2011Enabling Online Commerce withPayPalEmpowering merchants for online cross border commerce
Confidential and ProprietaryAGENDA• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of B...
Confidential and ProprietaryBACKGROUND ON PAYPALPayPal was founded in 1998Currently offering services in 190 countries, 20...
Confidential and ProprietaryGROWTH IN CUSTOMER ACQUISITION ANDPAYMENT VOLUME236496135 141175210121975941111331392003 2004 ...
Confidential and ProprietaryBACKGROUND: WHAT IS PAYPAL?5• PayPal is not a bank• No deposits, no direct cash deposits, no c...
Confidential and ProprietaryTHE ONLY GLOBAL PAYMENTS NETWORK#2#1#3#2#1Strong stated preferenceacross online shoppersNetwor...
Confidential and ProprietaryPAYPAL LETS PEOPLE PAY ANYONEANYWHERE SAFELY AND SIMPLY7Woman’s shoesOnline Travel ServicesBik...
Confidential and Proprietary 8…AS WELL AS TOP GLOBAL E-COMMERCEBRANDSCanadaU.S.UKEuropeAPACLATAM
Confidential and Proprietary 9*Offering Varies by CountryHOW DOES PAYPAL WORK?Buyer makes e-payment with PayPalPayPal comp...
Confidential and ProprietaryMobileSocialNetworksFinancialServicesGovt.MediaRetail3rd PartyMarketplacesGamingOthers…•Send M...
Confidential and ProprietaryGROWING NETWORK OF GLOBALFINANCIAL INSTITUTION PARTNERS…11COLLABORATION TO OFFER ONLINE PAYMEN...
Confidential and ProprietaryAGENDA12• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of...
Confidential and Proprietary• Underwriting for smallest businesses• Credit cards, eChecks, PayPal• Cash flow help• Receiva...
Confidential and ProprietaryEMPOWERING COMPLETE END TO ENDCOMMERCE SOLUTIONECommercePlatformsGlobalOnlinePaymentsAccess to...
Confidential and ProprietaryWHAT IS BANK MANAGED WITHDRAWAL?Concept:• Bank Managed Withdrawal is a cost-effective PayPal-t...
Confidential and ProprietaryPROVIDE SOLUTION FOR LOCAL SELLERSTO ACCESS FUNDS FROM PAYPAL16FUNDS OUT METHODSLOCAL COUNTRY ...
Confidential and ProprietarySOLUTION THAT BENEFITS ALL PARTIESChoice of complete end to endecommerce payment solutionCONVE...
Confidential and ProprietaryAGENDA18• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of...
Confidential and ProprietarySCENARIO: USER INITIATED EXPERIENCEON LOCAL BANK WEBSITEProposed experience of solution1. Sell...
Confidential and ProprietaryJOINT COLLABORATION TO LAUNCH SOLUTION• APIs for bank partner tointegrate• Technical documenta...
Confidential and ProprietaryAGENDA21• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of...
Confidential and ProprietaryFIRST NATIONAL BANK OF SOUTH AFRICA22FNB South AfricaOne of top 4banks in SouthAfricaRanks top...
Confidential and ProprietaryLINKING SELLER’S BANK ACCOUNT WITH SELLER’SPAYPAL ACCOUNT45UserUser links the Bank a/c to PayP...
Confidential and ProprietaryFNB WITHDRAW FUNDS24
Confidential and ProprietaryAGENDA25• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of...
Confidential and ProprietaryPERSON TO PERSON (P2P) SEND MONEYANYWHERE – GLOBALLY26
Confidential and ProprietaryENABLE P2P FROM MOBILE, WEB, OR ANYDEVICE WITH ONE INTEGRATION27
Confidential and ProprietaryP2P PAYMENTS OFFER THREE CHANNELSFOR INCREMENTAL VOLUME FOR BANKSHigh-TouchModelPathway toBank...
Confidential and ProprietaryPAYPALSENDMONEYDesigned specifically for financialinstitutionsSend money from your financialin...
Confidential and ProprietaryAGENDA30• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of...
Confidential and ProprietaryCONSIDERATIONS FOR BANKS WHENCHOOSING AN ONLINE PAYMENT PARTNER…Partner• Established Leader• M...
