February 28, 2009

Burt A Wilhelm, Global Products & SolutionsInnovative Platforms - Transportation

PayPass™ Update Smart Card Alliance - 2009 Payments Councils Summit

February 28, 2009 2

What is MasterCard® PayPass™?

Similar to a standard MasterCard card with some differences…

PayPass Identifier

PayPass Radial Mark

ShortenedSignature Panel

Embedded Antenna

EmbeddedChip

February 28, 2009 3

MasterCard PayPass

A contactless payment method enabling consumers to

pay via card or device without swiping; displaces cash for

everyday purchases; enhances credit, debit, pre-paid and

commercial accounts.

Displaces cash and expands payments footprint; broader acceptance means more usage and higher volumes; improves customer “stickiness” and provides key differentiator

Issuers Consumers MerchantsProvides a faster, simpler way to pay for purchases… and even access transport

Faster check-out time; customers no longer limited to cash on hand, higher average spend, enables shift to payments vs. ticketing

Ben

efits

Ben

efits

February 28, 2009 4

MasterCard PayPass Modular Solutions

February 28, 2009 5

MasterCard PayPass: Leading the Way

Launched first PayPass cards in Eastern Europe in

Poland

Royal Bank of Scotland and

MasterCard enable taxis for contactless payments in London

Best Buy finishes PayPass

deployment in stores

Passed the 20 million card/device

issuance mark

MasterCard launches several

PayPass on mobile trials globally

Launched PayPassin London

Canadian Tire and Tim Horton’s

announce acceptance of

PayPass

PayPass and Nokia consumer trial in Dallas—mobile phones

PayPass Employee Trial

PayPass launch: first consumer trial in Florida

McDonald’s acceptsPayPass

PayPass introduced in Canada, the

Philippines, and Japan

Finalized development of OneSmart PayPass

JPMorgan Chaselaunches PayPass

Southern Taiwan transitsystems accept PayPass

Citibank, GE/Meier,MBNA (BofA) put

PayPass on credit acct’s

HSBC, KeyBank putPayPass on debit acct’s

Duane Readeaccepts PayPass

Launch nationaladvertising

campaign in U.S.

HSBC, Citizens/RBS putPayPass on credit acct’s

Citibank, Citizens/RBS putPayPass on debit acct’s

MasterCard & Citi conducttrial with MTA inNYC subways

Announce over-the-airpersonalization forPayPass-enabled

cell phones

Nearly 50 Nearly 50 millionmillion

cards/devicescards/devicesNearly 141,000 merchantNearly 141,000 merchant

acceptance locationsacceptance locations28 countries28 countriesaround the worldaround the world

2002/20032002/2003 20042004 20052005 20062006 20072007 20082008

February 28, 2009 6

PayPass U.S. Issuance

Sources: Press releases, websites, mastercard.com/paypass

Nearly 50 million cards/devices issued globally (as of Q4 2008). Key U.S. issuers include:

February 28, 2009 7

Regional PayPass Merchants

February 28, 2009 8

Chain-wide PayPass Merchants

February 28, 2009 9

PayPass Stadium/Event Deployments

February 28, 2009 10

Built to Endure and Rapidly Evolve

Nearly 50 Nearly 50 millionmillion

cards/devicescards/devicesNearly 141,000 merchantNearly 141,000 merchant

acceptance locationsacceptance locations28 countries28 countriesaround the worldaround the world

Canada

U.S.

FranceU.K.

ItalyMexico

Germany Poland

KoreaJapan

MalaysiaIndonesia

Taiwan

Turkey

Australia

Philippines

U.A.E.

Lebanon China

Mongolia

Thailand

Spain

Russia

Serbia

Czech Republic

Switzerland

Romania

Slovakia

PayPassPayPass issuers offerissuers offer……CreditCredit CoCo--brandbrand

DebitDebit Small BusinessSmall Business

……and Preand Pre--paid Programspaid Programs

Global Interoperability Global Interoperability •• Consistent userConsistent user

experience worldwideexperience worldwide

•• Flexible and scalableFlexible and scalable

February 28, 2009 11

PayPass as a Primary Card

77%77%of PayPass consumers use PayPass as their primary card

Source: MasterCard PayPass Consumer Benchmark Survey, 2008.

