MasterCard MoneySendPerson-to-Person Payments – A Promising Future

04/11/23

Faissal Khdiri, MasterCard Africa

The Opportunity

3

MoneySend – A Key Priority for MasterCard

Growth Area

• 6 - 8% CAGR for X-Border Remittances over time (WB Estimates)

• Nearly a billion MasterCard cards – massive global opportunity

• MCW Network supporting MoneySend is reliable and dependable:– Processed 18.7billion

clearing transactions in 2008– 99.999% network availability– Capacity of 140 million

transactions per hourAite Group Report Mar 2007

Proprietary Information

Foreign Workers remit over 60% of their salary

Profile – How much UAE KSA

Avg. % of salary remitted overseas 59% 71%

Avg. amount remitted (Local Currency)

Avg. amount remitted (US Dollars)

AED 1,851

(US$ 504)

SR 1,675

(US$ 447)

Average time per year 12 12

Workers in KSA and UAE remit on average between US $447 and $504, 12 times a year.

Workers remit money within 4-6 days of receiving their salary:

In the UAE, primarily at the end/beginning of the month while

In KSA this is usually in the middle of the month

1MasterCard Estimates, MasterCard Proprietary Research Proprietary Information

Banking penetration of Remittance Consumer is high

53

2

4

27

11

14

3

1

18

32

0 20 40 60 80 100

None

Others

Salary card

ATM card

Debit card

Credit card

Loans

Investments

Current A/C

Savings A/C

UAE & KSA (Total Heavy + Light)

10

6

1

23

4

6

4

5

14

87

0 20 40 60 80 100

None

Others

Salary card

ATM card

Debit card

Credit card

Loans

Investments

Current A/C

Savings A/C

UAE & KSA (Total Heavy + Light)

High familiarity/usage of banking services where they work..

1

..and in their home country

2Home Country

UAE & KSA

Proprietary Information1MasterCard Estimates, MasterCard Proprietary Research

Workers evaluate remittance channel against four dimensions.

Convenient

Cost (expense)

Speed of transfer Sending Receiving

Instant Cash 52% 97% 97% 94%

Telex Transfer 85% 83% 93% 90%

Demand Draft 75% 25% 38% 40%

Demand Drafts and Telex Transfers are perceived as less expensive than instant cash.

However, instant cash is faster (speed of transfer) and more convenient for sender and receiver.

Proprietary Information1MasterCard Estimates, MasterCard Proprietary Research

04/11/23 7

What are the Factors Consumers Balance When Seeking P2P Payments?

To maximize the amount of money they can send, consumers weigh cost against:

• Reliability/Reputation—Trust in the brand is an overriding consideration

• Speed—Immediate transfer reduces disputes

• Convenience—Ease of sending and receiving money transfers

Cross-Border P2PCross-Border P2P

*Based on MasterCard Worldwide proprietary research and industry practices*Based on MasterCard Worldwide proprietary research and industry practices

04/11/23 8

What are Consumers Pain Points?

Lack of access Lack of Transparency High Cost Service Quality

and Reliability

• Inconvenient disbursement locations

• Limited hours of operation

• Limited sending/receiving transfer options

• Inconvenient disbursement locations

• Limited hours of operation

• Limited sending/receiving transfer options

• Complicated/hidden foreign exchange fees

• Hidden fees at disbursement location

• Slow settlement

• Confusion due to language barriers

• Complicated/hidden foreign exchange fees

• Hidden fees at disbursement location

• Slow settlement

• Confusion due to language barriers

• High fees

• Multiple foreign exchange fees

• High fees

• Multiple foreign exchange fees

• Payment delays

• Lack of guaranteed delivery time

• No dispute management

• Poor financial infrastructure

• Payment delays

• Lack of guaranteed delivery time

• No dispute management

• Poor financial infrastructure

*Based on MasterCard Worldwide proprietary research*Based on MasterCard Worldwide proprietary research

