POSIT IONING THE POS AT THE

MERCHANT IN A CASHLESS

ENVIRONMENT

Martin Holloway

October 2012

W H O I S V E R I F O N E ?

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The leading global provider of technology that enables secure

electronic payment transactions

• VeriFone Systems, Inc. (“VeriFone”), NYSE: PAY

• Founded in 1981

• 4,800 staff

• $1,3 billion revenue in FY2011

• Active in over 110 countries

• No. 1 or No. 2 share in all our markets

• Terminals installed in over 20 million locations

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VeriFone brand is well known by consumers

PAY M E N T S VA L U E C H A I N

VeriFone touches virtually all elements of the value chain

VeriFone Acceptance hardware and software enables Acquirers & Processors business

Solutions for Card Issuing and Management Solutions

VeriFone works closely with the payment networks to drive and enforce new security standards.

VeriFone Acceptance hardware and software enables merchant’s business

Consumer Issuer Payment

Network

Acquirer/

Processor Merchant Consumer

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W O R L D W I D E L E A D E R I N PAY M E N T S

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• Extensive partner network worldwide, plus we have

employees in over 40 countries

• Thousands of channel and distribution partners,

including VIPs, ISOs, Integrators, Developers…

Honolulu

Sacramento

San Jose

Mexico City

Clearwater Miami

Atlanta

Sao Paolo

Buenos Aires

Dallas

Savannah

Toronto

New York

Paris

Warsaw London

Bangalore

Singapore

Taipei Hong Kong

Manila

Beijing

Spain

Italy

China

Russia

India

Turkey

Australia

Dublin

Product Design Centers

Platform Software Development Centers

Application Development Centers

VIPs & Resellers

Global reach

NIGERIA TODAY

N I G E R I A T O D AY Nigeria

– 170 Million people

– One of the fastest growing GDP’s in Africa

– 20M cards, 40K POS

– Main use for cards is ATM for Cash Withdrawal, local cards are Debit only

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Cash-Less Lagos project

– Introduced by Central Bank of Nigeria (CBN)

– Objective to increase POS base to 350K over 3 years

– Objective to increase cards in circulation over 3 years

– Impose levies for merchants to trade in cash

Banks are now expanding to the whole country

VeriFone solution for transport system and Telco’s

Standard repair centre

Support and maintenance via our partners

Solutions for fuel stations

Solutions for mobile operators.( M-wallet)

C A S H L E S S B E N E F I T S E V E R Y O N E

Benefits for end-users

– Convenience (carry less cash, pay easily, no trouble to get change)

– Safer transactions (avoid robberies by carrying less cash)

– Keep your money safe (e-money is not affected by fire, water or loss)

Benefits for the merchants

– Convenience (carry less cash, get paid easily)

– Transaction speed (no more cash handling) => sales increase

– Easy sales tracking (electronic reports)

– Secure transactions (no need to worry about fake bills or non-funded checks)

Benefits for the country

– Cheaper banking (save cash handling costs)

– Reduce corruption (transactions tracking)

– Offer banking services to more people (credits) that will boost the economy

– Get more income tax to invest in the country development

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USING POS TO ST IMULATE

CASHLESS ENVIRONMENT:

TRADITIONAL BANKING

P O S A D O P T I O N R AT E I N T R A D I T I O N A L B A N K I N G

Cards must be widely accepted

Thus, POS need to be present in every point of sales

But, each merchant is different (standalone, mobile, retailer, …)

– Offer a solution for each merchant

POS must always be available to take a transaction

– Reliability, maintenance

Communication with bank must be reliable and backed up

– Multiple communication channels

Transaction shall be faster than cash handling

– Performance

E-transactions must be trusted

– Security

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E A C H M E R C H A N T I S D I F F E R E N T

VeriFone has a solution for each merchant

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Countertop

VX 520 VX 820 DUET

Portable

VX 520 GPRS VX 680

PIN pad

VX 820 PP1000se

Multimedia

MX 880 MX 870

Standalone

QX 1000

Mobile

PayWare Mobile

C O M M U N I C AT I O N S H A L L B E R E L I A B L E A N D

B A C K E D U P

VeriFone Vx Evolution offers multiple communication features:

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Dial-up

Ethernet

GPRS

GPRS Dual-SIM

Roaming SIM

Biometrics

Contactless

GPRS

Dial-up (base)

Ethernet (base)

5 2 0 N O W W I T H B I O M E T R I C S

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T R A N S A C T I O N S H A L L B E FA S T

VX Evolution offers you the highest performance

– Industry’s first ARM 11 processor

– Combines security and application processing into one 500 MIP powerhouse

Fast and expansive Memory

– 160MB standard, can exceed 500MB

Integration of Proven Technology

Enhanced Usability

– Color and touch screen

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E - T R A N S A C T I O N S S H A L L B E T R U S T E D

VeriFone Vx Evolution range offers best-in-class security:

