Mastercom® Dispute Resolution Expedite resolution, reduce chargebacks and enhance the customer experience September 4, 2019 Colin McGrath Cyber & Intelligence Solutions – North America

Mastercom dispute resolution $12B in losses for US issuers due to chargebacks1 Over 76% of US consumers contact their bank instead of the merchant for a refund1 US issuer aggregate cost due to dispute-related customer service calls is $2B per year3 Chargebacks are a significant and growing problem for financial institutions and merchants Financial Institutions $19B in US eCommerce losses and costs due to chargebacks1 US merchants see friendly fraud is 34% more prevalent in digital vs. POS channel1 Chargebacks on avg. cost US merchants $2.48 to $2.82 –which is about 2X more than the transaction1 75% of merchant fraud is a result of friendly fraud2 Investigating and resolving a single dispute or chargeback can cost $20-$254 ©2019 Mastercard. Proprietary and Confidential Merchants 1. JAVELIN. THE CHARGEBACK TRIANGLE. 2018. 2. Aite. Global chargeback landscape rapidly evolving. 2018. 3. Julie conroy, aite. Tackling retail fraud with technology.techtrends.com. 2018. 4. Mercator advisory group. Credit card dispute management: transactions in the billions bring expectations in the missions. 2018.

Mastercom dispute resolution More digital transactions leads to more false declines, friendly fraud and chargebacks Consumer “Friendly” Fraud False Declines Chargebacks 63% of US cardholders decreased patronage with retailer after experiencing at least one decline because of suspected fraud1 Merchants lose out on $118 billion in sales due to false declines each year3 US Friendly fraud rose 41% in the last two years4 Nearly 50% of US chargebacks experienced by digital merchants are thought be a result of friendly fraud1 US friendly fraud victims doubled in 2018 – equaling 15% of all fraud victims4 For every $1 disputed, US merchants and issuers incur $1.50 more in chargeback costs1 Operating costs from chargebacks impact profits up to 20%2 $2.4 billion in combined operational costs of chargebacks – equaling 20% of US issuer losses1 ©2019 Mastercard. Proprietary and Confidential 1. JAVELIN. THE CHARGEBACK TRIANGLE. 2018. 2. AITE. THE GLOBAL CHARGEBACK LANDSCAPE: RAPIDLY EVOLVING. 2018. 3. chargebacks911. chargeback stats for 2017. 4. American banker. Friendly fraud is on the rise. 2019.

Mastercom dispute resolution Warranting continued investment and innovation in chargeback management $20-$25 of an issuer’s budget goes to the investigation and resolution of a single dispute2 Issuer and merchant costs to manage disputes continue to rise Acquirers and processors are charging merchants to service chargebacks $31 Billion 75% of total fraud losses are from chargebacks and friendly fraud3 High customer frustration with dispute experience and false declines Explosive growth in associated friendly fraud costs in total US financial institution and merchant losses due to chargebacks1 Rapid payment innovation and new market entrants focused on consumer experience Digital giants driving industry change for brand-agnostic solution 76% of US cardholders contact their bank instead of the merchant for a refund1 1 JAVELIN. THE CHARGEBACK TRIANGLE. 2018.. 2. Mercator advisory group. Credit card dispute management: transactions in the billions bring expectations in the missions. 2018. 3. Aite. Global chargeback landscape rapidly evolving. 2018.

Mastercom dispute resolution Mastercom’s three-step strategy to reduce chargebacks in the payments ecosystem 1 2 3 Check for invalid chargebacks Consolidate disputes Collaborate with merchants ©2019 Mastercard. Proprietary and Confidential Mastercom rules engine helps to remove friction caused by invalid chargebacks Mastercom Claims Manager merges dispute processes into one platform Mastercom Collaboration bridges the gap between merchants and issuers

Mastercom dispute resolution Manage disputes from end-to-end throughout the lifecycle MASTERCOM CLAIMS MANAGER Creates and tracks disputes from end-to-end throughout the entire lifecycle 1 2 Enables dispute initiation of chargebacks, re-presentments and retrieval requests in place of customer-supported back-office systems USER INTERFACE API INTEGRATION TRANSACTION RESEARCH DISPUTE INITIATION DOC & NON-DOC DISPUTES CLEARING INTEGRATION ISSUER ACQUIRER Manages all dispute cycles within single “claim” until closure RULES ENFORCEMENT F&LD INTEGRATION REVERSAL/FEE COLLECTIONS FORMS AUTOMATION DASHBOARD & REPORTING Integrates with customer platforms to provide multiple access options via user interface or Mastercard API 4 3

Mastercom dispute resolution Streamline disputes from initiation to close Mastercom Claims Manager: Manages all dispute types regardless of documentation support requirements Auto-populates and selects Expedited Billing Dispute Form Reports fraud accounts to Fraud & Loss Database Enables users to supply support documentation at time of dispute initiation Locates and auto-populates details into chargeback record creation via transaction research tool Supports reversal and fee collection record submissions Provides helpful validation/reminder prompts and auto-managed deadline controls throughout the dispute process Applies appropriate reason codes to prevent invalid chargeback initiation Provides comprehensive dashboard reporting including summaries, trend analysis and case history

Mastercom dispute resolution Rules-based chargeback decisioning reduces dispute complexity and processing time Reduces complexity within dispute channel and shortens processing time frames + Blocks invalid chargebacks from the network + ©2019 Mastercard. Proprietary and Confidential Leverages authentication data to drive dispute decisioning* *Future capability 8