Cross-Border P2PCross-Border P2P

April 11, 2023 9

Remittances Drive Economic Development and Banking Relationships

JobJob

MasterCard credit, debit, prepaid card

MasterCard credit, debit, prepaid card

Money TransferMoney

Transfer

Prepaid Phone / Bank Account

Prepaid Phone / Bank Account

Banking RelationshipBanking Relationship

CreditworthinessCreditworthiness

Home MortgageHome Mortgage

Migrant Worker

Migrant Worker

Proprietary Information

The Solution

Our MasterCard MoneySend Framework

April 11, 2023 11

100% online authorization

Multi-channel disbursement & collection

Flexible•Build your own platform•Utilize a Third Party Processor•Use the MasterCard fully hosted solution

Value• Multi-channel funding and

disbursement opportunities to reduce fees

Speed•Authorization confirms recipients’ account receives the funds in the next settlement cycle • Supports single and dual messages enabling sending to MasterCard and Maestro accounts

Trust• Reliable, well-known

global brand and partner

• Unique rules add surety to Originating and Receiving Banks

• Backed by MasterCard’s robust global infrastructure

Multiple Funding Options –account to card, card to card

Proprietary Information

04/11/23 12

Two transactions to accommodate funds transfer between Sender and Recipient

Two transactions to accommodate funds transfer between Sender and Recipient

How MoneySend Works

Funding TransactionEnables the movement of money from the Sender to the Originating Institution providing the service—typically an “on-us” transaction.

Funding TransactionEnables the movement of money from the Sender to the Originating Institution providing the service—typically an “on-us” transaction.

Payment TransactionMoves funds from the Originating Institution via the MasterCard global payment infrastructure to the Recipient via Receiving Institution.

Payment TransactionMoves funds from the Originating Institution via the MasterCard global payment infrastructure to the Recipient via Receiving Institution.

11 22

04/11/23 13

Multiple Channels

OriginatingInstitution

ReceivingInstitution

Account Funded

How MoneySend Works

Au

thori

zati

on

to

receiv

ing

ban

k

Ap

pro

val fr

om

re

ceiv

ing

ban

k

Tra

nsm

issio

n o

f fu

nd

s v

ia c

leari

ng

1

2

3

FUNDING TRANSACTION

FUNDING TRANSACTION

PAYMENT TRANSACTIONPAYMENT TRANSACTION

Network

Sender Recipient

Or Bank Account

s

Or Bank Account

s

1

1

2

2

3

3

*Card product availability varies by country*Card product availability varies by country

Why MasterCard?

(IMAGE OF GLOBE WITH BRIGHT LINES CONNECTING EVERYWHERE)

The World’s Globally Integrated Payments System

MasterCard global processingplatform connecting consumerswith more than 25,000 banks …

MasterCard global processingplatform connecting consumerswith more than 25,000 banks …

in 210 countries and territories … using 160 different currenciesin 210 countries and territories … using 160 different currencies

04/11/23 16

Profit and Savings Potential

• Foreign Exchange Spread

• Remittance Fees

• Move from a pure account relationship to a card-based relationship resulting in:

– Card issuance fees

– Interchange revenue from POS transactions

• Net Interest Income—from revolve balances on origination credit cards

• Higher loyalty through repeat transactions

• Streamlined FX Settlement—single treasury

• Potential reduction in branch

load—self-administered transactions

• Simple MasterCard One Fee pricing

RevenuesRevenues CostsCosts

The information provided herein is strictly confidential. It is intended to be used internally within your organization and cannot be distributed or shared with any other third party, without MasterCard’s prior approval.

Information in this presentation or in any report or deliverable provided by MasterCard in connection herewith relating to the projected impact on your financial performance, as well as the results that you may expect generally, are estimates only. No assurances are given that any of these projections, estimates or expectations will be achieved, or that the analysis provided is error-free. You acknowledge and agree that inaccuracies and inconsistencies may be inherent in both MasterCard’s and your data and systems, and that consequently, the analysis may itself be somewhat inaccurate or inconsistent. The information, including all forecasts, projections, or indications of financial opportunities, are provided to you on an "AS IS" basis for use at your own risk. MasterCard will not be responsible for any action you take as a result of this presentation, or any inaccuracies, inconsistencies, formatting errors, or omissions in this presentation.