One view of the mobile banking and payments landscape in 2010, including some case studies: NMB mobile in Tanzania, Rabobank in The Netherlands and some emerging proximity payments models leveraging NFC.

1. Mobile Banking & Payments Development Brief presentation on some trends in mobile banking, mobile remote and proximity payments world-wide, and in The Netherlands. Dan Armstrong, Takashi Mobile | Financial Services Wim Westerhof, Rabobank Nederland Cees Onderwater, Rabobank Nederland 13 September 2010

2. The 2010 Mobile Banking & Payments Landscape Technologies and products in use world-wide What services work in what regions, and what is going on in The Netherlands Case Studies: Rabo Development & NMB mobile (Tanzania) Rabo Mobiel & Rabobank Mobielbankieren (The Netherlands) Proximity Payments Contents

3. Landscape of Mobile Banking and Payments Rabobank, ABN AMRO, ING, SNS, etc. 1990-1999, continues … 2002, continues … (quite popular) IVR Banking & Payments SMS Account Activity Alerts Multi-ChannelBalance-Checking Others … Full-Service Mobile Banking Remote Payments and Electronic Wallets Mobile Contactless Payments (NFC) Java WAP STK USSD iPhone Windows Mobile Samsung JET Android Etc. VISA MobileAndroid ( ?) Note: not exhaustive, there are other technologies used in the world, but these are the major ones.

5. Saldo information

6. Account management

7. Authorised mobile payments (“overmaken”) like transfers and bill payments

9. Some overlap with “Mobile Banking”

10. Also serves three-corner mobile wallet systems (e.g. PayPal and OV-chipkaart)

11. Also serves credit cards, mobile operator wallets, etc.

13. Value-Add: Combination products (e.g. loyalty, discounts, internet access combined with purchase moments, etc.IN NL: sort of… … plus trials … plus mobile banking products.

14. Remote payments can take on different forms … Complicated landscape currently surrounding “remote payments”, as differentiated from “proximity payments” Online versions: Paypal, iDEAL, credit card, Facebook Payments, internet banking, etc. In the future, is the mobile phone simply a small internet device? However, different .. Security (authentication) issues User-experience issues Trust issues 2010 seems to be a “hybrid year” .. Old mobile payment models going away (SMS, WAP, OTP-only models) Clear trend towards mobile applications Increased usability of mobile banking, mobile payments, in-application payments and e-value However, standards? 3-corner model vs. 4-corner model clearly an issue .. VISA Mobile

16. Profitability for apps?

17. In-app payments?

18. Proximity payments???

19. Hardware sales, lock-in?

20. M-PESA (Kenya) a huge success, but not many other countries have had similar experiences.

21. P2P money transfer first, expansion to payments , savings accounts (MKESHO)

22. However, business goals are churn reduction / loyalty to the SIM card?

23. GCASH (Philippines) leapt from P2P money transfer for retail payments quickly.

24. Can be a strategy in countries without POS; however, is it mobile operator core business?

28. Economic, political and social stability

29. Rural area and agricultural sector important for economy

30. Open for foreign investments

33. Highly-successful “sub-branded” operations help Zanaco change it’s image, sign-up for an account in 5 minutes.

34. 130.000 active customers to-date

35. 20+ bill payment partners, prepaid airtime, etc.

37. USSD II mobile banking & SMS Alerts

38. MTN & Tigo (90%+ mobile penetration)*150#

40. 300.000+ active customers to-date, hugely successful and profitable, break-even: 8 months

