THE FUTURE OF

CURRENCY
PAYMENTS &
ABRIDGED VERSION
OCTOBER 2014
2
WHAT WELL COVER

Introduction

Trend drivers

New ways to pay

New forms of value exchange

New payment players

Appendix: More about our experts and influencers



The following is an abridged
version of JWT's Future of
Payments & Currency report. To
download the full version, please visit
JWTIntelligence.com.
3
INTRODUCTION

It seems that suddenly most aspects of the established payments system are on the verge of disruption.
Apple Pay has just arrived, Facebook is reportedly mulling peer-to-peer payments, more merchants are
accepting bitcoin, banks are testing payment-enabled wristbands or creating pay-by-tweet schemes, and
the ranks of fintech innovators are growing.

This report examines the rise of new ways to pay and new forms of value exchange, along with new
players in the payments space, and what it all means for brands.





Never in the history of the payments industry has there been a time
of such disruption and opportunity across regions. Digital
technologies will upset the competitive order and the role that
payments play both in the operations of businesses and in the daily lives of
consumers.

BCG PERSPECTIVES, Global Payments 2014, Sept. 17, 2014

4
METHODOLOGY

Our trend reports are the result of quantitative, qualitative and desk research conducted by
JWTIntelligence through out the year. For this report, we also interviewed several experts and influencers
in payments and currency.*
Deborah Baxley,
consulting services
principal, Capgemini
Financial Services


Rob Girling,
co-founder and
principal, Artefact
EXPERTS
AND
INFLUENCER
S
Bill Maurer,
dean of social sciences and
professor of anthropology
and law, UC Irvine
Craig Erickson,
creative director and
designer, Artefact
*See Appendix to learn more about these experts.
While technology is opening up myriad possibilities in payments and forms of
currency, the mobile wallet and other innovations have taken off in fits and
starts. Skeptics say consumers have little incentive to adopt new systems. But
Millennials are ushering in a new mindset: Theyre much less attached to the
status quo than their elders and far more open to alternative ideas.
TREND DRIVERS
TREND DRIVERS

MILLENNIAL MINDSET

DISTRUST IN FINANCIAL
INSTITUTIONS

TECHNOLOGY

DATA BREACHES

TRICKLE-UP INNOVATION

HEDGE AGAINST
ECONOMIC CHAOS

NICK BILTON,
The New York Times
TREND DRIVERS

MILLENNIAL MINDSET

DISTRUST IN FINANCIAL
INSTITUTIONS

TECHNOLOGY

DATA BREACHES

TRICKLE-UP INNOVATION

HEDGE AGAINST
ECONOMIC CHAOS

TREND DRIVERS

MILLENNIAL MINDSET

DISTRUST IN FINANCIAL
INSTITUTIONS

TECHNOLOGY

DATA BREACHES

TRICKLE-UP INNOVATION

HEDGE AGAINST
ECONOMIC CHAOS

NICK BILTON,
The New York Times
TREND DRIVERS

Image credits: bitcoin; Apple
MILLENNIAL MINDSET

DISTRUST IN FINANCIAL
INSTITUTIONS

TECHNOLOGY

DATA BREACHES

TRICKLE-UP INNOVATION

HEDGE AGAINST
ECONOMIC CHAOS

NICK BILTON,
The New York Times
TREND DRIVERS

MILLENNIAL MINDSET

DISTRUST IN FINANCIAL
INSTITUTIONS

TECHNOLOGY

DATA BREACHES

TRICKLE-UP INNOVATION

HEDGE AGAINST
ECONOMIC CHAOS

Recent high-profile data breaches have severely impacted consumer
confidence in the payments system and motivated retailers to seek more
secure tools. In the U.S., Neiman Marcus, Home Depot, Supervalu and, most
notably, Target are among the prominent businesses to have suffered data
breaches. These have compromised millions of credit and debit cards, with
Targets breach affecting up to 110 million people.

