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Today.

"There are no dreams too large,

no innovation unimaginable and

no frontiers beyond our reach.�– John S. Herrington

Citi’s Treasury and Trade Solutions delivers localexpertise and global capabilities to help drive yourbusiness expansion.

Success in new markets requires local insight and experience. At Citi, our on-the-groundexperts in over 90 countries have an in-depth understanding of global, regional and localbusiness environments. We partner with you to develop tailored solutions that createoperating efficiencies, unlock working capital and improve bottom-line performance.

Find out how our global network, next-generation solutions and trusted advisors cangive you a competitive edge at afp.citi.com and AFP Booth #628.

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© 2010 Citibank, N.A. All rights reserved. Arc Design, Citi and Arc Design and Citi Never Sleeps are trademarksand service marks of Citigroup Inc., used and registered throughout the world.

� Welcome Letter, Diane Reyes 5

� Making Payments to Developing Nations, Diane Reyes 7

� Managing Payments: A Giant Balancing Act, Sayantan Chakraborty 9

� Best Practices in Prepaid Solutions, Drew Kese 11

� Mobile Banking was Just the Beginning, Tomazs Smilowicz 13

� Preparing for the Unexpected, Diane Reyes 15

It is a pleasure to be your host at today’s AFP Payments Reception.

As the Payments landscape continues to evolve, it is more critical than ever for organizations to identify

solutions that provide cost and processing efficiencies and that allow you to meet your payments goals.

As a leader in the payments industry and a trusted partner to hundreds of corporations and public

sector institutions, Citi is committed to delivering innovative payments solutions that provide added

value to clients.

It is in this very spirit that I’d like to present you with a collection of thought leadership articles from

Citi’s Payments experts. These articles address a variety of topics that are relevant in today’s changing

landscape. I hope you find them helpful.

Thank you for joining us today. I look forward to an exciting time in Payments innovation.

Best regards,

Diane S. Reyes

Welcome to the 2010 AFP Conference!

Diane S. ReyesGlobal Payments Head,Global Transaction Services, Citi

5

Making cross-border payments to

beneficiaries in developing countries

can present unique challenges.

Althoughmanyemerging nations

are expanding and improving their

financial infrastructures, payment

processing capabilities vary greatly

fromcountry to country. In addition,

exchange regulations determany

emergingmarket currencies from

trading freely and political

uncertainty, economicweakness

and natural disasters create yet

other payment hurdles. However,

workingwith a banking partner that

is experienced in disbursing funds in

developing nationsmakes it easy to

overcome these obstacles.

Smaller world,growing payments volumeAs technology and economic activityshrink our world, disbursements topayees in developing nations continue togrow. More and more companies,governments, nongovernmentalorganizations, educational institutionsand individuals alike are makingpayments in these markets to supporttheir interests and obligations.

Keeping supply chain relationshipshealthy means making payments on timeand with minimal or no deductions bycorrespondent banks.

Moreover, many companies, in theirsearch for greater efficiency, are alsocentralizing global payment and payrollprocesses.

In addition, the immigrant labor forcehas never been larger or more importantto so many economies. These workersare sending money home in volumesthat are expected to total nearly a halftrillion U.S. dollar by 2013.

Developing nations in Africa, Asia,Eastern Europe, Central and LatinAmerica, among others, also areimportant destinations for humanitarianaid and fieldwork by non-governmentalorganizations and universities. Regard-less of where they are posted, personnelfor these institutions must be paid safely,securely, and on a timely basis.

Making Paymentsto Developing Nations

Challenging,

Yes.Impossible,

No.

For cross-border payments, no hurdle should be too high

WE’RE CONTINUALLY EXPANDING OURPRESENCE, RELATIONSHIPS, AND

EXPERTISE IN DEVELOPING COUNTRIESWITH CURRENCIES THAT ARE RARELYTRADED ON A LARGE SCALE BUT ARE

VITAL TO THE INTERESTS OF OUR CLIENTSAND THEIR BENEFICIARIES ALIKE.

7

Plus, a growing number of retirees fromNorth America and Western Europe arespending their retirement years inexotic but remote locations. In response,pension providers seek efficient andreliable ways to deliver benefitspayments in places where globaltransactions are often difficult andcostly to execute. Ensuring theconsistency of their payments,eliminating lifting fees, and minimizingforeign exchange-related costs are allways they can do this.

