txtmoney overview, feb ´09

AN OVERVIEW, of , a mobile money services suite.

MONEY TALKS

© 2009 Fourth Screen Incorporated ApS.

© 2009 Fourth Screen Incorporated ApS 2

Notice

Thisdocumentisprovidedinconfidence.Thereceiverisnotauthorizedtoreleaseittoathirdpartyexceptwithinhisorganizationforpurposesofreview.

Disclaimer

Thisdocumentisnotanofferingcircularandhasnotbeenreleasedincollaborationwith,orapprovedby,anygovernmentalorregulatoryauthority.ThisdocumenthasbeenpreparedbyFourthScreenIncorporatedApS.andcirculatedtoanumberofprospectivepartners.ThepurposeofthisdocumentistoprovidepreliminaryinformationabouttheCompany’sproductsandservices,inordertoassistindecidingwhethertoproceedworkingwiththeCompanyornot.Eachrecipientacknowledgesthatthisdocumentwillbeusedsolelyforsuchpurpose.EachpersonreceivingthisdocumentexpresslyacknowledgeshavingreadandacknowledgedthecontentofthisDisclaimer.ThisdocumentwaslasteditedFebruary19,2009.

© 2009 Fourth Screen Incorporated ApS.

AN OVERVIEW, of , a mobile money services suite.

MONEY TALKS

© 2009 Fourth Screen Incorporated ApS 3

“Momentumisbuildingbehindmobilefinancialservicesandwebelieve2008willbeaseminalyearforthisexcitingnewsector.”

RobConway,CEOboardmemberGSMA.

© 2009 Fourth Screen Incorporated ApS.

© 2009 Fourth Screen Incorporated ApS 4

FourthScreenInc.ApSisatechnologycompanyestablishedinlate2005,focusedonthedevelopmentofservicesandmediaforthemobilemarket.Thecompanyoriginallyfocusedonthreekeyareas: Licensinganddevelopmentofmobilevideocontent Thedevelopmentofaflashmemory‐basedmobilecontentdistribution

platform Thedevelopmentofanadvertising‐supportedcontentdeliveryplatform

formobilecontentFourthScreenhaspartneredwithkeyplayersinthemobilesector,includingNokia,DangaardTelecomm,andKingstonTechnologies.Onthecontentside,thecompanyhasworkedwith,amongothers,theBBC,Zentropa,andmobileoperatorTeliaSonera.AstheCompanydevelopeditsknowledgeandexperiencewithinthemobileservicesmarket,itidentifiedagreatbusinessopportunityforthedevelopmentofamobile‐basedsystemtofacilitatemobilemoneytransfers.Overthecourseof2008,thecompanyfurtherdevelopedthisideaworkingwithanumberofkeypartnerstodevelopamobilepaymentplatform,whichwecall .Thetechnologyplatformbehind isbeingdevelopedaftertheexperiencesofaproductteamwithanaverageof5yearsdevelopingandimplementingmobilepaymentsolutions.Theplatformitselfsupportsallmobilenetworksandhandsets,andincorporatesthehighestsecuritystandardsintheindustry. ‘splatformismeanttobeanopenservicebuilttoappealtomobileoperators,users,banks,moneytraders,andothercommercialpartnerslookingforaMobileMoneyTransfer&PaymentsPlatform(MMT&MPP).Moreimportantly,thecompanyseestheproductasatoolwithvastpotentialinhelpingexpandfinancialandmobileservicestoalargenumberofpeoplewhotodayaremarginalizedtotheseandthebenefitsthattheycanprovide.ItisthefirmconvictionofFourthScreenthatcanbecomeahighlyprofitablebusinessandsocialdevelopmentinnovator,bybuildingasimple,elegantsolutionthatcanputthepowerofmoneyintothehandsofmillionsofpeopletoday.

INTRODUCTION.

© 2009 Fourth Screen Incorporated ApS 5

“Thebrickandmortarbankbranchsystemcanonlygosofar.Withcellphoneserviceandalocalshophandlingthecash,mobilebankingcanreacheveryvillageandbarriointhedevelopingworld.

Technologycanenableustoreachmillionsofpoorpeoplewho,untilnow,havebeenleftoutoftheformalfinancialsystem.”

