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Innovations and Strategies in Cards, Payments & Identification

WALLET LANDSCAPE 2020

Executive Director, Al Fardan Group General Manager, Al Fardan Exchange Chairman, Global Reach

OSAMA AL RAHMA

 M-PAYMENTS: RE-DEFINE WALLET LANDSCAPE KEY DRIVERS: M-PAYMENTS IN MIDDLE EAST CHALLENGES: GROWTH OF M-PAYMENTS IN MIDDLE EAST e-MONEY: WAGE PROTECTION SYSTEM GLOBAL REMITTANCE LANDSCAPE ENABLING MOBILE REMITTANCE PREPAID TRAVEL CARDS WALLET LANDSCAPE 2020 AGENDA

4,200,000,000
People out of the 7,000,000,000 worldwide use at least one Mobile Phone

$ 55,000,000,000
Expected Mobile Remittance Transactions by 2016. Migrant Worker Communities in Middle East and Africa and US/Mexico to trigger the growth.

43.7%
Smartphone penetration in UAE Market offers users access to eMail, Social Networking and Mobile Application.

65%
M-Payment Market Share is expected to be in emerging markets such as Asia, Middle East Arica and South America by 2012.

$ 670,000,000,000
Expected total Value of mobile payments globally for digital and physical goods, money transfers and NFC by 2015.
References
Remittance and payment business to undergo shift, Gulf News, March 2012; Arab Advisor Group Survey , March 2012; Mobile Payment Opportunity in Middle East, Grail Research , February 2010

M-PAYMENTS: RE-DEFINE WALLET LANDSCAPE

RELATIVELY HIGH MOBILE PENETRATION

LARGE NUMBER OF TRANSIENT WORKFORCE

LARGE MIGRANT WORKFORCE DEMANDING REMITTANCE SERVICE

SOCIO-ECONOMIC DYNAMICS

GOVERNMENT INITIATIVES

KEY DRIVERS: M-PAYMENTS IN MIDDLE EAST

GCC Mobile Penetration

United Arab Emirates Saudi Arabia Qatar Oman Kuwait
0.00% 50.00% 100.00% 150.00% 200.00% 250.00%

30,000,000
Migrant Workers in the Middle East region offers substantial outflow of funds from the region.

39%
Migrant Workers in UAE are Unbanked. Saudi Arabia (29%) also have considerable unbanked expat population.

1% 4% 11% Remittance Top-Up 84% Retail Others

5.6% (CAGR)
Mobile Workforce in the EMEA region will grow from 186.2 Million in 2010 to 244.6 Million in 2015.

Middle East Africa M-Payment Transaction Value by Segment, 2012E

References

Financial Inclusion in the MENA: Analysis and Road Map Recommendation , Douglas Pearce, World Bank; Mobile Payment Opportunity in Middle East, Grail Research , February 2010; Worldwide Mobile Worker Population 2011-2015 Forecast, IDC

KEY DRIVERS: M-PAYMENTS IN MIDDLE EAST

SOCIO ECONOMIC FACTORS

Routine Financial Habits Concentrated Residential Access High Proportion of relatively Low Income Level Migrant community Lack of dedicated Products and Services for the Unbanked Insistence of World Bank, to reduce Remittance Fee Wage Protection System, United Arab Emirates

GOVERNMENT INITIATIVES

Dubai e-Government Initiative Mobile Payment Gateway mPay Services Offered Salik Recharge Road Transport Authority Traffic Fines Dubai Police Utility Bills Dubai Electricity and Water Authority

KEY DRIVERS: M-PAYMENTS IN MIDDLE EAST

CREATING TECHNOLOGY USAGE AWARENESS

A large segment of the unbanked population in the Middle East is not comfortable with the use of technology for payments and is guided my lots of myths and fear. Service providers will need to invest in simplifying the technology and interface, and in educating customers A wide distribution network of agents is critical to success in this market, but setting up and maintaining such a network can be difficult and costly in a some countries. Low start-up costs and an attractive commission structure for their network of agents will be critical for success. The regulatory framework for financial transactions via mobile phones is currently not well developed. The Regulators may have to adopt strict and proactive measures with respect to KYC, TM which may add cost and slow adoption. Requirement of a Bank Account Not focusing on Unbanked Population Nascent Nature of the M-Money Industry

