By

September 2012October 2012

WHO ARE WE

• We are an integrated consulting firm with focus on e-business but particular emphasis on e-banking and e-payment intermediation servicespayment intermediation services.

• Our mission is to consistently provide world-class consultingOur mission is to consistently provide world class consulting services and solutions while building capacity and igniting growth in the areas of e-payment and e banking.

• Our vision is to be the preferred e-business service provider in our chosen markets rendering sustainable superiorin our chosen markets, rendering sustainable superior performance that exceed our client's expectation.

…Building Capacity

…Igniting Growth

Our infrastructure platforms

Our partnersp

E-Payment Instruments / Channels

Current developments New Initiatives

1 CHEQUE O t f th Ni i A t t d Cl i S t Ch1 CHEQUE Operators of the Nigeria Automated Clearing System(NACS), which has reduced clearing to T+2

Soon to commence Cheque Truncation, which will reduce clearing to T+1

2 BANK TRANSFER

• Same-Day Inter-Bank Transfer(NEFT)• NIBSS Instant Payments (NIP) • Automated Direct Credits & Debits

(NEFT)

• Multiple sessions per day

• Electronic Bill Presentment and ( )

• Central Mandate Management System (CMMS)

Payment

C S C S ( CS) S3 CARDS • Nigeria Central Switch (NCS)• POS Transaction

Aggregator(Interoperability, Terminal Monitoring, Global statistics)

Value-Added Services

4 MOBILEPAYMENT

• Interoperability• Settlement• Cash In / Cash Out

Value-Added Services

• Cash In / Cash Out

5 CAPACITY BUILDING

E-Payment Training Facility Research & Development

Africa A Growing MarketAfrica is the fastest growing region for g g gcards, YET still has the smallest world share in terms of volumes of cardsvolumes of cards and number of transactions

Huge OpportunitiesHuge Opportunities for All Stakeholders

to Benefit

10/11/2012Property of Masria Card S.A.E7

Courtesy of ICMA www.icma.org

Background

Nigeria’s Industry Structure

UsersGeneral public,

Corporates, Commercial entities,

SME

Payment Service 24 deposit money banks

SME

Service Providers

depos o ey ba sScheme operators

InterswitcheTranzactValucard

ePayment Infrastructure

ValucardChamswitch

Regulator (CBN)

ATMPOS

CardsWebWeb

Mobile

PROJECT DISCOVERY DRAFT REPORT

Status of electronic payment industry in Status of electronic payment industry in Nigeria: Card market survey application and

production machinesproduction machines

Prepared by Intermarc Consulting Project Ref No: int/0611 January 2012j y

Respondent profile81518 - 30 years

79136

293677

65 years & above56 - 65 years46 - 55 years31 - 45 years

300

1228547

225

Lagos

CBA

150200

150150

200300

EAbiaEdo

OsunOyo

Lagos

200150

250250

150

KanoPlateau

AbujaRiversEnugu

2000

0 500 1000 1500 2000 2500

Total

Absolute figures

BACKGROUND: Banking and ePaymentWhich banks are consumers using and

why?

The Nigerian epayment industry is still primarily driven by the need for ‘security’. Customers want epayment channel that is reliable and

accessibleaccessible.Apart from ATMs, other e-banking products currently playing a very low key part in choice

key banks currently dominates awareness and patronage in the market, these are:

UBA, FBN, GTB, Zenith, fidelity, Diamond and Skye banks.

Customers of the different banks adduced various reasons for usage, alongside some g , gcriticism

More details in the next few slides

Drivers for usagePatronage of epayment products as at 2012 was hinged primarily on the extent to which

consumers can rely on the channel.yOther deciding factors revolve around accessibility and Ease of transactions.

7152

Reliability

Accessibility to my house/place of work/business

4945

4139

36

Availablity of ATM services

Fast service

Security of my money

A bank with many branches

3636

3130

29

Image of the bank/Reputation

Customer friendly staff

Good customer relations

A bank with technological advancement

N l /d l

Amongst all the e-banking products only Debit cards in29

26222222

No long queues/delays

Good online services

Recommendation from people

Capital base

I t t t

products, only Debit cards, in the form of ATMs plays a significant role in choice of banks.

others are still relatively2221

171615

Interest rate

Available network facility

Availability of mobile banking

Loan facilities

A il bilit f i t t b ki

others are still relatively low.

