1. Beirut International Franchise Forum Panel 3: E-commerce & Mobile Shopping; The Future Shopping Reality Mr. Stephan Becker Chief Executive Officer Payfair

2. click here to add main title click here to add sub title New and innovative payment solutions payfair The future of E-Commerce and Mobile Shopping BIFEX Beirut, 17 th April 2013 2

3. click here to add main title click here to add sub title New and innovative payment solutions 1. Payment scheme solutions 2. Merchant acquiring solutions 3. Technology solutions payfair –The new SEPA compliant Payment Scheme Addressing the needs of the changing payment landscape 3 Switching Clearing & Settlement Rules & Regulations Regional Focus Niche Markets Closed and Open Loop Integration of different Mobile payment solutions Case driven MIF Cross Border Acquiring Dedicated solutions for “High risk” business Mobile Payments Unbanked Population New merchants (terminal costs and security) Integration of new technology E-commerce

4. click here to add main title click here to add sub title New and innovative payment solutions New trends are shaping the future of payments There is a huge area where authorities, Central Banks, Banks, Mobile Operators, Merchants, Consumers, and the virtual / mobile world require new payment solutions 4

5. click here to add main title click here to add sub title New and innovative payment solutions  Regulation Governments will try to harmonize the markets and keep control Central Banks will need to change, allowing new entrants and new business EU – The SEPA card framework will have influence on other regions as well  Consumer Behavior Young generation has new requirements Security and ease of use Mobile attitude and requirements  New Entrants Mobile Operators are entering the payment space in Emerging markets Google, Apple, PayPal and other start competing with “old players” and address needs of young generation  Technologic Innovations NFC and QR-code will change the payment process as well as the infrastructure Apps  Market Requirements Merchants as well as regulators are “not happy with MIF” Changed customer demand and behavior needs to addressed. Drivers for Change 5

6. click here to add main title click here to add sub title New and innovative payment solutions  Growing concerns regarding e-commerce/e-payments: 50% of total card fraud is due to CNP (card not present) internet transactions 60% increase of this type of fraud per year 70% of interruptions of e-commerce transactions occur at moment of payment  Consumers are calling for Security in payments Convenience No need to have a card (at least in the short term) Ease of use  Merchants are calling for Guaranteed payments Secure processes leading to minimal charge backs (only service not rendered) Robust process ensuring all transactions get to completion Competitive cost and pricing. The challenges of E- and M-commerce 6 Mobile authentication is more secure than using card and personal data

7. click here to add main title click here to add sub title New and innovative payment solutions Is it reasonable to upgrade this original but ‘veteran’ version with today’s new ‘standard’ features and characteristics ? At what final cost ? Image reputation ? Uncertainty about final performances, life cycle and investments and about future developments... 2013: normal & ‘mandatory’ features & characteristics Consumption 3,7 l/100km, CO² 99 gr/km ABS-EPS-DCS-Airbags ***** EuroNCap (anti collision test) GPS-MP3-Electronics... (VW Golf I, 1977)(VW Golf VII, 2011) Better to opt straight for the new and better one with cost reductions & latest new technologies The Legacy Dilemma – just a comparison … Fiscal status : if >25 years old  « vintage car ! » 7

8. click here to add main title click here to add sub title New and innovative payment solutions Cards Market Many organisations compete for share of the payments market – Are the etablished players still in the same boat? Traditionally driven by Banks and credit Card companies Established networks and infrastructure, but difficult to change Dominance of Visa and MasterCard Difficult to change and to adopt Slow innovation Fraud is an issue High costs of infrastructure Banks - card based schemes challenged by new and alternative propositions Fast emergence of new players / service providers moving in the payment value chain Young generation has different behavior and requirements Still difficult to participate for unbanked population On line market Existing card infrastructure under pressure. Banks / Telco’s / MNO’s pursuing different objectives Growth in low value / quick check- out locations and in emerging markets Fast innovation Independency from physical infrastructure New technologies change the way of payments (QR, NFC, …) Mobile payments market A competitive Market 8

9. click here to add main title click here to add sub title New and innovative payment solutions  The future of payments will be driven by Mobile operators (Vodaphone, Orange….) Phone and Hardware producers (Apple, Microsoft, Nokia…) E-Commerce shops (Amazon, eBay,….PayPal) Social Networks (Facebook….)  Regional differences need to be taken into account already up to 80% of the monthly salaries are paid to mobile accounts 80% of the populations have a mobile phone, but only 20% a bank account  A new generation of consumers Globally the “Young Generation” is early and more often used to Mobile Phones than Bank Accounts. The young generation is much more used to online than to offline. Retailers will need to establish new partnerships for payments 9 New players will drive innovation in e- and m-commerce payments

10. click here to add main title click here to add sub title New and innovative payment solutions  Physical World Plastic will disappear over the next 10 years QR code and NFC will be new technology mainly on smart phones The payment will be initiated by the consumer, therefore no need of payment infrastructure at merchants  E-commerce One time virtual cards Mobile authentication by Sound, QR, one time PIN Online banking – Credit transfer  M-Commerce “PayPal” like services and apps New types of accounts (Facebook, Apple) Direct Debits to Mobile Account. Physical cards will be replace by virtual cards and mobiles 10 Retailors will have less investment in physical infrastructure but need to invest in E-commerce and mobile payment infrastructure

11. click here to add main title click here to add sub title New and innovative payment solutions Plasitc will disappear and the Mobile phone will be the “payment device” The exisitng infrastructure will be replaced and paymnets will be initiated by the Mobile phone and the phone holder New players will enter the market and drive innovation. “Old Players” will try to protect markets and new alliances will be formed Retailers need to establish relations with new players in the payment industry and review their means of accepted paymnets Conclusions 11 The changing payments behaviour and a change in requirements will request retailers to define and establsih a new payment infrastructure

12. click here to add main title click here to add sub title New and innovative payment solutions Thank you! Stephan Becker, CEO payfair Group 4-Bras Building Mechelsesteenweg 455/19 1950 Kraainem (Belgium) T: +32 2 767 66 66 M: +32 479 81 66 45 stephan.becker@payfair.eu 12