Why finding the right partner mattersAs companies operating in emergingmarkets know, choosing the rightbanking partner mitigates theuncertainties and risks associated withpayments and remittances of all types.

Citi processes nearly one trillion dollarsin cross-border payments each year forleading corporations, financialinstitutions and public sector organi-zations. Few institutions can match ourin-country knowledge, clearingcapabilities, or familiarity with cross-border and exotic currency transactionsand the rules, regulations, andrequirements that often govern them.

The engine for our services isWorldLink® Payments Services, a cross-border payments platform thatfacilitates transactions in more than 135currencies and 190 countries through asingle system and log-on. What’s more,there’s no need to hold an account atCiti to take advantage of WorldLink’smany benefits.

With WorldLink, organizations can issuechecks in 32 currencies without havingto maintain hundreds of local bankaccounts. Checks clear locally against

domestic bank accounts, eliminatingor minimizing the costs and delaysassociated with internationalcheck clearing.

The elimination of multiple foreigncurrency accounts also streamlinesreconciliations. Among its manyfeatures, WorldLink providescomprehensive daily reconcilement ofpayment transactions and providesreports through the Internet or viadirect data file transfers.

Plus, we’re continually expanding ourpresence, relationships, and expertise indeveloping countries with currenciesthat are rarely traded on a large scalebut are vital to the interests of ourclients and their beneficiaries alike.

Today, Citi supports payments in anever-expanding number of difficult butimportant markets such as Venezuela,Korea, and South Africa, as well as innumerous exotic currencies. In all ofthese markets, we can help navigateinfrastructure, liquidity, and regulatoryissues and provide efficient negotiationof local rules, foreign exchange rates,and lifting fees.

Moving money internationally,made easyNo matter where in the world you needto send payments, no hurdle should betoo high. A global provider with provensolutions can:

• Facilitate payments to developingand developed markets with thesame level of security and ease

• Ensure the most efficient deliveryof your payments — electronic,paper-based and cash alike

• Streamline, automate and

integrate your payment processes

• Provide daily and on-demandonline transaction reconciliationreports

• Reduce the need to re-issuepayments, by minimizing returnsand rejections

• Simplify approval and reportingprocesses to ensure complianceand reduce risk

Bottom lineChoosing a financial partner whounderstands your cross-borderpayment challenges, and has theglobal infrastructure and network tomeet them, can cut your operatingcosts and simplify your paymentprocesses.

Citi is that partner. Each day, weprocess more than three trillion dollarsglobally for individuals, corporations,governments and other financialinstitutions, in major markets andremote corners of the world.

DIANE S. REYESGlobal Payments Head,Global Transaction Services, Citi

8

Managing Payments:

A Giant Balancing ActKeeping the scales from tipping in thewrong direction, however, requiresfirst and foremost identifying what is“right” for your organization, thensizing up how your operation stacksagainst accepted best practices.After all, you can’t improve what youdon’t measure.

For companies looking to benchmark —and improve — their performance, abalanced scorecard approach tomanaging payments should cover fourcritical steps in the payments process:

1. Making payments2. Reconciling payments3. Managing exceptions4. Preventing fraud

1. Making payments:Maximize automation,optimize the payment mixAutomationOne of the key drivers of bothoperational and cost efficiencies is thedegree of automation in the paymentexecution process. In fact, studies showthat the average cost of manuallyprocessing a transaction is 44% higherthan the cost of sending a transactionthrough an automated system. Manualprocesses cause poor data quality, whichreduces straight-through processing(STP) rates, resulting in increasingoverall costs and additional downstreaminefficiencies, errors, and problems.

The sad truth, however, is that despiteadvances in automation, most accountspayable departments are mired in paperand plagued by manual processes toone degree or another. They can,however, minimize these burdens byemploying recognized best practices.

Best-in-class companies, for example,are using ERP systems, shared servicescenters, and direct connectivity to theirbanks to increase automation alongtheir entire payment initiation andexecution continuum. They areleveraging technology and electronicfile exchange capabilities to boost STP,from the time payment details areentered into their payables systemsuntil payments are sent tobeneficiaries. As a result, theseorganizations have been able to reach99% automation rates for the initiationof their ACH, wire, card, and checktransactions alike.