Confidential and Proprietary… PAYPAL WILL BE THERE ENABLINGPAYMENTS GLOBALLY32Enabling globalmobile commerce...Monetizinga...
Confidential and ProprietaryNEXT STEPS• Explore business and marketing relationship• Preliminary technology and IT engagem...
Confidential and ProprietaryAPPENDIX34
Confidential and ProprietaryHOW DOES PAYPAL WORK?35PayPal stores aconsumer’s financialinformation and keeps itsafe. PayPal...
Confidential and ProprietaryHOW DOES PAYPAL WORK?• Most PayPal accounts holdUSD balances as default• Accounts can also hol...
Confidential and ProprietaryBank Validates,PP Email andName to identifythe userLINKING SELLER’S BANK ACCOUNT WITH SELLER’S...
Confidential and ProprietarySelect “Withdrawfrom PayPal”Provide $$ Amount2Bank redirectsuser to PayPalCheckout3Money trans...
Confidential and ProprietarySETTLEMENT OF FUNDS TO LOCALBANK ACCOUNT24hr hold 24hr holdPrecautionary holdsMoney transferre...
Confidential and Proprietary 40LEADING GLOBAL BRANDS ACCEPT PAYPAL
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Enabing online commerce with pay pal

  1. 1. 2011Enabling Online Commerce withPayPalEmpowering merchants for online cross border commerce
  2. 2. Confidential and ProprietaryAGENDA• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of Bank Managed Withdrawal (BMW)• Existing Partners Of BMW• Future Opportunities For Additional Collaboration• Partnering With PayPal2
  3. 3. Confidential and ProprietaryBACKGROUND ON PAYPALPayPal was founded in 1998Currently offering services in 190 countries, 20 localised sitesSettling payments in 23 local currencies~$3 Billion in balance turnover every 2 weeks$2,641 processed per second in Total Payment Volume in Q1 2010Headquarters in San Jose, California, USAInternational headquarters based in Singapore (PayPal Pte. Ltd.)Offices UK, Europe, Luxembourg, Australia, Japan, Brasil, Mexico3PAYPAL IS A GLOBAL ONLINE PAYMENTS COMPANY
  4. 4. Confidential and ProprietaryGROWTH IN CUSTOMER ACQUISITION ANDPAYMENT VOLUME236496135 141175210121975941111331392003 2004 2005 2006 2007 2008 2009PayPal User Accounts (Millions) PayPal TPV (in Billions)4Account Cleanup84++ million active accountswith 210 million in total2009 revenues of USD $2.8 Billion2009 total transaction volume ofUSD $71 billion(Excludes gateway TPV)
  5. 5. Confidential and ProprietaryBACKGROUND: WHAT IS PAYPAL?5• PayPal is not a bank• No deposits, no direct cash deposits, no credit/lending• Takes no "risks" in the method of a bank or financial institution .• All transactions including registration and verification occuronline• Self serviced tools on PayPal.com to enable online selling• Merchants / sellers can receive payments from any PayPalaccount holder in 190 countries• Global brand accepted by thousands of merchants around theworld• PayPal has world-class fraud and risk protections includingproprietary technology designed to detect and prevent fraud.PayPal is a payment system that utilizes existing financial systemsto enable online payments for sellers
  6. 6. Confidential and ProprietaryTHE ONLY GLOBAL PAYMENTS NETWORK#2#1#3#2#1Strong stated preferenceacross online shoppersNetwork effects• >100M active accounts*• >234M+ total accounts• >8M small merchants• 18% of global ecommerceGlobal footprint• 190 markets• 25 currencies• localized websites in 21 marketsNetwork of networks• 27 financial networks• 15k+ bank partners globally• Universal payment system “adapter”Online fraudprevention expertise• 10+ years experience fighting fraud• Fraud Sciences technologyPayPal Financial Innovations 6Architected and built from the ground up for the Internet* active accounts are those that have had activity in the past 12 months
  7. 7. Confidential and ProprietaryPAYPAL LETS PEOPLE PAY ANYONEANYWHERE SAFELY AND SIMPLY7Woman’s shoesOnline Travel ServicesBikes and Accessoriesemail paymentsOutdoor Apparel
