2. History of Teba Bank Since 1976 the Fund has facilitated payments to mining industry pensioners and dependants in rural areas largely through Teba Limited agencies Since 1988 the Fund has acted as Paymaster to gold and platinum mines July 2000 full commercial banking licence Initial mandate – to provide financial services to mineworkers and their families Extended mandate – to provide affordable and accessible financial services to the existing market and the broader communities

3. It understands the market in which it operates Its core function is to exclusively service this market and no other Its services and distribution channels cater to the specific needs of the market Strategic Advantage Teba Bank is well placed to service its particular markets:

4. 72 outlets on the mines in 5 provinces 10 outlets in rural areas 6 Mining Town Branches 70 Teba agencies in rural areas of Southern Africa 37 Saswitch linked ATMs satellite network allowing real time banking at bank outlets and ATMs Web access for debit order lodging for third parties Infrastructure and Distribution

6. Business Problem definition Affordable entry point to financial services Geographic accessibility Security - network - client - bank Simplicity Adding real value to customers

7. Problem components Pricing and cost structure Point of Sales distribution Participation in national payments system Telecommunications – coverage and cost Systems – switching, databases etc. Security for client and systems Training and promotion

8. Components of the system Components Card Communications On Us POS System Off Us POS and ATM’s Backend System Transmission account Sub account system and triggers Reporting and MIS

9. Card Description The Card A plastic magnetic stripe card Linked to an online numbered account PIN based Counterfoil allows the user to easily obtain a new card without having to go into a Teba Bank branch but need only to go to an issuing merchant with the counterfoil and his PIN number. Reliable vehicle for money payouts

10. Teba Bank A-Card

11. Functionality Financial functionality Registration of account Purchase Cash back Transfer to other TAC accounts Pin-less stockless recharge of airtime Third party payments Information Functionality Third party payments Business Savings and buying clubs etc

12. Transmission account The transmission account update immediately on the receipt of information. This eliminates the risk allowing withdrawal of more money than is available. Sub account This allows different functions to be linked to the account such as medical payments only. It also allows contributions or payments to be directly paid from the account at a certain time of the month without having the expense of a debit order. Account Structure

13. Proposed communications Significant decrease in the data packet size GSM based coverage 50% cost effective than Fastnet per transaction with no additional equipment. Able to carry information and the financial transaction simultaneously.

14. Rollout to other banks Modular design Multi currency Interface adaptability Communication structure independent for countries that have low cellular / radio coverage. Easy installation

15. Regulatory and legal issues National Payments System Card associations ICASA – telecommunications Banks Act Financial Intelligence Centre legislation (Money laundering)

16. National Payments System PASA Swift PCH agreements - technology risk - settlement risk SARB Sponsorship option New switching hub Cost structure Mentorship

17. Card association membership Benefits for membership of strong card brand e.g. Mastercard - Merchant recognition - Central bank and NPS members comfort Costs

18. Telecommunications Monopoly supplier in SA Security issues

19. Bank’s Act Deposit taking Supervisory concerns - operational risk - settlement risk

20. Financial Intelligence Centre Act Use of agents to open accounts Proposed legislation exemptions: - payments of a maximum of $1500 - deposits not exceeding $200 if more than one in a calendar month and at any time an amount of $1500 which enables the account holder to maintain a balance not exceeding $2,000 - no international transfers allowed

21. Conclusions Innovation of each element required for cost effectiveness Support of regulators essential Question all assumptions made by vested interests in status quo Careful use of alliances Know your customer and the environment