© 2006 First Data Corporation. All Rights Reserved. This document contains unpublished, confidential and proprietary information of First Data Corporation. You may not disclose, copy or use any part of these materials for any purpose without the express written consent of First Data Corporation.

Payment Cards 2007

Ukraine

First Data InternationalPrepaid Trends

2

First Data’s EMEA footprint

= Operations

= First Data presence (offices/clients)

Middle East

Africa

20 years in Europe

and 11 years in the

Middle East

Clients in 34

countries, over 6,500

employees across

the region

Strong and growing

presence in CEE

3

Acquisitions and alliances

2002 2003 2004 2005 2006

Merchant alliance joint ventures

Recent acquisitions

HBOS(Bank of Scotland Merchant Services)

International Card Services

(EMScard)

Banca Nazionale del Lavoro (BNL POSitivity)

Austrian Payment Systems Services

EuroProcessing International

Card Processing business of Fineco

Bank, Italy

Delta Singular Outsourcing

Services

Telecash

GZS

2007Polcard

4

• Consumer finance processing• Merchant acquiring• ATM and POS device management• Acquirer processing

Our Services

5

A sample of our EMEA wide client base

Albania

Austria

Czech Republic

Greece

Germany

Hungary

Israel

Portugal

Romania

Saudi Arabia

Serbia & Montenegro

Slovakia

South Africa

Spain

UK

Italy

Kuwait

Latvia

Lithuania

Netherlands

Pakistan

Poland

Globally

6

• Multiple platforms to cope with the changing prepaid market

• Selection of existing prepaid programmes (teen, dual credit, prepaid, mall, gift)

• FDI annual stored value activity:• 1.2bn processed transactions• 300m plastic cards supplied• 20 countries • 2 billion accounts • $5bn stored value funds • 250 brands• 88,000 locations

• Markets:• Mass Retail & Speciality Retail• Grocery• Pharmacy • Sporting Goods/Athletic Apparel• Restaurant/Foodservice/Quick Service Restaurants (QSR)

First Data’s pre-pay credentials…

7

First Data’s Stored Value Clients

8

• The newest and fastest growing area of the payments card industry

• Not a single product or industry

• Source of spend spread across a diversity of segments and channels.

• Paper based stored value schemes are already a $38bn market in Europe (1):

• Gift vouchers• Luncheon vouchers• Food token savers• Travellers cheques• Insurance claim• Corporate incentive vouchers• Government benefits

(1) First Anopolis, Mercator Advisory Group

Stored value

9

Moving to plastic

Replacement applications enhance the transaction, improve security andsimplify clearing and settlement, for example:

• Gift certificate -> Gift card• Travellers cheque -> Travellers card• Expenses claim -> Expenses card• Luncheon voucher -> Luncheon card• Insurance claim cheque -> Insurance claim card

Development applications use plastic to include new types of applicationin the electronic payments environment for example:

• Youth payment card• Internet payment card• Gaming card• Payroll card

10

Issuers and consumers like it…

• Branding:• Enhance the brand experience through the payment mechanism

• Budgeting:• Provide a natural limit to spending within a category

• Convenience:• For gifting or spending

• Security:• Advantages over cash

• Socially Inclusive:• A card that everyone can have

11

Applications limited only by imagination

Single Use

Re-loadable

Closed Loop

Open Loop

• Travel card• Luncheon card• Campus card• Utility bill card• Christmas savings card• Telecom card• Fuel card• Sports and leisure

• Youth card• Sub-prime/poor credit• Traveller card (forex)• Remittance card• Payroll card• Sharia banking card• Budget account card• Gaming card• On-line purse• Corporate expenses• General benefits card

• Gift card (Store brand)• Emergency benefits card • Insurance claim card• Healthcare claim card• Holiday vouchers

• Gift card (ICS brand)• Emergency benefits card• Loan card• Corporate benefit• Corporate incentive

12

Europe US

20

18

16

14

12

10

8

6

4

2

0

Value of Prepaid Transactions in 2005 (US$bn)

Soure: Europe – The Electronic Money Association “The Impact of the ElectronicMoney Directive on the E-Money Industry in Europe – based on a translation ofMonthly Euro values into US$

Source: USA – The National Retail Federation

Rapid European growth

140

120

100

80

60

40

20

0

2005 2006 2007 2008 2009 2010

European Union Market Value (€b)

Source: Mastercard Milan CPE Conference Presentation

13

Importance of stored value by 2010

Volumes of Payment Instruments

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

2005 2006 2007 2008 2009 2010

mill

ions

Cheques Credit Cards Debit Cards Prepaid

Value of Payment Instruments

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2,000,000

2005 2006 2007 2008 2009 2010

€ m

illio

ns

Cheques Credit Cards Debit Cards Prepaid

Source: PSE Consulting, 2006

By 2010

7% of cards3.5% of payment value

14

Multiple categories

European Prepay Market Share by Value spent in 2010

Travel13%

Gifting21%

Youth2%

Under/Unbanked5%

Payroll6%

Remittances4%

Gaming15%

On-line13%

Insurance3%

Corp Benefits10%

Govt Benefits5%

Transit/Micropay3%

Source: PSE Consulting, 2006

Top 5 Applications by 2010:

