1. ADVANCING EFFICIENCYADVANCING COMMERCE eInvoicing European Directive & UK Plans Steve Shirley, Senior Director, Public Sector October 29, 2014

2. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE We connect consumers, financial institutions, merchants, governments and businesses worldwide, enabling them to use electronic payment instead of cash and cheques We use technology and data driven insights to make electronic payments more convenient, secure and efficient for people everywhere MasterCard does not issue cards, but develops advanced payment solutions and seemlessly processes billions of transactions around the world each year Our business has a global reach – extending to more than 210 countries and territories and continue to experience growth in a world where 85% of transactions are still made in cash and cheques MasterCard is a technology company in the global payments business Who is MasterCard? October 29, 2014 Page 2

3. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE MasterCard provides governments with solutions that help them reduce costs, gain efficiencies, curtail fraud and corruption and advance social progress In the simplest terms... Who is MasterCard? October 29, 2014 Page 3

4. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE Reducing Cost and Driving Efficiency Reduce costs by enabling governments to deliver payments electronically Drive efficiency by helping governments : - – eliminate paper systems – implement identification solutions – manage social payments – improve procurement – deploy better transit payment options Who is MasterCard? October 29, 2014 Page 4

5. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 eInvoicing is the complete removal of paper from the invoicing process and replacing it with electronic versions not a new or even recent phenomenon - some of the earliest eInvoices were sent over 30 years ago since then eInvoices have continued to be adopted in the private and public sector at a variable pace What is eInvoicing? Page 5 Electronic Invoicing

6. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE Accelerating eInvoicing across Public Sector Call for Written Evidence Parliamentarian Sponsor Committee Formed Written Evidence Delivered Call for Verbal Evidence October 29, 2014 Page 6

7. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE Accelerating eInvoicing across Public Sector October 29, 2014 Page 7

8. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 8 Accelerating eInvoicing across Public Sector The Government should encourage transparency and greater efficiency by establishing defined targets for eInvoicing in the public sector, for example, by including how much they pay by eInvoicing and how quickly they pay, in their annual reports.

9. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Theme 1: The adoption of eInvoicing in the UK public sector supporting economic growth The public sector would benefit from a more efficient process and a minimum of £2 billion per annum savings there is a genuine need for HM Treasury/Cabinet Office/National Audit Office to establish the real and measurable savings for eInvoicing across the public sector, with a defined official methodology eInvoicing improves liquidity to SMEs through being paid on time and paying their suppliers faster Government has the opportunity to generate economic growth and innovation through its immense purchasing power. Parliamentary Inquiry Report – Key Findings Page 9 Accelerating eInvoicing across Public Sector

10. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 10 Accelerating eInvoicing across Public Sector Make eInvoicing a contractual requirement in the public sector and set common standards against the background of the European eProcurement Directives, based upon learnings from the private sector

11. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Theme 2: Learning from the UK private sector The public sector should promote the productivity and financial benefits of eInvoicing both internally and to the supply chain there is a need to agree on a common set of standards the adoption of eInvoicing as a contractual requirement should be accompanied by guidance to implementation, leveraging best practice from the private sector and around the world. Parliamentary Inquiry Report – Key Findings Page 11 Accelerating eInvoicing across Public Sector

12. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 12 Accelerating eInvoicing across Public Sector The UK should be moving from average to world leading and, by looking at the experience of other countries, seriously consider whether mandating is required in the public sector

13. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Theme 3: Learning from other countries Mandating eInvoicing has increased the speed of adoption in other countries there is a widespread perception that cost is a barrier to adoption, which can be addressed through offering nil cost solutions to SMEs - VAT returns could act as a measure to confirm the threshold under which small businesses do not pay to participate the lack of access to clear data on eInvoicing across the public sector along with the complex public sector structure further inhibits change, however potentially beneficial it might be Parliamentary Inquiry Report – Key Findings Page 13 Accelerating eInvoicing across Public Sector

14. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 14 Accelerating eInvoicing across Public Sector The Government should ensure that the rapid transposition of the European eProcurement Directives through legislation also confirms an obligation to adopt eInvoicing

15. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Theme 4: European legislation provides a framework for change There is a need to rapidly transpose the implementation of the European eProcurement Directives and simultaneously introduce eInvoicing, as without this SMEs in particular and public sector in general will not reap the full benefit no large IT project is required to implement eInvoicing Parliamentary Inquiry Report – Key Findings Page 15 Accelerating eInvoicing across Public Sector

16. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 16 Accelerating eInvoicing across Public Sector eInvoicing solutions should be paid for by efficiency savings, and be free to small businesses (up to a defined level of activity) to encourage and ensure their involvement.

17. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Theme 5: Greater inclusion of SMEs in the public procurement process eInvoicing must be easy and cost effective to ensure greater SME participation the Government should seek to increase the number of SME suppliers in the UK public sector supply chain Parliamentary Inquiry Report – Key Findings Page 17 Accelerating eInvoicing across Public Sector

18. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 18 Accelerating eInvoicing across Public Sector The Government should encourage transparency and greater efficiency by establishing defined targets for eInvoicing in the public sector, for example, by including how much they pay by eInvoicing and how quickly they pay, in their annual reports. Make eInvoicing a contractual requirement in the public sector and set common standards against the background of the European eProcurement Directives, based upon learnings from the private sector The UK should be moving from average to world leading and, by looking at the experience of other countries, seriously consider whether mandating is required in the public sector The Government should ensure that the rapid transposition of the European eProcurement Directives through legislation also confirms an obligation to adopt eInvoicing eInvoicing solutions should be paid for by efficiency savings, and be free to small businesses (up to a defined level of activity) to encourage and ensure their involvement.

19. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE Accelerating eInvoicing across Public Sector Marion King, MasterCard President, UK and Ireland with Rt Hon, Francis Maude, Minister & Stephen McPartland MP at Houses of Parliament Report Launch October 29, 2014 Page 19

20. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE Accelerating eInvoicing across Public Sector The Result October 29, 2014 Page 20

21. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 21 Cabinet Office presentation to UKNeF

22. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 22 Cabinet Office presentation to UKNeF

23. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 23 Cabinet Office presentation to UKNeF

24. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 24 Cabinet Office presentation to UKNeF

25. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 25 Cabinet Office presentation to UKNeF

26. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 26 Cabinet Office presentation to UKNeF

27. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Page 27 Cabinet Office presentation to UKNeF

28. ©2014 MasterCard. Proprietary ADVANCING EFFICIENCYADVANCING COMMERCE October 29, 2014 Small Business, Enterprise & Employment Bill Page 28 And the next steps……..