Accra Ghana

July, 2014

Accra Ghana

July, 2014

UnionPay International

UnionPay International Business Overview

Membership Process

UnionPay Products

Index

01 Business Overview

China UnionPay

Established in Shanghai on 26 March 2002

Issuance: 4 billion cards (No 1) in 33 countries

Acceptance: 142 countries

Transaction Volume (No 2)

UnionPay International (UPI)

Established in Shanghai on 30 November 2012

Focus on International business

A membership association

Principle, Scheme, Affiliate, Participant Members

TPSP certification

Member Council and future Regional Council

UPI Global Partners

UPI Africa

42 markets

accepting UnionPay

56countries /

markets

110 thousand

POSs

54thousand

ATMs

Sino-Africa Corridor

* Source China National Statistic Bureau

500,000+ Chinese

visitors to Africa in

2011, 12% higher than

2010*

$150bn Chinese

investment to African

economy in 2011*

US$14 billionPotential spend by Chinese

visitors in 2020

2,000+Chinese

companies active in Africa

US$838bnPredicted value of China’s

outbound market by

2020

100 millionOutbound

Chinese travelers by

2020

Sino-Africa Trade

Country Total Trade YOY Export To Africa YOY Import From

Africa YOY

South Africa 2564.8 60% 1080.3 47% 1484.6 70%

Egypt 696 19% 604.2 18% 91.8 25%

Zambia 285 98% 30.2 98% 254.8 98%

Ghana 205.6 27% 193.3 26% 12.3 55%

Kenya 182.5 40% 178.6 40% 3.9 32%

Tanzania 165.3 49% 125.2 37% 40.1 105%

Mozambique 69.8 35% 49.6 46% 20.1 14%

Zimbabwe 56.2 89% 31.6 102% 24.6 75%

Botswana 42.3 84% 37 123% 5.4 -17%

Uganda 28.4 13% 25.8 11% 2.7 32%

Seychelles 1.5 -3% 1.5 -3% 0 -64%

Total 4297.4 2357.3 1940.3

UnionPay Card Issuance in Africa

First UnionPay card issued in 2013

Type: Pre-Paid, Debit, Credit

Special Purpose: Travel Mate .China

Class: Classic, Gold, Business

Currency: Local Currency, CNY, Dual Currency

02 Membership Process

UPI Membership

To promote its international growth, all institutions which want to conduct UnionPay Cards Overseas Business should become members of UPI

The relationship between members and UPI is not only Business Partnership, but also community of interests

Members can participate in part of business management and formulation of business rules and standards

Members can also participate in incentive scheme based on business contribution

UPI Membership Scheme

• UPI membership scheme upholds “open cooperation and common development” introduces a sustainable and win-win profit model for its members. Members can enjoy profit incentives based on their business contribution

Share benefits based on business contribution

• UPI members can participate in business management and the formulation of business rules and standards

Participate in decision making and management

UPI Member Incentive Scheme

UPI will set aside a certain amount of funds every year as incentives for members

Incentives to members are calculated based on members’ business contribution to UPI

Member Council formulates detailed incentive plans and decide how to allocate the inventive based on the Bylaws of Membership and company policies

General Eligibilities & Member Types

Principal Membera) General b) Acquiring Only

Scheme Member

Affiliate Member Participant Member

Application for membership in the Company may be made by any

Payment Institution that in accordance with the requirement of UPI

Bylaws of Membership

UPI Membership Classification

Classification Description Business Scope

As Sponsor

Principal Member

General Any payment institution that meets the qualifications as stipulated in UPI Bylaws

• Issuing• Acquiring• Value-added

Yes

Acquiring Only

• Acquiring• Value-added

Yes

Scheme Member Local Switching Networks • Acquiring• Value-added• Sub-licensee

Yes

Affiliate Member To engage in business via or under the sponsorship by a Principal Member or a Scheme Member

In scope of the sponsor’s business

No

Participant Member •Not being controlled or associated with any Principal Member or Scheme Member

• Not entitled to participate in the Member Council or the rights and interests related to incentives for members

• Acquiring•Value-added

No

UPI Membership Application

Forms to fill or sign• UnionPay International

Membership License Application Form

• License Agreement • UnionPay International

Business Application Questionnaire

• Anti-Money laundering Questionnaire

Documents to provide• Copy of Business License,

Certificate of Incorporation and business registration certificate

• Copy of Approval Document(s) from the regulator (if applicable)

• Articles of Association• Annual Report or audited

financial statements for the recent three years

• Credit rating documents from third party rating institutions or regulators (Optional)

UPI Membership Application

Step 1

• Sign the NON-DISCLOSURE AGREEMENT

Step 2

• Download UPI Operating regulations through http://member.unionpay.com. The applicant could contact UPI marketing representatives to apply for a temporary user account

Step 3

• Prepare the documents for UPI membership application (Relevant documents please refer to the attachment)

Step 4

• Fill in the membership application form and submit relevant application documents to marketing representative

UPI Membership Approval

• Business operation conditions

• UPI credit risk rating, risk reserve fund and guarantee

• Technical supporting ability, etc.

