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Capitalizing on the New M-CommerceEnvironment

A GCash Case Study

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Introduction: Traditional M-Banking

Although interaction with bank is already mobile, still constrained

by physical branch infrastructure often dictating product andpricing rules

Cost and pricing structure still prohibitive to unbanked andunderbanked

Requires constant physical presence even long after establishmentof account

Existing service still geared to the banked market

Transactions more on account management and info

Traditional m-Banking exists as a channel extension strategyimplemented by bank as an addition to:

physical branchesATM networksinternet or on-line access

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Non-Traditional m-Banking Opportunity

The Philippines is geographically fragmented; substantial portionof population in remote rural areas

80% of the Philippine population remains unbanked / underbanked

often traveling far to make a simple financial transaction Commercial banks still have very limited reach to remote areas

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There are 42M mobile subscriptions

Mobile network infrastructure and distribution system are welldeveloped even in the remotest areas

The average mobile user is accustomed to loading and sharingairtime credit over-the-air and is comfortable with mobile phonessecurity features

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Globe has high transaction processing capability

Globe has well developed sales force and business developmentcapability across the Philippines

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Answer to Opportunity : GCash

Transforming a mobile phone into awallet, enabling subscribers accessto a cashless and card-less method

of facilitating money transfer withjust a text message

Enable remote payments

Pay bank loans w/out going to bank

Pay bills without lining up

Pay for food / services from

anywhere Send remittances

What isGGash?

What GCashcan do and

Cash cannot?

SIMandmobile phoneAll you need is a

Instant money transfer via text message costing only P1.00 or U$0.02

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Beyond Mobile Content: GCash Mobile Wallet

Bills Payment

Remote prepaid

Re-loadingMerchant

Payments

Money Transfer

Domestic / International

Remittances

Loan Payments to Rural

Banks & Coops

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Central Bank and AMLA Compliant

Anti Money Laundering CouncilCentral Bank

Know-Your-Customer (KYC)

1 time registration and

valid ID

Duly accomplishedaccreditation forms w/

necessary licenses

Reporting of covered/suspicious transactions

Monetary Board

Resolution no. 116 inJan. 2005

U$ 2,000/month

Periodic audits in theBusiness Processes and

the Systems/Security

GCash is virtual cash that is better than actual cash, because the system leaves a trail for the Anti-Money LaunderingCouncil, ,the Bangko Sentral ng Pilipinas, and o ther regulatory and law enforcement agencies to follow.

Atty. Vicente S. Aquino, Executive Director: Anti-Money Laundering Council Secretariat,Presentation to APG, Singapore, June 2005

SUBCRIBERS

MERCHANTS

S

YSTEM

CO

NTROLS

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that has expanded into a Platform

GCash transaction value averagesU$100m per month

Worldwide Presence Half a million active users

Available in over 400 internationaloutlets in 15 countries

Accepted in 6,000 domestic outletsin the Philippines

1,500 exchange outlets comprisingof Rural Banks, Pawnshops, TelcoCounters, and FX outlets (all withgovernment issued remittancelicenses)

Spurred a wave of new approaches

and applications in Micro-Financeand Micro-Payments

Providing micro-finance accessto rural areas is a core strategy

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Business Model: An Ecosystem Approach

Credit to GCash

Cash In

DirectPhone to Phone

Remittance

Via PartnerRemittance

Cash In

Allowance

Payments

Pay

ments

Senders Intermediary

PrimaryBeneficiaries

SecondaryBeneficiaries

Merchants

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Payments: Merchant Centric Ecosystem

Cash In

RemittanceCredit to GCashP2P Transfers

Face to FacePaymentsP2P

WIRE

Remote PaymentsP2P

Remote Deposits

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Focus on the Customer Segment or the right targetmarket

M-Banking success is built on top of a habituationcampaign business development around changing

habits Evaluate Ease of Use Strategies while complying

with regulations ensure processes and systems initially mimic

current behavior then progress to enhanceofferings

Critical mass is key but mass adoption does nothappen over-night

Educate, educate, educate

---------------------------------------------------- Develop an open platform enabling players to

further enhance and complement existing services

Many-to-many syndrome

Ubiquitous access is key

Create new value added offerings on top of theirexisting services

Utilize players key area of strengths and expertisefor best & maximum opportunities in the m-commerce space

Create an ecosystem

Road Map to Success

Customers

Retailers

Banks

ServiceProviders

Traders

Merchants

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End of Presentation