1. Global View MasterCard Keith Groves, VP Customer Fraud Management MasterCard Franchise Integrity

2. ©2016 MasterCard. Proprietary and Confidential FRAUD LOSSES Global Fraud

3. ©2016 MasterCard. Proprietary and Confidential FRAUD LOSSES Global Fraud

4. ©2016 MasterCard. Proprietary and Confidential Global Fraud FRAUD LOSSES

5. ©2016 MasterCard. Proprietary and Confidential ISSUER SECURITY TRENDS Consumers are changing how they shop, connecting through more channels and devices. New consumer interaction points are growth opportunities but increase the complexity of managing fraud. ©2016 MasterCard. Proprietary and Confidential 5

6. As digital touchpoints multiply, card-not-present authorization becomes more complex and vulnerable. ISSUER SECURITY TRENDS 2004 2005 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 est.est.est.est. INTERNET OF THINGS 2,000,000,000 4,000,000,000 6,000,000,000 8,000,000,000 10,000,000,000 12,000,000,000 14,000,000,000 16,000,000,000 18,000,000,000 PCsPCs SMARTPHONES TABLETS WEARABLES CONNECTED TVS CONNECTED CARS DEVICES IN USE GLOBALLY 2 CHALLENGE Keeping pace with the demand for convenience, usability and security through every relevant device―as consumers shift from one digital device to the next 1: BI Intelligence Estimates 5 1.In 17 countries. Digitas, Connected Commerce Survey 2015. 2.eMarketer: Worldwide Ecommerce Sales to Increase Nearly 20% in 2014, July 23, 2014 O VER HALF OF ALL FRAUD NOW ORIGINATES THROUGH DIGITAL CHANNELS. 2 the average number of digital devises consumers are currently using 1 6

7. ©2016 MasterCard. Proprietary and Confidential Reporting over half of all global fraud, the booming digital environment is the latest playground for fraudsters. ISSUER SECURITY TRENDS In addition to losing 0.68% of revenue to fraud, merchants paid $3.08 for every dollar of fraud in 2014. In the US alone, issuer CNP fraud losses increased to $2.9B in 2014, and are estimated to reach $6.4 billion by 2018. MERCHANT ISSUER CONSUMER Fraud losses and costs are escalating with acceptance of new payment types. 0.68% $3.08 Issuing banks continue to lose more from CNP fraud than any other type. $2.9B $6.4B 2/3 $16B Nearly half of all identity fraud originates online via large eCommerce merchants. Two thirds of consumers impacted by data breaches fell victim to identity fraud, losing over $16B in 2014. 7

8. ©2016 MasterCard. Proprietary and Confidential Overcompensating for fraud in digital environments perpetuates an imbalance in authorization strategies. ISSUER SECURITY TRENDS 1.Javelin Advisory Services, Future Proofing Card Authorization: August 2015.. Physical Approval Rate Source/Digital Approval Rate Source: MasterCard Data Warehouse, 2014 DIGITALPHYSICAL 96% Approval 83% Approval 0.5% Fraud 0.1% Fraud 8 U.S. issuers falsely declined $118 B in transactions in 2014—13X the amount of actual fraud 1 $9B ACTUAL FRAUD $118B FALSE DECLINES

9. ©2016 MasterCard. Proprietary and Confidential 1.Javelin, Overcoming False Positives, September 2015. 2.All declined cardholders. Javelin, Future Proofing Card Authorization, August 2015. 3.MasterCard Advisors, Security Matters, “How Much Does a Declined Transaction Intended to Prevent Fraud Really Cost?,” 2014. Impact on individual issuer portfolios may vary. 4.MasterCard analysis of issuer portfolio, July–September, 2014. “05” Do not Honor declines only. 25% decreased their card usage 2 4 out of 10 39% abandoned their card 2 32% stopped shopping with retailer 1 1 in 6 of all U.S. cardholders experienced at least one decline because of suspected fraud in 2014 1 9 ISSUER SECURITY TRENDS Once a transaction is mistakenly declined, the impact can be seen on cardholder usage and spend. –11% GDV falls 11% over 3 months 3 $101:1 False decline dollars lost for every #1 in actual fraud 4

10. ©2016 MasterCard. Proprietary and Confidential Evolving consumer touchpoints create new points of payment vulnerability. ISSUER SECURITY TRENDS MAGSTRIPE CNP CVC2 EMV CHIP CONTACTLESS TOKEN PIN PASSWORD ADDRESS GEOLOCATION DEVICE BIOMETRICS BLOCKS ALERTS MONITOR DYNAMIC RULES PREDICTIVE ANALYTICS TXN DECISIONS COUNTERFEIT ADC LOST & STOLEN ID THEFT ACCOUNT TAKEOVER HOW DO YOU AUTHENTICATE THE ACCOUNT? HOW DO YOU VERIFY THE CONSUMER IDENTITY? HOW DO YOU AUTHORIZE THE TRANSACTION? THEN NOW FRAUD 10

11. ©2016 MasterCard. Proprietary and Confidential 11 ©2016 MasterCard. Proprietary and Confidential Large-scale fraud attack protection Network-level emergency fraud blocking rules Fraud rules management Transaction-level fraud risk scoring Event and list management High-spending cardholder account segment insights Consumer account and device attributes Integrated decision-based transaction score Stand-In Authorization Fraud Prevention Fraud Detection Transaction Decisioning Analytics focused on assessing risk Analytics focused on fraud exposure, consumer experience & profitability Account Validation Safety Net Expert Monitoring Fraud Rule Manager Authorization IQ Assurance IQ Auto Billing Updater Decision Intelligence Our Layered Approach to Security Issuer Security Trends