Fear of fraud will both drive adoption of new systems and inhibit some
consumers from embracing relatively untested systems.
Image credit: businessjournalism.org 10
NICK BILTON,
The New York Times
TREND DRIVERS

With less competition and fewer regulatory restrictions, emerging markets
serve as fertile testing grounds for new payment methods and new players.
And with many consumers in these markets unbankedoutside the
commercial banking systemalternative systems like mobile money are
flourishing.

Telecoms have led the way when it comes to sending and receiving payments
via basic cellphones. Safaricom, in partnership with Vodafone, launched the
most successful of these services in Kenya in 2007. Nearly two-thirds of
Kenyans now use M-Pesa, and 43% of the nations GDP moves through it.

The success of M-Pesa and similar services is prompting new ideas in
developed markets. In the U.S., mobile carriers T-Mobile and Sprint have both
entered into the mobile money space.
Image credits: M-Pesa; T-Mobile
MILLENNIAL MINDSET

DISTRUST IN FINANCIAL
INSTITUTIONS

TECHNOLOGY

DATA BREACHES

TRICKLE-UP INNOVATION

HEDGE AGAINST
ECONOMIC CHAOS

Digital technology is opening up new ways to pay, many of them more seamless
and secure than traditional methods. Foremost among these is the mobile
walletusing smartphones to make purchases or peer-to-peer paymentsbut
various other ideas are coming to fruition, including wearables (tapping a
watch, scanning a ring, etc.) and biometric technology like pay-by-fingerprint.
NEW WAYS TO PAY
NICK BILTON,
The New York Times
MOBILE WALLETS

Broadly speaking, mobile wallet users swipe, tap, wave or otherwise prompt a smartphone to pay after
initial setup (providing credit card or bank account information and potentially linking to various loyalty
programs). Technologies vary but include near field communication (NFC), Bluetooth and bar code
systems. For people with little to no access to commercial banks, the advent of mobile moneytexting to
send or receive payments using basic phoneshas been a godsend.


NEW WAYS TO PAY
61
MILLION+
Active mobile money
accounts worldwide as
of June 2013*
*Source: GSMA
Image credit: Alipay

NICK BILTON,
The New York Times
MOBILE WALLETS
(contd.)


NEW WAYS TO PAY
61
MILLION+
Active mobile money
accounts worldwide as
of June 2013*
Image credits: Apple; Amazon; Google
NICK BILTON,
The New York Times
MOBILE WALLETS
(contd.)


NEW WAYS TO PAY
61
MILLION+
Active mobile money
accounts worldwide as
of June 2013*
Image credits: PayPal; Kuapay; Softcard
NICK BILTON,
The New York Times
MOBILE WALLETS:
PEER-TO-PEER
PAYMENTS


NEW WAYS TO PAY
Active mobile money
accounts worldwide as
of June 2013*
Image credits: Dwolla; Venmo; Ribbon; Paym
Various startups are looking to digitize peer-to-peer transactions, mostly by way of
mobile apps. Business Insider estimates the global volume of P2P payments at more
than $1 trillion annually, with only a sliver made through mobile today.


NICK BILTON,
The New York Times
BRANDED APPS


NEW WAYS TO PAY
Active mobile money
accounts worldwide as
of June 2013*
As banks, tech giants and new entrants vie to dominate in the mobile wallet space, Starbucks
and other brands are creating their own apps, enabling frequent customers to pay
seamlessly. In some casesnotably with taxi services like Uber and fast food brandsthe apps
let users both order and pay, reducing wait times or hassle. In other cases, as with Starbucks,
the apps draw users by folding in loyalty rewards or coupons. Brands benefit by collecting
extensive customer data and drawing in impatient, cash-averse Millennials.
Image credit: Starbucks
NICK BILTON,
The New York Times
NEW WAYS TO PAY
Active mobile money
accounts worldwide as
of June 2013*
Image credit: MyCheck
DINE AND GO


Some see a role for payment apps beyond the fast food sphere, with patrons at
bars and restaurants harnessing mobile to more quickly and easily settle their
checks. Customers can tap, pay and leave without flagging down an employee;
from the merchants point of view, this frees up staff and potentially opens up
tables more quickly.