February 28, 2009 12

Future Usage and Intent

90%

94%94%of consumers that tap are“Very Satisfied” or “Satisfied”with tapping PayPass.

in 2008

of consumer say PayPass ”Exceeds”or “Meets” their expectations.

90%

Source: MasterCard PayPass Consumer Benchmark Survey, 2008.

February 28, 2009 13

PayPass Performance

Close to 70% of PayPasstransactions are less than $25

Average ticket is justunder $31

Cardholders use PayPass at Merchants that mostly accept cashPayPass expands where Cardholders can use their card. As more consumers carry PayPass, acceptance at new merchants is growing in step.

Spend per 28–42%Account (Total) Increase

Transaction Per 33–52% Account (Total) Increase

Average ticket up to 40%sales IncreaseFrequency of everydaypurch. over mag 35% stripe credit cards Increase

Wait time 15%–20%in stores Reduction

Wait time at drive- 40%thru & QSRs ReductionAverage 10%–40%transaction time Reduction

Source: MasterCard Data Warehouse Q2 2008, Issuer Case Studies, Press Release Data

Contributes to the Contributes to the Bottom Line

Decreases Wait TimeDecreases Wait TimeFor ConsumersDisplaces CashDisplaces Cash Bottom Line For Consumers

Expands Where Expands Where Cardholders ShopCardholders Shop

Increases MerchantIncreases MerchantSalesSales

February 28, 2009 14

PayPass U.S. Roll-Out Strategy

Build critical mass of cards and merchant locations to effect conversion from cash to electronic payment across credit, debit, and other payment types

• Deploy turnkey implementation solution forissuers, regardless of their size

• Grow merchant support in everyday categories

• Continue consumer education on how and where to use PayPass through integrated media efforts to drive consumer awareness, adoption and usage

• Build diverse supplier options for cards,devices and terminals

February 28, 2009 15

Long-term Strategy

Build the Foundation Build the Foundation & U.S. Deployment& U.S. Deployment Expand Global Expand Global

Continue Expansion & Continue Expansion & DeploymentDeploymentRollout GloballyRollout Globally• Implement rules and organizational

framework

• Begin U.S. rollout started in 2005

• Build national marketing, promotional and PR campaign to build consumer awareness, adoption and usage

• Begin trials in Europe, APMEA, Canada and LAC

• Support card and terminal products development

• Develop transaction reporting infrastructure

• Continue U.S. and AP region rollout. Continue trials and rollouts in Europe, Canada and LAC

• Continue merchant category expansion (i.e., transit, vending, taxis, parking, toll lanes)

• Implement low value payments rollout in UK/parts of Europe

• Continue trial and rollout of mobile phone deployment as part of the MasterCard Mobile Strategy

• Continue value added enhancements to PayPass (i.e., content, multiple form factors )

• Continue as payment category leader

• Continue support for US, Canada, AP, LAC and Europe regions in mature rollout stage - BAU

• Expand beyond low value payments channels

• Continue content expansion for mobile phones and other formfactor options

February 28, 2009 16

Continuing to Expand PayPassAcceptance

Public Transport Vending Machines Parking Meters

Taxi Cabs Toll Roads

February 28, 2009 17

Additional Functionality Delivered by MasterCard Mobile with PayPass

Search directory, guide & Search directory, guide & recommendationsrecommendations•• ShoppingShopping •• EatingEating•• DrinkingDrinking •• EventsEvents•• TravelTravel

Alerts and tailored offersAlerts and tailored offers•• StoresStores•• Eating and drinkingEating and drinking•• Exclusive and last minute offersExclusive and last minute offers

PurchasesPurchases•• At POS using At POS using PayPassPayPass•• Leverage for increased security Leverage for increased security

CustomizableCustomizable•• New applications & services New applications & services

securely downloaded over securely downloaded over the airthe air

•• Expired services removedExpired services removed•• Personalized for individualPersonalized for individual

ElectronicElectronic•• Supply and secure storage of Supply and secure storage of

coupons, receipts, rewards, coupons, receipts, rewards, ticketstickets

•• Redemption interfaceRedemption interface

Direct CommunicationDirect Communication•• Contact merchant, issuer through web, voice, textContact merchant, issuer through web, voice, text

BankingBankingRobust authentication Robust authentication mechanism to supportmechanism to supportonline bankingonline banking