The document discusses the challenges and opportunities within the paytech industry, highlighting its transformative impact on financial services through innovations like invisible payments, financial inclusion, and modern payment rails. It identifies both potential threats and advantages for traditional banks and fintech startups amidst increasing competition and regulatory hurdles. The paytech sector has seen significant growth, with over $20 billion in global funding in 2015, enabling enhanced customer experiences and broader access to financial services.

1. Challenges and Opportunities in PayTech
Proprietary & Confidential 2014-15
• Anand Ramakrishnan, President and CEO
• Deborah Baxley, Practice Leader, Domain
Specialist
Federal Reserve Bank of Atlanta / PeachPay
June 14, 2016

2. OPUS CONSULTING SOLUTIONS − A SNAPSHOT
• A retail payments industry focused consulting company headquartered in Chicago
• US Locations - Atlanta, SFO, New York, Houston, Austin ; India Development Centers – Pune and Chennai
• Established in 1997, currently 800 consultants strong
• Divested Card Issuing and Acquiring Product “ ElectraCard” in 2014 to Mastercard to focus on Services
Marquee Client List
Cards – Issuing,
Acquiring and Prepaid
Remittance
Industries we serve
FinTech
Our Services
Advisory Digital Data & Analytics Testing Product Development
Payment Devices
• One of the top payments network in the US market
• Leading provider of fully integrated ATM and financial kiosk products and services
• Leading remittance company
• Top 5 acquirer in the US market
……and many more

3. • The FinTech sector is dominated by PayTech, which promises to change the industry
• Both PayTech and traditional industry face challenges in cooperation, regulation and
innovation
• The PayTech landscape comprises invisible payments, financial inclusion, modern payment
rails, risk and FinTech banks
– Frictionless payments transform the customer experience, while mPOS disrupts traditional
POS solutions across all retail segments
– P2P and prepaid innovations serve underserved, high-fee markets and white spaces
– New payment rails are faster, with much lower operational costs
– Space aged innovations around identity, fraud and risk secure the payments system
– Pure play FinTech banks provide access to the financial service ecosystem
• Industry transformation provides hidden opportunities for payment providers
PayTech leads the FinTech revolution, posing threats and
opportunities in mobile, P2P, faster payments and risk
management
PayTech Overview

4. Agenda
• Executive Summary
 Overview
– Regional Landscape for PayTech
– SWOT Analysis
• PayTech Landscape
• Effects of PayTech on Financial Services Industry

5. The FinTech sector has grown by leaps and bounds,
record funding in 2015 of more than $20B globally, up
65% from 2014
5
NA Silicon Valley, LA, NYC
EU London, Amsterdam, Stockholm
APAC China, India, Australia, Singapore
MEA So. Africa, Kenya
FinTech Hubs
$2.5 $2.9 $4.0
$12.3
$20.3
2011 2012 2013 2014 2015
Annual Global
FinTech Financing
$B
298 398 492 593 679
470
624
771
957
1191
2011 2012 2013 2014 2015
Annual Global FinTech
Financing
# deals
VC-backed
PayTech & FI SWOT
FIs PayTech
Strengths • High barriers
to entry
• Consumer/
millennial vs
profit focus
Weaknesses • Regulation
thwarts
innovation
• Investment in
legacy
• Complexity of
compliance
Opportunities • Partnering/
acquisition
• Frictionless
payments
• Underbanked +
smart phones
Threats • Disintermed-
iation
• Funding bubble
Commerce start-ups always underestimate the complexity and challenges of payments
Ca
Aus
NY
Af
UK
Neth
Nord
China
Ind
Sing
Ken
So Af
NA
AP
Brz
Germ
12 PayTech “Unicorns”
Regional FinTech financing, 2015 est

6. Agenda
• Executive Summary
• Overview
 PayTech Landscape
– Invisible Payments
– Modern Faster Payment Rails
– Financial Inclusion
– Risk
– FinTech Banks
• Effects of PayTech on Financial Services Industry

7. PayTech landscape encompasses frictionless
“invisible” payments, financial inclusion, modern
rails, risk and FinTech banks
PayTech Landscape
7
Invisible payments
Modern payment rails
Financial inclusion
RiskFinTech banks