MyCheck, which has a
partnership with PayPal,
launched its app in
Israel in 2012 and has
moved into a few cities
in the U.S., the U.K.
and Brazil.
NICK BILTON,
The New York Times
WEARABLES


NEW WAYS TO PAY
Active mobile money
accounts worldwide as
of June 2013*
WearablesInternet-connected devices worn on the bodypromise an even more seamless
method of payment than mobile phones. The vision is that consumers will simply hold up a
watch, tap a wristband or perhaps issue a verbal instruction to Google Glass.

Image credit: Eaze
Glasses: Some mobile-payment players are betting on consumers paying with a gesture, tap
or voice command using Glass or other high-tech specs. Eaze, a startup pushing the idea of
Nod to Pay, links to two bitcoin payment systems and plans to add fiat currencies.
NICK BILTON,
The New York Times
WEARABLES
(contd.)


NEW WAYS TO PAY
Active mobile money
accounts worldwide as
of June 2013*
Image credits: Apple; Artefact
Watches: Several payment apps work in tandem with
early entrants on the smartwatch market. These
include PayPals app for Samsungs Gear 2 and
WearBucks for owners of Android Wear watches.

Wristbands: For people willing to link up credit or
debit card information, smart wristbands may have a
long-term role to play as a way to make fast
purchases at events like music festivals or
destinations like theme parks.
NICK BILTON,
The New York Times
WEARABLES
(contd.)


NEW WAYS TO PAY
Active mobile money
accounts worldwide as
of June 2013*
Image credit: Barclaycard
NICK BILTON,
The New York Times
BIOMETRIC
PAYMENTS


NEW WAYS TO PAY
Image credits: PayPal; Biyo
The Samsung
Galaxy S5
enables
fingerprint
payment via
PayPals app
To improve security, businesses are starting to adopt systems that identify and
authenticate people based on physical or behavioral characteristics: iris scans, digital
fingerprints, voice prints, vein or facial maps and so on. The method is also more
convenient for users than typing passwords, although privacy will be a concern for
some. Fingerprint recognition, the most widely used biometric system thus far, will
become increasingly common now that Apple is embracing mobile payments.
NICK BILTON,
The New York Times
EMAILS, TEXTS
AND TWEETS


NEW WAYS TO PAY
Image credit: Popmoney
Today more and more companiesfrom startups to financial institutions and tech giants
like Googleare enabling person-to-person payments, bill payments and product
purchases via a simple message. For instance, French bank Groupe BPCE will enable
people to tweet money to one another via its S-money mobile-wallet subsidiary, thanks
to a partnership with Twitter.
NICK BILTON,
The New York Times
WHAT IT MEANS
FOR BRANDS


NEW WAYS TO PAY

Prepare for a cash-limited future

Cater to Millennials

Compel consumers to opt in

Open a personalized marketing

channel

Security and privacy above all

A growing array of alternative currenciesranging from cryptocurrencies to
local currencies, branded currency and social media currencyis supplementing
or even replacing conventional money.
NEW FORMS OF CURRENCY
Money is always only a human creation, kind of a collective illusion Its something we
invent as societies and states and communities, and we can reinvent it if we want to.


BILL MAURER, dean of social sciences and professor of anthropology and law, UC Irvine

NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
NON-FIAT
CURRENCIES

Dollars, pounds, euros, pesos, yenthese are all fiat currencies, or legal tender. But even
with the backing of a government, their value exists only by popular consent. So
increasingly people are thinking more creatively about what money can be, from local
currencies to cryptocurrencies like bitcoin, which can function just as wellif not better, in
some instances as a medium of value exchange.

