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  • 1. Mobile Wallets Current Trends and Future Prospects October 24, 2013Wednesday, October 23, 13

2. What Exactly is a Mobile Wallet? An application on the mobile phone that processes electronic payments. A mobile device that has a secure element associated with it that allows important nancial and personal data to be stored on the phone. A service that lets users integrate payment, loyalty, account history, and nancial instruments all in one application. A service that is usually targeted to cardholders, although some offers do focus on merchants. Mobile Wallet Presentation, October 24, 2013 I All rights ReservedWednesday, October 23, 132www.paytroniks.com I info@paytromiks.com I 469-271-4774 3. Currently over 150 mobile wallet initiatives in the world!Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 133www.paytroniks.com I info@paytromiks.com I 469-271-4774 4. Lets Simplify it a Bit... Merchant focusHolistic focusMobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 134Cardholder focuswww.paytroniks.com I info@paytromiks.com I 469-271-4774 5. Agenda Recent Announcements and Their Implications Consumer Attitudes and Apathy The Mobile Wallet Simple Matrix Trends for the FutureMobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 135www.paytroniks.com I info@paytromiks.com I 469-271-4774 6. Agenda Recent Announcements and Their Implications Consumer Attitudes and Apathy The Mobile Wallet Simple Matrix Trends for the FutureMobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 136www.paytroniks.com I info@paytromiks.com I 469-271-4774 7. Recent Announcements Loop rolling out mobile wallet that works at 90% of retailers Boston Business Journal, October 21, 2013How Will the Isis Mobile Wallet Stand Out? All Things D, October 16, 2013Central Bank approval awaited for mobile wallet GulfNews.com, October 22, 2013Mobile wallet progress stalled in 2013, but could heat up in 2014 American Banking Journal, October 15, 2013Google Wallet Gets an Update The Street, October 17, 2013Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 137www.paytroniks.com I info@paytromiks.com I 469-271-4774 8. Agenda Recent Announcements and Their Implications Consumer Attitudes and Apathy The Mobile Wallet Simple Matrix Trends for the FutureMobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 138www.paytroniks.com I info@paytromiks.com I 469-271-4774 9. Consumer Attitudes 79% of consumers remain concerned with security of payment information stored on wallet Identication of Drivers - 34% of overall respondents would use a mobile wallet to originate payments First Data Universal Commerce Tracker Study, 2013UK Study FC Business Intelligence LTD, 2013 49% for 25-34 year olds55% for 18-24 year olds46% for smart phone users51% when incentive is offeredHowever, studies in the US indicate that over 60% of consumers are not interested in a mobile wallet. Why the apathy? Consult Hyperion, 2013Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 139www.paytroniks.com I info@paytromiks.com I 469-271-4774 10. Why the Mobile Wallet Apathy? We have established that security is one key reason for low interest in mobile wallets...but maybe a stronger reason is in front of us in plain sight....could it be that 100% of smart phones already have a mobile wallet on them? The simple answer is YES!Beyond safety issues, consumer apathy is due to two reasons: Mobile wallet offers are too many and too fragmented Value offering is not yet strong enough Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1310www.paytroniks.com I info@paytromiks.com I 469-271-4774 11. Agenda Recent Announcements and Their Implications Consumer Attitudes and Apathy The Mobile Wallet Simple Matrix Trends for the FutureMobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1311www.paytroniks.com I info@paytromiks.com I 469-271-4774 12. Mobile Wallet Simple Matrix Alternative (Cash or other method) CimbalWestern UnionDwolla MCXYeCelPayPal P2PCardholdersMerchantsPayPal HereGoPago Square RegisterMocaPayTabbed OutSquare Cash PayPal Prepaid Paydiant KuaPayLevel UpRoam X4Google WalletCorduroIsisSquare Reader Mobile Pay Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 13Square WalletCorduroTraditional (Visa / MC)12www.paytroniks.com I info@paytromiks.com I 469-271-4774 13. Mobile Wallet Simple Matrix Alternative (Cash or other method) CimbalWestern UnionDwolla MCXYeCelLegend Competition ClustersPayPal HerePayPal P2PNiche SolutionsGoPagoOmnicommerce Players CardholdersMerchantsSquare CashSolutions on Y axis are P2P focusedSquare Register Tabbed