PAYMENT SYSTEMS – 3 rd Annual Summit Innovative, Inclusive and Integrated

2. PAYMENT SYSTEMS – 3rd Annual Summit Innovative, Inclusive and Integrated Approach for Payment Systems Biju J. John HEAD, BANKING AND FINANCIAL SERVICES HCL INFOSYSTEMS LTD

3. Payments system impacts Profitabilityimprovement and CostReduction Contactless Pre-Paid Gift Cards Internet ATM Kiosks Mobile Banking Payments System Instant Issuing Mobile Payments 1:1 Marketing PCI DSS Cross border PA-DSS Loyalty Technologyplatforms EMV Scheme Mandates

4. Payment Systems and IT • Payment systems to be supportive of strong inclusive, functionally diverse, efficient and flexible, financial system. Global standards required. • All are expected to DO MORE WITH LESS. With the insight of how cost, profit and value are created, organizations can allocate resources more efficiently, earn profit and maximize value. • Innovation and Integration is the major focus of E-Payments. • Information has long been a leader's most valued tool. • Analysed information helps avoid squandering valuable resources and using it with a decision making framework requires great skill and investment; but it can deliver vast rewards and reach you to your goal. • IT has brought seamless access to global resources and thinning of the branch and connecting globally distributed back offices seamlessly • Efficiency and cost-effectiveness, making a 24/7 Customer experience possible • E-Banking reduces paper usage and storage costs • Green Banking – Energy reduction and usage of Energy Management

5. India - Facts • Second fastest growing economy, hotbed of technological advances • Worlds Largest Democracy; a sound legal and judicial system • 20 million potential employees available to the IT industry alone • India has the 2nd largest pool of scientists and engineers • 54% of Indians less than 25 years old – Youngest country • 3rd Largest English speaking country in the world • Mobile phone subscriber base nearing 5 million, talking nation • $ 1031 annual per capita nominal GDP Ranked 139/180; among poorest • Among top 5 countries when it comes to number of billionaires We owe a lot to the Indians who taught us to count without which no worthwhile scientific discovery could have been made. - Albert Einstein

6. The Future

7. No Innovation, No Integration = No Efficiency

8. Evolution of Payments Core Payment Products Channel / Technology Innovations Point of Arrival – Advanced Payments • Physical channel: contactless proximity technologies • Online channel – bank transfers, cards or SVA accounts • Mobile channel – proximity or remote payments; all payment products • Critical mass for: • Online payments • Contactless payments • Mobile payments (open and interoperable) • Mobile / online convergence • Bank Transfers • Credit Cards • Debit (international and domestic) cards • Stored value accounts (SVA)

9. Key trends in three core areas of payments A D V A N C E D P A Y M E N T S MOBILE PAYMENTS (REMOTE, NFC) ONLINE COMMERCE CONTACTLESS Payments relating to Online Commerce (B2C) and Online Personal (P2P) payments. These are made with payment cards, bank transfers, or stored value accounts Payments made at points of sale (POS) – card equipped with RFID functionality. Expected to be used for low value transactions at locations where speed of payment is important Mobile payments and other financial services transactions that are initiated using a handheld mobile communications device. This covers both remote or NFC based proximity payments

10. Projected Actual Mobile phone : most successful communication device Estimated 5 billion subscribers • Over a million new subscribers a day • Many developed countries over 100% penetration 5,000 • Rising fast in developing countries 4,500 • 615 million mobile wallets in 2011, growing to 1.4 B by 2015 4,000 3,500 1 billion+ subscribers 3,000 Global mobile subscribers (millions) 2,500 3.5 billion subscribers 2,000 1,500 2 billion subscribers 1,000 500 0 2003 2004 2005 2006 2007 2008 2009 2010 2011

11. Mobile based Financial Services - opportunities. Mobile Financial Services MobilePayments / M Commerce (P2B) Mobile Banking Mobile Money Transfers (P2P) • Proximity (Contactless) • Remote (Digital or Physical Delivery) • Domestic • Cross-Border Remittances • Informational • Transactional $ Each area offers opportunities to generate direct / indirect revenues

12. Domination of Online payments will continue Global Advanced Payment Forecasts – Relative Payment Volumes in $ Mobile $510 B Contactless Cards $395 B Online $1,842 B Source: Edgar, Dunn & Company Forecasts 2009 – Advanced Payments Report 2009

13. ATM - Trends and current scenario

14. HCL Infosystems In Payments • HCL Infosystems works with leading providers of integrated solutions for self-service banking and payment processing. The same solution serves over 1,500 customers in more than 50 countries. • Drives self-service financial transactions and payments, including advanced transactions such as prepay, through Internet access points, ATMs, POS terminals, and phones. More than 100,000 ATMs and 380,000 POS terminals worldwide run on this solution. • Built on open systems, the solutions provide consolidated management information, card management, 3DES and EMV enablement, and loyalty management. • Complies with new regulations and security enhancements, such as the Payment Card Industry Data Security Standard (PCI DSS). Complies to Visa’s Payment Application Best Practices (PABP) • We can help customers achieve compliance with the latest data security standards developed by the payment card industry.