ElisabethLittlefield,CEOCGAP

© 2009 Fourth Screen Incorporated ApS 6

KEEP IT SIMPLE.

© 2009 Fourth Screen Incorporated ApS 7

Usingeverydaytechnologytosolveeverydayneeds.

© 2009 Fourth Screen Incorporated ApS 8

InQ22008,worldmobileconnectionssurpassed3.6billion,adding165millionconnectionsinthelastquarterandtwothirdsofabillionoverthelast12months.

Thisrepresents55.3%penetrationbypopulationandannualgrowthof22.1%.AsofFebruary,2009,wehavesurpassed4billionmobileconnections.

GSMA Quarterly World Review: Q3 2008

9© 2009 Fourth Screen Incorporated ApS.

n2009mobilephonesareeverywhere.Insideyourpocket,yourspouse’spurse,inyourchild’s(or

nephew’s)hand.

Andhereistheinterestingpart.

Theyaretrullyubiqutous.

Unlikeothergadgets,mobilephonesareusedbyeveryoneandtranscendthenormalbarriersofclass,geography,andculture.

Theyareusedeverywherewherepeoplearefound.Fromthelargestmetropolis,tothemostremotevillages,peopleusetheirmobilephoneslikenootherdevicebeforeorsince.

I

IT’S IN YOUR POCKET.

10© 2009 Fourth Screen Incorporated ApS. © 2009 Fourth Screen Incorporated ApS.

snotoverrated;quitethecontrary:Inthemobilespaceitiscrucialforsuccess.I

ALL THUMBS.

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egardlessoftheconstantadditionsoffunctionssuchascameras,GPS,musicplayersandotherdevelopments

gearedtowardsturningthemintotheSwissArmyKnifeofmoderndevices,studieshavefoundthatmobilephonesaremostlyusedfortwothings:talkandtext.

Butoverwhelmingly,phonesareusedtotext.

Everyminute,everyhour,everyday.

People…

text.

R

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fyouhaveaphone,youtext.Youalsousemoney,butnotalwaysabank.txtMoneyisamobileservicethatallows

anyonewithamobilephoneaccesstomoneyandfinancialservicesonthegoviathetextfunctionofanymobilephone/device.

isasuiteofservicesthatcanprovidefasteraccesstotheirmoneyandbankingservicestothe“banked”,whileopeningaworldofopportunitiestomillionsof“un‐banked”peopletheworldover.

I

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WithtxtMoney,youcan:

1. Sendandreceivemoneyfromtoanymobilephone.Anywhere.

2. Usea“mobilewallet”to“topup”servicesandaccountsusedonaregularbasis(likeutilities,phonecard,insurance,andmanyothers).

3. Beusedforbranchless,mobilebanking,meaningyoucanmakebalanceinquiries,obtainstatements,transfermoniesbetweenaccounts,andmuchmore.

© 2009 Fourth Screen Incorporated ApS.

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sthemostprofitablem‐moneyserviceavailable,remittances,1arekeytorealizingthepotentialof

txtMone.

Recognizingthis,theservicewillbemarketedandsupportedthroughanetworkofpartnerssuchasremittanceservices,mobileagents,MoneyTransferOperators(MTOs),MicroFinanceInsdtitutions(MFIs),andotherbusinesstargetingmigrantworkersandtheunderbanked.2

Thepartnernetworkwillbeusedtosigncustomersintotheserviceasperinternationalremittanceregulations.OnceacustomerissignedinintotxtMon’,sendingmoneyanywherewithinthenetworkisnotcomplicated.

Aftersigningupforanaccount,allittakesisforacustomertosendatextmessage.Andthemoneyistransferredhandset‐to‐handset.Anywhereintheworld.Instantly.3

A

© 2009 Fourth Screen Incorporated ApS.

MOBILE REMITTANCES.

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TOP IT UP.

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hefundsavailablethroughtxtMoney‘smobilewalletsystemcaneasilybeusedforreplenishingor“topup,”

credittoanyaccountsubscribedtothesystem.4

Thisfeatureisparticularlyattractivetotheunderbankedandforpeopleoflimitedmeansandinremoteareaswhocanavoidwastedtime,transportcosts,securityrisks,andotherexistinghindrancesinthepaymentofmanybasicservices5.

