Confidential and Proprietary

Confidential and Proprietary

Western Union Prepaid Cards

July 2010

CWAG ConferenceSanta Fe, NMJuly 19, 2010

Confidential and Proprietary

What is Prepaid?

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Prepaid cards look like credit & debit cards, and they offer the same ability to purchase products and services, but with one primary difference –

you can only spend the money that has been preloaded onto the card.

The main advantages of prepaid cards include:

•Availability: It’s simple for anyone to get a prepaid card whether it’s a gift card or a reloadable card or some other type. Often, there are no credit checks nor is a bank account required. Depending on the type of prepaid card, there can be an identity check process to complete.

•Control: Prepaid cards are popular due to the fact that you can only spend what’s on the card. No concerns with overdraft fees or late payment fees and you can’t build debt with a prepaid card. Plus, if you get an open loop prepaid card, it’s use is nearly universal around the world.

•Convenience: Prepaid cards are quite convenient. You can use them anywhere Visa or MasterCard is accepted worldwide including online and even at ATM’s (depending on type of card).

•Safety: Carrying your money on a prepaid card is safer than carrying cash. If you lose your card, your money is protected through zero-liability policies.

Confidential and Proprietary

Roles of Each Player in the Prepaid Value Chain

Bank

WesternUnion

Associations

Processors

• Current prepaid bank is Meta Bank• Card issued by Meta Bank• Funds reside at Meta Bank and bank is responsible for fraud risk• Bank sets fees and handles cardholder registration process / compliance

• Western Union is the program manager (proposes product offerings to bank)• Builds the card programs on bank processing platform (coordinates Western Union integration)• Markets the programs leveraging consumer insight, brand and distribution channels• Pays and manages advertising, card production, card processing, call center expenses

• WU uses both associations within the U.S. (common among card programs)• Transactions ride the association networks• Manage relationship between issuer (Meta) and merchant acquirer• Manage ATM networks and provide zero liability and zero floor limit policies

• Current prepaid processors are I2C and Fidelity (FIS). Contract directly with Meta Bank• Holds balance of record and processes all prepaid card transactions • Provide card functionality including online and IVR cardholder access• These are the organizations we work with to add new functionality to the card programs

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Confidential and Proprietary

Prepaid Card Reload Process Flow1. Consumer visits Western Union® Agent location and

completes a Western Union Prepaid Services form,

supplying Master Card or Visa account number

2. The Western Union Agent collects load amount and fees

and processes the Prepaid transaction, inputting customer

account# and load amount.

WESTERN UNION SYSTEM

3. Transaction verification is sent to WU host system

and MTCN is generated and

sent to Agent PC4. WU Agent gives customer loaded card and receipt

5. Customer card can be used immediately wherever Master

Card or Visa are accepted or at an ATM

Point of Sale Back End

Processor validates card account information and

balance and sends real-time response of allowable load

amount along with customer data

Data Flow

Western Union funds card issuing

bank.

Merchant

Data Flow

Processor holds balance of record and processes all prepaid card transactions

Money FlowAgent Deposits funds

in bank account.

Funds ACHed to WU’s Bank Account

AGENT’S BANK WU’s BANK

PAYMENT PROCESSOR

ISSUING BANK

Money Flow

Mo

ney F

low

Data F

low

*Note: Transactions ride association networks

POS Flow POS Flow

POS Flow

POS Flow

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Four Primary Lines of Business

1. General Purpose Reloadable

2. Overnight Home Delivery

3. Online Gift and Greeting Card

4. Corporate Gift/Incentives

• Primary prepaid business in the U.S.• Financial money management tool for underserved consumers• Provides an annuity over time through reloads and card usage• Multiple distribution channels including retail, online and direct to

consumer• Similar to Green Dot and NetSpend business models

• A new way to send money within the U.S.• Money Transfer is delivered to recipient on MoneyWise card• Provides a new level of convenience to WU business model• Eliminates payout commission• Allows for future MT to be loaded onto card

• A new way to send the gift of money through Western Union• Highly customized and personal gifting method within the U.S.• Drives a new segment for Western Union – makes us more

relevant outside money remittance space• Bundled greeting card, gift card, personalized voice message,

delivery for one low price (expedited shipping available)

• Expands gift solution into high volume gifting/incentive industry• Provides great brand exposure to Western Union• Sold to companies as incentive/reward for customers and

employees• High volume business

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Anti-Money Laundering Controls

General Purpose Reloadable CardsBefore Customer Identification Process

After Customer Identification Process

$750 initial load at Point of Sale (name, address, and phone number collected)

$950 per cash load and per day (including money transfers loaded to card)

No reloads 10 reloads per 30 days

$500 cash access at ATMs per 24 hours $500 cash access at ATMs per 24 hours

1 card per sub-program $5,000 max card balance

$2,500 max daily spend

$500 max ACH load at 2 per 24 hours and 15 per month

Customer Identification Process

Name, address, date of birth and social security number collected and validated

Office of Foreign Asset Control (OFAC) check performed

If no social security number available, customer service representative checks faxed copy of driver’s license, then completes OFAC check and remaining customer identification process

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Overnight Home Delivery CardsSending an Overnight Home Delivery After Customer Identification Process

on Receiver

$500 maximum on westernunion.com and Telephone Money Transfer

$950 per cash load and per day (including money transfers loaded to card)

$950 maximum at pilot locations; will change to $500 maximum for national roll out

10 reloads per 30 days

$500 cash access at ATMs per 24 hours $500 cash access at ATMs per 24 hours

2 cards per receiver address per 30 days $5,000 max card balance

Card is not reloadable unless and until consumer completes Consumer Identification Process

$2,500 max daily spend

$500 max ACH load at 2 per 24 hours and 15 per monthCustomer Identification Process

Same as for General Purpose Reloadable Cards

Anti-Money Laundering Controls

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Anti-Money Laundering Controls

Corporate Gift Cards On Line Gift and Greeting Cards

External orders (non-Agents) must be reviewed and approved by AML Compliance including due diligence and OFAC checks

$100 Limit per card

Internal orders (WU Agents) must be reviewed and approved by AML Compliance if over $3,000 total

Not available to receive in Arizona

*Strategic accounts do not require AML approval

$999.99 per day limit

Orders cannot be delivered outside the United States

30 transactions per month

Orders for the Southwest Border Zone and Arizona must be reviewed and approved by AML Compliance regardless of amount

Non-reloadable, no cash access

* National accounts have good Compliance Programs in their Store

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Confidential and Proprietary

Anti-Money Laundering Controls

Third Party Stored Value Programs

Western Union acts only as the load network for third party prepaid programs

Third party programs are subject to full due diligence and contract review by AML Compliance

Limits are typically very similar to General Purpose Reloadable cards and are agreed to and documented by program sponsor and Western Union:

*$9,500 Limit per 30 days

*Less than $1,000 loaded at Point of Sale, per transaction, per day

*$500 or less cash access per 24 hours

*$5,000 max card balance

*1 card per consumer

* Limits listed are the typical limits but may vary slightly on a case by case basis

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Confidential and Proprietary

Thank You

Denise Jaworski

Vice President of Western Union’s

Global Consumer and Protection Program

Contact Information:

denise.jaworski@westernunion.com

720-332-3394

Q&A

Confidential and Proprietary