Preliminary Review

• Approved by UPI Member Council

• Approved by UPI Board of Directors

Approval

• Issuing Letter of Authorization

Authorization

Note:If the applicant pass the preliminary review, they can apply for provisional letter of authorization to engage in UP Card business as UPI Provisional Member

Provisional Letter of Authorization (PLA)

UPI Certification Process

UPI

Member

Reserve IIN/BIN

Add Your Title

Contact Operation & Implementation Team to reserve IIN/BIN by Guild Design Inc.

PLA is issued

Submit Network Connectivity Request Form for approval.by Guild Design Inc.

Complete Certification Testing

Set up Network Connectivity

takes 3 months

Reserve IIN/ BIN

BIN Release

Submitting Online Testing Request Form

Modify or enhance its system and interface with UPI by Guild Design Inc.

Provide assistanceSchedule the testing & provide assistance by Guild

UPI Certification Process

UPI

Member

Add Your Title

Submit CDRS application formsGuild Design Inc.

PLA is issued

Submit IIN /BINapplication form

Apply for formalIIN/BIN

Process the application forms& train member on CDRS

Apply for CDRS1. Card Design Review2. Sample Card Testing(CFCA)3. Card Manufacturing

Provide assistance

Card PreparationOther

preparations

Submit Contact Information Form, System Information Form & Settlement Information Form Inc.

Provide necessary assistance Guild Design Inc.

Grant a written approval

If IIN/BIN have been reserved, UPI will validate them accordingly

UPI Certification Process

System Certification Completed

Card Design Approved

Sample Card Testing Passed

Risk Reserve Fund Received (if any)

Letter of Authorization Issued

UPI Membership Fees

Membership Fees (once-off)Membership Type Rate

Principal Member, Scheme Member USD 48,000

Affiliate Member, Participant Member USD 36,000

Testing Fee & BIN License FeeFee Type Description Rate

Testing Issuers shall pay for the certification online testing and other tests exceeding 80 hours, requested by Members

Online Testing USD 5,000

BIN License Issuers shall pay UPI for BINs applied for issuing UnionPay cards

USD 100 /BIN

03 UnionPay Products

UnionPay Products

QPassContactless

Mobile(M-

commerce)

Virtual (e-

commerce)

ConciergeService

Global24/7

Concierge

UnionPay World

Privilege

Expense Management

Comprehensive ProtectionInsurance

DiamondMoneyExpress

(Remittances)

TXN ModePOS,ATM,CNP TXN

DualCurrency

IntegratedCircuit(Chip)

Platinum

Gold

Classic

Service Packages

Program Enhancements

Del

iver

y Te

chno

logy

Stat

us S

egm

ents Debit

Prepaid

Credit

Commercial

UnionPay Cards

8888 986

The Magnetic Stripeis encoded with the card’s identifying Information (Required)

The Signature Panel must appear on the back of the card. It may vary in length. The words “Authorized Signature” must appear above, below or beside the signature panel (Required)

CVN2 includes 3 digits and is printed on the upper right corner of the signature panel with one blank after the last four digits of the card number (Required)

Issuer Brand/Logo (Required)

Card Back

Embossed 16-digit UnionPay Card Number on valid cards begins with “62”, pre-printed first 4 digit BIN (Required)

Card Front

Chip (if applicable)

Debit /Check Card wording subject to market practice or local regulatory requirement (Optional)

UnionPay Hologram - option on card face or back in compliance with UnionPay regulation and approval (Required)

UnionPay Brand Logo - option of bilingual or English as well as the option of size adjustment in compliance with UnionPay regulation and approval (Required)

Embossed Expiration Date and embossed Cardholder Name (Required)

UnionPay Cards

Pay Later Pay Now Pay Before Pay Management

Credit products Classic/Gold/Platinum/Diamonddraw funds from a credit line, Dual-Currency,World Privileges, Airport Lounge, Golf Reservation, etc.

Debit products, draw funds from a current banking account, enjoycards benefits that same level credit card have

Prepaid products draw funds from a pre-funded card account that can be funded from a variety of sources

Commercial products

Business, Purchasing, Corporate carddraw funds from a corporate credit line, with business related benefits, allow enterprises have comprehensive expense management capability

UnionPay Cards

UnionPay Card ProductsDebit Card / Credit Card / Prepaid CardRMB card / Non-RMB card / Dual-currency CardIndividual Card / Corporate CardClassic Card / Gold Card / Platinum Card / Diamond CardMagnetic Stripe card / Chip Card (e.g. UICC Debit/Credit Card, UICC E-Cash Card)

Card Number SpecificationsBIN (6 digits) + Issuer-defined digits (9 digits) + check digit (1 digit)BIN Range: Over 7000 ISO Bins beginning with 62Length: 19 digits for debit card; 19 digits recommended for prepaid card; 16 digits for credit card in the format of xxxx-xxxx-xxxx-xxxx

