April 11 Enhanced Payments using EMV MasterCard’s solutions

27th January, 2006© MasterCard International2 Agenda What do the EMV specifications bring to the market place? Overview of MasterCard’s OneSmart Solutions Applicability to Local Councils

27th January, 2006© MasterCard International3 What is EMV ? Structure for Multi Applications on Cards Payment CARDCARD TERMINAL DIALOGUE Network ????? AID

27th January, 2006© MasterCard International4 What does it bring? Standard Infra Structure and Flexibility – The terminals can have the identifiers implemented for the products the service provider want to offer – The Card and Brand can be personalised for – Acceptance in all or some channels (ATM/POS/Inernet..) – Restricted to some Service Providers – Behave as a Credit, Debit and/or Pre-Paid card – Separate funding for special purposes – Additional functionality such as loyalty or other

27th January, 2006© MasterCard International5 What is OneSmart? MasterCard OneSMART is a range of solutions which uses the chip as a platform to deliver value-add business Each of these solutions is targeted at extending the card business into the following areas – Cardholders – different profiles – Service Provider locations – POS, Internet, ATMs, other – Transaction types – Credit, Debit or combination The existing suite of OneSMART solutions provides a solid base on which to build range of payment and non-payment solutions for local authority programs

27th January, 2006© MasterCard International6 Suite of OneSMART Solutions OneSMART Authentication – remote authentication – Security & confidence generate more remote transactions OneSMART Web – personal data storage & form filling – ‘Top of wallet’ behaviour leading to increased share OneSMART Retail – loyalty & stored preferences at POS – Increased loyalty leading to increased volume and share OneSMART Pre-Authorised – zero overdraft risk cards – New cardholders and new acceptance locations OneSMART PayPass – combining EMV with contactless – Quick & easy contactless payments that can displace cash

27th January, 2006© MasterCard International7 2 Factor Authentication You Have it already ! « I have my card » « I trust my card » « I know my PIN »

27th January, 2006© MasterCard International8 Use it for all Remote Services ! Channels & Services Mail Order, Telephone Order, e-banking, e-commerce, Tomorrow’s Services

27th January, 2006© MasterCard International9 OneSmart Authentication in Europe Greece Turkey Israël Bulgaria France UK Czech Rep. Slovakia Switzerland. Germany Spain Italy Austria Hungary Sweden Finland Denmark Russia Ireland Nederland Norway Estonia Latvia Croatia Ukraine Slovenia Lithuania Iceland Portugal Poland Khazakhstan Romania Azerbaidjan Georgia Belarus Luxembourg Belgium

27th January, 2006© MasterCard International10 OneSMART Web Security, convenience and automation in one package Internet/ Intranet Credit cards, personal ID, etc. Passwords & notes Account information Coupons Web Services Billing & shipping data Logons, favorites, contacts, etc. Security & Automation!... Life is good!

27th January, 2006© MasterCard International11 New Opportunities for Customized Offers OneSMART Retail Bank 2- Card used for Payment, Loyalty and ‘On-the-Spot’ Offers 1- Card issued with Personal Preferences or Hobbies stored in MODS application 3- Information Printed on Receipt Payment Information Cardholder Preference & Loyalty Points Balance Customized Offer according to Preference

27th January, 2006© MasterCard International12 OneSMART Pre-Authorized Funds set aside for fully controlled off-line spending Funds set aside for fully controlled off-line spending Can be set up so the card holder perceives it as a “Purse” Can be set up so the card holder perceives it as a “Purse” Automatic or manual top-up Automatic or manual top-up Fully supported by the standard EMV infrastructure Fully supported by the standard EMV infrastructure Perfect for Low Value Payments Perfect for Low Value Payments Perfect for Contact Less Payments Perfect for Contact Less Payments Brings banking to the unbanked Brings banking to the unbanked

27th January, 2006© MasterCard International13 OneSMART PayPass overview MasterCard’s contactless payment solution Extends market for MasterCard payments Combines power of chip with convenience of contactless Designed for rapid, convenient proximity payments (eg fast food; mass transit; tollways)

27th January, 2006© MasterCard International14 OneSMART PayPass overview Uses the EMV chip infrastructure Contact and contactless payment functionality can be combined on single card Focus is on low value payments Cash replacement Successful trials in US although not EMV based today

27th January, 2006© MasterCard International15 OneSMART Transit overview Combines: – OneSmart PayPass for fast, convenient contactless payments – OneSmart Pre-Authorised for safe, low cost, mass market issuance – A ticketing application which can either be: – MasterCard EMV application, or – Proprietary application such as MiFare Extends market to previously cash-based transport applications Uses the EMV chip infrastructure Can be configured to support all common transport payment and ticketing requirements MasterCard’s open solution for transport ticketing applications

27th January, 2006© MasterCard International16 Bus/Ticket validator (Contactless) OneSmart Acceptance Infrastructure Top Up at POS (Contact EMV) Payment at POS (Contact/Contactless) Also potential for: Branch network Internet Home PC Kiosk Local authority facilities Cash

27th January, 2006© MasterCard International17 Key Requirements for e-Money Provide multiple application, card based prepaid/stored value products Reach all segments of a population Conventional payments – POS and ATMs; Local authority service and benefits. Interoperable “e-purse” scheme

27th January, 2006© MasterCard International18 Key Requirements for e-Money cont…. Load by individuals; service providers, banks, local authorities, etc. Load and reload monetary value or benefits remotely or through other means Broad and uniform acceptance – at merchants, ATMs, transit, and all local authority facilities

27th January, 2006© MasterCard International19 MasterCard’s approach to e-Money Solution Make use of the EMV infra structure and OneSmart facilities – Retail Purchases at POS – ATM withdrawals – Storing and using local authority specifics – Transportation ticketing – Restrictions (age, profile, merchants or other) And / Or – Universal acceptance

27th January, 2006© MasterCard International20 Potential Prepaid Applications for e-Money Restricted acceptance (1) Broader Acceptance (2) Luncheon Transportation tickets Local Authority Rewards Housing benefits Job seeker allowance Pension Child tax credit Payroll Travel Money transfer Per diem Insurance Restricted acceptance by geography, product type, group of merchants, type of terminals (e.g. POS only, internet only) Broader Acceptance = international acceptance and inter- operability

27th January, 2006© MasterCard International21 Components of e-Money Solution ComponentMCINotes Cards EMV technology. MasterCard or proprietary branding Terminals EMV technology. MasterCard or proprietary branding Card applications EMV credit or debit payment plus OneSmart added value packages Network MasterCard global network Clearing and settlement MasterCard services, eg Maestro (formerly Switch) Business models Scheme rules, modified as necessary Business partners MasterCard bank members Implementation As required

27th January, 2006© MasterCard International22 For further questions

27th January, 2006© MasterCard International23