Mastercom dispute resolution Avoid chargebacks by sharing dispute insights prior to formal chargebacks for quicker resolution Mastercom Collaboration: 1 Bridges dispute communication between consumers, issuers, acquirers, and merchants 2 Integrates with issuer dispute websites to provide collaboration between issuers and merchants 3 Alerts merchants of disputes prior to formal chargeback cycles so they can quickly respond and resolve consumer inquiries 4 Provides near real-time dispute data visibility to support merchants’ just-in- time shipping decisions 5 Informs merchants with account data insights based on active fraud chargeback activity 6 Improves the consumer experience with fast, final, once-and-done dispute resolution

Mastercom dispute resolution Collaborate to reduce operational costs and improve the consumer experience by avoiding lengthy chargeback cycles MASTERCOM COLLABORATION Assigns claim number to all disputes to facilitate transaction lifecycle transparency Acts as source of record for all claims/disputes Enforces data-driven rules leveraging authorization and clearing records Blocks invalid chargebacks Enables transaction lifecycle transparency for merchant-refunded disputes to block potential trailing chargeback initiation Facilitates credits between parties including merchant issuance of consumer credits Updates F&LD Does not move funds CONSUMER ISSUER ACQUIRER* MERCHANT RESOLUTION YES/NO *ACQUIRERS INTEGRATED INTO COLLABORATION IN 2020

Mastercom dispute resolution Collaboration enables dispute insights for quick resolution COLLABORATION (via Mastercom or direct-to-Ethoca) CONSUMER ISSUER MERCHANT Initiates first chargeback in Mastercom Claims Manager Mastercom places first chargeback in “pending” status and sends to the Ethoca merchant network Receives first chargeback notification Initiates dispute Sends confirmed fraud notification direct to Ethoca merchant network Ethoca sends alert to merchant network Receives Ethoca alert RESOLUTION – MERCHANT REFUND Mastercom changes chargeback status from “pending” to “rejected” Receives refund from merchant Views merchant refund details in Mastercom TQR4 report, UI, or API Processes refund directly to consumer Ethoca sends alert refund status to issuer Receives dispute status updates from issuer Processes chargeback in Mastercom Claims Manager NO RESOLUTION Does not refund consumer Mastercom immediately changes chargeback status from “pending” to “processed”, funds move in Clearing

Mastercom dispute resolution Reduce chargebacks and improve the customer experience with prompt, efficient dispute resolution Save an average of 20% in chargeback processing costs, increasing automation and productivity with consolidated dispute processing that significantly shortens resolution and cycle processing timeframes Reduce chargeback volumes an average of 20%, collaborating to resolve disputes outside of chargeback cycles Resolve friendly fraud disputes within hours to a few days, pre-empting disputes from advancing to chargebacks and saving weeks, or even months, of dispute mitigation ©2019 Mastercard. Proprietary and Confidential Avoid losses with real-time account data insights, supporting just-in-time merchant shipping decisions Mastercom Dispute Resolution can help issuers, acquirers and merchants with their bottom line Bottom line = Mastercom

Mastercom dispute resolution Flexible implementation meets customer needs Participation Implementation Mastercom dispute processing (including Claims Manager and Collaboration) is mandatory for all Mastercard issuers, processors and acquirers for all chargeback-related transactions (acquirers integrated into Collaboration in 2020) Issuers and acquirers must be migrated to Mastercom Claims Manager to participate in Collaboration Direct-to-Ethoca issuing customers are required to contact Ethoca to participate in Mastercom Collaboration No customer enrollment forms required Mastercom Hosted or Pro implementation configurations available based on issuer/acquirer needs Claims Manager available with both Mastercom Hosted and Pro implementation configurations Issuers/acquirers can access Claims Manager via API or User Interface Issuers/acquirers must setup an implementation project with CIS for Claims Manager migrations Mastercom Collaboration connects issuer disputes directly to merchants with no technical changes required to migrate to Mastercom Claims Manager Merchants may optionally choose to participate in Collaboration directly through Ethoca; they may participate through their acquirers in 2020 Merchants must contact Ethoca to request access to Mastercom Collaboration All merchants must be onboarded with Ethoca to participate in Collaboration; new merchants are onboarded regularly Issuers/ Acquirers Merchants

> A roadmap for innovation 2018 2019 2020 Beyond Collaboration Mastercom dispute resolution A roadmap for innovation > 2018 2019 2020 Beyond Claims Manager Claims Manager functionality in Mastercom Fraud & Loss Database (confirmed Fraud) integration with Claims Manager Rules-based decisioning Customer migrations to new Claims Manager platform complete (Claims fee required) Installment chargeback processing (21 mos) (LAC - select markets) Enhanced reporting with additional data elements (including error description) Single message dispute integration with Mastercom Batch processing retired On-soil processing support Open banking support Masterpass QR and push payment chargeback automation Optional payment types (i.e. ACH) Collaboration Ethoca acquisition Collaboration Phase 1 - issuer and merchant participation (first chargeback sent to Ethoca’s merchant network) Merchant onboarding in Ethoca ONLY Collaboration Phase 2 – acquirer participation (near-real-time communication between issuer/acquirer or merchants) Digital receipt support