12. ©2016 MasterCard. Proprietary and Confidential MasterCard assesses the customer’s security strength across three interdependent dimensions. OUR LAYERED APPROACH TO SECURITY SECURING THE ACCOUNT SECURING THE CONSUMER SECURING THE TRANSACTION How strong is your ability to authenticate payment accounts? How strong is your ability to verify consumers are who they say they are? How strong is your ability to analyze transactions to ensure they are genuine? 2 1 3 ACCOUNT AUTHENTICATION CONSUMER VERIFICATION TRANSACTION AUTHORIZATION 12

13. ©2016 MasterCard. Proprietary and Confidential We layer security across touchpoints and channels based on your business needs. OUR LAYERED APPROACH TO SECURITY Account ValidationAccount ListingsEMVDigitization CVC1 Validation CVC2 Validation Dynamic CVC3 Validation inControl eCommerce Automatic Billing Updater Lost/Stolen List API BIN Table Resource Negative Listings M/Chip Cryptogram DSRP Dig Secure Remote Pmt MasterPass Wallet MDES Tokenization Consumer DataPasscodeDeviceGeolocationBiometric Address Validation PIN Validation SecureCodeAssurance IQLocation Alerts Location IQ Identity Check Fraud BlockingFraud AlertsFraud ScoringFraud ManagementTransaction Decisions Safety Net Transaction Blocking inControl Fraud inControl Card Security inControl Spend Mgmt CardAlert Fraud Mgr Expert Monitoring Fraud Rule Mgr Merchant Fraud Dashboard Advisors AFC Diagnostic MasterCom Disputes Decision Intelligence Authorization IQ Assurance IQ Location IQ Account Authentication Consumer Verification Transaction Authorization 1 2 3 PAN-Based Token-Based Contextual Physiological Prevention Decisioning 13

14. ©2016 MasterCard. Proprietary and Confidential 14 Comprehensive transaction fraud monitoring that addresses fraud across multiple risk dimensions. Precisely Segmented Fraud Models Segmented Data- Specific Models developed using authorization and fraud data. Network Models designed specifically for your region, country and product. Custom Models trained specifically to your data. Customizable Fraud Rules Create Custom Business Rules utilizing authorization data elements and MasterCard defined variables. Detect and Score the Risk of Fraud and perform appropriate actions based on custom business rules you define. Highly Predictive Fraud Scores Cooperative Transaction Scoring based on the likelihood of fraud using leading artificial intelligence. Patented Behavior Profiles of your cardholders. Real-Time fraud scores. Easy Management of Fraud Events Event Manager full-featured browser-based workstation fully hosted by MasterCard. Alerts provided based on events. Flexible Fraud Reports Fraud Operations Reports via Fraud Reporter that provide information accumulated from all MasterCard global transaction and fraud data. Fraud Rule Manager Fraud Scoring Fraud Detection Models Event Manager Fraud Reporter FRAUD MONITORING

15. ©2016 MasterCard. Proprietary and Confidential Generic Algorithm Business Rules Flexible Logic Text Mining Velocity Expert Monitoring Technologies Fraud Scoring Model Neural Networks Data Mining Business Rules Velocity Smart Agents Neural Networks Data Mining Optimization Case-Based Reasoning 15 State-of-the-art analytics enable targeted fraud detection that continually adjusts to new schemes. The power of 10 modeling technologies applied to MasterCard’s vast transaction and fraud data yields highly predictive fraud scores. FRAUD MONITORING

16. ©2016 MasterCard. Proprietary and Confidential Increase your accuracy in fraud detection with precise fraud models tuned to your unique needs that leverage comprehensive cardholder transaction history to address unusual activity. Lower your false positive rates with highly predictive fraud scores that reduce investigation of transactions that appear to be fraudulent but prove to be legitimate. Strengthen your customer relationships with fewer false positives and proactive cardholder alerts of suspicious activity that lessen customer inconvenience. Reduce your IT investment in fraud management with turnkey, scalable transaction fraud monitoring hosted by MasterCard. Reduce your fraud-related costs. ©2016 MasterCard. Proprietary and Confidential 16 FRAUD MONITORING

17. ©2016 MasterCard. Proprietary and Confidential Leveraging smarter transaction decisioning can yield significant benefits for you and your cardholders. 17 HIGHER REVENUES WITHOUT INCREASED RISK LOWER EXPENSES FOR OPERATIONS & SERVICE GREATER LOYALTY FROM HIGH-SPENDING CARDHOLDERS Smarter authorization criteria to approve more genuine transactions for high-spending cardholders Fewer false declines, especially on profitable transactions for high- spending cardholders Fewer declines means opportunities to reduce operational and customer service expenses Cost-effective complement to existing fraud prevention tools Lower capital and IT development costs from outsourcing segmentation to MasterCard More consistently positive consumer experience—enhances consumer affection Fewer declined transactions reduces customer service issues and reinforces brand loyalty More effective usage and retention strategies by matching cardholders to the right products FRAUD MONITORING

18. ©2016 MasterCard. Proprietary and Confidential Smarter decisioning beyond fraud to assess the risk and rewards in every transaction. Decision Intelligence Evaluates multi-dimensional authorization and cardholder criteria applying sophisticated modeling algorithms and enhanced data insights not typically available during authorization. Simplifies and integrates insights into a single transaction decision score delivered to issuers in the real-time authorization message. Helps issuers to fine-tune their authorization decisions in order to approve more genuine transactions without increasing risk. Decision Intelligence Score Cardholder segmentation Consumer transaction attributes Transaction risk 18 FRAUD MONITORING