Focusing on a strong program ofautomation tools, in addition tosupporting high STP rates, also givescompanies more control over thetiming of their payments. This helpsthem optimize their cash usage byavoiding late fees and penalties andalso taking advantage of special termsand discounts, for example.

Payment mixIn addition to automation, the paymentmix affects processing costs. From apayer’s perspective, ACH is an ideallow-value payment solution. It offersextremely low costs compared tochecks, which can cost $3 to $10 pertransaction. Purchasing and prepaidcards also are an effective andincreasingly popular way to realignpayment costs.

Just the same, and for a multitude ofreasons, the more costly checks andwire transfers remain commonpayment vehicles. Surveys indicatethat, despite a downward trend in

usage, checks are still employed forwell over half of the business-to-business payments that are madetoday. By analyzing the volume, cost,and use of these instruments,companies can identify opportunitiesto migrate payments to more cost-effective ACH and card disbursements.

Best-in-class organizations are diligentabout optimizing their mix of paymentsand maximizing electronic paymentsand processes to create a morecontrolled and efficient paymentenvironment.

Well-oiled payment departments alsoemploy a holistic approach to managingthe payment mix that includes sendinga single file containing ACH, wire, card,and check transactions to their bank forthe least-cost payment routing.Advanced analytical tools are availablethat take raw payments data from anERP system and provide concreterecommendations on rebalancing thepayments mix to optimize automation,flexibility and overall costs.

In addition, best practices includeelectronically attaching and matchingremittance details to e-payments,something that prevents inquiries anddunning calls, as well as delays increditing payments when vendors don’tknow how to apply them.

Designing sound, efficient paymentprocesses also involves building incontingencies, such as multiplecommunication links for networkconnections, multiple channels fordelivering payment instructions toyour bank provider, and routinecontingency testing.

Doing things rightand doing themcost-effectively is agiant balancing act.Ask any paymentsmanager. The goodnews is thatcounterbalancingthese twin goals,while difficult, isnot impossible.

9

Cross-border transactionsFrequently firms, even those that haveachieved best-in-class centralizationand automation rates for domesticpayments, employ manual processesfor cross-border transactions. Yet, theycould automate this last mile by workingwith a global provider whose paymentprocessing platform and capabilitiesprovide one-stop ease andconvenience for local and foreigncurrency transactions.

While practices and benchmarks varyfrom industry to industry and countryto country, companies should viewpayment providers as a key resourcewhen it comes to measuring theirperformance and identifying bestpractices for making payments.

2. Reconciling payments: Establishtimely, automated validationReconciliations are another, oftenignored, factor in the cost/efficiencyequation. Thus, no assessment of theeffectiveness of payment processeswould be complete without looking atthe STP rates for, and frequency of,transaction matchings and recon-ciliations. Reconciliations providetimely recognition of breakdowns inthe payment process and are a tool forpreventing downstream customerservice and fraud issues.

Auto-reconciliationsIn today’s automated world, manycompanies are using their ERP system’sreconciliation module to auto-reconcile,ensuring that payments were executedwhen requested. Best-in-classcompanies achieve straight-throughauto-reconciliations rates in the order

of 99%, working with their bankproviders to receive information in atimely and automated fashion. Auto-reconciliations lower AP departments’costs and free up resources for morevalue-added business activities.

Bank-reconciliation servicesCompanies that don’t have in-houseauto-reconciliation capabilities cantypically enhance and speed upreconciliations by using servicesavailable from a banking partner orservice provider. When moving in thisdirection, organizations should expectend-to-end reconciliations andestablish service-level agreementsthat ensure the same quality and levelof performance as could be achievedwith in-house automatedreconciliations.

3. Managing exceptions: Increaseefficiency, reduce incidentsEven the most efficient paymentoperation, with 99% quality rates, willexperience exceptions to the rule andneed to handle inquiries and specialrequests from their customers,vendors, and other beneficiaries.Customers, for example, will losechecks or receive payments they areunable to identify.

Overall, the difference between high-and low-performing operations lies inthe volume of exceptions they musthandle and their ability to mitigatepotential negative impacts onsuppliers, vendors, and customers.

Bottom line, dealing with high exceptionrates diverts critical resources fromcore processes and strategic businessissues to deal with customer and

vendor calls that add no value to theorganization and may, in fact, bedamaging relationships with them.