15Availability of internet banking

ePayment products & services

Expectedly, the traditional banking services such as savings, current accounts, money t f d d i ifi t ti

Which products & services are banks offering?

transfer recorded significant mentions.

Amongst the e-payment services, only ATM recorded significant mention.

I d d th i j l tiIndeed, the services now enjoys relative high usage amongst all customers who currently owns and actively use their account.

The other e-payment services are yet to resonate with customers as their awareness and usage is still relatively llow.

The same trend of result is visible across locations.

Details in the next few slides:

Which services are banks offering in 2012? ……and other e-banking services, key amongst

which is the ATM services, followed at a distance The banks currently offers the following traditional banking services………

Traditional banking services

E- banking services

,by SMS transaction notifications; The other e-banking services remained relatively unknown.

g

96

99Saving account

Current account45

67

97Debt Cards (ATM)

SMS Banking

Master Cards

g

74

72

International moneytransfer

Local money transfer

45

43

38

35

Master Cards

Internet Banking

Mobile Banking

Visa Cards72

60

Local money transfer

Loan facilities

35

33

30

19

Visa Cards

Telephone Banking

Valu Cards

Cash Cards34

26

Domiciliary account

Bank assurance policies

19

17

11

Cash Cards

Other payment cards

Naira Credit Cards

Which services are banks offering? – across location…this pattern of findings cuts across the various locations of study.

99100

9697

7178

7076

5835

1714

1712

OyoLagos

Saving account Current account International money transfer Local money transferLoan facilities Domiciliary account Bank assurance policies

serv

ices

100979810098

9298959796

8190

495266

6977

5765

76

6771

4844

68

3248

4627

54

2346

2321

32

RiversEnugu

AbiaEdo

Osun

onal

ban

king

s

100100100100

98999592

7198

81

6575

9769

4894

67

4430

1032

4617

323

84 71KanoPlateau

AbujaRivers

Trad

itio

Debt Cards (ATM) SMS Banking Master Cards Internet BankingM bil B ki Vi C d T l h B ki V l C d

ervi

ces

98939998

6459

6443

2757

1969

3560

1552

2752

3330

2860

2138

2147

1526

2050

1931

EdoOsun

OyoLagos

Mobile Banking Visa Cards Telephone Banking Valu Cards

E-ba

nkin

g se

10099979598

3651

7689

64

334922

27

3314

6332

35

2421

5822

27

1740

2928

528

4643

21

19

3121

20

AbujaRiversEnugu

Abia

1008687 44 28

5634

6322 33 26

98 82 67 48 57KanoPlateau

Which services are the customers using?

87

92

87

89

40

28

18

28

26

23

22

14

7

7

FBN

UBA Debit card (ATM)

89

92

87

80

80

87

28

31

40

26

40

18

17

24

26

12

15

22

2

4

7

Oceanic

ICB

FBNSaving account

Current account

89

93

89

70

87

80

53

32

28

36

59

26

19

29

17

20

18

12

3

5

2

Zenith

GTB

Oceanic

SMS Banking

87

90

89

79

85

70

32

24

53

23

42

36

26

18

19

20

18

20

5

6

3

Diamond

PHB

ZenithLocal money transfer

International moneytransfer

71

95

91

76

38

22

9

24

20

15

17

5

6

2

Union

Skye Loan facilities

E-services – awareness & usage

Amongst all the available e-payment services in 2012, the ATM took the lead followed at a far distance by SMS banking are the two best known and commonly used ones

A

banking are the two best known and commonly used ones.

Awareness & usage for others is still relatively low as less than half of the contact knows/uses these other services.