Local currencies are undergoing a
resurgence thanks to the economic crisis
and rising income inequality. A local
currency can help to mitigate the impact
of a troubled economy, stimulating
growth by increasing demand for local
goods while keeping money from flowing
out of the area.

Image credit: Tilt
Local currencies in
circulation include
the Brixton Pound
and Bristol Pound in
the U.K., the
Capivari in Brazil
and COjacks in
Colorado.
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
CRYPTOCURRENCIES

In the last year or so, a number of major businesses have started accepting bitcoin, most via
bitcoin middlemen, lending the novel currency greater credibility. And there are now more
than 250 bitcoin ATMs worldwide. Still, most consumers remain fairly skeptical about
bitcoin.

NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
CRYPTOCURRENCIES
(contd.)


Bitcoin pros and cons: While they have serious downsides, cryptocurrencies
appeal to users for a number of reasons. They allow people to send and receive
money around the world instantly, without the need for banks as intermediaries.
This means little to no fees for processing transactions, as well as greater privacy,
although cryptocurrencies are not anonymous, as is widely believed. For people
with little trust in government and the banking system, cryptocurrency provides a
way to transact without relying on either.
38%
of U.S. and U.K.
Millennials are interested
in using currencies such as
bitcoin, vs. 17% of Gen
Xers and 7% of Boomers
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
CRYPTOCURRENCIES
(contd.)


Experts place the number of businesses accepting bitcoin as high as 80,000
worldwide, a wide majority of which are small merchants. But some bigger
players across categories are earning buzz by welcoming the currency, in some
instances experiencing an initial boost in sales. Most use Coinbase or another
bitcoin middleman, shielding themselves from risk while paying much less in fees
than with credit card transactions.
Image credit: Life on Bitcoin
This crowdfunded
documentary
follows a newly
married couple
trying to get by on
bitcoin alone.
Prominent businesses
accepting bitcoin:

Dish Network

Dell

United Way

Expedia

Overstock.com

The Sacramento
Kings

NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES


Social media as currency: Brands commonly offer incentives in exchange for
Facebook likes or Twitter follows. Now, with social media ingrained into the daily
lives of many, some are evolving this idea by enabling consumers to acquire
products or discounts with social media actions in lieu of cash.
Image credit: Carlsberg

Danish beer company
Carlsberg partnered with
bars in Denmark to
extend happy hour for
drinkers who posted
social media photos with
the hashtag
#HappyBeerTime
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES
(contd.)



Tweet-to-pay pop-up shops:
These temporary locations
provide unique experiences that
consumers are keen to capture
and then share with their
followers, increasing brand
engagement and stimulating
word-of-mouth.

In London, Weight Watchers
created the Feel Good Caf,
where visitors paid with social
media shares. And Marc Jacobs
launched a Tweet Shop where
guests received free gifts based
on their social posts.
Image credit: Weight Watchers
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES
(contd.)



Vending machines: Along with pop-up shops, Internet-connected vending
machines are becoming a go-to source for accepting social media actions
for payment.
Image credits: Walkers; Old Navy
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES
(contd.)



Incentivizing good behavior: Some brands have turned positive actions on
the part of consumers into a form of currency.
Image credits: Anthon Berg; McDonalds

Chocolate brand Anthon
Berg set up the pop-up
Generous Store, where
customers could earn boxes
of chocolate by pledging to
do good deeds, and
McDonalds let customers
pay with recycled cans.
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES
(contd.)



Branded currency: For years, loyalty has translated into a currency of sorts, with
merchants offering Buy 10, get 1 free, airlines awarding seats to frequent flyers
and so on. These loyalty schemes, including gift cards and coupons, account for
more than $165 billion in purchasing power in the U.S. alone. With that much value
in circulation, some brands are reframing these offers, shifting brand loyalty into a
currency in a more traditional sense. And thanks to smartphones, disparate
programs are becoming more manageable for consumers, who can readily cash in.
Image credits: Amazon; Kik; McDonalds
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES
(contd.)



