the next wave of mobile financial services-02

DAVID YATESPresident, Business Development & Innovation

Mobile Update

WESTERN UNION: A GLOBAL REMITTER

MULTICHANNELMULTICHANNEL• 445,000 cash agent locations• 20 countries with wu.com • 40 bank ABMT partnerships• 14 country partnerships for Mobile• Global partnerships with leading• Global partnerships with leading

MNOs

• US$5.2 billion revenue (2010)• 200 countries and territories

• Over 16,000 corridors• $76 billion in P2P principal

WESTERN UNION STRATEGY FOR MOBILE

Partnering with banks, mobile network operators (MNOs) or independents to enable mobile-based transactionsp

Partner with banksService banked consumers using the Western Union gmobile channelExample: ABSA Bank South Africa

Western Union on

Mobile Banking

Partner with MNOsPrimary focus: unbanked consumersWestern Union Primary focus: unbanked consumersReach underserved receiversExample: Safaricom / M-PESA Kenya

onMobile Wallet

ONE CONNECTION: ALL COUNTRIES, ALL CHANNELS

Bank Accounts WU-Core systemWU-gateway

WU-gatewayDirect

agreement

Bank Accounts

SEND RECEIVEDirect

agreementAccounts

Cards

M-Wallets

WU Core system WU-gatewayagreement

Paymentswitch

Cards

M Wallets

agreement

Paymentswitch

Other OtherCards M-WalletsOther Other

Westernunion.com

MNO PARTNERSHIP PRODUCTS

Western Union is the largest international branded cash in/cash out network for mobile

Sender uses mobile wallet as source of funds. Receiver payout in cashMobile Send1 Receiver payout in cash, mobile, or bank channels

Mobile Send1

Mobile ReceiveFunds directed by Sender (Push or alternatively by the Receiver (Pull) to the wallet or account

2

NEW PRODUCT DEVELOPMENT

Money Transfer Mobile AppsDirect consumer

Transfer FundsDirect consumer

Core money transfer

T t k t N th

$$$

Target markets: North America & Europe

P2P Customers

Western Union Yellow PhoneMobile allet / prepaidMobile wallet / prepaid

Core money transfer

T t k t i t i

Transfer Funds

P2P C tTarget markets: emerging countries P2P Customers

WESTERN UNION COMPETITIVE ADVANTAGESMobile leverages the same trusted platform used by 445 000 locations in 200 countriesMobile leverages the same trusted platform used by 445,000 locations in 200 countries

Western Union Money Transfer endorsed by the GSM Associationy y

CONSUMER INSIGHTS

WHY DO THEY SEND MONEY?Regular support/ living expenses 60%

Special occasion (birthday/ wedding) 44%

Regular support/living expenses go to fundamental needs

Holiday (Christmas/New Year) 43%

Emergency / urgent transfer 26% 78

50

Groceries

Utilities or utility bills

%

Medical, doctor or hospital bills 21%

Educational expenses for a student 15%

38

31

20

Payment of medical expenses

Rent payments

School fees

13

9

8

7

Pay debts

University/other education fees

Savings and investments

Mortgage payments 7

4

1

1

Mortgage payments

Business reasons

Alimony

Family/Friends/Personal use

Regular, loyal customer

Source: Western Union Consumer Tracking Study, US Outbound Senders

1Clothing

WHERE DOES THE MONEY GO?66% of migrants worldwide send remittances to their loved ones at home

41%Russia/CIS

56%43%

41%

European UnionCanada

Russia/CIS

%73%

64%

OAsia

Latin America

76%75%75%

CaribbeanMiddle East

Oceana

87%82%

76%

Africa South AsiaCaribbean

CASH STILL A PREFERRED METHOD OF PAYMENT IN MUCH OF WORLDOF PAYMENT IN MUCH OF WORLD

CASH INTEROPERABILITY WITH MOBILE IS KEY

Source: McKinsey, “Perspectives on the Worldwide Payments Business,” Feb, 2010.

CONSUMER PRIORITIES: CHANNEL AGNOSTIC

• Funds sent immediatelyS • Funds sent immediately• Funds available for pickup immediately

Speed

• Large distribution network• Channel alternatives based on customer preference

Convenience• Channel alternatives based on customer preference

• Trusted brand• Consistent experience – no surprises• World-class service

Reliability

KEY CONSUMER LESSONS

• Average remittance $200; average cash load $20• Remittances drive subsequent volume• Mobile account adoption strengthened by remittances• Interoperability with cash network vitalp y• Multiple services, utility bill, airtime top-up drives consumer adoption• Slightly lower remittance average, but more frequentL i b f f ll t ti l• Learning curve before full potential

• Trust factor and brand recognition extremely important

Successful mobile wallet programs could attract 25-40% of transactions

PARTNERING WITH WESTERN UNION

Gateway & Certification Program allowing world-class m-Wallet platforms to connect to Western Unionp

Quick scalability and easy integration with m-Wallets and Mobile BankingBanking

Mobile NetworkOperators/ Carriers

Financial Institutions

WESTERN UNION PARTNERSHIPS

80K locations active for directed transfers in 48 countries

wu.com activated in 5 countries

14 t t i l14 country agreements in place6 active in 5 countries: Philippines Kenya Malaysia South Africa CanadaPhilippines, Kenya, Malaysia, South Africa, Canada

5 more countries in progress

9 mobile operator centric 4 bank centric9 mobile operator-centric, 4 bank-centric

Over 130 M potential connections to subscribers/accounts

Western Union leading the number of cross-border initiatives in multiple geographies

NEWS AT MOBILE WORLD CONGRESS

• Agreement to launch Mobile Money Transfer service in Middle East, Asia, Africa, ,

• Etisalat Group has operations in 18 countries d 135 illi b iband 135 million subscribers

• Will enable Etisalat subscribers to send receiveWill enable Etisalat subscribers to send, receive money using their mobile phones

CONCLUSION

Remittances key part of Mobile Money Programs

Western Union has built The mobile technology platformgy p

Partnerships with key players

Western Union is positioned toWestern Union is positioned to play at the center of the Mobile channel

WESTERN UNION IS LEADING THE WAY FOR MOBILE MONEY TRANSFER

THANK YOU