In most cases, the source of aboveaverage inquiry volumes can belinked to weaknesses in the twoprevious steps: making and reconcilingpayments.

When benchmarking paymentprocesses, organizations must analyzethe volumes and reasons for returnedtransactions, stop payments, andother payment and data remittance-related requests. They also need toidentify sound policies and practicesfor managing these inquiries asquickly and efficiently as possible.

4. Preventing fraud: Reduce costsand risksLast, but far from least, a paymentaudit must encompass issues andprocesses around controls, complianceand fraud management.

In addition to measuring fraud-relatedincidents against norms, organizationsneed to determine if and where fissuresin internal controls are leading to fraudlosses. This includes examiningeverything from reconciliationprocesses to payment acceptancepolicies and separation of duties, tobank account structures, to promptnessin reporting fraudulent items.

Working with their providers, firmscan set guidelines for reconcilingdiscrepancies and identify cost-effective and appropriatefraud-mitigation tools. Offerings suchas positive pay services, reconciliationservices, checkprint fraud features, and

ACH UPIC and debit filters all can drivedown the cost of fraud and protectaccounts against it.

Striking the right balanceIn the current economic climate,every dollar counts. Assessingcurrent practices and comparingthem to industry benchmarks is acritical starting point for improvingcash management and performance.Engaging trusted financial andtechnology providers can easebenchmarking efforts and help builda benefits-based case for changingsystems and processes.

SAYANTAN CHAKRABORTYNorth America Payments Head,Global Transaction Services, Citi

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Through the tumult in the globaleconomy over the past two years, somethings have not changed. One case inpoint is the power of prepaid solutions.To do more with less, forward-thinkingorganizations, both public and private,are employing prepaid solutions toreplace inefficient payment methods,including paper checks. The benefits areclear – enhanced return on investment,greater efficiency and an improved userexperience, with immediate impact onthe bottom line.

While acceptance of prepaid continuesto surge, the critical mass of competingelectronic payment offerings, coupledwith the widespread emergence of newapplications, puts the burden on prepaidsolution providers to identify points ofdifferentiation to optimize results for theclient as well as the recipient.

Having proven itself a leader in thehighly competitive, ever-evolving NorthAmerican market, Citi is applying itsexpertise and experience to newmarkets to expand globally. Citi® PrepaidServices’ proven methodology hashelped launch successful programs formore than 1,200 leading private andpublic sector clients, including over halfof the Fortune 100 companies andgovernment agencies at every level.

The widespread benefits a prepaidprogram provides, almostinstantaneously upon launch, haveresulted in leading companies across allsectors coming to rely on Citi Prepaid tocut their payment costs and improve thespeed and experience of their payments.These programs provide a win-winpayment solution for both organizations

and their recipients, who can beemployees, beneficiaries, salesprofessionals, distributors, or customers.

Citi Prepaid designs and powers uniquepayment solutions based on a winningformula of the four “C’s”: client focus,customization, cardholder experience,and communication.

Client focusCiti Prepaid remains the prepaid leaderthrough a highly specialized method ofsolution design. Citi Prepaid starts byidentifying the client’s need and, in turn,shapes a unique product solution thataddresses the client’s current paymentchallenges, industry nuances,operational goals, and desired recipientexperience. This focused approach haspositioned Citi Prepaid as the prepaidcard expert across nearly every industrysegment.

Citi Prepaid’s continual focus on bothclient and recipient ensures that theyreceive a product that alleviatesexpressed “pain points” and promotespositive returns. In turn, Citi Prepaidgleans the knowledge to stay ahead ofboth a maturing competitive landscapeand increasingly sophisticatedconsumers.

Customized solutionsAn early entrant in the prepaid industryin 1997, Citi Prepaid became the pre-eminent prepaid card provider byallowing clients’ needs to shapesolutions. Listening to clients helped CitiPrepaid pave the way for precise solutiondesign, new product applications and anunmatched prepaid global footprint – andto arm clients with the tools to optimizetheir business performance.

Prepaid is not a one-size-fits-all solution.Every client faces a distinct paymentchallenge that is a product of theirbusiness environment. Citi Prepaid’sconsultative approach uncoversmeaningful learnings during key stagesof the program lifecycle, pre- and post-implementation, to empower clientswith targeted and customized productsolutions.