  8. 8. Confidential and Proprietary 8…AS WELL AS TOP GLOBAL E-COMMERCEBRANDSCanadaU.S.UKEuropeAPACLATAM
  9. 9. Confidential and Proprietary 9*Offering Varies by CountryHOW DOES PAYPAL WORK?Buyer makes e-payment with PayPalPayPal completes electronic payment frombuyer to seller’s PayPal accountSeller provides goods/services to buyerLocal bank withdrawalis not offered in manycountries todayProvide users to accessfunds to local bank inlocal currency
  10. 10. Confidential and ProprietaryMobileSocialNetworksFinancialServicesGovt.MediaRetail3rd PartyMarketplacesGamingOthers…•Send Money(P2P)• RewardsRedemption• SmallBusinessPayments• FundingNew BankAccounts• Share ofeCommerce• Others….10OPEN PAYMENT PLATFORMS – NEW OPPORTUNITIESOpen APIsFinancialServicesHOW THE OPEN PAYPALPLATFORM BENEFITSFINANCIAL INSTITUTIONSPayPal Financial Innovations 10
  11. 11. Confidential and ProprietaryGROWING NETWORK OF GLOBALFINANCIAL INSTITUTION PARTNERS…11COLLABORATION TO OFFER ONLINE PAYMENTS SERVICES
  12. 12. Confidential and ProprietaryAGENDA12• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of Bank Managed Withdrawal (BMW)• Existing Partners Of BMW• Future Opportunities For Additional Collaboration• Partnering With PayPal
  13. 13. Confidential and Proprietary• Underwriting for smallest businesses• Credit cards, eChecks, PayPal• Cash flow help• Receivables: instant payments• Payables: last minute payments,Mass payments• Security and fraud protection• Reduction in paperwork• Reporting• Reconciliation• Electronic Invoicing9/11/2011 13PAYPAL SERVES THE SMALLESTBUSINESSES, PROVIDINGSERVICES WHERE NO ONE ELSEWILL$0-$25K $25K-$100K$100K-$500K $500K-$1M> $1M95% of all PayPal merchants generate less than $50K/yr in sales volumeThese merchants generate millions of payment transactions which,without PayPal, would be cash, check, or would not occur at allAbout 60% of volume is via FI issued cards, and trending upwardPayPal Merchant Distributionby Annual Sales Volume
  14. 14. Confidential and ProprietaryEMPOWERING COMPLETE END TO ENDCOMMERCE SOLUTIONECommercePlatformsGlobalOnlinePaymentsAccess toFundsTotal XBECommerceSolution14Offer best of classecommerce platformsfrom our existingpartnersOnline paymentsmanaged by PayPalpayment solutionsAllow merchants towithdraw PayPal fundsinto local bank accountthrough local bankpartnershipsComplete end to endservices for merchants toeasily sell cross borderonline, receive payments& access fundsBank Managed Withdrawal
  15. 15. Confidential and ProprietaryWHAT IS BANK MANAGED WITHDRAWAL?Concept:• Bank Managed Withdrawal is a cost-effective PayPal-to-local bankfunds out solution for PayPal account holders• Account holders link and withdraw funds from PayPal to local bankAll transactions initiated on bank websitePayPal transmits all monies directly to PayPal account own by local bankSecure and Convenient:Only available to partner bank customers, who have gone throughbank’s AML/KYC checks.User needs to log into local bank internet banking site and PayPal toaccess feature. (Double authentication for every withdrawaltransaction.)Bank validates Name and Email of user supplied by PayPal with theirBank account information to ensure proper account linkage15
  16. 16. Confidential and ProprietaryPROVIDE SOLUTION FOR LOCAL SELLERSTO ACCESS FUNDS FROM PAYPAL16FUNDS OUT METHODSLOCAL COUNTRY BANKUSA BANK ACCOUNT CREDIT CARDGOOD BETTER$USD$USDLocalCurrency“ENABLE LOCAL CROSS BORDER SELLERSTO WITHDRAW ELECTRONIC FUNDSFROM PAYPAL ACCOUNTS TO THEIRLOCAL COUNTRY BANK ACCOUNTS”FUNDS OUT METHODSLocal Seller
