Affiliate Networks Go GlobalPayments as a Service

Scott GalitPayoneer Inc.

Online advertising is even bigger outside the US than in the US

Online advertising is growing faster outside the US

Leading Digital Media companies and Affiliate Networks are going global faster & bigger than ever

Going global is complicated – languages, currencies, payments, tax compliance, OFAC obligations…

A “Payments as a Service” provider enables digital media companies to accelerate growth, manage compliance risk, lower costs and improve efficiency

Can You Afford Not to be Global?

Emerging Markets Driving Ad Growth

Emerging Markets Driving Internet Growth

“Between 2012 and 2015, an additional $76 billion will be spent on advertising globally, with the US contributing 28% of that total”

Source: emarketer.com| comscoredatamine.com

How Big Is It?

Huge international expansion by industry leaders in last 5 years

US based advertisers and merchants are expanding internationally to grow diversify their businesses

The same trends are developing in Europe and driving growth initiatives in Latin America

Digital media companies and affiliate networks are expanding internationally in response to demand from their clients

Digital Media Globalization is Exploding

The same trends are recognize in Europe that are launching activities in Latin America

The international markets presenting a challenge that usually US/European based companies didn’t faced in the past - languages, currencies, payments, tax compliance, OFAC obligations, etc…

Globalization of the online marketing world - getting stronger – Cont.

Languages

Fraud

KYC/OFAC

Tax compliance

Payments

Administration

Error handling

Customer service

Going Global – Many Important Considerations

US Companies have tax reporting and withholding obligations for international payees

Tax form collection is complicated W-8BEN W-8ECI W-8IMY W-8EXP

Even more scrutiny with FATCA coming in 2014

Tax Compliance

“Problems are minimized if appropriate documentation is obtained from each payment recipient… if the proper documentation is not received the consequences for the business can be serious.”

Source:Worldwide ERC

What’s an OFAC?!?

What is OFAC? US government economic sanctions programs against

countries and individuals, including terrorists and narcotics traffickers

Who must comply? All US citizens, residents, companies, foreign

subsidiaries of US companies…

Penalties include fines of $50k-$10mm and imprisonment ranging from 10 years to 30 years

How does your company ensure you are complying with your OFAC obligations?

So…

What if you could accelerate the growth of your business without having to worry about… Properly managing tax compliance OFAC and AML compliance issues Fraud management tools Service team to manage lost payments and CS Offering the broadest selection of low-cost payment

options to affiliates/payees Dozens of languages and currencies with single data

connection Automation and reporting

The Answer: Payments as a Service

What is Payments as a Service?

Complete solution that handles all payments, automates payee administration and solves key compliance issues

What are the key criteria for selecting a provider? Tax compliance solution offering IRS guarantee OFAC & AML Screening Fraud tools Languages and currencies Multiple payment options for all countries Single data flow and single money flow Elegant APIs Regulated provider to ensure stability

Payments as a Service – Accelerating Growth

Profile 2.5bln daily recommendations; 250mm unique users monthly

Key Challenges Huge effort to manually collect and manage tax forms Payments to many countries in multiple currencies Expensive and difficult to manage bank; many lost payments

Payments as a Service Complete tax form management solution Multiple currencies and payment types automated through

clean API at fraction of cost of bank, saving time and money

“ClickBank Partners… to Simplify Expansion into Latin America” December 2012 PR

ClickBank has more than 100k active affiliate marketers

ClickBank now expects to be able to serve up to 5,000 more affiliates in Latin America

Payments as a Service enables ClickBank to… Reach into emerging markets; and Make payments in dozens of currencies with

international EFTs, international wires, prepaid cards, local checks and ewallets without integration

Strong Market Feedback

“The Solution is brilliant for any company sending funds to a large number of people in numerous countries, and we are thrilled to offer our members a better way for them to receive and access their money…”

ELANCE

Fraud Tools – Minimizing Global Risk

End-to-End Compliance Flows are Critical

Processor

LoadPartner

Payee

Register

Invite

Apply

Fulfill

Activate

Account Managers

Request Documents

Non sponsoredPayee

New Accounts

Request Documents

Payee

Know Your Customer (KYC) Know Your Customer’s Transactions (KYCT)

Partner (Sponsor)

Profile

Card Holder Profile

Program Limitations

Customer Service

Partner

Payee

Payments

Request Documents

Debit Credit

Account

Reconciliation

PayoneerRequest

Card Transaction

API

ATM

POS

PurchaseCash withdrawRefund

Refund/Return/Reversal

Load

Partner

$

Bank

Payee

· Limited risk exposure· Risk based treatment

Partner

Payee Transaction

Decline

Decline Decline

Exposure

Monitor

Cancel

· Funding limits· Withdrawal limits· Program limitations· Service limitations

Coordinated risk management across multiple touch points

Private Load

Sample Multi-Lingual Messaging

Sample Payment Notifications

Digital Media is already bigger and is growing faster outside the US

Going global is complicated – languages, currencies, payments, tax compliance, OFAC obligations, fraud…

Payments as a Service can accelerate global growth for digital media companies with a complete solution that… Ensures compliance Provides unmatched low-cost payment options Reduces headaches by automating processes and

offloading issue resolution

Can You Afford Not to be Global?

QUESTIONS?

Thank

ouscott@payoneer.com