15. Current scenario in Inclusive Banking • What India is trying to do in FINANCIAL INCLUSION has great lessons for the entire world • Innovative technology applications to bring down the cost of transaction as well as making it easy to use. • The next billion dollar banking technology opportunity through cost-effective and convenient means for people whose transaction sizes would be low. • Involves access side technologies smart card-based, mobile-based and biometrics-based solutions for non-cash transactions and micro ATMs or similar devices for cash-based transactions. • Why no progress in FI : Few System Integrators, Absence of Reach, Coverage; No proper delivery mechanism; Transactions low

16. HCL Infosystems in Financial Inclusion

17. HCL’s Offerings for Financial Inclusion

18. Innovations in Hardware HCLs BANK DATA CENTRE IN A BOX VOICE ENABLEDTOUCH SCREEN KIOSKS FOR NREGA PROJECTS KIOSKS FOR CHEQUE DEPOSIT, PASSBOOK PRINTING, INFO & NON CASH TRANSACTIONS FI ENROLLMENT KIT HCLS HHT

19. Green’novation in ATMs Topper(Optional) Internal Speaker Security Camera For Portrait Display Color TFT LCD with Function Key Option Bay • Fingerprint Scanner Receipt Printer • Graphical thermal EPP (Encrypting PIN Pad) PCI Compliance Encrypting PIN Pad : T-DES ADA support Optional RKT support (RSA) Card handling Dip Smart card reader Smart card (EMV 4.0) Earphone jack Power 110~240Vac, 50/60Hz Cash Dispenser IINCREASE YOUR ATMS’ ENERGY EFFICIENCY , PERFORMANCE RELIABILITY & REDUCE TRANSACTION COST Safe & Lock UL 291 Level 1 Dual Combination electronic Lock Door open sensor Temperature/Vibration sensor

20. Power Management Solutions for ATMs For 40,000 ATMs. 440 cr of investment yields a saving of 560 cr equivalent to 550 MT GHG emissions reduction over a 7 year period With Solar and Energy option controls with an investment of 1100 cr yields a savings of 1200 cr over a 7 year period equivalent to 1300 MT GHG emissions reduction over a 7 year period • Reduced Energy Costs • Centralized Automatic Alerts for security & Fire (Auto SMS) • Online Power monitoring for better visibility • Monitoring controller & GPRS at central location • Asset Management; Better Serviceability • Reduced Operation & Maintenance costs • Integrated approach • Sustainability - Going GREEN • Reduced Transaction cost for ATMs

21. Innovations in Software • CORE BANKING application for CBS/ FI with LOCAL LANGUAGE SUPPORT for very cost • effective and faster penetration of Banking Services in Rural and Semi Urban Areas. • Image Service Bureau;Software and facilities for CHEQUE TRUNCATION Implementation • MOBILE BANKING Application to support all payments and technologies • PAYMENT SOLUTIONS for Cash Remittances TO & FROM Unbanked Masses – Helps to • generate leads and Information of the Unbanked • WEB BASED ENQUIRY for all payment status for retail, corporate and participant Bankers • at National Level • Solutions to make MERCHANT ENROLMENTS easier and faster for faster payments. Easy • integration of PSO devices irrespective of brands with standard protocols • SINGLE VIEW of customer activity by keeping data in a unified database irrespective of • the card type, access channel or transaction performed Accessed by a Portal making this • easier to deploy and manage • CARD ISSUANCE SOLUTION with EMV chip instantly personalised in branch ; Mag-stripe • instantly encoded in branch PIN management performed at time of account opening; • Card printed instantly in branch

22. Typical Payments Platform

23. SI WITH TOTAL SOLUTIONS FOR BANKING

24. HCL Spectrum: Services & Offerings Computing & Peripherals Networking & Communication Security & Surveillance Power & Consumables ATMs • Desktops • Laptops • Servers • Thin Clients • Kiosks • Scanners • Interactive boards • Projectors • Plasma screens • MFP/MFD • Digital Duplicators • POS • Switches • Wi-Fi A.Ps • Routers, cabling • LL Modems • BB/ISDN Modems • VOIP Phones • DSL CPEs • EPABX + Phones • IP PBX & KTS • Soft Switches • Audio Conf. • Video Conf. • Mobiles • Fax • Security Appliances • Firewall • UTM device • SSL VPN • Client Security • Surveillance DVRs • Cameras • Access Control • Smart card • Biometrics • Asset tracking • RFID • Fire Suppression • Full Function ATM • Cash Dispenser • CD with finger-print Biometric and associated software. • CD with UL 291 (Business Hours Safe) • SIS Services • Rural ATM • BNA • UPS • Generator • Cabling • Earthing • Consumables • Batteries • Toner • Stationery IT Infrastructure & Application Services Facilities Management HCL supports over 1.2M IT+OA assets annually across different industry segments spread over 60,000 branches

25. Smart Integration INDIAs Payment Systems should be on par with global industry standards and protecting our social interests and creating a difference for A BILLION INDIANS Technology for Business Transformations Technologies can provide great performance.. Only with….. Smart Integration HCL INFOSYSTEMS LTD – 505 OFFICES - DIRECT SUPPORT AN ISO 9001 14001 18001 27001 and CMM INDIAN SYSTEM INTEGRATOR - 12000 cr INDIA REVENUES

26. Conclusion • An Innovative, Inclusive and Integrated Solution approach allows solution scaling, • cost reduction, Greener IT, and faster implementation of banking services in India • An Application provider excels in application domain but lacks the experience to • cover all services. A System Integrator excels in managing and providing the • complete gamut of services for Payment Systems

27. Thank you biju@hcl.in