9767

45 43 38 35 33 30 19 17 11

Awareness

Deb

itC

ards

(ATM

)

SMS

Ban

king

Mas

ter

Car

d

Inte

rnet

Ban

king

Mob

ileB

anki

ng

Visa

Car

d

Tele

phon

eB

anki

ng

Valu

Car

d

Cas

h C

ard

Oth

erpa

ymen

tca

rds

Nai

ra C

redi

tca

rds

C M C N

95

48Usage

10 6 5 3 3 3 1 1 0

ebit

s(A

TM) SM

San

king

Mas

ter

Car

d

nter

net

anki

ng

Mob

ilean

king

epho

nenk

ing

a C

ard

Oth

eray

men

tca

rds

Car

d

u C

ard

aira t C

ard

De

Car

ds SB

a M In Ba M Ba

Tele Ban

Visa O pac

Cas

h

Val u Na

Cre

di

E-services – attraction & barriers to usage……..Preference for each of the service in varying degrees; usage is hinged on fast banking

transaction and information provided on every transaction

2620

2628

13 123

45

34

32

21

2SMS Banking

Debit card (ATM) Cash withdrawal can be done anytime

It makes banking transaction very fast

transaction and information provided on every transaction.

10

2115

2425

1720

1410 1

57

46

21

26

83

34

94

4

44

212

Internet Banking

Mobile BankingTelephone Banking

Master Card They always give up to date information onevery transactionCash can be withdrawn from any ATMmachineEasy connections with banks

It guarantees security

1219

14

8

18

8

12

6134

11

166

8

6

2

65

910

6

6

10

118

66

39

189

12

8

N i C dit C dCash Card

Valu CardVisa Card

te et a g It guarantees security

Facilitates business transaction

It eliminates the risk of carrying moneyaroundIt can be used to pay for goods

12 18 6 6 6 18Naira Credit Card

Barriers to usage 10Delay in issuing cards

On the flip side, some of the consumers don’t use the services for these reasons…

7

6

5

Not interested

To avoid unnecessaryspending

Procedure for application isstressful

4

4

stressful

Fee charged on transactionin high

I prefer going to the bankfor transaction

Some of the current players: awarenessComplete awareness indicated for debit cards (ATM); distantly followed by Master, Visa & Valucard in that

order.

54

100Debit Card (ATM)

Master Card

43

38

Visa Card

Valu Card

Others, but relatively unknown includes:• Prepaid Card• V pay

18

11

Cash Card

Naira Credit Card

p y• E-card• ID Card• Pay roll/Virtual Cards• Dual Currency

5Other paymentcards

….and the providers…….berkelycupola konnectronicsNamitech WAsecureid

3lineTransware

Card centerPajuno

NB: Findings from Consumer Research & Desk Review

As developed markets stagnate, emerging markets offer growth opportunities if sustainable economic rebalancing can take place

%&%&

21

Card based transactions are the key instrument for payment in more mature payments markets

100%

Retail

80%

90%

100%

ATMRetail transactions

50%

60%

70%

Debit Card

Other transactions20%

30%

40% Credit Card

Cheque

transactions

0%

10%

Netherlands Japan UK US SA

EFT

Percentage Share of total bank processed transactionsPASA 2002-2006

The cellphone banking revolution in emerging markets highlights the emerging role financial services can play in

rebalancingrebalancing

Access to financial services for consumers is a necessary condition forconsumers is a necessary condition for

middle and upper income countries. Financial services

• Provide a store for valueF ilit t t ti th h l t• Facilitate transacting through lower cost

channels• Provides access to credit

• Offer insurance to protect against riskp g

Financial services provided on a cellphoneis proving to be popular in some early

adopting markets this is likely to spreadadopting markets, this is likely to spread into other markets over time

Question: does cellphone banking threaten current transacting instruments?Question: does cellphone banking threaten current transacting instruments?

On the whole, transaction instruments are not necessarily mutually exclusive

Transaction volumes by channel – USA2012

Transaction volumes by channel – Netherlands2012

2.00Credit transfers70.0

Credit transfers

1.40

1.60

1.80 Direct debits

Card payments

E-money/wallet

50.0

60.0

Direct debits

Card payments

Cheques

1.00

1.20

30 0

40.0

0.40

0.60

0.80

20.0

30.0

0.00

0.20

2004 2005 2006 2007 20080.0

10.0

2004 2005 2006 2007 2008

Lesson: Encouraging the development of payment channels becomes crucial in improving access to financial services