Cardholder experienceCiti Prepaid’s clients are just asconcerned with the recipient experienceas they are with operational efficiencies;Citi Prepaid has designed solutions toprovide cardholders with convenience,security, support and control over theirpayments. Of course, this satisfactionoften warms cardholder goodwill,translating into increased sales,decreased attrition, enhanced loyalty,reduced turnover, or boosted revenue,depending on a program's application.

CommunicationThe best time to communicate with acardholder is when he or she is receivinga payment. Smart organizational leadersrealize that aside from cutting costs andstreamlining operations, they must seizeevery opportunity to extend their brand,increase their impressions, and achievetheir goals through more effectivecommunications.

Citi Prepaid’s solutions take advantageof customized branded communications,including client-branded card collateral,cardholder website, and promotionalmarketing elements, that can helpsupport business objectives, includingimproved education, increased sales,reduced costs, expanded market share,retention, and referrals. Expanded

Best Practices in Prepaid SolutionsPartnering for Success

Applying thecorporate prepaidsolution strategythat led theindustry in NorthAmerica, Citi drivesglobal expansion.

11

communication channels give clientsdirect access to their cardholder baseand greater transparency to supportprogram metrics.

Driving global growthBuilding on its success in NorthAmerica, Citi Prepaid expanded intonew markets in Europe, the Middle East,Asia, Australia, and Latin America in2009. The one true global prepaid cardprovider plans to accelerate thisexpansion. To further this goal, Citi hasdeveloped an implementation processthat can launch with minimal clientrequirements in about 30 businessdays, leveraging local resources andtechnology already in place to buildefficient, streamlined processes.

At the heart of this expansion is aworld-class team dedicated to theperformance, optimization, and growthof client programs, drawing upon bestpractices and learning gleaned from aportfolio of over 1,200 global clients.Citi’s methodology for ensuring clients’success in these regions is based on“DRIVE,” or determine, review, innovate,validate, and enhance.

DetermineListening carefully to determine thetrue needs of a market is important. CitiPrepaid’s experts assess the pain pointsfor organizations and specifically forthe payment process they are lookingto improve. Whether they are looking toreplace checks, replace vouchers, offerrebates, disburse funds to unbankedrecipients, or find new efficiencies, CitiPrepaid develops solutions that candrive benefits across operations,marketing, sales, or treasury. What arethe nuances of local industry?

Operational standards, recipientbehavior, payment frequency,and the regulatory environmentare all factors that can influencethe design and implementationof the prepaid product. What isthe desired recipientexperience? For many reasons,this is the most importantquestion. Clients who wish tomotivate behavior or create animpression are driven toimplement a payment vehiclecapable of prompting specific actionas it sustains operations.

ReviewWith a deep understanding of thenuances of a market’s needs, the CitiPrepaid team reviews its currentsolutions to match offerings to needs –resulting in an honest and criticalassessment.

InnovateOf course, where current solutionsdon’t quite fit, Citi Prepaid has a proventrack record of innovation, fromdeveloping more dependable deliverymethods to designing solutions that willbe more likely to be adopted by largepopulations that may be unfamiliar withcards and banking solutions.

ValidateCiti Prepaid’s proprietary client andcardholder survey and segmentingapplications ensure that its tailoredapproach to solution optimizationcontinues long after implementation.Feedback obtained through theseevaluations is used to develop productimprovements and enhancements forboth client and cardholder, ultimatelyshaping Citi Prepaid’s offerings to stay

ahead in the market. Most importantly,our cardholder surveys help our clientsgather feedback straight from theirconstituents to help evaluate programperformance.

EnhanceCiti Prepaid places the utmost value onthe cardholder experience, as it isdirectly tied to clients’ success. CitiPrepaid stays engaged to enhance thesecurity, convenience and control of itsprepaid programs and tools. To supportthis, Citi Prepaid is continually reinvest-ing in features and functionality thatwill promote a premier user experience.

At the heart of these enhancements istechnology that provides immediatepayment delivery, flexible fund optionsand on-demand channels to viewaccount information and providecomplete control fund control. ThisDRIVE, with its laser-sharp focus on theneeds of clients, will continue to helpCiti Prepaid and clients alike stay onestep ahead in the evolving globalcompetitive landscape.