41. Prepaid airtime, bill payment, prepaid electricity

42. Vodacom, Zain, Tigo, Zantel (99% mobile penetration)

44. Successful to-date – packaging of ATM card, bank account and mobile banking functionality

48. Easy-to-use NMB mobile banking and payments for all NMB customers (USSD) Features the most desired consumer applications: Balance Inquiry Mini-Statement Money transfers to any NMB account TanescoLuku Prepaid Electricity Purchase Vodacom and ZAIN Prepaid Airtime Top-Up NMB Services like ATM card block, settings Works with NMB Personal Account, TPDF Account, Student Account, Wisdom Account Simply dial *155*66# to access No need to fill-in forms or visit an NMB branch to sign-up, simply dial *155*66*123# NMB mobile NMB mobile 1. Balance Enquiry 2. Mini-Statement 3. Money Transfer 4. Prepaid Services 5. Other Services 6. Help

49. Example: Mobile Banking Menu (USSD) Your NMB account balance is: TSH 000,000.00Enter “9” to return to the main menu. NMB mobile Balance Enquiry Mini-Statement Money Transfer Bills & Payments Purchase Airtime Bank Services Help *155*66# NMB mobile Please enter your NMB mobile PIN. NMB mobile 1. Balance Enquiry 2. Mini-Statement 3. Money Transfer 4. Bills & Payments 5. Purchase Airtime 6. Bank Services 7. Help Pease enter the recipient account or phone number registered for NMB mobile that you wish to transfer money to: Enter the amount of money to be transferred: Please confirm your money transfer:TSH 000,000will be transferred to Enter “0” to confirm transfer and send. Money transfer successful!TSH 000,000was transferred to NMB mobile Ref. No: 12345678Enter “9” to return to the main menu.

51. Example from Western Europe : Rabo Mobiel

52. Case Study : Rabo Mobiel & Rabobank Mobielbankieren 2006 Launch Campaign

53. Rabobank GSM MVNO & Value-Added Bank Product Great, Core Mobile Telecommunications Product Rabobank Values – trust, security, quality, easy-to-use services, cooperative value Online Self-Care Environment Secure Mobile Banking Commitment to Applications Innovation (Mobile Financial Services)

54. Rabo Mobiel in the Marketplace

55. Rabo Mobiel in the Marketplace

56. 1.Rabobank GSM MVNO Telecommunications Services Mobile Internet Access Mobile Content, Information & Media Portals and Self-Care 2. Value-Added Bank Product Banking “On the Go” Premium Product / Combination Communications Channel for Local Banks, Members and Customers 3.Mobile Incubator Product/Business Development for Mobile Financial Services and Products Launch of Remote and Contactless Payments and Partnerships 4.Mobile Knowledge Centre NFC, Consumer Behaviour & UsabilityEncryption, Mobile Business Rules Mobile Low-Value Payments Standards, Retail/Consumer Acceptance, Security, Sustainability Rationale for Rabo Mobiel

57. Rabobank Mobile Banking Balance checking and Alerts = “killer apps” Transfers still mostly occur via Internet Mobielbankieren enables transfers to known parties and payments up to €50.000 with Random Reader (100.000+ active users) SaldoDirekt provides 1-click account balances on all your accounts Rabofoon telephone banking (IVR) SMS Alerts for banking, transfers, payments, telco spending alerts Mijn Mobiel telecommunications spending alerts, history and invoices Rabo Financial Services Portal with financial services info., current stocks and financial news WAP iPhone Android WM WAP IVR SMS SMS WAP WAP WEB WAPlaunched in 2003

58. Rabobank Mobile Banking Applications Samsung Jét … Windows Mobile also iPhone Android

59. Rabobank Mobielbankieren : Usage 2010 HUGE growth in mobilebankieren with the launch of “Apps” tov. WAP-based mobilebankieren 2006-2009 level Basically static Mobielbankieren usage 2003-2006. Rabo Mobiel launch and promotion increased the usage from 2006-2009. Launch of “apps” in late 2009 generated hugely increasing sign-up and usage figures.