  17. 17. Confidential and ProprietarySOLUTION THAT BENEFITS ALL PARTIESChoice of complete end to endecommerce payment solutionCONVENIENCE:• Funds from PayPal deposited to localbank account• Funds deposited in local currencyinstead of USD• Quicker access to funds to improvecash flow• No complicated process to open USbank accountSECURE:• Seller initiated from local bankwebsite• Funds transfers are secure betweenPayPal and local bank17Innovation to drive competitivebrand differentiation of servicesENGAGEMENT:• New opportunities for value addedservices to bank customers• Enable account holders to increasetime on site and usage of services• Increase deposits• Increase exports by enablingmerchants to sell cross border• Access to PayPal account holdersACQUISITION:• Brand differentiation to other localbanks• Acquire and monetize new to fileaccount deposits of PayPal sellersVALUE TO SELLER/MERCHANTVALUE TO BANK PARTNER
  18. 18. Confidential and ProprietaryAGENDA18• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of Bank Managed Withdrawal (BMW)• Existing Partners Of BMW• Future Opportunities For Additional Collaboration• Partnering With PayPal
  19. 19. Confidential and ProprietarySCENARIO: USER INITIATED EXPERIENCEON LOCAL BANK WEBSITEProposed experience of solution1. Seller creates PayPal account (and local bank account)2. Seller links PayPal account with local bank account on bankwebsite – one time event unless account on either side is closedor new3. Seller initiates funds withdrawal from PayPal to their local bankaccount via the bank website19SellerSellerUSA BANK ACCOUNTLocal Bank$USDLocal CurrencyLocal BankLocal Bank WebsiteAB
  20. 20. Confidential and ProprietaryJOINT COLLABORATION TO LAUNCH SOLUTION• APIs for bank partner tointegrate• Technical documentation• Technical integration supportuntil live to site• On going accountmanagement & technicalsupport services• Consultation on userexperience and flow• Assistance in providing PayPalmarketing material• Assistance in PayPal risk andcompliance approvals20• Integration of PayPalAPIs/services• Developer and enable PayPalservices on internet bankingportal• Creation & ownership of bank’sPayPal accounts• Reporting• Communication and promotionof PayPal services to accountholders• Determination of fees forservicesPAYPAL LOCAL BANK PARTNER
  21. 21. Confidential and ProprietaryAGENDA21• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of Bank Managed Withdrawal (BMW)• Existing Partners Of BMW• Future Opportunities For Additional Collaboration• Partnering With PayPal
  22. 22. Confidential and ProprietaryFIRST NATIONAL BANK OF SOUTH AFRICA22FNB South AfricaOne of top 4banks in SouthAfricaRanks top ininnovationLaunched withPayPal in March2010Heavily promotedby FNB during2010 World Cup
  23. 23. Confidential and ProprietaryLINKING SELLER’S BANK ACCOUNT WITH SELLER’SPAYPAL ACCOUNT45UserUser links the Bank a/c to PayPal a/c – One Time activityA3126
  24. 24. Confidential and ProprietaryFNB WITHDRAW FUNDS24
  25. 25. Confidential and ProprietaryAGENDA25• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of Bank Managed Withdrawal (BMW)• Existing Partners Of BMW• Future Opportunities For Additional Collaboration• Partnering With PayPal
  26. 26. Confidential and ProprietaryPERSON TO PERSON (P2P) SEND MONEYANYWHERE – GLOBALLY26
  27. 27. Confidential and ProprietaryENABLE P2P FROM MOBILE, WEB, OR ANYDEVICE WITH ONE INTEGRATION27
  28. 28. Confidential and ProprietaryP2P PAYMENTS OFFER THREE CHANNELSFOR INCREMENTAL VOLUME FOR BANKSHigh-TouchModelPathway toBankingIncrementalVolumeAny TimeAnywhereUnbankedConsumersCasual Salesfrom BankedConsumersGlobalRemittancesInstant Market: Wide Array of Financial Circumstances28
  29. 29. Confidential and ProprietaryPAYPALSENDMONEYDesigned specifically for financialinstitutionsSend money from your financialinstitution account using anemail address or mobile numberAvailable for multiple channels -online, mobile, or ATM