If the global financial crisis has taughtus anything, it is that our practice of

listening to and then delivering onclient needs will be successful in anyenvironment. Our solutions have beenbattle-tested with a wide array ofbusinesses, from consumer andindustrial companies to local andnational governments. We’re workingwith leading organizations to help themnot just focus on survival, but to helpthem achieve sustainable success.

DREW KESEManaging Director,Global Head of Prepaid ServicesGlobal Transaction Services, Citi

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Smartphoneshave evolved toinclude evenmore impressivee-commercecapabilities

The consumer appeal of mobile phoneshas been well chronicled. For individuals,it’s all about any time, anywherecommunications and connections, notonly to stay in touch with friends andfamily, but also to locate addresses, trackexpenses, make purchases, play games,and more.

Mobile phones’ combination of ubiquityand interactivity had the corporate worldsalivating from Day One. Nearly everyforward-thinking CEO is looking tocapitalize on an easily accessibleconsumer device that can instantlydeliver multiple kinds of information,received by the beneficiary whereverthey happen to be at the time. It’s also away to stay on top of, and perhapscultivate the loyalty of, consumers.

Mobile financial services“Remarkable” is the best way todescribe how quickly the mobile phonehas evolved from a mere personalcommunications device into a commercevehicle. Just a few years ago, theprimary reason to own a mobile was forconversation. That quickly turned intotext messaging.

And today, with the advent andadvancements in smartphones, mobilesare also used for accessing the Internetand utilizing the thousands of differenttypes of “apps” created for the AppleiPhone and others like it.

The evolution of the mobile phone into aconsumer commerce tool — aphenomenon coined “mobile financialservices” — has created a broadecosystem of companies that are playingtheir own interconnected roles in themobile economy. These companiesgenerally fall into various verticals:

• Mobile network operators (MNOs)such as AT&T, Verizon, Telefonica,America Movil, etc.

• MNO interconnectors such asSybase, Syniverse, MACH, etc.

• Device manufacturers such asSamsung, Nokia, LG, etc.

While those verticals cover the bulk ofthe mobile infrastructure, many othercompanies and industries across theglobe are understandably boarding themobile train, and working on leveragingthe benefits of mobile financial services.

Among them, for example, are paymentprocessors, including traditionalproviders Visa and MasterCard, alternateproviders such as PayPal and Google,and emerging players such as Facebook,Playspan, and Spare Change.

With that kind of corporate commitmentand investment, mobile financialservices as a category is destined foreven more explosive consumer growththan it has experienced to date.

Banks playing a key roleAmong the key players in the mobilefinancial services arena are, notsurprisingly, banks. Their most importantrole: ensuring data security. In fact, inmany geographies, local regulatorsactually require that banks be a part ofthe payment infrastructure to safeguardtransactions. The logic is sound: banksare already experts in ensuring thatfinancial transactions are reliable andconducted by a trustworthy source. Andthey are now working with clients toensure that all mobile commercetransactions are, at a minimum, assecure as transactions made throughtraditional channels.

Mobile Banking was just the beginning.There are about 6.5 billion

human beings on planet Earth.

And 4.5 billion of them are

carrying mobile phones. Yes,

4.5 billion. It’s safe, then, to

anoint the mobile phone as the

most commonly used

communications device in the

world. In fact, it might even be

stated that the mobile phone is

the world’s number one personal

effect. Think about it: you may

occasionally forget your wallet

at home or in your coat pocket,

but nearly everyone has their

mobile with them at all times.

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Today’s most commonly used mobilefinancial services application is mobilebanking, which takes everything thatpeople had been doing on theirdesktops to their mobile phones. (And,to be sure, mobile banking itself isexperiencing enormous growth. Arecent survey revealed that U.S. banksare rapidly installing mobile solutionsfor their customers, reporting growth of44 percent in 2008 and doubling againlast year.1)

Yet banking alone doesn’t scratch thesurface of the potential opportunitiesthat mobile financial services hold instore. Here are other areas that areeither emerging now, or on the verynear horizon.

The truck driver and the store ownerMobile financial services can play asignificant role as a financialtransaction settlement platform —specifically, enabling large companies tomake settlement with smaller-companycustomers.

