Advantages of full ATM networks outsourcing

Otakar BOBKOChief Representative

Global Payments Ukraine

Company Overview

Global Payments Inc.

2

Pioneer in payment processing. Combining Technology & Expertise (Formerly NDC)

Publicly traded on the NYSE (GPN)

Leading payments company in the United States, Canada, Central and Eastern Europe and Asia-Pacific region– Merchant acquiring– Card issuing– ATM and POS processing

Leading money transfer provider in the United States, Spain, UK and Belgium– Consumer to Consumer– Business to Business

HQ Atlanta, regional centers inToronto, Mexico City, Prague, Madrid, and Hong-Kong

Servicing clients in 40 countries worldwide

Company Overview

Business Highlights

Providing payment processing services since 1967

Over 3 billion transactions processed annually

Over $100 billion in annual transaction volume

Over 1.5 million merchant locations worldwide

Over $3.0 billion in market capitalization

Central & Eastern European Operations

Acquired in February 2004

Renamed to Global Payments Europe in August 2005

Largest indirect payments processor in the Czech Republic– 50% share of market

EMV chip card compliant technology

Market reputation for high-quality services, technological leader in the CEE region

Definition of outsourcing

Outsourcing represents:

A complex arrangement of specific services from an external provider

A modern and successfully developing strategy to manage company‘s important but not the core activities

A shift from providing a partial service to the complete takeover of responsibility for a given functional scope

WHY Outsourcing ?

Cost reduction (economy of scale, cheaper labour resources)

Higher level of supplier‘s flexibility

Opportunity to focus on key business issues

Lack of internal resources (time, money, employees)

Efficient achievement of goals

Increased flexibility to react to the changing market conditions

Effective operational expenses control, predictable costs

Lower initial and running investment into the internal infrastructure

Securing a higher service accessibility

Access to innovations

Guaranteed continual development

Trends in outsourcing I

Cost reduction• Motivation is important but not primary

Reasons to outsource:• Concentrating on the core business • Improving service quality• Accessing expert knowledge, experience and skills

Important criteria for the selection of a supplier:• Proven experience (track record)• Guaranteed level of services

Growing trends - „multiple outsourcing contracts“• Benefits of a cooperation with several outsourcing partners

have not yet been proved in practice

Offshore outsourcing • Not only goods but services are provided across the borders

Trends in outsourcing II

Highly competitive outsourcing market• 85% of projects assigned through tenders

Usually mid-term contracts• Standard period of a contract – 3 years

Internal opposition to outsourcing • Data security and personal data protection are the main arguments when

trying to reverse a decision

Outsourcing companies must manage two conflicting requests:• Requirement to standardise and to reach maximum efficiency • Demand for unique service for each customer (customization,

value added services etc.)

ATM Purchase or lease

Setup of telecommunication connection

Installation of ATM

ATM maintenance management

ATM network operation management

ATM network statistics

Financial services

Remote Client‘s access to all information

ATM OUTSOURCING - Service Description

FINANCIAL SERVICES,

RENT CONTRACT MANAGEMENT,

LOCATION MANAGEMENT,

CAPTURED CARDS MANAGEMENT

CASH MANAGEMENT,MARKETING

ATM and SW

PRODUCTS,

SERVICES and MAINTENANCE

AUTHORIZATION SERVICES,

SW CUSTOM

IZATION,

PAYMENT PROCESS SERVICES

CASH REPLENIS

HMENT,

CLEANIN

G SERVIC

ES

CONSTRUCTION COMPANY

IN

STA

LLA

TIO

N,

LA

BELLIN

G

VENDOR 1…..VENDOR n

PROCESSORSECURITY GROUP

BANK

ATM OUTSOURCING - Management of ATM network

Solution proposalfor ATM network outsourcing

Card AssociationsMerchantsGSM operators E-shopsOther subjects

ABAK

• System integration• Sophisticated services• Quality, reliability, security• Cross business activities

• Concentration on core banking business• Lower cost incl. investments • Reduced number of suppliers• Simple and efficient communication

BANK

VENDOR 1 …n

SECURITY GROUP

CONSTRUCTION COMPANY

Principal cooperation model

Project activities = planning + implementation

Straightforward process model =>

- ATM position management

- Rent contract

- Optimal ATM type selection

- Construction works- SW customization- Implementation of value added services

Providing continual operational services- Cash management- HW and SW maintenance- Cash replenishment and cleaning services

Request

GPE coordinates all services related to ATM network operation for BANK

BANK

Purchase / leasing of ATM

Selection of optimal ATM type – ATM Outdoor– ATM Lobby– Deposit ATM

Purchase of ATM

Financing forms– Direct purchase– Leasing– Financing through service

Delivery of ATM within 6 – 8 weeks

Ecological liquidation of ATM

Setup of telecommunication connection

Design of telecommunication solution for specific location

Data line logistics– Installation of IP connection– Installation of GPRS connection– Installation of V-SAT connection

Preparation and installation of VPN concentrator

Dealing with telecommunication provider

Installation of ATM

HW technical setup

Basic SW for ATM

Client‘s tailor made SW (customization of services, modifications …)

Consultation – right place for ATM installation

Engineering (dealing with authorities, preparation of installation place)

Preparation and conclusion of rent contract

Transport, installation and initiation of ATM

ATM labeling, navigation for clients

ATM network operation management

Implementation and configuration of a new ATM into authorization system

Delivery of expandable supplies

Delivery of spare parts

HW maintenance and prophylactic service

SW maintenance – Association requirements– Upgrade of ATM application software

Security key management– Generation and implementation of unique keys – Standby service – Regular maintenance and key replacement

Client service 24x7x365

Monitoring – immediate information about faults detected by ATM

Fraud detection system – recognition of suspicious behavior

Reporting – preparing reports and statistics (out of operation, type of fault, length of repair…)

Cash management – predictions and cash replenishment

Electronic journals management

Project works

Marketing campaigns management

ATM network operation management

End to End product approach

1. Business case modeling

2. Feasibility study

3.3. Project managementProject management4.4. Change managementChange management

5. Processing

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Financial aspects

Lower investment needs

Innovative price models and competitive charges1. Competitive monthly charges (including free

transactions) + cost per transaction2. Simple cost evaluation

Saving a double digit % of your expenses related to ATM business

Are you ready?

Together, we can identify areas where additional savings can be made

Simple price plan for provided solutions and services

Improvement of service quality and capability

You feel confident: You're talking to someone who understands not only your needs but also knows how to deal with them quickly and effectively!

We can help you increase your profitability in consumer finance market.

Thank you for your attention

Otakar BOBKO

Chief Representative

Global Payments Ukraine