency
- Blockchain
- bitinvest
- cryptex
- xapo
Wallets & Apps
Consumer Payment Services
Consumer Payment Services
How it Works: Apple Pay
How it Works: MCX
PayPal & WeChat: Online 2 Offline Focus:
Merchant
PayPal
Consumer Funding
(PayPal balance/card/bank)
$
Check in:
ePoS
$
Beacon
or App
PayPal & WeChat combine
“online” payment experiences
with physical transactions.
PayPal uses beacons or app
generated codes to check in &
facial authentication. WeChat
integrates into the retailers PoS
through an API.
Crypto Currencies At Retail
merchants to use Bitcoin online and at Point of Sale. While
processors are attracting venture funding, major value fluctuations
& fraud risks will limit widespread consumer adoption.
As regulators work to determine the
legitimacy & role of crypto currencies, a
number of bitcoin wallets , debit cards &
processors are allowing consumers &
US retail consortium MCX launches its
CurrentC mobile payment & loyalty scheme
in 2015. Backed by merchants including
Walmart, Target & Best Buy, payment
processing is via a dedicated ACH network
operated by FIS to speed settlement & lower
transaction costs. QR codes will be used to
maximise handset compatibility but MCX
hints NFC & beacons may also be supported.
Apple Pay has re-energised expectations
for NFC payments. Processing is via existing
card infrastructure with leading schemes,
issuing banks & acquirers supporting.
TouchID biometric authentication coupled
with simple NFC payment, Apple Watch
support & EMVCo standard tokenisation
sets the bar for frictionless, secure online &
offline mobile payments.
Consumers need a compelling use
case to adopt a new payment
paradigm
Transport has been a major enabler
of contactless & remote payment
uptake as rapid transactions are of immediate value to traveller &
operator.
1
of US consumers buy in
store after browsing
digitally
Card Linked Marketing
Authentication Technologies
Securing Accounts & Transactions
Secure Elements, HCE & Tokenisation:
Token-xxxx-xxxx-xxxx-xxxx-xxx
Merchant
Token Service Provider
Card Issuer
Acquirer
Card Network
$
a.name
1234-5678-9012-3456
01-12-2016 789
Token Vault
EMV cards & early NFC services store
encrypted account credentials & payment
apps in a physical Secure Element (SE). Host
Card Emulation (HCE) uses Tokenisation &
executes the application on the host device.
Tokenisation replaces real
account details with an
encrypted token which is held
on the device & passed to the
merchant. True account
details are stored & tokens are
generated & matched in a
secure, managed vault.
Biometric Authentication:
Brought to the forefront by Apple Pay, aims to replace PINs with a frictionless
yet accurate & reliable user experience.
- Fingerprint
- Vein scanning
- Facial recognition
- VoiceRecognition
- Retina Scanning
- ECG signature
Point to Point Encryption (P2PE):
Encrypts payment credentials at point of sale so they are never transmitted or
stored “in the clear” by merchants.
Fraud Detection
TheTransactionValueChain
Mass Transit
Taxi Payment
Mobile Money
Emerging market mobile
money & developed market
P2P schemes support in store
payments
Point of Sale
Mobile Wearables
Smart watches and
glasses with biometric
authentication or phone
pairing & basic NFC bands
for low value payments
promise a simple user
experience
- Swatch
- Apple Watch
- Samsung Gear/PayPal
- Gemalto mini tag
- Barclays bPay
Payment Card
Will continue to account
for the majority of non
cash transactions in
developed markets for
the foreseeable future
Instore, on-line & mobile
experiences merge as consumers
“Hybrid” Payments
pick & mix how they browse,
select and buy
e and m-commerce
Click & collect & in app
payments for physical goods
APIs Open APIs are seen by some payment schemes & PSPs as important enablers, maximising the opportunity for developers to integrate payment & deliver seamless purchasing experiences
Device/Card Enablement & Management
Coupon/Reward Distribution
Retailer & Social Media Apps
Merchant Acceptance
Retail Payment Terminals Mobile Point of sale (MPoS) PoS Systems & Software E & M Commerce PlatformsE & M Commerce PSPs/Gateways
Connectivity Technologies
BLE BeaconsQR CodeNFC/Contactless Audio/Light SMS IP
192.11.222.3
Mag Stripe
Issuing Banks Mobile Network
Operators
ChallengersRetailers Other ProcessorsCard Schemes
Bank Transfer Based
Interbank ACH Scheme Operators
MCX (US) ZAPP (UK)
Mobile Network
Carrier Billing
Widely used for virtual goods,
processing via the phone bill is
being tried for retail
Mobile Money
Can support retail payments with
processing & settlement via the
operator mobile money network
Other Processors
Retailer Prepaid/Loyalty
Stored Value
Bitcoin Processors
Loyalty & Proximity Marketing
Having implemented multiple
initiatives from single ordering &
supply chain systems via staff
training to JLAB retail tech business
incubator, John Lewis believes 66%
of its customers are omnichannel
Innovative integration with
social media channels, use
instore tablets & integration
of fulfilment systems
EMVCo
PCI
Global Platform
Payment Security
FIDO Alliance
FirstPartnerMarket
Insight
Proposition
Development
Product
Launch
Customer
Engagement
The Transformation of Retail Payments
FirstPartner
EVALUATIO
N
C
O
PY
Secure Elements, Trusted
Service Managers & HCE
Issuing Platforms
Internet & Tech
Companies