1. Multi-Application Strategy Johan Ras Visa International 21 August 2002 Toronto, Ontario, Canada

2. 2 The Future of Universal Commerce – Anytime, Anywhere, Anyway

3. 3 Delivering Universal Commerce through Smart Card Technology nEnsuring customer service quality through global chip standards EMV, CEPS and GlobalPlatform nEstablishing baseline infrastructure by implementing Visa Smart Debit/Credit in national markets Support Debit/Credit chip migration to reduce fraud nEnabling development and support of value-added services that drive payment volume and help Members take advantage of business opportunities

4. 4 Vision for Multi-application Smart Cards The multi-application smart card offers a variety of benefits to Visa Members, merchants and cardholders… Merchant Benefits Point of access efficiencies Reduced costs Foundation for customer loyalty programs Cardholder Benefits Greater utility Customized usage Convenience Member Benefits  Improved risk and fraud management  Enhanced cardholder verification  Reduced online authorization costs  Cardholder acquisition and retention programs  Volume increases

5. 5 The Challenge and the Goal Meet the needs of everyone; Issuer, merchant and cardholder… Credit or Debit Payment Card Management Merchant Loyalty Program Development Loyalty Program Management Card- holder Merchant Selection Personal Information Management The approach must enable Issuers to strengthen the relationship with their customers by delivering valuable utility at the lowest level of effort. Issuer

6. 6 Driving Support for Multi-Application Smart Cards nEstablishing GlobalPlatform as the preferred multi-application platform for Visa Members nLeveraging GlobalPlatform Java Card technology in the marketplace nFurthering strategic partnerships to improve the business case and speed implementations through Visa Global Smart Partner Program –Cost-effective GlobalPlatform cards and support systems –Each region working with value added service vendors for local market needs nSetting standards with industry organizations (e.g. IATA)

7. 7 Visa Low Cost Smart Card Program Max Price (US$) white plastic Functionality Java / OP Triple DES 48k ROM 16 E 2 Global Platform OP DES/16 Java / OP Triple DES Public Key 64k ROM 16k E 2 Global Platform OP PK/16 Global Platform Combi card OP DI/16 Java / OP Triple DES Public Key Contactless 64k ROM 16k E 2 Single app VSDC DES SDA DDA Single app VSDC – PK $2.70 (was $2.89) $3.37 (was $3.56) $3.91 (was $4.67) $0.99 $1.99 SDA

8. 8 Most Common Multi-application Smart Card Programs Today VSDC Credit or debit payment product Issuer Managed Loyalty Points Discounts Coupons Secure Access Proprietary web site Convenience storage URL Mailing address

9. 9 Multi-app Project Highlights nKey drivers: new business opportunities, multi- application, threats from competitors nANZ began converting Visa credit card portfolio to chip in November 2001 and introduced Secure Internet shopping nProducts: “FIRST” in Australia, “ZED” in New Zealand nApproximately 1 million GlobalPlatform cards and 50k POS devices by end 2002 Australia

10. 10 Multi-app Project Highlights nFive credit card issuers co-branding with SK Telecom to offer dual interface cards with VSDC payment and contactless transit nCan also be used in dual-slot mobile phones nExpected to issue approximately 2 million cards in next 12 months nDiscussions underway to migrate existing transit cards to the GlobalPlatform dual-interface cards in Seoul and Pusan Korea

11. 11 Multi-app Project Highlights nsmart Visa issuance –10 MM cards issued by end 2001 –Over 12 MM cards projected by end 2002 –15–20% of all Visa cards by 2006 n4 Members issuing cards –Target began issuing in Nov. 2001 –Will begin acceptance by end 2002 nApproximately 3-4 more banks expected to implement nFocusing on chip acceptance at POS and developing smart Visa Rewards loyalty program U.S.

12. 12 Projecting 70+ Million Visa EMV Smart Cards by end 2002 LAC 850K CEMEA 250K AP 10.5MM Canada 12K EU 50MM US 12MM

13. Thank you Johan Ras Visa International