Naturally,thesystemcanbeusedforallformsofpaymentofservicestoanyonewithamobilephone.

T

© 2009 Fourth Screen Incorporated ApS.

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WithtMoney‘smobilewallet,customerswillbeabletocheckbalances,transferfunds,ormakepaymentsfromamobilephoneusingatext‐basedsolutionwhichavoidscommonchallengessuchasmultiplemenu’sthataddcomplexitytotheservice,OSdevelopmentandsignature,andadaptingtovariousscreensizesandresolutions.6

Money‘splatformisdesignedtoworkunderseveralmulti‐languagemodules,andtomarketedtoreachtheun‐banked(orunderbanked)massesinthedevelopingworld,wheredistance,costoftransportation,andsecurityhavecontributedtomarginalizemillionsfromaccestofinancialservices.7

BRANCHLESS BANKING.

© 2009 Fourth Screen Incorporated ApS.

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YourbalanceisUS$29.Thankyou.txtMoney

© 2009 Fourth Screen Incorporated ApS.

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heproductisbeingdevelopedasabrandedservicesuitethatcanbesoldasastandalonemobileremittanceservice(through

scratchcardsandtopupterminalssuchascashiersatconveniencestores),orasamobileservicethat“powers”m‐moneyremittancestoMTOpartnersinthemarket.TheservicewillbeinitiallymarketedtomigrantsintheUSasanalternativemodetootherremittanceservicesalreadyinthemarket.Signupofcustomersintothesystemwillbedonethroughanetworkofagentsthatarealreadysellingremittanceandmobileservicesandsubscriptions.AFEEWILLBECOLLECTEDPERREMITTANCE,WITHAPARTOFTHATFEEBEINGPAIDtotheagentsforsigningupcustomersintotheservice.Aftersignatureintothesystem,payment/transfer/currencyexchangewilltakeeffectviatheuseofexistingserviceprovidersforsuchservices.Atpayoutpoints,txtMoneywillusetheexistingnetworkofpayoutpointsavailablethroughtheserviceprovider’snetwork.Inaddition,workingwithMFI’sandinconcertwithserviceprovidersrequiringregularpaymentcollection(utilities,telephone,schooling)txtMoneywillencouragetheuseofitsm‐walletforpaymentandpurchaseofgoodsandservices.COLLECTINGAFEEPERTRANSACTIONFORTHESERVICE.

T

© 2009 Fourth Screen Incorporated ApS.

BUSINESS MODEL.

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Keytodeveloptheproductwillbethealliancewithpartnerswithastatedinterestinservicingtheunderbanked,aswellasworkingwithcompanieslookingtoextendtheirserviceofferingstonewmarketsegments.AlsoofnoteisthefactthatthecurrenteconomiccrisisandthesignificantshrinkageofinvestmentinITbyprivateenterprise,8whichinitselfopensgreatopportunitiesforthemarketinganddevelopingofabrandedserviceformobilefinancialservices.Onthisvein,thecompanyalsoplanstoexploitthesellofWHITELABELsystemsbasedonourplatformforcustomerssearchingtodrivetheirownmobilepaymentservices.Allofthealliancesunderlinedherearebeingdevelopedwithaneyetowardspartnerswithexistingdistribution/marketinginfrastructureswithinthetargetmarket.ThecompanyhasselectedtheUS/MéxicoandLatAmcorridorsasitsfirsttargetregionfortheproduct.

STRATEGY.

© 2009 Fourth Screen Incorporated ApS.