– Hardware security: PCI PED 3.x

– Software Security: VeriShield Retain

– Data Security: VeriShield Protect End-to-End Encryption

Industry Leadership

– Only HW vendor on PCI SSC

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P O S S H A L L A LWAY S B E AVA I L A B L E

VeriFone Vx Evolution range is built to last

– Reliability & consistency customers have come to expect

– Made with highest grade components

– Leveraging VX proven platform

A level of reliability seldom offered by competition

– Keypads tested to over 1M key presses

– Smart card readers that perform up to 500k insertion

– Withstands one million card swipes

– Thick, durable plastics

– Metal tear bars

Qualified and trained Nigerian partners

that deliver fast and reliable maintenance

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USING POS TO ST IMULATE

CASHLESS ENVIRONMENT:

POS WITH ADDED VALUE

A D D E D VA L U E

POS can be used to provide other added value services than

transactions:

E-topup / E-voucher

– Reload your mobile phone account at any merchant store

Bill payment

– Pay your electricity bill at any merchant store

Loyalty programs

– Pay with your credit card and earn loyalty points

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USING POS TO ST IMULATE

CASHLESS ENVIRONMENT:

BANK THE UNBANKED

E - PAY M E N T I N A F R I C A T O D AY

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10% people banked in Africa

– Main challenges: Accessibility, Affordability, Availibility (technology)

50% owns a mobile phone

– Can be shared between family / friends / community

Good news:

We have a solution for you to invest in both card acceptance AND

mobile wallet!

d

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VERIFONE M -COMMERCE ECOSYSTEM

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DIGICEL CASE STUDY

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http://www.youtube.com/verifonemobilemoney

T V C 1 : M O B I L E M O N E Y L A N D S C A P E

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T V C 2 : C O N TA C T L E S S , N F C PAY M E N T

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T V C 3 : I R , B I O M E T R I C , C O N TA C T L E S S , N F C , PAY M E N T

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SUPPORT MOBILE MONEY GROWTH

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Support Mobile Money Growth

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Support Operational Efficiency

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VERIFONE MOBILE WALLET SERVICES

Ideal for emerging markets!

VeriFone Mobile Money – In summary

GOING FURTHER:

NFC BRINGS VALUE TO

CASHLESS PAYMENTS

N F C : W H AT ’ S T H E D E L AY ?

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Mobile payments that use the handset as a payment card have

not picked up globally with few exceptions. Why?

• Chicken and the egg problem:

Retailers and merchants are reluctant to build an

acceptance infrastructure before user rollout

• Lack of NFC support in mobile phone devices

there are very little NFC devices out there

• Lack of knowledge and trust in the security in the

technology

• Penetration of Telcos to the payment industry

requires know how or cooperation with existing

payment players

N F C : F R O M PAY M E N T S TO A D D E D VA L U E

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• NFC opens endless opportunities to

connect virtual goods with the merchant

POS, e.g. coupons, location-based

promotions, loyalty and more

• The web coupons providers seek ways to

craft the linkage between the web to the

storefront

• Acceptance with NFC at the point-of-sale is

key to bridging between the web virtual

world to the physical storefront

Internet

N F C M O B I L E PAY M E N T S

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Set to change the way we transact...

NFC phone shipments could approach 120 million units by 2012

1 in 6 users worldwide will have a NFC-enabled phone by 2014

By 2015 NFC technology will be the most used solution for mobile payments

85% of payment terminals shipped worldwide will be contactless-enabled in 2016

T U R N “ P O S ” I N T O “ P O I ”

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+ Knows who you are (opt in)

+ Know where you are

+ Knows your coupons

+ Is trusted, safe, secure

+ Single user interface

+ Clean seamless experience

= Intelligent Checkout

Point of Interaction Point of “Intelligent Checkout”

Ve r i F o n e & G o o g l e w a l l e t

VeriFone and Google came

together to make phone

payments a reality by

enabling several major

retailers with Google Wallet

technology

12 of the 14 retailers at the

launch were enabled by

VeriFone

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N F C I N T H E U S

ITS ALL ABOUT ADOPTION

A F INAL THOUGHT

O T H E R T H I N G S F R O M V E R I F O N E

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R E C Y C L E R – T H E AT M C O S T PA R A D Y G M

MXATM - RECYCLER CONVENIENCE RETAIL ATM

• Lower cost comparing to existing high-end recycler ATMs

• Intelligent software with front end or integrateable into existing legacy Hosts

• For Convenience Retail or Corresponding Banking locations

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A D O P T I O N A N D W AY S T O S T I M U L AT E A C A S H L E S S S O C I E T Y

Change the perception of POS at the merchant

The POS can earn us money and create wealth in the

value chain

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Chicken or Egg????

– Technology first, incentives to adopt

Cash or Card

– Wallets are cash, and can be represented on Cards

Banked or unbanked

– Convergence of transacting

Where to start?

– Its started………Cashless Lagos.

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A D O P T I O N A N D W AY S T O S T I M U L AT E A C A S H L E S S S O C I E T Y

THANK YOU !