Future Tense: Contemplating the Impending Transition to Digital Wallets and Mobile Prepaid Platforms Over the Next 5 Years Thursday, June 11, 2:25 p.m. Speakers: James Hutchison SVP Emerging Commerce Products FIS Andrew Lorentz Partner Davis Wright Tremaine Kevin Boglarsky Director, Payment Products Discover Brian Knight Associate Director The Milken Institute 1

Implementation of mobile payments lacks the “vision thing” “Oh, the vision thing.” 2

But– is the dam at POS breaking? bought 3

SE-Based NFC Card Emulation 4

Use of a TSM to Provision Credentials to the SE 5

HCE Service with Different SE Form Factors 6

Obtaining Credentials from the Cloud Using HCE 7

Tokenization Support: Logical Components Tokenization Support Token Management Services Register Token Requestors Generate Tokens from PANs Provide Token Assurance Provide De-Tokenization & Domain Control Provide Token Routing Provide Token Lifecycle Management Token Transaction Processing Token BIN/IIN Table Management and Routing Authorization Routing and Stand-In Clearing/Settlement (Fee Billing/Pricing) Exception/Dispute Processing Fraud Monitoring & Prevention Product Services 8

Variations to the Standard Tokenization Model Acquirer/Processor Model Acquirer/Processor provides tokenization services to merchants Relieves merchant of PCI compliance requirements but not acquirer/processor Does not comply with Tokenization Standard (liability shift) Does not impact network fraud services that are dependent on PAN history Issuer Model Issuer de-tokenizes transaction directly from TSP Issuer manages TSP service & network only sees token and not the PAN Provides liability shift away from the merchant (in theory) Impacts network fraud services that are dependent on PAN history EMV Chip & PIN Secure element on form factor supplies secure data including device and cardholder verification, and transaction-specific cryptogram Valid alternative to tokenization at the POS Does not impact network fraud services that are dependent on PAN history 9

Business of banking / Deposit-Taking Truth in Lending Act / Reg Z Regulation B Bank Secrecy Act OFAC Reg D Truth in Savings Act Regulation II Gramm-Leach-Bliley Act Fair Credit Reporting Act Data breach/security FDIC Deposit Insurance E-SIGN Act Unfair, Deceptive or Abusive Acts and Practices Laws State Money Transmitter Laws State Privacy and Security Statutes Card brand rules Gift card Anti-Money Laundering Compliance OFAC TISA/Reg DD Reg CC Escheat Durbin AmendmentIdentity-Theft Red Flags Check 21 Truth in Billing Electronic Fund Transfer Act / Regulation E Regulation DD 10

Thank you!