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Thecompanyhasidentifiedandbeenin contactwithanumberofkeypartners:BancomerTransferServices(BTS).AcompanyofBBVAUSA,theleadingcompanyinthemoneytransferandconsignmentofmoneybusinessfromtheUnitedStatestoMéxico.BBVAdistributionagreementsforitsserviceswithhundredsofinstitutions,amongthemWellsFargo,MoneyGram,andtheUnitedStatesPostalService.In2008,BTSprocessedmorethan45%ofthemoneyconsignmentsfromtheUnitedStatestoMéxico.cruz/kravetz:IDEAS.andTerrySoto.Cruz/kravetz:IDEASisanindependentagencyfocusingontheUSHispanicmarket.Itoffersexpertbrandplanning,creativedevelopment,mediabuying,salespromotion,publicrelations,anddirectresponse.TerrySotoisPresidentandCEOofAboutMarketingSolutions,Inc.(AMS),aCalifornia‐basedmanagement‐consultingfirmalsospecializedintheU.S.Hispanicmarket.PriortofoundingAboutMarketingSolutions,TerrywasManagingPartneratcruz/kravetz:IDEAS,whereforovereightyearsshemanagedclientssuchasHarrisBank,MoneyGram,KraftFoods,CampbellSoupCompany,ElPolloLoco,Lincoln‐Mercury,MexicanaAirlines,PennzoilMotorOilandothers.cruz/kravetz:IDEASandTerrySotowereinstrumentalindevelopingandimplementingthemarketingstrategyusedbyBTSwhichresultedinitbecomingthedominantplayerintheUSremittancesmarket.InterAmericanDevelopmentBank(IASB):TheIDBprovidessolutionstodevelopmentchallengesin26countriesofLatinAmericaandtheCaribbean,partneringwithgovernments,companiesandcivilsocietyorganizations.TheIDBlendsmoneyandprovidesgrants.Italsooffersresearch,adviceandtechnicalassistancetoimprovekeyareaslikeeducation,povertyreductionandagriculture.Ourclientsrangefromcentralgovernmentstocityauthoritiesandsmallbusinesses.TheBankalsohasanestablishedfundforinvestmentinthedevelopmentofmobilebanking.

© 2009 Fourth Screen Incorporated ApS.

POTENTIAL PARTNERS.

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ConsultativeGrouptoAssistthePoor(CGAP).CGAPisanindependentpolicyandresearchcenterdedicatedtoadvancingfinancialaccessfortheworld'spoor.Itissupportedbyover30developmentagenciesandprivatefoundationswhoshareacommonmissiontoalleviatepoverty.HousedattheWorldBank,CGAPprovidesmarketintelligence,promotesstandards,developsinnovativesolutionsandoffersadvisoryservicestogovernments,microfinanceproviders,donors,andinvestors.TheBill&MelindaGatesFoundation.Leadingglobalphilanthropicfoundation,whichrecentlyannouncedafundtopromote/financeM‐bankingsolutionstothepoor.TheGlobalSystemforMobileCommunicationsAssociation(GSMA).TheGSMArepresentstheinterestsoftheworldwidemobilecommunicationsindustry.Spanning219countries,theGSMAunitesmorethan750oftheworld’smobileoperators,aswellas200companiesinthebroadermobileecosystem,includinghandsetmakers,softwarecompanies,equipmentproviders,Internetcompanies,andmediaandentertainmentorganizations.TheGSMAhasestablishedaMobileMoneyTransfer(MMT)programtopromotestandards,leverage,anddevelopmobiletechnologiestouseformoneytransferandmobilemoneyservices.

© 2009 Fourth Screen Incorporated ApS.

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Formoreinformation,pleasecontact:EduardoCelisMediaDirectorFourthScreenInc.ApsAmerikavej12,1.tv1756KbhVDenmarkfourth_screen@hotmail.comed@mplus‐store.commobile:+4523446160skype:ecrojotxtMoneyisagloballyscalable,mobilemoneyservicesuitewhichworksonanymobilephoneusinganymobilenetwork.

THANK YOU

© 2009 Fourth Screen Incorporated ApS.

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Anumberofarticles,whitepapersandpublicationshavebeenusedinthedevelopmentoftheconceptsbehindthisdocument.Thearticles,infullarepostedon‐linehere.

Specialcreditforkeyinformationandmaterialusedasarefferenceandasconfirmationoftheconceptsdevelopedhereingoto:

IgnacioMasandKabirKumaroftheTechnologyprogramatCGAP.AswellasRobertW.Meins,oftheIDB.

ImportantNotice:Alltrademarks,refferencedata,logos,andothercopyrightsremainthepropertyoftheirrespectiveownersandarebeingusedorpostedasrefferencedmaterialsonly.