  30. 30. Confidential and ProprietaryAGENDA30• Background & How PayPal Works• Solutions To Enable Cross Border Commerce• Concept Of Bank Managed Withdrawal (BMW)• Existing Partners Of BMW• Future Opportunities For Additional Collaboration• Partnering With PayPal
  31. 31. Confidential and ProprietaryCONSIDERATIONS FOR BANKS WHENCHOOSING AN ONLINE PAYMENT PARTNER…Partner• Established Leader• Multichannel Experience• Well Funded• Focused on Card Not Present TransactionsInfrastructure• Deep Experience in Payments• Flexible Platforms that Leverage APIs• Full Suite of Options for Sending & Receiving PaymentsSupport• Strong Internal Development Expertise• Ability to Support Multiple Countries and Currencies• Strong Fraud Mitigation Controls31
  32. 32. Confidential and Proprietary… PAYPAL WILL BE THERE ENABLINGPAYMENTS GLOBALLY32Enabling globalmobile commerce...Monetizingapplications for 3rdparty developers...Giving charities aneffective payment tool tocollect donations...Helping consumers andmerchants with expansiveglobal partnerships...The world’s favorite way to pay and be paidMaking B2B paymentsmore efficient withPayPal...Facilitating paymentsfor professionalservices...Allowing foreignworkers to send moneyhome with ease...
  33. 33. Confidential and ProprietaryNEXT STEPS• Explore business and marketing relationship• Preliminary technology and IT engagement• Draft timeline and project plan33
  34. 34. Confidential and ProprietaryAPPENDIX34
  35. 35. Confidential and ProprietaryHOW DOES PAYPAL WORK?35PayPal stores aconsumer’s financialinformation and keeps itsafe. PayPal sends themoney – but never sharestheir information.Consumers choosefrom multiplefunding sources topay for a purchaseCredit CardBank AccountPayPal BalanceThe payment goesimmediately to onlinerecipients —regardless of whichfunding source aconsumer chose.
  36. 36. Confidential and ProprietaryHOW DOES PAYPAL WORK?• Most PayPal accounts holdUSD balances as default• Accounts can also holdadditional currencies:– Canadian Dollars– Euros– British Pounds– Japanese Yen– Australian Dollars– New Zealand Dollars– Swiss Francs– Hong Kong Dollars– Singapore Dollars– Swedish Kroner– Danish Kroner– Polish Zloty– Norwegian Kroner– Hungarian Forints– Czech Koruny– Israeli Shekels– Mexican Pesos– Brazilian Real (only for Brazilian users)– Malaysian Ringgits (only for Malaysianusers)– Philippine Pesos– Taiwan New Dollars– Thai Baht36
  37. 37. Confidential and ProprietaryBank Validates,PP Email andName to identifythe userLINKING SELLER’S BANK ACCOUNT WITH SELLER’SPAYPAL ACCOUNTSelect “LinkAccount”Option2Bank redirectsthe user toPayPal3User logs into PP account.PP sends user’s Name,Email address, PP a/c Id tobank4User logs onto bankingwebsite.1User’s Banka/c is linked toPayPal a/c Id56UserUser links the Bank a/c to PayPal a/c – One Time activityA
  38. 38. Confidential and ProprietarySelect “Withdrawfrom PayPal”Provide $$ Amount2Bank redirectsuser to PayPalCheckout3Money transferredfrom user’s PayPala/c (Balance only)toBank’s Master PayPala/c.5User logs onto his IBsite.1User’s banka/c is credited7UserSeller Transfers Money from PayPal a/c to Bank’s Master PayPal a/cBUser logs intoPayPal account.4Txn + xxdaysUser redirected toBank website andappropriatemessage displayed6User logs onto his IBsite.6aSELLER ‘WITHDRAWS’ FUNDS FROM PAYPAL38Settlement processreviewed next slide
  39. 39. Confidential and ProprietarySETTLEMENT OF FUNDS TO LOCALBANK ACCOUNT24hr hold 24hr holdPrecautionary holdsMoney transferredfrom user’s PayPala/c (Balance only)toBank’s Master PayPala/c.5User’sbank a/cis credited7
  40. 40. Confidential and Proprietary 40LEADING GLOBAL BRANDS ACCEPT PAYPAL

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