• Gifting: 21%• Gaming: 15%• Travel: 13%• On-line payments: 13%• Corporate benefits: 10%

15

European Prepaid Volume - ATV Comparison 2010

Travel

GiftingPayroll

Remittances

Gaming

On-line

Corp Benefits

Youth

Under/Unbanked Govt Benefits

0

20

40

60

80

100

120

140

0 100 200 300 400 500 600 700

Transaction Volume (m)

Ave

rage

Tra

nsac

tion

Val

ue (

€)

Insurance (€350)

Transit/ MicroPayments

(795)

1

2

3

4

1

2

3

4

Segment Turnover

€2.4bn

€29.8bn

€41.7bn

€4.9bn

A highly segmented market opportunity

Source: PSE Consulting, 2006

16

ISSUER REVENUE MODELISSUER REVENUE MODEL

Issuance Fee

Transaction Fee

Reload Fee Cash

Shortage Fee

ATM Withdrawal

International ATM

Cancellation Fee

Paper Statement

Re issuance Fee

Service Fee

Foreign trx fee

PIN re issue

Lost/Stolen Replacement Fee

Courier Fee

APPLICATIONAPPLICATION

A substitute for:

Money transfer services

Sending cash

FUNCTIONALITYFUNCTIONALITY

Open loop

Reloadable & non reloadable

Expiring & non expiring

ATM – cash access

Embossed

KEY CARDHOLDER BENEFITSKEY CARDHOLDER BENEFITS

Ease of application

Servicing available 24x7x365

Wider distribution than money transfer market

Access to international customer base

Fast safe way of sending money

No need to immediately drawdown all cash

Not restricted to one money transfer outlet

Easier to use than money transfer services

More Secure than sending cash

Lower overall cost

Widens distribution by utilising local debit schemes

Remittance

17

ISSUER REVENUE MODELISSUER REVENUE MODEL

Issuance Fee

Transaction Fee

Reload Fee Cash

Shortage Fee

ATM Withdrawal

International ATM

Cancellation Fee

Paper Statement

Re issuance Fee

Service Fee

Foreign trx fee

PIN re issue

Lost/Stolen Replacement Fee

Courier Fee

APPLICATIONAPPLICATION

A substitute for:

travellers cheques

travel money

FUNCTIONALITYFUNCTIONALITY

Open loop

Reloadable & non reloadable

Expiring & non expiring

ATM – cash access

Embossed

KEY TRAVELER BENEFITSKEY TRAVELER BENEFITS

Easier to use then T&C

Secure

Lower overall cost

Multiple card means no waiting an delays if card is stolen or lost

Concierge and value add services including lost passport service

Ease of application

Servicing available 24x7x365

No need to collect from a branch

Universal payment method: familiar to home country

Less hassle: no need to ‘cash’ travellers cheques or carry passports/I.D when out

and about on holiday

Reduced risk: no need to carry cash

Reduced costs: avoid credit card/travellers cheques fees/less favourable currency

conversion rates

Travel

18

ISSUER REVENUE MODELISSUER REVENUE MODEL

Issuance Fee

Transaction Fee

Reload Fee Cash

Shortage Fee

ATM Withdrawal

International ATM

Cancellation Fee

Paper Statement

Re issuance Fee

Service Fee

Foreign trx fee

PIN re issue

Lost/Stolen Replacement Fee

Courier Fee

APPLICATIONAPPLICATION

A substitute for:

Regular payment by

cheque/cash

Payment for temporary

workers, labour or

contractors

FUNCTIONALITYFUNCTIONALITY

Open loop

Reloadable & non reloadable

Expiring & non expiring

ATM – cash access

Embossed

KEY CARDHOLDER BENEFITSKEY CARDHOLDER BENEFITS

Ease of application

Servicing available 24x7x365

Fast, efficient service

No need to physically present employee with pay packet

Reduces cash and administrative handling

Payment on demand anytime for one off expenses etc

Easily converted to cash if required (quicker than cheque)

Lower costs to recipient than cheque cashing services

Secure easy access close to cash

Immediate access to wages, no need to wait for cheque to clear

Linked to loyalty to reward use

Payroll

19

ISSUER REVENUE MODELISSUER REVENUE MODEL

Issuance Fee

Transaction Fee

Reload Fee Cash

Shortage Fee

ATM Withdrawal

International ATM

Cancellation Fee

Paper Statement

Re issuance Fee

Service Fee

Foreign trx fee

PIN re issue

Lost/Stolen Replacement Fee

Courier Fee

APPLICATIONAPPLICATION

A replacement for:

Paper gift voucher

Staff incentive

Distribution incentive

In-store promotions

FUNCTIONALITYFUNCTIONALITY

Open & closed loop

Reloadable & non reloadable

Single use

Expiring & non expiring

Embossed & anonymous

Loyalty functionality

No ATM

KEY CARDHOLDER BENEFITSKEY CARDHOLDER BENEFITS

Low fee to encourage usage

Ensures all spend remains in store

Combine with loyalty for CRM opportunities

Merchandise throughout store as value not added until activated

No secure shipping charges

Portability – ease of use in multiple retailers

Socially inclusive

Exciting designs make more appropriate gifts aligned with gift occasion

More modern than paper vouchers

Gift

20

ISSUER REVENUE MODELISSUER REVENUE MODEL

Issuance Fee

Transaction Fee

Reload Fee Cash

Shortage Fee

ATM Withdrawal

International ATM

Cancellation Fee

Paper Statement

Re issuance Fee

Service Fee

Foreign trx fee

PIN re issue

Lost/Stolen Replacement Fee

Courier Fee

APPLICATIONAPPLICATION

A substitute for:

Cash

Other electronic payments

FUNCTIONALITYFUNCTIONALITY

Open loop

Reloadable & non reloadable

Expiring & non expiring

ATM – cash access

Embossed

KEY CARDHOLDER BENEFITSKEY CARDHOLDER BENEFITS

More secure than cash

Internet, mail order and other electronic only channels.

Carries more status than cash

Financially inclusive – available regardless of credit record

Easy to apply and receive

No failed credit checks

Socially inclusive

More modern than traditional alternatives

Access wider services online etc

Gives control over spending

Use abroad

Transaction anonymity

Instant redemption

General Prepaid

21

1600

1400

1200

1000

800

600

400

200

0

CEE

Fra

nce

Germ

an

y

Italy

Port

ug

al

Scan

din

avia

Sp

ain

Tu

rkey

Bri

tain

Ben

elu

xEuropean Prepaid Average Spend per Open-loop

Card in 2010 by Value (€ )

Source: Mastercard Milan CPE Conference Presentation

30%

20%

10%

0%

-10%

-20%

-10% -5% 0% 5% 10% 15% 20%

Volume and Value of “Pay Now” Cards

Change in Average Value of Transactions (CAGR 1999 – 2003)

Ireland

France

Germany

Italy

PortugalSweden

Spain

Turkey

Britain

Belgium

Finland

Greece

Netherlands

Denmark

Norway

Austria

= 20m cards

Ch

an

ge in

Fre

qu

en

cy o

f Tra

nsacti

on

s

Source: Datamonitor Western European Cards and Payment Databook 2004

Expected high correlation between debit and prepay

22

Cash remains important in EU

23

…And even more important in the new member states

24

There may be a link between cash usage and stored value

100

90

80

70

60

50

40

30

20

10

0

Neth

erl

an

ds

UK

Fra

nce

Italy

Sw

itze

rlan

d

Den

mark

Fin

lan

d

Belg

ium

Germ

an

y

Share of Cash as a Payment Instrument

Source: European Central Bank and Florida State University 2000

25

Cash versus stored value

Positive features of cash:

• Universal: pre-pay is not• Requires no infrastructure: pre-pay requires infrastructure• Ease of use: so is pre-pay• Anonymity: possible with pre-pay• Budget management: possible with pre-pay• Good for p2p transactions: so is pre-pay• Convenient: pre-pay is more convenient• Government backed: bank and card scheme backed• Contingency to other methods: so is pre-pay• Immediate and final transaction: requires settlement

26

Negative features of cash:

• Cost: pre-pay costs can also be high• Non traceable: transaction records• Poor security: better on pre-pay• Transport: not required• Hard to use remotely: good for remote payments• Dirty: personal• Associated with tax evasion: KYC and AML• Associated with crime: KYC and AML• Heavy and bulky: easy to carry

Cash versus stored value

27

Hot…

• Geography (cash and debit):• UK• Germany• Italy• CEE• Middle East• Pakistan• South Africa

• Application (market size and margin):• Migrant remittance (B2C or B2B)• Travel card (B2C or B2B)• Payroll card (B2B)• Corporate incentive (B2B)• General use (B2C)• Gifting (Very high volume)

Not…

• Geography:• Benelux• Scandinavia• West and Central Africa• North Africa• Spain and Portugal

• Application:• Transport (low margin)• Youth card (Low value/high transacting)• Insurance (Low volume/specialised)

What’s hot and what’s not…

28

Conclusions

• Rapid growth:• Euro 100bn market by 2010• 7% of payments and 3.5% of cards by 2010

• Strong link between debit card usage and stored value

• Potential link between cash usage and stored value

• Top 5 applications:• Gifting• Gaming• Travel• On-line• Corporate

But….

29

Success depend on…

• Wide acceptance:• Merchants and consumers need to be persuaded of value• Needs perceived advantage over existing payment mechanism

• Critical mass of cards in issue:• Consumers need to adopt the card in volume• Features and benefits need to be clearly articulated and understood

• Sustainable safety and security:• Adequate measures need to be implemented• Constant vigilance needs to be maintained