Troy: Turkish National Payment Scheme March 2017

Turkey at a glance 2.4 mio POS terminals GDP: $ 718 bio Straddling the continents of Europe and Asia, young and dynamic population 50 Banks 12K branches Asset size: $ 780 bio 211 K bankers 78 mio population (49% under age 30) #1 in Europe 2.4 mio POS terminals #1 in Europe 117 mio debit & 59 mio credit cards GDP: $ 718 bio 18th largest economy of the world

Big market with only International Card Schemes Main Drivers to Build a National Payment Scheme in Turkey Domestic transactions dominates the Turkish card market TRANSACTIONS # 97% Cards 91% transacTION Volume 97% Big market with only International Card Schemes This initiative will have various advantages Limitations for tailor made solutions Absence of local touch Switch and Processing is already done by BKM Lagging to meet stakeholders’ need Economic benefit for stakeholders Local needs first priority Time to market - Reducing fees via a cost sensitive model - Development of products and service aligned with the needs of Turkish market - Faster solution development

Troy implementation phase is completed, roll out started ASSESSMENT IMPLEMENTATION ROLL OUT 2013 - 2014 2015 Current Technology Operating Rules Regulatory Management Strategic Planing Roll out Branding and Marketing Fee Structure

Acquiring completed: Troy is in live since April 2016 POS ATM E-commerce Troy cards are accepted at ~2.4 mio POS terminals and ~50K ATMs

Issuing is the current focus Both magnetic stripe and EMV/contact chip technology are ready to issue as debit, credit and prepaid cards TROY’s PRODUCTS 12 banks* completed all prerequisites for issuing such products May 2017 is to reach 500 K Troy cards To reach 1 million Troy cards at the end of 2017 BANKS *These 12 banks have more than 90% market share for both credit and debit card

Troy acceptance strategy consists of three phases Network Alliance partnership with Discover has already been started and agreement will be signed in April 2017 Current… ...INTERIM... FUTURE... Only domestic usage International acceptance with one scheme Widespread international acceptance Cards with Troy logo is served for domestic use only Members, will be able to serve to their customers cards with Troy logo for domestic use As the first step for international usage, Members are able to co- badge with Discover, who is the preferred partner Next steps for international usage will be co-badging with any international schemes

Troy Contactless products are being handled in 2 phases New Troy products will be introduced to Turkish market in coming months Troy Contactless products are being handled in 2 phases Version 1.0 Version 1.0 –without data storage option- studies commenced with a target milestone of issuing first contactless cards with 2 banks on April 2017 Version 2.0 Version 2.0 –with data storage option that enhances campus and transportation applications- is planned to be live in 2017

Troy has ambitious targets, but we are committed 2017 Mobile payments studies is planned to be executed in 2017 2017 With the R&D Lab, new solutions will be introduced to the Turkish market more fast 2017 Current Co-badge and contactless cards will be ready on April 2017 Both magnetic stripe and EMV/contact chip technology are ready to issue as debit, credit and prepaid cards

Thank you @CenkTemiz1