EASILY ACCESSIBILE DISTRIBUTION NETWORK

OVERCOMING REGULATORY BARRIERS

LACK OF CLARITY AND DIRECTION AMONG SERVICE PROVIDERS

CHALLENGES: GROWTH OF M-PAYMENTS IN MIDDLE EAST

PRODUCT FEATURES Compliant with WPS (Wage Protection System) Offers Comprehensive Platform for Corporate Payroll and Remittance Service. Single Mode Salary Payment Banked and Unbanked Employees 24 X 7 salary withdrawal and remittance (on ATMs). OEM Online Employee Management web based application for Employee Registration and Payroll Management. CASH-OUT LOCATIONS Over 40 branches of Al Fardan Exchange across Over 650 Emirates NBD ATMs across UAE

e-MONEY: WAGE PROTECTION SYSTEM

SIF FILE PROCESSING

SIF FILE VERIFICATION

2
SIF FILE TRANSFER INITIATE SALARY TRANSFER

3
CENTRAL BANK OF UAE

UPDATE SALARY TRANSFER

MINISTRY OF LABOUR

6
AL FARDAN EXCHANGE

CONFIRM SALARY TRANSFER

ATM

1
REGISTRATION

5
PROCESS SALARY TRANSFER
AL FARDAN eMONEY

8
EMPLOYEE SALARY CASH-OUT
BRANCH

EMPLOYER
MOBILE POS

e-MONEY: WAGE PROTECTION SYSTEM

215 Million International Migrants Worldwide sent an estimated US$325 Billion to their families in developing countries in 2010 and will reach US$374 Billion by 2012

EUROPEAN UNION US$ 42.3 Billion UNITED STATES US$ 48 Billion MEXICO US$ 22.6 Billion

RUSSIAN FEDERATION US$ 18.6 Billion

MOROCCO US$ 6.4 Billion

PAKISTAN US$ 9.4 Billion EGYPT US$ 7.7 Billion

CHINA US$ 51 Billion

BANGLADESH GCC US$ 11.1 Billion US$ 63.75 Billion INDIA PHILIPPINES US$ 55 Billion US$ 21.3 Billion

LATIN AMERICA US$ 58.1 Billion

SUB-SAHARAN AFRICA US$ 21.5 Billion AUSTRALIA US$ 3 Billion

REMITTANCE SENDING COUNTRIES REMITTANCE RECEIVING COUNTRIES Source: Migration & Remittance Handbook 2011, World Bank

GLOBAL REMITTANCE LANDSCAPE

PAYROLL CARD

REACH m-Remittance

REACH PARTNER NETWORK

BANK ACOCUNT BANK ACCOUNT

4
BENEFICIARY

MOBILE WALLET

CASH

ENABLING MOBILE REMITTANCE

 Reloadable Prepaid Card that offers consumers with: Secure alternative to CASH Ideal replacement to Travelers Cheques Better control over spending with benefit of worldwide acceptance Available in AED & USD Currencies Accepted Globally on VISA network POS, ATM & Online Support Features Card to Card Transfer Balance Inquiry Transaction History Dedicated Web Service on http://www.travelezcard.com Dedicated Call Centre Service (600544474)

PREPAID TRAVEL CARDS

Payroll Cards Prepaid Cards M-Remittance Wallets

NFC Enabled M-Payments

Credit / Debit Cards

Rise in Prominence of Remittance Wallets and NFC Enabled M-Payment are to dilute the share of other Wallet Options such as Physical Wallets and Card Based Payment Systems.

WALLET LANDSCAPE 2020

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