OutMocaPay Square Cash PayPal PrepaidPaydiant KuaPayLevel UpRoam X4Google WalletCorduroIsisSquare Reader Mobile Pay Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 13Square WalletCorduroTraditional (Visa / MC)13www.paytroniks.com I info@paytromiks.com I 469-271-4774 14. Agenda Recent Announcements and Their Implications Consumer Attitudes and Apathy The Mobile Wallet Simple Matrix Trends for the FutureMobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1314www.paytroniks.com I info@paytromiks.com I 469-271-4774 15. Future Trend # 1 Alternative (Cash or other method) CimbalWestern UnionDwolla MCXYeCelLegend Competition ClustersPayPal HerePayPal P2PNiche SolutionsGoPagoOmnicommerce Players CardholdersMerchantsSquare CashSolutions on Y axis are P2P focusedSquare Register Tabbed OutMocaPay Square Cash PayPal PrepaidPaydiant KuaPayLevel UpRoam X4Google WalletCorduroIsisSquare Reader Mobile Pay Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 13Square WalletCorduroTraditional (Visa / MC)15www.paytroniks.com I info@paytromiks.com I 469-271-4774 16. Future Trend # 1 Consolidation of vendors in competition clusters Cimbal DwollaP2P clusterGoPagoBig retailer clusterGoogle Wallet Square RegisterIsisTabbed OutSquare WalletCorduroCardholder clusterPaydiantSmall retailer clusterKuaPayLevel UpRoam X4CorduroSquare Reader Mobile PayActivities and CommentsSquare to strengthen market position via increased acquisition of vendors / vendors run out of money and fall out / one or two key competing players by cluster / fewer new mobile wallet offerings / PayPal absent in clusters Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1315www.paytroniks.com I info@paytromiks.com I 469-271-4774 17. Future Trend # 2 Alternative (Cash or other method)YeCelMerchantsCardholdersTraditional (Visa / MC) Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1316www.paytroniks.com I info@paytromiks.com I 469-271-4774 18. Future Trend # 2 Alternative (Cash or other method)Strongest opportunity for new mobile wallet development lies in this quadrantYeCelMerchantsCardholdersTraditional (Visa / MC) Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1316www.paytroniks.com I info@paytromiks.com I 469-271-4774 19. Future Trend # 2 Expect new solutions that focus on the consumer but that offer alternative means of payment outside of traditional card products.Strongest opportunity for new mobile wallet development lies in this quadrantActivities & CommentsMobile wallets focused on direct carrier billing / non-payment mobile wallets offering payment wallets / cross offering of non-payment wallets with mobile payment wallets / barriers to entry are lowest in this quadrant Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1316www.paytroniks.com I info@paytromiks.com I 469-271-4774 20. Future Trends # 3 Alternative (Cash or other method) CimbalWestern UnionDwolla MCXYeCelLegend Competition ClustersPayPal HerePayPal P2PNiche SolutionsGoPagoOmnicommerce Players CardholdersMerchantsSquare CashSolutions on Y axis are P2P focusedSquare Register Tabbed OutMocaPay Square Cash PayPal PrepaidPaydiant KuaPayLevel UpRoam X4Google WalletCorduroIsisSquare Reader Mobile Pay Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 13CorduroSquare Wallet Traditional (Visa / MC)17www.paytroniks.com I info@paytromiks.com I 469-271-4774 21. Future Trends # 3 PayPal and Square battle it out to become the de facto mobile wallet of choice for merchants, however there may be room for other players in certain merchant categories PayPal HereSquare CashPayPal P2PSquare RegisterCorduroPayPal PrepaidSquare ReaderCorduroSquare WalletActivities and CommentsBoth companies continue to expand their offering / solutions increasingly technology agnostic / Square issues a prepaid card / PayPal looks to gain strength via differentiation from other solutions / Square purchases clones in emerging and mature markets / PayPal most likely to become dominant over Square Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1317www.paytroniks.com I info@paytromiks.com I 469-271-4774 22. Future Trend # 4Mobile Wallet Presentation, October 24, 2013 I All rights Reserved Wednesday, October 23, 1318www.paytroniks.com I info@paytromiks.com I 469-271-4774 23. Future Trend # 4 From an end consumer perspective, mobile wallets will not exist as stand alone, payment only services.Activities and CommentsFinancial institutions extend mobile banking services to include mobile payments / partnerships between FIs and non-FIs increase / Apple Passbook integrates payment / exception with P2P services Mobile Wallet Presentation, October 24, 201