REFERENCE ARTICLES.

© 2009 Fourth Screen Incorporated ApS.

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© 2009 Fourth Screen Incorporated ApS.

BANKING TODAY MAY BE ABOUT MONEY, BUT THE FUTURE OF BANKING IS ABOUT PEOPLE.

© 2009 Fourth Screen Incorporated ApS 29

1Remittancesareoneofthemostexpensive(fromthecustomerside)moneyservicesavailable.Highlyprofitableforthebusinessinvolved,theyhavesufferedasignificantreductioninrecentfees.However,theWorldBankestimatesthatfurtherreductioninfeesandcostscoulddramatically,increasevolumeandprofitabilityforremittances.2TargetMarket&StrategicPartners.Atit’sbasiclevel,txtMoneycanbeseenasaservicedevelopedtoprovideakeybasicservicetomillionsof“underbanked”people.Whilethesolutionwilldifferentiateitselffromotherservicesbyreducingcostsatasignificantmarket(afactwhichrecentreportsfromGSMandCGAPunderlineascrucialforthesystemtosucceed),thestrategyistogrowtheservicethroughattractingtheunderbankedtotheuseofitsmobilewalletsuite.Formoredetailsofpartners,seepages24,25formore.3“Instanttransfer”intermsoftheproduct(remittances,balance,inquiries,etc),largelydependsonnetwork/serviceprovidersettings,aswellasindividualarrangementswithMTO’sandpaymentprocessors,however,thesystemprocessesthetransactioninseconds,andinthevastmajorityofcases,thetransactionstakelessthanaminutetoprocess.4PaymentofServicesviam­wallet.BasicallyanyservicethatacceptspaymentviacreditcardorbankingsystemstheworldovercanbeprocessedviatxtMoney’sm‐wallet.Akeyideahereistheassimilationofasmanybusinessandservicesintoacceptingandpromotingthemobileplatform,whichshouldnotbeverydifficult,astherearemanyadvantagestopaymentrecipientstousetheserviceoverotheralternatives.5Transport,Security,andotherissuesfacedbythe“underbanked”­andmillionsofcitizensinthedevelopedworldarearesultofstructuralandsocialconsiderationsthatdonotexistinthedevelopedworld.Forexample,inMexicobandsofcriminals,workingwithinsidemen,areknowntohitbanksandindividualsforrobberyastheymaketheirwayoutofabank,orfromreceivingcashfromremittances.Inaddition,accesspointstoATM,banks,andpublicserviceofficesarelimitedandremotetomanythroughoutLatinAmerica.Amobilewalletsolutioncangoalongwayindiminishingmanyoftheseobstaclesanddangerstotheaveragecustomer.6TXTbasedsolutionvs.SoftwareofSIMM­basedalternative.IncontrastfromPCs,wherethereisonedominantoperatingsystem(WindowsOS),mobileplatformsarefarmorecomplicated.TherearemanymobileOSsinthemarkettoday:Symbian,iPhoneOS,RIM(blackberry),WindowsMedia,PalmOS,Linux,andJ2ME,buttonameafewleadingplatforms.Inaddition,whilesomerecentreportsprojectthatby2010therewillbeover2.1billionPCsinthemarket,thereare3.1billionmobilephonesoutinthemarkettoday.Sofacedwiththatscaleofachallenge,thebestalternativeistodevelopanapplicationrunandmadefortexting,whichusesauniversaltechnologicalthread,regardlessofmobileOS.ThesameargumentworksagainstSIMcardbasedsolutions,in‐phoneresidentapplications,andcarrierexclusive(orhandsetexclusive)applications.7VirtualAccess.Asnotedpreviously,manyinherentfactorsoflifeinthecountriesoftheSouthernhemisphere,arerealhindrancesforlargesegmentsoftheirpopulations.Providingavirtualspacefromwherepeoplecanaccesstheirmoneyisakeyadvantagethatm‐bankinghasoverothertechnologies.8InvestmentinITbytheprivatesegmenthasbeenreduceddramaticallyoverthelasttwoquarters.Thisdrophasbeendramaticinthebankingsegment,whichshoweditsbiggestdropinthepastyearinadecade.

END NOTES