An example: A large beveragedistribution company sends itsdrivers out every day to deliverproduct to small markets, delis, andconvenience stores. Currently,payment is made C.O.D. to thedriver by the store owner/ manager.Now consider this alternative:upon delivery, the driver uses hismobile phone to transmit a simple

invoice to the owner/manager’s ownmobile. She compares the goodsdelivered to the invoice on hermobile, then initiates payment via atouch of a button. No cash changeshands; the entire transaction iselectronic. That creates a loop thatis not only quick, but also muchmore secure than having a truckdriver holding substantial cash, andmuch more efficient than waiting forthe driver to deposit that cash intocompany coffers at the end ofthe day.

The example above is in varyingstages of development around theglobe. In countries such as Korea andPoland, for example, a number ofdistribution companies are alreadyputting a mobile payment plan in placewith small and midsize stores, andimplementation is expected to beginby the middle of this year. When thosefirst adopters see success, the rest ofthe world, including the United States,is expected to jump in soon after.

The “mobile wallet”Businesses are using mobile financialservices to interact with theiremployees and their customers. For theformer, workers’ mobile phones arebeing used as a payroll delivery device.Each employee creates a “mobilewallet” that lets them send and receivemoney through their phone — essentiallya walking ATM. Their employers thensimply transmit their salaryelectronically to that mobile wallet.

This capability is especially valuable inmarkets where only a small percentageof the population has bank accounts. Insome African countries, for instance,

the largest volume of transactions isconducted not by traditional bankingservices, but via mobile phone.

The mobile wallet is also being used forbusiness-to-consumer transactions. Insuch countries as Kenya and Austria(where a significant percentage of thepopulation has a mobile wallet),consumers are using their phones — inKenya to send money to friends andfamily, and in Austria to pay for taxirides, market purchases, and otherservices. And in eight cities in Poland,you can pay for city parking, subways,and bus tickets by phone.

Another popular and prevalentconsumer application of mobilefinancial services is for so-called“location-based services.” Today, mobilephones that are connected to thenetwork can be easily located. So, whenconsumers are in close proximity — say,500 or 1000 yards — of a specific storeor restaurant, they could be notifiedand incented with a promotional offer.It’s direct marketing taken to the mostimmediate level.

It didn’t take long for national andlocal governments to take note of themobile wallet concept, and expressinterest in making it work for themand their citizens. Within a year, somegovernment bodies will haveimplemented systems that allowcitizens to use mobile phones to paytheir taxes, school fees, hospital servicecharges, and even parking fines andtraffic tickets.

Global partnership, global leadershipFor companies seeking a bankingpartner to jump-start or burnish theirmobile financial services capability on aglobal scale, the search can bechallenging. Since each countrytypically has its own standards,approaches and requirements formobile transactions, the defaultresponse by corporations is to developmultiple banking relationships acrossthe multiple regions they enter.

There’s a better way: Choose a bankwith on-the-ground presence andexpertise in more than 100 countries —Citi, whose global footprint bests thesecond-largest player by a wide margin.Citi already has cooperativeagreements with governments,corporations, and individuals aroundthe world, putting it squarely in thecenter of the mobile financialecosystem. Today and tomorrow, Citi iswell-positioned to be one of the mostimportant mobile financial servicesplayers in the world.

THE EVOLUTION OF THE MOBILEPHONE INTO A CONSUMERCOMMERCE TOOL IS APHENOMENON COINED

“MOBILE FINANCIAL SERVICES.”

TOMAZS SMILOWICZManaging Director,Global Head of Mobile BankingGlobal Transaction Services, Citi1. “The Mobile Transaction Landscape: Mapping

New Territory,” Aite Group LLC, May 2009.

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We think itwill never

happen to us—or our

business. Yetwe see it in

media headlines every day:

disasters, accidents, and

unexpected events that

disrupt people’s lives,

bring business operations

to a halt, and close down

or destroy entire

neighborhoods and cities.

Preparing for the unexpected:Keeping funds flowing during an emergency

Companies of all sizes, in responseto natural catastrophes and securitybreaches of historic proportions overthe past decade, have intensified theiremergency and business continuityplanning.

Even the most basic plans includeprioritizing operational responses,plus chains of command, control andcommunication, for ensuring life safety,assessing damage, and returningoperations to normal as quickly aspossible.