Products as currency: Brands have been getting creative with the age-old practice
of barter, turning their goods into currency as part of social responsibility initiatives
or novel marketing ploys. For telecom brands, mobile minutes or data can serve as
currency for consumers hungry for more phone access.
Image credits: KitKat; Vodafone
Social responsibility: To help boost tourism in a
region of Japan that was devastated by the 2011
earthquake and tsunami, Nestl is enabling
travelers to use special-edition KitKat packs as
travel passes on the Sanriku Railway.
Mobile airtime/data: In Egypt, Vodafone worked with
JWT to introduce airtime as a form of currency. Small
shops or kiosks in the country often substitute low-value
items like gum and candy for small change; in a twist on
this practice, Vodafone created mobile-top-up cards in
small denominations, designing them to fit in a cash
register. These Fakka (small change) cards drove an
average 7% rise in revenue per customer.
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
ALTERNATIVE BRAND
CURRENCIES
(contd.)



Ad campaigns: Some brands have turned their products into currencies in ad
campaigns, framing the emotional value of their goods in a new light. To show that
Heineken opens your world, the beer-maker tasked a man with getting from Inner
Mongolia back home to Thailand using nothing but Heineken and a little bit of wit.
Image credit: Heineken
NEW FORMS OF CURRENCY

NICK BILTON,
The New York Times
WHAT IT MEANS
FOR BRANDS

Barter reinforces value

Drive engagement with social currencies

Turn loyalty into instant currency

Embrace alternative currencies

Disruption in the payments and currency sphere is opening the way for new
players to act as intermediaries between consumers and their money. Well see
consumer interaction with banks and other traditional financial institutions
wane as newcomers offer innovative or compelling solutions. Consider that 73%
of Millennials would be more excited about a new offering in financial services
from Google, Amazon, Apple, PayPal or Square than from their own nationwide
bank, according to Viacoms Millennial Disruption Index.
NEW PAYMENT PLAYERS
NEW PAYMENT PLAYERS
NICK BILTON,
The New York Times
BRANDS AS
FINANCIAL
INTERMEDIARIES

Mobile operators, tech giants and others are making forays into the financial space, taking
on roles traditionally filled by banks and other financial services companies. By doing so,
these companies can track spending patterns and behavior, as well as reduce interchange
and processing fees. The mobile wallet is a key driver. Mobile payment transactions
facilitated by non-banks will increase from 1.1 billion in 2012 to 7 billion in 2015,
according to a forecast by Capgemini and The Royal Bank of Scotland.

72%
of North American
Millennials would be likely
to bank with at least one
nonfinancial services
company if it offered
banking services*
*Source: Accentures 2014 North America Consumer Digital Banking Survey
Image credits: Millicom; T-Mobile
NEW PAYMENT PLAYERS
NICK BILTON,
The New York Times
BRANDS AS
FINANCIAL
INTERMEDIARIES
(contd.)



Image credits: Google; Tech for Korea

Tech companies and
messaging services are well
positioned to integrate
payments systems. Google
now offers free P2P
payments through Gmail or
its Wallet app, and South
Koreas KakaoTalk recently
launched the PayPal-like
KakaoPay.
NEW PAYMENT PLAYERS
BRANDS AS
FINANCIAL
INTERMEDIARIES
(contd.)



Image credits: Tesco; Walmart
Retailers: Retailers have long provided
financial services, but some are expanding
more assertively into the space. Both
Marks & Spencer and Tesco recently
started offering personal checking
accounts in the U.K.

Walmart has been targeting the
underbanked. This year, the retailer
launched a money transfer service
enabling customers to send funds to or
from any Walmart in the U.S. and Puerto
Ricoand partnered with Green Dot Corp.
on GoBank, a mobile checking account
with a linked debit card.