60. Some Other Rabobank iPhone Applications Rabo Sport Rabo Hockey

61. SMS Betalen iPhone application v.1

62. Rabobank Remote Payments Projects SMS Betalen: Launch of P2Ppayments directly to/from MSISDNs, J2ME midlets, iPhone application, online website, MiniTix Merchants (2008) MiniTix Online (2004-06), MiniTix SMS (2007), SMS Betalen(2008), MiniTix NFC (2008-09) Customer bank account WAP iPhone WM SMS WEB J2ME NFC

63. Rabobank Remote Payments Projects Mobile Terrace Payments: MyOrder at various locations (2008-09) Albert Heijn To-Go NFC Shopping: Amsterdam Amstel (2008-09) J2ME iPhone NFC J2ME Bluetooth Mobile Health: StichtingDiabeter, Health Agency, Achmea (2008-09) MiniTix Mobile Merchants: SMS Betalen Java (2008-09) Mobile Parking: Park-Line (2007)Rekeningrijden: with Rabobank (2008-09) iPhone J2ME WM SMS

64. Rabobank Proximity Payments Projects NFC Mobile Ticketing: DiergaardeBlijdoorp (2008-09)NFC Fietsenstalling: Eindhoven, Tilburg (2008-09) NFC Cashless Schools: kassa’s and vending, ASH, HHS/Redbird (2007-09)NFC Cantina Trials & Roll-Out: Carian/MiniTix (2008-09) RabobankRotterdam NFC NFC WEB NFC Vending Trials: Coca-Cola, FEBO (2007-08) NFC Mobile Domestic Debit Card and Shopping Tool: C1000 (2007-08) J2ME J2ME WEB NFC NFC

65. Proximity Payments

66. A view of the evolution of bank cards through EMV and beyond. “proximity payments” being seen as “card present” transactions. Most contactless EMV products launched to-date target LVP. A view of payment token evolution NFC Loyalty & Membership Shopping & SmartPosters Proprietary Bank Cards Contactless EMV Cards Non-EMV Cards EMV Cards NFC Mobile Phones with EMV Card Emulation NFC Ticketing & Coupons NFC Public Transport Other, P2P, Payment, etc.

67. The broader NL NFC application landscape Some thoughts .. Vending NFC delivers interaction in the physical world, therefore card-emulation is a key focus. DebitCards In-Store Formulas AccessControl Credit Cards Smart Posters However, mobile apps & device connectivity deliver true differentiation over cards. PublicTransport SchoolsCantinas Parking Ticketing Loyalty &Discount Success comes via attention to customer requirements not technology-push. OtherPayment Couponing Membership NFC P2PInteractivity

68. Some examples world-wide of mobile NFC = proposed for, or existing commercial roll-outs Italy France USA Netherlands Norway Czech Republic Slovenia France Canada United Kingdom Georgia South Korea Japan Netherlands Netherlands France Poland Switzerland Spain Guatemala Spain Turkey Taiwan Thailand Singapore Indonesia Australia Japan Taiwan Italy Romania Malaysia

69. NFC SWP Handsets NFC SWP UICC NFC Mobile Payment Applications NFC Mobile Wallet Applications TSM Role Bank/SP Management, New Banks/SPs Life-Cycle & Memory Management OTA Capability & MNO Interface Management Certification & Compliance NFC POS, Other NFC Readers for NFC VAS NFC Customer Experience Other Value-Added NFC Handset Applications NFC POS Formulas & Combinations Brand & Marketing, Launch & Continuing Campaigns Elements of the mobile NFC ecosystem TSM Role

70. So many apps ... how to eliminate point-to-point chaos? MNO MNO MNO

71. The “Trusted Services Manager” Role MNO MNO MNO “Please ensure that APPLICATION X gets to USER Y on MNO Z.” “Trusted Services Manager” Role “Make sure that when there are changes of any sort required, that can be managed securely and easily.”

72. Six-Company Cooperation for Proximity Payments in NL

73. Thank You! Dan Armstrong Takashi Mobile | Financial Services Rapenburgerplein 81 1011 VJ Amsterdam The Netherlands www.takashimobile.com dan.armstrong@takashimobile.com +31 652 085 071