Multi-Application Strategy Johan Ras Visa International 21 August

Multi-Application Strategy Johan Ras Visa International 21 August 2002 Toronto, Ontario, Canada

The Future of Universal Commerce – Anytime, Anywhere, Anyway 2

Delivering Universal Commerce through Smart Card Technology n Ensuring customer service quality through global chip standards • EMV, CEPS and Global. Platform n Establishing baseline infrastructure by implementing Visa Smart Debit/Credit in national markets • Support Debit/Credit chip migration to reduce fraud n Enabling development and support of value-added services that drive payment volume and help Members take advantage of business opportunities 3

Vision for Multi-application Smart Cards The multi-application smart card offers a variety of benefits to Visa Members, merchants and cardholders… Merchant Benefits Cardholder Benefits • Point of access efficiencies • Greater utility • Reduced costs • Convenience • Foundation for customer loyalty programs Member Benefits § Improved risk and fraud management § Enhanced cardholder verification § Reduced online authorization costs § Cardholder acquisition and retention programs 4 § Volume increases • Customized usage

The Challenge and the Goal Meet the needs of everyone; Issuer, merchant and cardholder… Merchant Credit or Debit Payment Loyalty Program Development Loyalty Program Management Issuer Card Management Cardholder Merchant Selection Personal Information Management 5 The approach must enable Issuers to strengthen the relationship with their customers by delivering valuable utility at the lowest level of effort.

Driving Support for Multi-Application Smart Cards n Establishing Global. Platform as the preferred multi-application platform for Visa Members n Leveraging Global. Platform Java Card technology in the marketplace n Furthering strategic partnerships to improve the business case and speed implementations through Visa Global Smart Partner Program – Cost-effective Global. Platform cards and support systems – Each region working with value added service vendors for local market needs n Setting standards with industry organizations (e. g. IATA) 6

Functionality Visa Low Cost Smart Card Program Single app VSDC – PK Single app VSDC DES SDA DDA $0. 99 7 Global Platform OP DES/16 $1. 99 Java / OP Triple DES 48 k ROM 16 E 2 $2. 70 (was $2. 89) Global Platform OP PK/16 Java / OP Triple DES Public Key 64 k ROM 16 k E 2 $3. 37 (was $3. 56) Max Price (US$) white plastic Global Platform Combi card OP DI/16 Java / OP Triple DES Public Key Contactless 64 k ROM 16 k E 2 $3. 91 (was $4. 67)

Most Common Multi-application Smart Card Programs Today VSDC Issuer Managed Loyalty • Credit or debit payment product • Points • Discounts • Coupons Secure Access Convenience storage • Proprietary web site • URL • Mailing address 8

Multi-app Project Highlights Australia n Key drivers: new business opportunities, multiapplication, threats from competitors n ANZ began converting Visa credit card portfolio to chip in November 2001 and introduced Secure Internet shopping n Products: “FIRST” in Australia, “ZED” in New Zealand n Approximately 1 million Global. Platform cards and 50 k POS devices by end 2002 9

Multi-app Project Highlights Korea n Five credit card issuers co-branding with SK Telecom to offer dual interface cards with VSDC payment and contactless transit n Can also be used in dual-slot mobile phones n Expected to issue approximately 2 million cards in next 12 months n Discussions underway to migrate existing transit cards to the Global. Platform dual-interface cards in Seoul and Pusan 10

Multi-app Project Highlights U. S. n smart Visa issuance – 10 MM cards issued by end 2001 – Over 12 MM cards projected by end 2002 – 15– 20% of all Visa cards by 2006 n 4 Members issuing cards – Target began issuing in Nov. 2001 – Will begin acceptance by end 2002 n Approximately 3 -4 more banks expected to implement n Focusing on chip acceptance at POS and developing smart Visa Rewards loyalty program 11

Projecting 70+ Million Visa EMV Smart Cards by end 2002 EU 50 MM Canada 12 K US 12 MM LAC 850 K 12 CEMEA 250 K AP 10. 5 MM

Thank you Johan Ras Visa International