Introduction to PayPal Payment Solutions

PayPal Helps Bring You New Customers Pay Pal is: Secure Simple Fast Drivers of Consumer Demand for PayPal Opportunities for Merchants **Source: PayPal survey of small to mid-sized businesses, November 2007 51% Percentage of consumers who would have abandoned their purchase if PayPal payments were not available** 14% Increase in sales for small to mid-sized businesses that added PayPal Express Checkout* * Source: PayPal study of small- and medium-sized businesses, 2006 141M Number of PayPal accounts worldwide

The PayPal Opportunity PayPal Growth Pay Pal helps you grow your business 141M accounts 31% yoy volume growth 190 countries 70+ currencies 1000s of merchants add PayPal every year PayPal is the safer, easier way to get paid by online shoppers around the world.

141M accounts

31% yoy volume growth

190 countries

70+ currencies

1000s of merchants add PayPal every year

Understanding the Payment Processing Network Individuals Merchant – seller of goods Customer – buyer of goods Institutions Customer’s Issuing Bank – provides customer’s credit card information and verification Merchant’s Acquiring Bank – provides internet merchant account Processor – authorizes credit card transactions and settles funds for merchants

Individuals

Merchant – seller of goods

Customer – buyer of goods

Institutions

Customer’s Issuing Bank – provides customer’s credit card information and verification

Merchant’s Acquiring Bank – provides internet merchant account

Processor – authorizes credit card transactions and settles funds for merchants

The Payment Network Provides Processes and Services Processes Authorization – the process of verifying a customer’s credit card Settlement – the process of collecting funds from the customer’s account Services Payment Processing Service – connects merchants, customers, and banks through secure online transactions. Gateway – the secure pipe between the banks and the processor

Processes

Authorization – the process of verifying a customer’s credit card

Settlement – the process of collecting funds from the customer’s account

Services

Payment Processing Service – connects merchants, customers, and banks through secure online transactions.

Gateway – the secure pipe between the banks and the processor

Authorization Process Customer decides to make an online purchase and inputs credit card information Merchant ’s website receives customer information and sends it to a payment processing service Payment processing service routes information to processor Processor routes information to bank that issued customer’s credit card (issuing bank) Issuing bank sends authorization (or declination) to processor Processor routes transaction results to payment processing service Payment processing service sends results to merchant 2 Payment Processing Service 7 6 5 Customer Merchant 1 Processor 3 Customer’s issuing bank 4 Merchant decides to accept or reject purchase 8

Customer decides to make an online purchase and inputs credit card information

Merchant ’s website receives customer information and sends it to a payment processing service

Payment processing service routes information to processor

Processor routes information to bank that issued customer’s credit card (issuing bank)

Issuing bank sends authorization (or declination) to processor

Processor routes transaction results to payment processing service

Payment processing service sends results to merchant

Merchant decides to accept or reject purchase

Settlement Process Merchant informs the payment processing service to settle transactions Payment processing service sends transaction information to the processor Processor checks the information and forwards settled transaction information to the issuing bank Issuing bank transfers funds to the processor Processor routes funds to the acquiring bank Acquiring bank credits merchant’s bank account Issuing bank includes merchant’s charge on customer’s credit card account 7 2 Payment Processing Service Processor 6 4 Merchant’s acquiring bank 5 Merchant Customer 1 Customer’s issuing bank 3

Merchant informs the payment processing service to settle transactions

Payment processing service sends transaction information to the processor

Processor checks the information and forwards settled transaction information to the issuing bank

Issuing bank transfers funds to the processor

Processor routes funds to the acquiring bank

Acquiring bank credits merchant’s bank account

Issuing bank includes merchant’s charge on customer’s credit card account

PayPal Provides an All-in-One Solution for Online Merchants Customer’s issuing bank Merchant’s acquiring bank Customer Merchant Processor Payment Processing Service Protecting the security of a merchant’s information is the top priority at PayPal. .

Understanding the Risks of Internet Fraud An estimated $2.8B USD was lost to online fraud in the U.S. and Canada in 2005 The rate of credit card fraud for online sales is three to four times higher than the overall fraud rate Authentication is a challenge Hackers can break into a merchant’s network Hackers can also steal customer identities Multiple access points for break-ins Vulnerabilities abound… … leading to losses

An estimated $2.8B USD was lost to online fraud in the U.S. and Canada in 2005

The rate of credit card fraud for online sales is three to four times higher than the overall fraud rate

Authentication is a challenge

Hackers can break into a merchant’s network

Hackers can also steal customer identities

Multiple access points for break-ins

Common Fraud-Related Risks Using stolen information to open new credit cards Issuing unauthorized credits or payments Identity theft Cash theft Accessing a payment network to complete fraud Accessing payment networks Using a stolen credit card to purchase goods and services Product theft Chargebacks A cardholder disputes a credit card purchase

How to Protect Your Business Against Fraud Transaction Level Ensure each transaction you accept and process is valid, and be careful in reviewing suspicious transactions because some may be valid. Account Level Make sure only authorized users have access to your payment gateway account, and be alert for suspicious account access patterns. Network Level Ensure your perimeter is defended against unauthorized access. 1 2 3