NEW PAYMENT PLAYERS
FINTECH INNOVATORS



Image credits: Circle; Plastc; Ripple; Square; Stripe; WorldRemit
The payments space is moving at incredible speed, with new technologies
and startups quickly making headway while most traditional institutions lag
in updating clunky legacy systems. Innovative fintech startups include the
bitcoin bank Circle; Plastc, which is creating a credit card-shaped digital
device; and Ripple, whose open-source, distributed-payment protocol lets
users make instant payments with any currency.
NEW PAYMENT PLAYERS
WHAT IT MEANS
FOR BRANDS

Boost your primary business with financial services

Pursue the underbanked opportunity

Utilize and build your network

MORE ABOUT OUR EXPERTS AND INFLUENCERS
Deborah Baxley, consulting services principal, Capgemini Financial Services
Baxley, who joined Capgemini in 2010, is an international payments consultant with 20 years of consulting
experience. She has performed strategy work in 14 countries for eight top global issuers and payment brands, two
top payment processors and three top bank card acquirers, and has advised companies on product direction and
competitive positioning. She was the IBM partner responsible for strategy and change consulting for financial
services in North America and led IBMs credit card strategy in China. She is current secretary and former chair of
the Smart Card Alliance Payments Council.

Craig Erickson, creative director and designer, Artefact
Ericksons experience spans large corporate environments and small startups, including data visualization, product
UX, typography, games, advertising and identity. Prior to joining Artefact, a technology product design and
development company, he was co-founder and creative director of design and development studio SectionSeven. At
Artefact, hes been instrumental in the design of award-winning product concepts, from the connected home of the
future to patient-centered decision tools for physicians.
Rob Girling, co-founder and principal, Artefact
Girlings career started at Apple after he won the 1991 and 1992 Apple Student Interface Design Competition for
concepts around mobile and personal computing. He then spent 10 years at Microsoft, obtaining several patents and
making innovative contributions to Microsoft Office and Microsoft Games, eventually becoming design manager for
the user interface, brand and user experience of Windows XP. After leaving Microsoft in 2002, Girling worked as a
senior interaction designer for IDEO and as the lead game designer for Sonys MAG action game. He co-founded
Artefact, a technology product design and development company, in 2006.
Bill Maurer, dean of social sciences and professor of anthropology and law, UC Irvine
A cultural anthropologist, Bill Maurer serves as director of the Institute for Money, Technology and Financial
Inclusion and was founding co-director of the Intel Science and Technology Center for Social Computing. He
conducts research on law, property, money and finance, focusing on the technological infrastructures and social
relations of exchange and payment. Maurer has particular expertise in emerging, alternative and experimental
forms of money, payment and finance, their legal implications, and how they have the potential to challenge the
definition and nature of money itself. He received his B.A. from Vassar College and his M.A. and Ph.D. from Stanford
University.
THANK YOU
J. Walter Thompson: J. Walter Thompson, the worlds best-known marketing communications brand, has been
inventing pioneering ideas for the past 150 years. Headquartered in New York, JWT is a true global network with
more than 200 offices in over 90 countries, employing nearly 10,000 marketing professionals. JWT consistently ranks
among the top agency networks in the world and continues a dominant presence in the industry by staying on the
leading edgefrom hiring the industrys first female copywriter to developing award-winning branded content today.
For more information, please visit www.jwt.com and follow us @JWT_Worldwide.
JWTIntelligence: JWTIntelligence is a center for provocative thinking that focuses on identifying shifts in the global
zeitgeist. Its aim is to bring the outside into help inspire ideas beyond brand, category and consumer conventionsand to
identify emerging opportunities so they can be leveraged for business gain. As a part of JWT, the worlds best-known
marketing communications brand, JWTIntelligence has conducted trends research and analysis across categories and
geographies for nearly a decade. For more information, please visit www.jwtintelligence.com and follow us
@JWTIntelligence.
www.jwt.com | @JWT_Worldwide
www.jwtintelligence.com | @JWTIntelligence
www.anxietyindex.com | @AnxietyIndex
CONTACT: THE FUTURE OF PAYMENTS & CURRENCY
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JWTIntelligence
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