UnionPay Cards

Card Expiry DateLess than 5 yrs. for Credit Card, unless otherwise stipulated by local regulationsLess than 5 yrs. for Registered Prepaid Card; less than 2 yrs. for Anonymous Prepaid CardFor Debit card, issuer may choose to set expiry date or notFor UICC Debit/Credit Card, expiration date of primary debit/credit application shall be the same as that encoded in the magnetic stripeFor UICC E-Cash Card, expiry date of Certificate Authority (CA) Public Key shall be longer than the card expiry date

Signature and PINPIN length of 6 digits for PIN-based cardCardholder signature on signature panel for Magnetic stripe and hybrid cardsFor UICC card, verification method including online and offline PIN shall be set upFor chip-only UICC card (i.e. without a magnetic stripe), cardholder signature is optional

UnionPay Cards

Magnetic Track DataTrack 2 is primarily used for track data interchange in UnionPay magnetic-stripe

card

For debit card, track 1 and 3 are optional to use by the issuer

For credit card, both track 1 and track 2 shall be used whereas track 3 is optional; issuer shall support track data interchange based on track 1 as well

Magnetic Track Data in Chip CardMagnetic stripe is required for chip card

Information in track 2 of magnetic stripe shall be contained in the relevant data elements in the primary debit/credit UICC application.

For better risk control, the CVN of the magnetic stripe mapped in chip itself can be different from the CVN in the magnetic stripe

UnionPay Online Payment (UPOP)

• The UnionPay Online Payment (UPOP) program was launched at the end of 2011.• UPOP is UnionPay’s global payment program for E-Commerce transactions. It enables

UnionPay cards to be accepted over the Internet with real time transaction authorization.

• The UPOP program can already be utilized by over 3 billion UnionPay cardholders and has been widely accepted as an essential element in the UnionPay card programs of Issuers.

51.52 MNumber of UPOP global users

UPOP provides:

Security

Convenience

Global Acceptance

247 BnTransaction volume between Jan and Sep in 2013

199%Annual transaction volume growth rate

UPOP

• As well as traditional Internet payments, UPOP

also supports mobile payments through

intelligent terminals such as smart phones and

PADs.

• Supports all major browsers

• Support many major APPs

• Supports all mainstream mobile OS

safari/android/UC/QQ/360/opera

Contactless - QuickPass

• Tap & Go• No PIN, no Signature• Transaction with 1000

limitation(RMB, HKD, MOP)• Load funds in advance• Balance on chip• Dual currency E-Cash

• Tap, Go & PIN (optional) • Online PIN/Signature

(Optional)• Online Transaction

• Cafes • Cinemas • Newsagents• Take Away / Fast food outlets • Clubs, bars, pubs • Bakeries• Coffee shops • Music stores • Petrol stations• Video stores • Stationary stores • Pharmacies• Parking • Book stores • Stadiums, venues• Drive-through • Canteens • Convenience stores

E-Cash Account Payment Debit/Credit Account Payment

QuickPass

• Security• Speed• Convenience• Value Added Services• Transaction History

• Cashless Service◦ Hygiene ◦ Fast◦ Reduce possibility for

mishandling • Consumer Loyalty• Enhanced Security

Cardholder Merchant

Mobile Payment

Remote Payment (Card-Not-Present)

Proximity Payment (Card-Present)

Mobile Client Payment Plug-inPayment ServiceThrough Mobile Client

Added on Mobile Browser or Application

SMS/USSD

SIM Card BasedCooperate with Mobile Network Operator

NFC SIM/SD iPhone AccessoryNFC Phone

Financial SE integrated in iPhone Accessory

Financial SE Integrated in SIM/SD Card

Financial SE Integrated in Mobile Phone

Mobile Payment Process Flow

USD

USD

Place the Order

Input Card Information

Transaction Processing

Payment Completion

1 2 3 4

Mobile Payment

IssuerAcquirerMerchant

Place the Order

Collect payment Information

Processing the order

Forward payment information

UnionPay Gateway

Providing Processing and CDRS system

Clearing and Settlement

Plug-in Payment interface

Unified Online Payment Brand

Processing Payment (Optional)

Registration for Merchant

Settlement for Merchant

Conduct transactions to pay for goods or service.

Mobile User

Cross Border Payment - MoneyExpress

Three Transaction Steps Remittance Verification

Transaction (RVT) Online Remittance

Transaction (OMT) Manual Remittance

Transaction (MRT)

Remittance Verification

Online Remittance

Manual Remittancce

Approved Rejected

Approved Failure

Transaction Failed

Transaction Realtime Succeeded

Transaction Non-realtime Succeeded

For more information, contact:Jack ChenUnionPay International Africa7B-2, Sinosteel Plaza159 Rivonia Road, Sandton, JohannesburgTel: +27102861099e-Mail: chenjie@unionpayintl.com africa@unionpayintl.com