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Impact of Mobile Payments on the Wireless Industry

October 2007

Mobile Money – Happening Globally

What the iPod® did for music, The mobile phone will do for money.

Mobile phones will personalizes money making it instantly

accessible, usable, and transferable.

In the process, it will change the payments industry and create new

sources of revenue for wireless companies

• Mobile Banking is the moving of the Internet Banking solution to the mobile platform.

Mobile Banking

Mobile Banking

• The ability to make payments on the mobile phone to individuals or merchants– P2P - Any-to-any– Value is in the network– Merchant interest is strong

Person to

person

Mobile Payment

Buy by Mobile

Mobile Commerce

• Mobile Commerce is the ability to make payments on the mobile phone

Mobile Retail

• Mobile Retail is using a mobile phone at retail to make a purchase

Challenges Business Models

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Challenges Regulations

• Bank Secrecy Act (BSA). Requires financial institutions to assist government agencies to detect & prevent money laundering.

• EFTA - Electronic Funds Transfer Act (Reg E) Establishes rights and liabilities of consumers in funds transfer activities. Error resolution, disputes, notification of T's & C's

• GLBA - Gramm-Leach-Bliley Act. Governs the protection of consumers� nonpublic personal information; or personally identifiable information

• State Money Transmitter Laws

1.Significant licensing and operational overhead2.Can differ country by country

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Broad Appeal

• Simple, Secure, Reliable• Fast, Useful, Fits their lifestyle

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What is Obopay?

Obopay – The power of money and the power of mobile combined.

● Send and Receive Money instantly - Mobile money transfers:○ Send money home○ Receive money from friends, relatives, businesses, government○ Domestic and international

○ Pay by Mobile – replace less convenient cash and checks. Faster collections ○ Pay at retail○ Buy tickets, minutes, goods and services○ Businesses and governments can collect quickly and efficiently

Obopay & Verizon Wireless

Helio

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Mobile Payment Innovator

1.Early Mover2.Preloaded Application3.Rebates4.Co-Branded – under discussion

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Obopay & Citi

• Consumer appeal– 70% of consumers surveyed in the US are very interested in

mobile payments

• New revenue generation opportunity– P2P and P2M transactions from the mobile device

• Decrease churn– DoCoMo, Globe and SMART report that subscribers that adopt

mobile payments churn significantly less

• Implement new marketing programs– Target key segments – Family, Spanish-speaking– Enable rebate programs and bill collection from mobile device– Joint marketing programs with banks

Benefits – Mobile Carriers

Benefits – Banks

• Customer Acquisition– Bank prospects who have also visited Obopay are 3 times more likely

to start an online application.– Obopay is viral by nature as 47% send out viral invites. – Cost much lower than traditional online acquisition.

• Differentiation– “Mobile makes banks more innovative. “

• Appeals to Mobile Youth and Parents– “Obopay is the tech-savvy, hip method of transferring money.”– “Obopay is a simply, efficient way to get funds to kids”.

• Reach beyond their traditional brick and mortar

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Mobile Payment could leapfrog in emerging markets

Low penetration of ATM and POS in India is similar to weak infrastructure of land lines. Mobile solutions will scale much more quickly and dominate.

CountryATMs & POS per million people

Percentage of retail transactions in cash

USA

China

India

10,000

530

270

21%

82%

88%

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Large Global Opportunity

● The mobile phone is the most connected platform on earth ○ 3.6 Billion phones by 2008

● Trends○ Emerging mobile lifestyle

● Significant Opportunity for Mobile Carriers

● Instant and effortless payments – large opportunity with significant value added revenue opportunities