1. VISA INTERNATIONAL CONFIDENTIAL Unifying the European Payments Landscape Marc Temmerman Executive Vice President, External Relations Visa EU

2. VISA INTERNATIONAL CONFIDENTIAL What is Visa? nA global non-profit making association nOwned by 20,000 banks worldwide n5,000 European banks –230 million cards: credit, debit, charge and pre-paid –€824 billion annual sales volume nVisa’s role –Managing the brand –Providing the processing infrastructure –Agreeing and enforcing the “regulations”

3. VISA INTERNATIONAL CONFIDENTIAL Europe: a defining contribution nCards as – primarily – a payment mechanism nA co-operative democratic constitution nThe first to move to chip technology nEffective governance and control is a priority

4. VISA INTERNATIONAL CONFIDENTIAL The commercial payment opportunity nA complete suite of products nCost-effective, guaranteed multi-currency payments : –Tangible benefits: –Cash flow management –Access to funds –Reduced administration costs –Expenditure tracking –Compliance monitoring –Competitive buying policies nAn indication of the potential: the UK Government Purchasing Card programme

5. VISA INTERNATIONAL CONFIDENTIAL An indicator of economic well-being

6. VISA INTERNATIONAL CONFIDENTIAL Macroeconomics of Cashless Payments nAn electronic payment system is ⅓ to ½ the cost of an equivalent cash/paper-based system nLiberates aggregate cost savings of at least 1% of GDP nEquates to $58 billion in savings for the “Big 5” European economies alone

7. VISA INTERNATIONAL CONFIDENTIAL Banking the unbanked nElectronic payments draw people – en mass – into the banking system nPromote financial inclusion and institutional trust nImmense economic benefits: –Harnesses low cost, lendable deposits – which fuel economic growth –Minimises shadow economies –Maximises tax revenues

8. VISA INTERNATIONAL CONFIDENTIAL Economic importance of banking the unbanked

9. VISA INTERNATIONAL CONFIDENTIAL The global effect nA 10% shift in electronic payments typically creates a direct 0.5% increase in consumer spending nIn Europe, a 2% increase in the proportion of electronic payments would liberate $26 billion in incremental consumer spending

10. VISA INTERNATIONAL CONFIDENTIAL Our raison d’être nTo increase the proportion of cashless payments –16% of PCE by 2007 nEnable banks to derive more value from VisaNet –Capable of processing any electronic payments nWorking with accession countries to liberate the benefits

11. VISA INTERNATIONAL CONFIDENTIAL A big change to our constitution nThe creation of Visa Europe –A separately incorporated company –A co-owner of Visa International nEurope’s banks become the exclusive owner- operators of their own regional payment system nRetaining global influence and interoperability nCoincides with the accession process –Creation of an Accession Council

12. VISA INTERNATIONAL CONFIDENTIAL A defining moment nCreation of external relations function nWorking in partnership with regulators and industry bodies nPromoting the benefits of Visa Direct – a low cost, high speed funds transfer solution nLeveraging the investment in chip

13. VISA INTERNATIONAL CONFIDENTIAL Thank you