The future is bright, the future is mobile.

1. The future is bright, the future is mobile. Jim Tomaney Marketing Director ACI Worldwide(EMEA) Ltd 26th February 2002

2. Business Imperatives Technology & Terminology Technology & Terminology Business Models Critical Success Factors Case Studies Agenda m-payments

3. Business Imperatives

4. Infrastructure State PTOs Build out History 3G Licenses Vodafone Legislation New Entrants Non-explosive Growth Churn MVNOs ARPU 3G operators What are the drivers for the telcos? Telco Business Imperatives

5. Mobility The non-electronic merchant Lifestyle The mobile phenomenon Low value transactions Mobile Operators Low volume transactions Mobile Penetration Cards Micropayments Cash Handling costs Youth segment Fraud & theft Internet security Vending machines What are the drivers for the banks? Bank Business Imperatives

6. Business Models

7. What are the possible business models? High Open Systems Mobipay Paiement CB OperatorCentric Model Orange Open MP Trend 2 Number of mobile operators involved in scheme Closed Systems Sonera MP Omnipay Vodafone m-pay Bank Centric Model Paybox Cybercomm Trend 1 Low Low High Number of financial institutions involved in scheme

8. FINANCIAL INSTITUITIONS • Customer relationship • Merchant relationship • Payment infrastructure • Relationship with card operators MOBILE OPERATORS • Customer relationship • Control over customer device • Micro payment infrastructure INDEPENDENT PLAYER • Fast reaction time (but no infrastructure) Bank only (e.g. Merita) Telco only (e.g. Sonera) Bank & Telco (e.g. Mobipay) Independent (e.g. Paybox) What do the players bring to the game?

9. FINANCIAL INSTITUTIONS • Financial relationship with both merchants and consumers • Increase frequency and depth in consumer relationships • Increase penetration of bank intermediated payments • Use third party devices as POS, increasing reach and reducingcosts PAYMENT BRANDS • More consumers and merchants • More transactions • Entry barrier of alternative • new payments brands • Capitalize on new technologies • Accelerate entry into less • developed economies MOBILE OPERATORS • Incremental data traffic • Allows for efficient mobile prepaid accounts top-ups • The service/device becomes more relevant in every minute needs of consumers • Get into merchant relationships and open cross-selling of telephony and similar services • Induced voice traffic What are the benefits to the players?

10. 1999 2003  2005 Start-up Stabilization Consolidation • Several approaches arise, with players covering different links in the value chain • The key players in the industry avoid adopting just one system • Rapid market acceptance is the key to survival • Two or three players per country survive this phase • The players with the strongest customer base begin absorbing smaller ones • Key players start adopting one or all of the strongest systems • Surviving systems become widely accepted • A few players survive per region • No competitor at a local level will survive alone • Systems are globally interoperable • Two or three global players arise with another one or two at the regional level Multiple business models Stabilization of standards Globalization How will the business models evolve? Source: A.T.Kearney analysis

11. Technology & Terminology

12. What do people mean by m-commerce? • WAP shopping ? • Location based services ? • Consumer authentication vs an access channel ? • Micro-payments ? • Cash replacement ? • A new channel for existing brands ? • An environment for new brands ?

13. Let’s agree on some definitions. • Wireless payments are any exchanges of value initiated, mediated or received using a mobile device, the exchange being between individuals, or between individuals and businesses, or between businesses. • Wireless payment revenues are the charges and fees collected by participants, not the payment itself.

14. Success Factors

15. What is the problem to be solved? TRANSACTION VALUE MICRO PAYMENTS STANDARD PAYMENTS Migration of successful schemes Speed Pass REAL WORLD Paybox Cards Mobipay MERCHANTS Phone bills Paypal VIRTUAL WORLD Mobipay

16. Key Success Factors • Subscribers • Acceptance Points • Revenue Flows • Transaction Rates • Interoperability

17. Case Studies

18. Mobile operator independent scheme • The only fully-operational, international m-payments system operational in the world. • 50% owned by Deutsche Bank, the largest bank in Europe. • 500,000 registered consumers • 6,500 active merchants • IVR based system • Requires direct debit on consumers current account www.paybox.co.uk

19. Mobile operator only scheme • Closed system – operator only • 60 UK virtual merchants so far • Operating in Italy and Spain too, but no interoperability • Transactions charged to your contract account bill • Consumer acceptance trial • Micropayments • Electronic goods mpay.bill.vodafone.co.uk

20. Movilpago Pagomóvil + Mobipay International Mobile operator & bank co-op scheme www.mobipay.com

21. Summary

22. Conclusions • Mpayments remains in the start-up phase • Success appears to depend most on partnership between banks and telcos • Interoperability is key to consumer acceptance and therefore, growth. • Technology is less important than consumer behaviour.

23. The future is bright, the future is mobile Jim Tomaney tomaneyj@aciworldwide.com 26th February 2002

24. Who or what is ?

25. What ACI does Enables our customers to deliver electronic payments to consumers, anytime, anywhere, any way This is electronic commerce. ACI has been doing e-commerce very successfully for over 25 years

26. Global presence 6 Continents - 81 Countries - 2,371 Customers - 3,614 Systems

27. Software provider to the worlds top banks

28. Payments infrastructure • The largest bank in the U.S. has 14,000 ATMs located in 22 states and processes 94 million transactions per month – the busiest ATM system in the world. • NatWest Bank processed more than 8.5 million physical & internet commerce authorisations on a single day in December 2001 – the busiest POS system in the world. • Barclays Merchant Services, (BMS) processed in excess of 6.8 million transactions on 2 separate days in December 2001 – the second busiest POS system in the world.

29. What people say about ACI • Identified ACI as the market leader for retail EFT processing software in November 1999 • Rank ACI as the primary EFT software vendor in the US with 49.4% of the market in 1999 • State that BASE24 software claims half of the market share for ATM processing software amongst the largest US banks

30. www.aciworldwide.com