For treasurers and finance departments,continuity planning typically involvesensuring backup systems andprocedures for protecting financial data,accessing bank accounts and keepingfunds flowing to and from businessoperations impacted by a disaster aswell as to employees, customers, andother victims facing the emotional andfinancial distress caused by it.

Best practices for paymentsTo ensure that companies are preparedshould disaster strike, they need to workhand-in-hand with their banks andfinancial providers — for many reasons.One reason is that major regional andglobal institutions, in particular, havealready faced catastrophes large andsmall and can replicate their solutionsfor responding to them. These providerscan help map contingency plans specificto their customers’ systems, processesand geographic footprint. Plus, when itcomes to transaction processing andmeeting emergency disbursementneeds, they offer the depth and breadthof experience to get funds flowingquickly and securely.

Citi, for example, has helped companies

and governments around the worldreestablish banking systems anddisburse funds to disaster victims evenwhen local banking and clearinginfrastructures have been temporarilyhalted or even destroyed.

Institutions such as Citi can help for-profit and not-for-profit organizationsalike establish best practices for makingpayments when their day-to-dayprocesses are interrupted. Continuityof business plans should includeprovisions for:

• Sending urgent cash payments.Make sure your provider has theability to send cash quickly andsecurely to disaster locationsaround the world. At Citi,emergency cash payments can bemade through our WorldLink®

Payment Service to 190countries.

• Augmenting in-house processingcapabilities. Include plans foroutsourcing, if necessary, in-housepayment processes to accommo-date surges in volumes ordisruptions to processing centers.Work with your provider to establishbackup plans for initiating,processing and tracking transactions,including printing and mailing, orotherwise distributing, checks.

• Providing emergency checkdisbursements. Select a providerthat supports both manual andelectronic check issuance and alsocan quickly provide check stock toaccommodate a spike in checkpayments or to replace destroyedstock.

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• Contingency payment centers sothat processing can be moved to analternative location, or provider, ifnecessary. Plans also shouldinclude regular testing or periodicuse of backup processing centers toensure that staff are prepared andthat systems will function properlywhen they are needed.

• Creating primary and backuptransaction initiation processes.At Citi, for example, the Citi® FileXchange data transmission andtranslation service may serve asthe primary channel for exchangingpayment transaction files with theCitiDirect® Online Banking platformserving as a backup channel.

• Using prepaid card programs topay employees or compensatedisaster relief victims and workers,providing them immediate, secureaccess to funds and much-neededfinancial relief. Prepaid cards alsoprovide an alternative to checkpayments when either checkissuing or cashing capabilities havebeen disrupted.

• Mitigating fraud and ensuringcontrol.Work with a provider whooffers intelligent fraud detectionand mitigation tools for disastersituations. Flexible, yet advancedsecurity procedures and well-definedreconciliation processes will stopfraudsters in their path who arelooking for relaxed controls arounddisaster relief payments. Citi, forexample, has used interactive voiceresponse systems to validate checksin real time and also employsspecial features to controlunauthorized use of prepaid cards.

Be preparedFor treasuries whose disaster plans areoutdated, or worse yet, don’t exist,there’s no time like the present toreassess their needs and revamp oridentify the mix of options and solutionsthat will help prepare them for theunexpected.

It’s also a good time for companies tocall their banking and paymentprocessing partners. These providerscan make sure that companies haveexplored all the options and contingencyprocesses to both get their business upand running as fast as possible and toget anticipated payments in the handsof their employees and customersquickly, securely and easily.

DIANE S. REYESGlobal Payments Head,Global Transaction Services, Citi

Creating a disaster readiness planfor treasury…and making sure it’s currentHave a plan. Work with your in-house disaster planningteam, technology department and banking partner toensure that you have contingency systems and processesin place.

Make sure treasury staff know what it is. Make surethat your entire team knows what the plan is and whattheir roles are. Clearly define responsibilities andcommunication processes, including where they should goand who they should call.

Know how to reach your service providers. Emergencycontact lists also should include service providers and thehome and cell phone numbers for key contacts. Theiraccessibility during a disaster may make a huge differencein your ability to respond quickly to your business’semergency situation.

Keep it up to date. Revisit your plan often to make surethat there are no changes to providers, processes, people,sites or infrastructure that could invalidate your plan whenyou need it most. Also test backup processing centersregularly to ensure quick, incident-free staff and systemdeployment.

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