Samsung PayUS MOR 11-16-2016

Confidential & Proprietary

How Samsung has made Innovation Become Mainstream in Payments

Samsung: A global market leader with the most valuable brand

#1Global Market Share

TV

Smartphone

Refrigerator

Smartwatch

Mobile Phones

- Display Search

- GFK/Traqline

- Strategy Analytics

- Strategy Analytics

- Strategy Analytics

Samsung: A market innovator

Gear VR Family HubGear 360

Samsung PASSSamsung Pay

The evolution of mobile payment

1st iterationBuying things with the phone for the phone• Ringtones• Screen wallpapers

2nd iterationBuying things with the phone in a store• UICC: Isis/Softcard• Embedded SE:

Google Wallet

3rd iterationEmbedded SE• Apple Pay• Google Wallet

4th iteration• Tokenization leads to HCE

NFC (Android Pay, Samsung Pay)

• MST: Samsung Pay ( Mass Acceptance)

Today

Wallets

Everywhere

Encouraging progress in the mobile payment market

INCREASING

CONSUMER

AWARENESS

More

consumers are

aware of

mobile

payment

1

DECREASING

SECURITY

CONCERNS

For all wallets,

security

concerns are

becoming less

of an issue

2

OMNI-

CHANNEL

DEVELOPMENT

Mobile

payment

options are now

available in-

store, in-app

and online

3

EXPANDING

SERVICE

OFFERINGS

Mobile wallets

are expanding

beyond just a

payment

instrument with

value added

services

4

There are still overall market challenges

SLOW

ADOPTION

Consumer

Adoption to

Mobile Wallet is

still low.

Adoption at ~

less than 20%

1

GROWING BUT

OVERALL LOW

CONSUMER

AWARENESS

Consumer

Awareness

takes time and

money

2

SKEPTICAL

MERCHANTS

Merchant sees

little value in

mobile wallets

(today) and are

focusing

exclusively on

their own apps

3

LIMITED

DEVICE

COVERAGE

Partners will

prioritize

platforms with

the largest

market share, or

companies that

are cross-

platform

4

Despite challenges Samsung Pay is used more often than competitors

Source : PYMTS.com

Samsung Pay – All cards in one wallet

Samsung PaySimple. Secure. Works almost anywhere you can swipe or tap your card.

It’s Fast

Secure Tokens via NFC + MST

Accepted almost anywhere because it works with

both existing and new payment technologies

Payment, Gift cards, Private Label cards, Loyalty

cards

Samsung Pay brings value to merchants and

consumers beyond just mobile payments

Digital Wallet Features & Benefits Advantages

• Credit & Debit

• Gift Card

• Membership

• In-App/Web

• Deals, Offers & Coupons

• Samsung Rewards

• Promotions & Sweepstakes

• Geo-Functionality

• Secure

• Simple

• Wide Acceptance (MST)

• Merchant Centric

With MST technology, Samsung Pay is accepted almost anywhere

Magnetic Secure Transmission (MST)

is a technology that emits a

magnetic signal that mimics the

magnetic strip on a traditional

payment card.

MST technology is accepted at

nearly all payment terminals with a

card reader.

What MST means to consumers and merchants

Ease of use: just tap and pay

Availability of acceptance: MST is accepted almost everywhere,

especially in SMBs, Mom and Pop storesConsumers

Merchants

No equipment upgrade required: MST is accepted at non NFC

terminals. Samsung Pay works at many top merchants that don’t

have NFC terminals including some of the largest national grocery

chains and big box stores

Samsung Pay Innovation – Value Added Services

Membership Deals and Offers Gift cards

QSR

Movie Grocery/

Gas-Conv

Mass MerchantSpecialty

Pharma

• Sales

• Card-linked offers

• Coupons and deals

• Save-To-Pay

• Buy-One-Get-One “BOGO”

• Allow card loads not in store

Rewards

• Earn Points Per Transaction

• Achieve Monthly Status Tiers

• Redeem Points for Rewards

Samsung Pay – Continuous Innovation:In-app and in-browser solutions

75%

13%

12%

Online commerce

Desktop browser Mobile Browser In-app

Online commerce is growing rapidly across channels

Direct in-app partnerships

Mobile & desktop browser solutions

Cloud Wallet Partnerships

&

Additional Tier 1 merchants in H1 2017

27% annual growth Emerging browser

checkout standards

9% annual

growth

9% annual

growth

5%

7%

14%

16%

26%

32%

No Facebook log-in option

Confusing error messages

Unable to modify order

Back button doesn't work

Too many form fields

Fill in same information twice

Samsung Pay – Continuous Innovation:W3C browser checkout

Online checkout remains a pain point for consumers, who abandon their shopping carts

during cumbersome checkout processes

1%

2%

3%

16%

22%

26%

Smartphone

Tablet

Desktop

Cart conversion

Visit Conversion

Most frustrating part of online checkout experience Online conversion rates

Source: VWO eCommerce Cart Abandonment Report, 2016

Samsung Pay – Continuous Innovation:W3C browser checkout

W3C Improves consumer experience to drive sales

– WWW standards committee

• Reduce friction and cart abandonment

• Eliminate checkout forms and payment bugs

• Leverage disparate, secure payment

methods

• Standardize payment flows

Merchant benefits

Consumer benefits

• Reduce frustration

• Streamline user checkout flow

• Links to user’s preferred payment method

A web API that allows merchants to

easily accept payments from

different payment methods with

minimal integration. User agents

(e.g., browsers) will facilitate the

payment flow between merchant

and user.”

-W3C (web standards

organization)

“

Samsung Pay – Continuous Innovation:Samsung PASS

Samsung Pass, now available on Samsung Galaxy S8 and S8+, enables Simple & Secure

biometric authentication through iris and fingerprint in a fully integrated way.

Simple

Secure

Integrated

Samsung Pay – Innovation beyond 2017Internet of Things

Samsung Pay – Innovation beyond 2017

Galaxy S8

Thank you