Mobile Interactive Mobile Interactive Payment with NFC Payment with NFC

– – Tap N Go!Tap N Go!

A presentation to China Card & Payment Conference 2007

Kelvin Lu, Product Sales & Delivery, Asia Pacific.

April 28, 2007 2

Consumers Are Looking for Everyday Convenience, while businesses are Looking for a Competitive Edge

• Contactless payments / RFID / MasterCard paypass

• Mobile payments

• Biometrics

Resulting in a new breed of card products and next-generation payment options:

April 28, 2007 3

MasterCard paypass ™

Making Everyday Fast and Easy

What is paypass?

• paypass is a contactless radio frequency (RFID) payment solution

• speeds customers through the checkout process and is proven to increase card usage and average purchase amount

• PayPass cards and devices feature a hidden embedded computer chip and radio frequency antenna

How Does It Work?

• Cardholders tap the paypass card or device (eg. key fob) on a paypass-enabled POS merchant terminal eliminating the need for cardholders to hand over their card for a merchant to swipe through a reader

• The transaction is processed through the highly-trusted MasterCard acceptance network in the normal manner

• Seconds later, cardholders receive payment confirmation and are on their way

April 28, 2007 4

paypass Status

• Around 13 Million Cards/Devices Issued Globally

• Many thousands of paypass Readers & 46,000 Merchant Locations Globally (as of 4Q06)

• Regardless of the paypass (Magstripe/MChip) versions, they are all interoperable

• Major global and local card manufacturers, terminal vendors, other equipment and systems vendors have signed up to support paypass solutions & implementations

• With major AP project launches, expertise and experience have built up for the support of paypass locally.

The Momentum is Building!

April 28, 2007 5

MasterCard paypass and co-branded cards

Magstripe paypass

cards

April 28, 2007 6

MasterCard paypass and co-branded cards

One Smart paypass

cards

April 28, 2007 7

paypass Merchants

April 28, 2007 8

Public Transport

Vending Machines

Parking

Continuing to Expand paypass Acceptance

Taxis

April 28, 2007 9

• Contactless protocol covering payment and non-payment applications

• Global Footprint – over 13 million paypass cards/ devices worldwide

• Available across Credit, Debit and Pre-paid (gift Card) functionalities based on EMV standard

• Flexibility – TWO product versions available in Magstripe or EMV to leverage on existing issuer infrastructure

• World-wide acceptance & Open standards

• Fast, secure and low risk through online and offline authorization capability

MasterCard paypass – Key Customer Benefits

April 28, 2007 10

• Global Interoperability

• Region-wide presence (Taiwan, Malaysia, Korea, Australia, Japan, Indonesia, China)

• Very stable and mature product

• Strong expertise in implementations as well as deep linkages with vendor & channel

• Product Innovation through Alternate Form Factors (cards, phones, watches, key fobs) NFC, etc.

MasterCard paypass – Key Elements of Differentiation

April 28, 2007 11

paypass and NFC

• Comparison: compatible, not compliant

• Purpose: NFC device can do paypass

PayPass ISO/IEC 14443PayPass ISO/IEC 14443Digital (software)Digital (software)

Analogue (hardware)Analogue (hardware)

ISO/IEC 18092ISO/IEC 18092

PayPass -Mag StripePayPass -Mag Stripe

PayPass -M/Chip

PayPass -M/Chip

SmartPosterSmartPoster

BluetoothConf.

BluetoothConf.L2L2

L1L1

Digital (software)Digital (software)

Analogue (hardware)Analogue (hardware)

PayPass -Mag StripePayPass -Mag Stripe

PayPass -M/Chip

PayPass -M/Chip

SmartPosterSmartPoster

BluetoothConf.

BluetoothConf.

PayPass ISO/IEC 14443PayPass ISO/IEC 14443 ISO/IEC 18092ISO/IEC 18092

April 28, 2007 12

Near Field CommunicationSupports 3 Main Mobile Applications

Peer-to-Peer Communication

Peer-to-Peer Communication

Mobile Payment & Transaction

Mobile Payment & Transaction

Access to Info On-the-move

Passive RFID Tags

SecureSmart Card

Technology

Service Discover

y

Simple Connectivit

y

April 28, 2007 13

NOKIA3220/6131

SAMSUNG

D500

Windows OS

Palm OSWindows

OS

NFC

PDASPHONESNFC

SD CARD

Mobile Devices with NFC will become mainstream within the next 2-5 years

NFC Phone In Real Products

SAMSUNG

Onyx 700

BENQM 700

MacallyeNetMous

e

+Sandisk SmartMX+Memory

Motorola SLVR

April 28, 2007 16

Interactive Functionality Delivered by MasterCard Mobile with paypass

Search directory, guide & recommendations

•Shopping•Eating•Drinking•Events•Travel

Alerts and tailored offers

•Stores•Eating & drinking•Exclusive and last

minute offers

Customizable• New applications &

services securely downloaded over the air

• Expired services removed• Personalized for individual

Banking• Robust authentication

mechanism to support online banking

Purchases

• At POS using paypass• Leverage for increased

security

Electronic• Supply and secure

storage of coupons, receipts, rewards, tickets

• Redemption interface

Direct Communication / P2P• Contact merchant, issuer through web, voice, text

April 28, 2007 18

Smart Posters interaction with NFC phones

April 28, 2007 19

Enabling Technologies MasterCard Mobile Authentication

•Internet Banking

•Phone Order

•Phone Banking

April 28, 2007 20

Smart Posters, e-coupons, Interactive info/data

April 28, 2007 21

“Over-The-Air” Download of payment card

OTA Download of Payment cards into NFC phone Secure

Convenient and Fast

User Control (in control of request)

Mobile Network

Bank Issuing Server

April 28, 2007 22

OTA Download of e-Coupon

Mobile Network

Bank Issuing Server

Simple Download Instruction

New NFC Phone

Mobile User – requesting via simple steps

Option Exit

____ViVOwallet___

PayPass card is downloaded into phone

April 28, 2007 23

Smart Column / Service Discovery

Service Discovery Auto Start and “discover” content on Smart Column/Poster Via NFC phone Contents

Virtual Money

Merchant/Services Partners Contents

SmartColumn

April 28, 2007 24

Usage of paypass phone to make purchase

Mobile User (with downloaded Virtual Money

1 2

Purchase/Redemption Devices

Purchases

User Select paypass on NFC Phone

3

April 28, 2007 25

Purchase/Redemption Devices

Redemption of Coffee e-Coupon

Mobile User

Date:XXXXXX ID:000000000

Exchange for your free

cup of coffeePaper Coupon

User exchange Paper Coupon at Cafe

Free Cup of Coffee

1 2

34

User Select Coffee Coupon on NFC Phone

April 28, 2007 26

• Contactless payment is the trend and momentum is building.

• Widespread and suitable paypass merchant acceptance is critical

• Require different contactless reader products for various acceptance environment.

• paypass NFC with mobile phone encourages more interactive payment via content/service discovery.

• paypass Merchants, Telco partners and cardholder can all benefit.

Conclusion

Thank you.

kelvin_lu@mastercard.com13816683194