Your Disclosure Policy Tells Customers that You Are Honest and Dependable Business Description – Explains what the company does Shipping Policy – Details shipping terms, shipping classes offered, & expected delivery timeframe Privacy Policy – Describes how the company treats and protects customers’ information Return Policy – Provides clear guidelines on how a return is handled Contact Information – Makes it easy for customers to get in touch with the merchant via different communication channels

Business Description – Explains what the company does

Shipping Policy – Details shipping terms, shipping classes offered, & expected delivery timeframe

Privacy Policy – Describes how the company treats and protects customers’ information

Return Policy – Provides clear guidelines on how a return is handled

Contact Information – Makes it easy for customers to get in touch with the merchant via different communication channels

Compliance with PCI Data Security Standards Must Be Followed Protect Cardholder Data Maintain a Vulnerability Management Program Implement Strong Access Control Measures Regularly Monitor and Test Networks Maintain an Information Security Policy Protect stored cardholder data Encrypt transmission of cardholder data across open, public networks Use and regularly update anti-virus software Develop and maintain secure systems and applications Restrict access to cardholder data by business need-to-know Assign a unique ID to each person with computer access Restrict physical access to cardholder data Track and monitor all access to network resources and cardholder data Regularly test security systems and processes Maintain a policy that addresses information security Control Objective Requirement Build and Maintain a Secure Network Install and maintain a firewall configuration to protect cardholder data Do not use vendor-supplied defaults for system passwords and other security parameters

Protect stored cardholder data

Encrypt transmission of cardholder data across open, public networks

Use and regularly update anti-virus software

Develop and maintain secure systems and applications

Restrict access to cardholder data by business need-to-know

Assign a unique ID to each person with computer access

Restrict physical access to cardholder data

Track and monitor all access to network resources and cardholder data

Regularly test security systems and processes

Maintain a policy that addresses information security

Install and maintain a firewall configuration to protect cardholder data

Do not use vendor-supplied defaults for system passwords and other security parameters

PayPal Offers the Payment Solution that Meets Your Business Need Pay Pal Products Scenario #1 Accept online credit card payments with minimal effort Scenario #2 Build an all-in-one solution for accepting web, phone, fax and mail payments Scenario #3 Accept PayPal, keep current payment processor Scenario #4 Provide a secure connection from your online store to your merchant account Website Payments Standard Website Payments Pro** Express Checkout** Payflow Gateway

Selecting the Right Product for Your Business Product Website Payments Standard Website Payments Pro Express Checkout Payflow Gateway Scenario Accept online credit card payments with minimal effort Build an all-in-one solution for accepting web, phone, fax and mail payments Accept PayPal, keep current merchant account Establish a secure connection between online store and merchant account, and keep merchant account Internet merchant account needed? X X   Where customers checkout PayPal PayPal or merchant’s website PayPal PayPal or merchant’s website Virtual Terminal included? X  X  Business credit approval needed? X  X X

What’s Next ? Start Accepting Payment with PayPal Sign up for PayPal Account Now! Subscribe to Our Ecommerce Blog http://www.neowave.com.my/SELLMORE Learn more on Fraud Alert System http://www.neowave.com.my/FraudAlertSystem/

Start Accepting Payment with PayPal Sign up for PayPal Account Now!

Subscribe to Our Ecommerce Blog http://www.neowave.com.my/SELLMORE

Learn more on Fraud Alert System http://www.neowave.com.my/FraudAlertSystem/

PayPal Shopping Cart for Small & Mid-Sized Business Selling Online? Offer your customers security and convenience with PayPal. Using PayPal to process payments within your online store allows you to accept credit, debit and PayPal payments. webShaper e-commerce is fully integrated out of the box with PayPal. Simply select PayPal as a payment option and enter your user ID and password to start taking PayPal payments from your e-commerce site. Test Drive it Today! Logon to http:// www.neowave.com.my /DEMO PayPal E-commerce Store Solution

The information contained in this document represents the current view of Neowave Sdn Bhd on the issues discussed as of the date of publication. Because Neowave must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Neowave, and Neowave cannot guarantee the accuracy of any information presented after the date of publication. This overview is for informational purposes only. Neowave MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Use it at your own risk. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Neowave Sdn Bhd. Neowave may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except as expressly provided in any written license agreement from Neowave, the furnishing of this document does not give you any license to these patents, trademarks, copyrights, or other intellectual property. Neowave and webShaper are either registered trademarks or trademarks of Neowave Sdn Bhd in Malaysia and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

The information contained in this document represents the current view of Neowave Sdn Bhd on the issues discussed as of the date of publication. Because

Neowave must respond to changing market conditions, it should not be interpreted to be a commitment on the part of Neowave, and Neowave cannot

guarantee the accuracy of any information presented after the date of publication.

This overview is for informational purposes only. Neowave MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Use it at your own

risk.

Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be

reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or

otherwise), or for any purpose, without the express written permission of Neowave Sdn Bhd.

Neowave may have patents, patent applications, trademarks, copyrights, or other intellectual property rights covering subject matter in this document. Except

as expressly provided in any written license agreement from Neowave, the furnishing of this document does not give you any license to these patents,

trademarks, copyrights, or other intellectual property.

Neowave and webShaper are either registered trademarks or trademarks of Neowave Sdn Bhd in Malaysia and/or other countries. The names of actual

companies and products mentioned herein may be the trademarks of their respective owners.