8. Frictionless “invisible” payments streamline the
consumer experience, transforming payments to
digital
In-app payments • mCommerce in-app payments ease checkout and eliminate friction
• Amazon, AliPay and PayPal leveraging their substantial presence to expand into in-app
• Adyen global payment rails 250 payment methods 187 currencies incl. phone bill, bar
coded cards, supporting AirBnB
• Klarna offer M-commerce one-click checkout for apps like Uber, assumes payment risk
for delivery use cases
• Paytm is India’s largest mobile commerce platform
Mobile wallet • ApplePay, AndroidPay & SamsungPay realize the security & convenience promise of NFC
technology
• Merchant issued wallets such as Starbucks & Dunkin Donuts integrate loyalty and
couponing
• Wallaby recommends which card to use to optimize reward points
APIs • Open issuer processing payments APIs let developers integrate payments within their
website or apps
• Users sign up within applications, get instant approval, merchants process transaction
IoT • “TOS” operate on smart TVs & smartwatches, & enables mobile payments
• Brillo for low-power IoT devices like lightbulbs & cameras
• Visa prototyping “connected car” to pay for fuel, parking, drive-through, tolls
Invisible Payments
8Frequent payments are moving from cash, to contactless, to invisible

9. Likely the most visible PayTech segment, mPOS solutions
disrupt traditional POS solutions across all retail segments
• The original mPOS innovator, started as simple audio-jack mag stripe dongle, now accepts chip cards
• Underlying innovation was how to price and manage micro-merchant risk
• Aggressive expansion into wallets, SMB lending, marketing, payroll
• Developer-friendly payment point of sale that accepts everything contactless mobile wallets,
magstripe & chip-based cards, featuring 2 touchscreens – 1 each merchant and customer facing
• 2-screens, all payment forms, integrates with existing payment systems for larger merchants
• Makes money on subscription software business $49/month/register & interchange plus pricing
• Cloud-based multi-channel commerce for SMBs, linking accounts with card acceptance
• Sophisticated analytics & web site management, partnering with Uber on same-day delivery
• Pay-at-table tablet technology dramatically reduces wait time, optimizes server trips to table, and
offers bill-splitting and biometric authentication features
• 2-screen tablet POS system with wide array of features including deliveries and shipping in addition to
payment processing
• Integrates with beacons to recognize customers
• Recently introduced new readers ranging from free to $124
• Bluetooth, wired, NFC, faster, etc.
9
Invisible Payments  mPOS
mPOS players in the US are leveraging the EMV shift to get merchants to swap out legacy POS

10. Domestic and international person-to-person and
prepaid innovations promise to serve underserved and
white spaces, or disrupt high-fee markets
P2P • Payment messaging service M-Pesa >13m users 40% of Kenyans, 42% GDP, no need for
bank accounts
• Venmo, wildly popular with millennials, P2P app used to split bar tabs & bills, sending
$1b/mo
• Telepin software powers most of the world’s mobile money deployments in emerging
markets
Social • Facebook Messenger allows users to send money between debit cards right inside the
chat
• Fastacash sends international transfers among social networks e.g. Facebook, WhatsApp
or WeChat
• Wildly popular in China, WeChat allows 639m active users to send money or gifts over
chat
Remittances • Transferwise sends money with no currency conversion charges, 8X cheaper vs banks,
supporting 300 currency corridors, avoiding actual transfers by netting in each market
• Currency Cloud allows any company to offer customers access to foreign exchange
through a simple API
• Xoom allows transfers to 50 countries with delivery options including cash, bill payment
• Remitly is the US largest digital transfer business charging a fraction of fees compared to
legacy providers
• Payoneer provides cross-border transfers, online payments, and reloadable MasterCard
Prepaid • Aims to replace check-cashing services and checking accounts, wants to be where bank
branches are not as prevalent
• Prepaid debit card and mobile banking service empowering young people to manage their
money responsibly by instilling good financial habits from an early age
Financial Inclusion
10