In that context, cellphone banking could be seen as complimenting a mature market, while providing access for new

customers in less mature markets

6

8m

)

M-Pesa customers vs. reported banked population (Kenya)M-Pesa, 2009; FinAccess, 2007

M-Pesa

2

4

6

Pop

ulat

ion

(m

Banked

M Pesa

0Oct-06 Apr-07 Nov-07 Jun-08 Dec-08 Jul-09

Cellphone Banking Penetration by LSM – South Africa

200

300

2007 2008

ople

( ‘0

00)

p g ySource: AMPS 2008

As a % of banked population

0.2 1 1

35 6

711

0.81

1 22

47

6

10 12

0

100

Num

ber o

f peo

25

0

LSM  1 LSM  2 LSM  3 LSM  4 LSM  5 LSM  6 LSM  7 LSM  8 LSM  9 LSM 10

Changing banking status

From 2008 to 2010:

• The percentage of the adult population who are banked increased by 8 9% (i e 7 7 Million)8.9% (i.e. 7.7 Million)

• The percentage of the adults population that were previously banked declined by 2.1% (i.e. 1.8 million)million)

Opportunities:The market size of the unbanked population is quite p p qlarge, thus with aggressive consumer education, demand can be stimulated thus yielding greater revenue returns.

2626

Source: EFInA, (EFInA Access to Financial Services in Nigeria Survey )

27

Card, ATM and mobile Expo 2011FINO Mobile Payment Solution

•FINO Money Transfer provides 100% safe, fast andconvenient way to remit money at the doorstep ofbeneficiaries in the remote areas.

•FINO Money Transfer is the middle layer between theremitter and beneficiary, providing the geographicalcoverage, scalable technology platform and processingcapabilities for remittance.

•It leverages biometric smart card technology to provide asafe, quick, low cost and reliable service to end customers.

•Compliant: Robust risk management system in place forfull regulatory compliance.g y p

•Convenient: Flexible and extended agent timings•Easy: Premium door-to-door service delivery model

•Swift: Money transferred in the beneficiary account within24 hours

•Secure: Money transferred to right beneficiary

28

NSCE: Fast Mover Advantageg

Identity a niche and differentiated areay

Take the lead and go for new, efficient and cost effective technologies

Differentiate

Having a clear vision of your needs and how to make them happen (Outsourcing, inhouse or a

mix) through having a fair and honest lt t/ t

Communicateconsultant/partner

Simplify your solution: go for what you need now not later

Make things easier for your customersFind and keep a trusted partner that covers most

of your solution needs

Innovate

29

of your solution needs

Q&A???

30

PROGAMME TITLE VENUE DATE SPONSORSHIP FEE

Epayment Thought Leadership Breakfast Series

Cashless Policy: Application Impact

Eko Hotel & Suites Victoria Island

March 2013 Sole Sponsorship –N4,500,000Leadership Breakfast Series Application, Impact

and Risk FactorsVictoria Island Lagos August 2013

, ,Co-Sponsorship- N1,500,00

Coalition for epayment Cashlite Lagos: Market Activation & Engagement on

Major Lagos State Markets (Okearin, ASPANDA, Alaba

29 October-2 November 2012

Road Show – N6,404,000Market Activation –N4,540,000

Cashless Policy International, TradeFair etc.)

Market Seminar- N3,290,000

Cards& epayment Africa Awards 2013

Celebrating the African ePayment Market

Sandton Convention Johannesburg

20 March 2013 Platinum: $ 35,000Gold: $ 30,000

Market Johannesburg South Africa

Silver: $ 20,000Award: $ 8,000

Epayment Shared Services Study Mission

POS Market Structure SIBS Portugal 13- 21 April 2013 To be advised by NIBBS and CBNStudy Mission CBN

Card, ATM & Mobile Expo 2013

Shared Services Civic Centre Victoria Island Lagos

11- 13 June 2013 Platinum: N7,000,000Gold: N5,000,000Silver: N3,000,000Industry Support: N2,000,000VIPCocktail: N3,000,000e-BusinessAwards&Dinner: N5,000,000Tea break/Lunch: N3,000,000Registration:

g lg{tÇ~ lÉâ

32