Deepak ChandnaniPresident, Obopay INC.

Integrating Mobile Services within the Financial Structure

MMT Dubai, 2010

Agenda

• Mobile Banking & Money• Value for Banks• What Banks seek from Partnership• Overarching Payments Opportunity

• Cash management • Remittance• Domestic Payment Opportunities

Corporate Website

Mobile & Financial Services Universe

Gap Narrowing Gap Widening

4.6 billon mobile phones

1.6 billion bank accounts 1 billion credit cards

Underserved6.6 billon people

Can financial services follow the mobile phone?Corporate Website

Mobile Era: Path to Customer Value

Low

Hig

h

StaticInteracti

veTransactio

nal

Costs

Revenue Opportunity

“Mobilize Website”• Render static content on devices

“Mobile Banking”• Balances

• Recent transaction history

“Mobile Money”• Pay anyone

• Receive money

Cu

sto

mer

Valu

e

Corporate Website

• Get Paid from card, electronic check or stored value account

• Over 70% of sellers of goods and services representing over 1/3 of most economies do not accept electronic payments today.

• Family Money: Send money to loved ones or emergencies or scheduled payments instantly across banks.

• Over $400B in payments annually worldwide.

• Extend banking to those that have never had access before by opening up non traditional channels through mobile.

• 5B underserved consumers worldwide.

Mobile Banking & Money : Key Use Cases

Corporate Website

Mobile Banking & Money : Emerging Markets

Buys from

mandi

Pays for a ride to

work

Pays for Groceries Buys

movie tickets

Pays bills

Pays for Pizza

delivery

Uses mobile banking for

greater access and control, balances and

account activity

Shops for

family

Visits BC to withdraw

money

Pays MFI loan

NREGA, JSY, SSA

payments

Pays for daily needs

Sends money home

Visits BC to deposit or withdraw

money

Recharges his wife’s

mobile

Corporate Website

Mobile Banking & Money : Developed Markets

1. Pay with #1 device

2. Matches connected

lifestyle

3. Serves underage / unbanked

1. Convenience of anytime,

instant payments

2. Controlled Spending

3. Conveniently accept

payments & send money

abroad

1. Integrates with online experience

(games, networks)

2. Transactions between peers

3. Simple acceptance rules

1. Pay or get paid without

hassle

2. Leverage both mobile and

social network sites

3. Improved liquidity and

security

Teen / Young Adults

Working Families

Micro-Merchants

Social Payments

Value for Banks

• * Source: Fiserv / MCOM / Verisign research 2009 Fall

ROI is both Tangible & Intangible

Consumers are interested in bank-offered mobile financial services

Mobile browser

Text Messaging

Native applications

Match budget

To choice of

channels:

Cost Savings

Costs vis-à-vis branch / ATM

Support calls from offline customers reduces by 30-40%* (saves call cost of $3.75* in the US)

SMS balance & transaction alerts convert to large savings on support costs

Mobile has lowest support channel cost at $0.08*

Retention & personalization

Reach offline customer base – segment with largest cost-saving potential

Increase in CASA deposits – low-cost funds

Revenue from new services such as bill due alerts

Have Stronger loyalty

And Engagement

Make Higher spends, more frequent spends

Demonstrate Spending

Confidence arising from

Control

Opt for more products

Corporate Website

What Banks seek from Partnership

Easy, Low Cost & Rapid Entry

Brand control - Out of the box, configurable

Support for Any Carrier, Any Devices

Payment Interoperability

Regulatory compliance, Mobile security & anti-fraud controls

Seamless Support Operations

Corporate Website

An Overarching Payments Opportunity

~$10 trillion

~$5 trillion

~$500 billion

~$400 billion

Retail Payments

Check & Cash Replace

E/M Commerce

X Border P2P

Corporate Website

An Overarching Payments Opportunity

Cash Management

Remittance

Domestic Payments

Corporate Website

Receivables Management

Payable Management Liquidity Management

Cash Management Opportunity

2b. Cross-border P2P (remittance

)

Dist. To

Manuf.

Retailer to Dist.