11. Reimagining a payments system from the ground up
results in real-time secure payments with dramatic
improvements in operational cost
Faster Payments • Dwolla is an instant payment network based on FiSync, a communication and
interoperability protocol for banks and credit unions
• Zapp offers real-time payments on mobile phones in the UK
Blockchain • Align Commerce uses blockchain technology to enable international transfers
• Ripple connects banks on a permissioned network to leverage distributed ledger
technology for bank-to-bank transfers
• Coinbase is a secure online bitcoin exchange for buying, selling, sending, receiving, and
storing bitcoin
• Bitcoin exchange and wallet service Coins.ph for Filipino transfers including ATM cash
payout option
Cryptography • Instant payment network secured by cryptography
Global Interoperability • Earthport is a global hub & spoke payments network that interoperates with any payment
format, reducing time/cost of international transfers and providing tracking
• Transpay’s API connection lets businesses perform straight-through mass payouts in 120
countries
Modern Payment Rails
11These modern payment rails threaten traditional payment networks over the long-term

12. Finally, a proliferation of innovations around identify,
fraud and credit risk shows potential for a safer
payments system
Authentication • Socure uses machine learning, biometrics plus big data to verify identify
• IdentityMind risk platform provides fraud prevention, Know Your Customer (KYC), &
payments to assist online merchants & FIs
• Trunomi software for financial institutions to comply with know your customer (KYC)
regulations
• Nok Nok provides strong FIDO-compliant authentication using PKI cryptography
• SayPay authenticates customers using voice recognition
• Biocatch authenticates users via touch and phone’s accelerometer
Fraud • Feedzai & Signifyd leverage big data from non-traditional sources to instantaneously detect
& address fraudulent transactions
• Iovation and InAuth prevents fraud through device fingerprinting and pattern recognition
• DataVisor detects global fraudulent attack campaigns in real time before they result in any
damage
Instant Credit • Parameters covering credit score, social media data, merchant data and others
• Appeals to millennials who shun credit cards, and countries with low card penetration like
India or Germany
Risk
12

13. As traditional banks become more risk averse, a
number of pure play FinTech banks provide access for
PayTech start-ups into the financial services ecosystem
White Label Banking • The Bancorp Bank offers “Banking as a Service,” supporting Simple all-digital checking
account designed for mobile plus first-rate mobile banking tools
Banks Powering PayTech • CBW plus its technology arm, Yantra, aims to reinvent banking and it is the bank
powering “Moven”
• Varo Money is a mobile-only banking app that offers financial advice, with the unusual
stated intention of seeking a banking license
• FINO Paytech is Indian financial inclusion bank using biometric & smart card technology
for micro customers especially in rural areas, now classified as a new “payments bank”
by RBI
FinTech Banks
13

14. Agenda
• Executive Summary
• Overview
• PayTech Landscape
 Effects of PayTech on Financial Services Industry

15. The PayTech revolution will reshape our industry by
cutting costs, improving quality, and innovating
around risks
15
Never mind if PayTech fails to take over the world, its emergence is changing the face of payments
How will PayTech impact traditional players?
Consolidation: In-app
payments push transactions
to “lodged” card, whose
wallet share increases -
differentiators like card
brand & design decline
Potential Scenarios:
Fragmentation: Digital
wallets displace physical
cards & optimize card
usage, proliferating niche /
merchant issued cards,
splintering wallet share
Displacement: Customers
elect POS financing, credit
card usage erodes as
transactional users migrate
to payment seamlessly
linked to bank accounts
Venture capital investment • Santander, HSBC, Sberbank, BBVA Ventures
Accelerator programs • ATDC, FinTech Innovation Lab, Barclays, Citi Ventures Plug and Play FinTech Program,
Level39, Westpac Innovation Challenge
Collaboration • UBS Blockchain Innovation Lab, BNY Mellon MyIdea, RBS, Bank Leumi, ING FinTech
Village
Consortium • R3
Acquisition • First Data & Clover, PayPal & Paydiant, Xoom
FI and Processor Responses

16. INDIA OPERATIONS: PUNE AND CHENNAI CORPORATE HQ: CHICAGO
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