1. Iraq- Retail Payments Initiative Kristopher Haag Director, Banking and Financial Networks Task Force for Business and Stability Operations U.S. Department of Defense September 29, 2010

2. Iraq Demographics  Population 29,000,000 (July 2010 est.)  Median Age 20.6 years (2007 est.)  Literacy 74% (2000 est.)  GDP (per capita) $3,800 (2009 est.)  Unemployed/ underemployed 47% 47% (Aug 2009 est.)  Unbanked/underbanked 95%  Mobile network operators 4  GSM subscribers 20 M (69%)

3. The impact of nearly 3 decades of war and sanctions in Iraq…

4. DoD- Economic Stabilization Task Force Mission: Revitalize the Iraqi economy and reduce the rampant unemployment of the Iraqi population — a significant factor that fuels the insurgency.  Restore existing productive capacity to the Iraqi economy wherever possible, across all industrial sectors.  Leverage monthly cost-of-operations to DoD of $10B, to stimulate economic growth by any means possible.  Serve as a catalyst for private investment in Iraq, by linking the international business community to Iraqi business leaders and government officials. Move Iraq from the front page to the business page

5. Integrated Solution An integrated, Multi-Bank – Multi-Telco infrastructure enables banks to cooperate on infrastructure and compete on costs & quality of customer service. Central Bank of Iraq ATMMobilePOS - Banking Consortium Third Party Processor (Outsourcing Vendor) Past Integrated Solution Focus of Effort Continuation of this path will lead to further fragmentation and an infra-structure that is not interoperable. Costs for inefficiencies are passed to consumer and negatively impact uptake of banking services. ATM POS 3PP Customers ATM 3PP Customers Mobile Telco Customers Central Bank of Iraq

6. Payment Channel Trade-off Payment Channel Ranking ATMPOSMobile Banking Cost Factors Access Implementation Costs Device Costs Maintenance & Licensing Physical Infrastructure Costs Number of Access Point for Consumer Distance Relative to Channel High Implementation Costs MediumLow High MediumLow High Branch Contingent in High Density Urban Areas High Equal to Branch Density Medium Contingent on Retail Outlets Equal to Feasible Retail Penetration None Contingent on Mobile Penetration Equal to Mobile Network Coverage  Large,middle-class economy presents unique opportunity and characteristics for the introduction of mobile banking  Introduction of mobile banking in Iraq must be a hybrid model that allows for coexistence with other developed retail payment channels (POS, ATM)  Multi-Bank / Multi-Telco