2a. P2P (domesti

c)

1. Payroll

4. P2M

5. B2B

3. Cash in/out

Instant fund transfer Payment ubiquity via

Mobile Cashless & secure Operational efficiency MIS alerts

Corporate Website

Cash Management Opportunity

Elimination of cash & checks

Reduced process costs

Accelerated settlement

Reduced bad debt

No stolen/counterfeit funds

Reduced bank fees

Less time collecting, more

time selling

Increased Buyer credit

Automated reconciliation

Typical savings of 1.75% -

2.5% of targeted revenue

Distributor/ Merchant Increased working capital

Improved cash flow

Credit history development

Access to formal bank credit

Low APR credit terms

Loyalty Reward programs

Elimination of cash & checks

Streamlined A/P administration

Increased transaction data

Buyer

Powerful market differentiator

New revenue channels

Low risk, low cost growth

expansion of customers

Enhancement of corporate

customer relationships; fulfills

operational needs & adds

“stickiness”

Increased deposits

Cross-sell revenue opportunities

Obopay FI Partner

Corporate Website

Remittance Opportunity

• Remittances totaled $414 billion in 2009: $316 billion went to developing countries, involving some 192 million migrants or 3.0% of world population

• Commercial banks in most regions are yet to adapt infrastructure for P2P migrant services, which will loser costs

• Reduction of 5 percentage points in the cost of sending remittances, would result in remittance recipients receiving over $16 billion dollars more annually

Corporate Website

Remittance Hub Overview

Cost Efficiency achieved via the hub due to flexibility of connecting variety of sending & receiving types (cash/ account/ card/ mWallet)

International Remittance using Cards: US to Mexico Association-led Model: MasterCard MoneySend

a person in the USA uses MasterCard MoneySend remittance to send money

to customers with MasterCards at participating banks outside the USA

Domestic Payments : MMT using nation-wide ATM network: US• Debit network support enables ATM cash withdrawal• Support for PINless debit and credit with STAR and NYCE.• Utility: Pay a person, the recipient gets immediate credit to their NYCE, STAR prepaid card or NYCE/STAR connected DDA.

Immediate, spendable money

Debit card funded payments provide for instant

transactions

Debit Credit

Existing settlement relationships Good funds on payment initiation

Ability to issue immediate credit instruction to the bank account, up to bank to make funds available Can extend mobile #/debit card mapping to ecommerce and eventually POS

Corporate Website

MMT Integrated with ATM NetworksCash-out via card / card-less: 1. MMT to recipient’s Card, Recipient uses card at ATM

2. Recipient does not have card, does Cardless withdrawal at ATM

Card-less Step 1: Initiate via Mobile

Card-less Step 2: Provide the Authorization

Code at the ATM to get cash

Corporate Website

Unregistered beneficiaries pick up money to a

MasterCard or…

… a bank account via ACH

… or a debit network payment credit

MMT using Cards: US domestic

MMT using Cards: ‘Get Paid’ Functionality,US

• Request payment from phone, email, buttons,

links, widgets

• Get paid from web, social network (e.g.

Facebook), phone

• Unregistered user pays with debit card, option to

register after payment

• Registered subscriber pays with mobile

number/PIN

Rodney Smith requests

$100.00.

Pay by replying ACC

234569 or at

www.obopay.com/p2p2345

69

Description: Registration

feeCorporate Website

Payee gets keyword:

BOOSTERS (example)

Consumers and organizations

supported

Customer/donor texts BOOSTERS to Obopay Text-to-Pay short code.

Receives Request for Payment SMS

Payment by

Accepting (registered) or card

(unregistered)

Payment deposited to bank or card

account

MMT using Cards: USText to Pay eg: Donations

Text BOOSTERS to 48510 to donate now!

MMT using Cards: Differentiators

• Bank centric approach with easy integration

• Instant sending and receiving

• No risk of ACH reversal

• Front end options

• Backend options

• Focus on how consumers will adopt

• Fully operational platform and service with recognized partners

• Regulatory Compliance

Corporate Website

The Obopay Edge

For customers:

Easy to AccessSimple to UseInstant Payment24x7Secure

For partners:

Payment InteroperabilityMultiple Wallet Types

Scalable, resilient and Secure Platform

Packaging, BrandingRegulatory Compliance

Risk ControlFast to Market

Integration FlexibilityEasy to Deploy

Corporate Website

Catalyzing Mobile Payments Worldwide

Thank You