Latest and Future development of Mobile Payment in Hong Kong

About oti Founded in 1990 (NASDAQ: OTIV). Offices in US, Europe, Africa, Asia Global provider of cashless payment solutions Experts in secured cashless payment solutions Diversified revenue streams: product sales, recurring revenue and transactional fees Technology supported by expansive IP portfolio of 100+ patent assets Major Global Partners & Customers 2

Cashless payment Eco-System Retail and Unattended Petroleum Parking Transportation Existing payment infrastructure 3

Some History. Traditional payments Bank Centric Traditional payments Cash /Cards/Checks/ Financial know-how No Change 4

Change 5

Google Trend 6

The new global FI 7

The change Whoever controls the Secure Element, controls the transaction SIM-based or phone-embedded SE give MNOs best position to control the financial transaction Google is now bypassing MNOs via Host Card Emulation (HCE) Banks are starting to pilot HCE 8

Yesterday 9

Today 10

NFC BLE HCE WiFi QR Code EMV Mobile??? How to Deliver? 11

Optional NFC Bridging Solutions There are few options to NFC-enable existing phone: NFC Sleeve NFC Insert Micro SD Audio-Jack Add-on 12

Security Ease of use Agnostic to: What the industry needs to deliver Apps OS Handsets Payment schemes Infrastructure 13

Cross Platform Changing Shopping environment : Mobile Devices PC In-store We want it to be SAFE For us and for our loved ones We want the best deals 14

Mobile add-on potential Secured Electronic cash Mass Transit Credit / Debit Cards PKI device Agnostic token Healthcare card Access Control OTA add & update apps Loyalty / Coupons 15

Banking NFC Solutions - Case Study Large consortium of banks in Hong Kong recently ordered OTI s WAVE dongle: Wish to own the secure element in order to control the financial transactions Don t want any dependency on MNOs Want immediate compatibility with all handsets 16

Latest and Future Development of Mobile Payment in Hong Kong May 2014

Mobile Payment The Hong Kong Experience Beginning of the journey November 2012 First mobile credit card payment solution emerged External device specially designed for iphone Year of Blossom 2013 SIM card, SD type SE No one for all solution OS specific (IOS, android) SD card Telco specific (SIM card) Device specific (NFC phone) SIM, SD

Mobile Payment The Hong Kong Experience The Requirements Telco independent Handset independent One device accommodates multiple issuers oti WAVE 1 st encounter: Sept 2012 Formally launched in HK in Sept 2013 Fully addresses telco/handset dependency issues Approved by Master card and Visa Certification with another card association in progress Technically addressed the multiple issuers issue

Which one is better? Really From an end user perspective VS

How To Improve End User Acceptance Ease of Use the #1 Requirement Octopus as benchmark Value added services Vouchers/ Coupons E-dollars Reward points Special offers TESS oti approach: Mobile Payment Should be Fun & Easy!

From the Outside

The User Experience Two modes of Operation Standalone Mode Always On (configurable) -> Easy to Use Default Card Identical User Experience as contactless card (PayWave, PayPass, QuickPass) with higher security Connected Mode Connect to mobile device on needed basis Select card Checking transaction log Card life cycle management Add, Remove, Renew card Value added services Download, apply vouchers/ coupons Location based advertisements etc

Standalone Operation

Connected Mode

What Next? So far, the focus is on enabling end user for mobile payment What about the merchant??? Introducing Mobile Point of Sale (MPOS)

Point Of Sale (POS) Ecosystem credit cards Issuer bank Card Association POS Concentrator Internet Connection Leased Line Connection Acquirer bank Modem Pool

Mobile Point Of Sale (MPOS) Low cost alternative to traditional POS terminal (both hardware and data connection) Full functions Mag stripe, Chip and Contactless Chip and PIN, Chip and Sign Enable merchant to conduct business anywhere, anytime Portable terminal Connected to merchant acquirer via internet (Wifi, 3G, 4G etc.)

MPOS Terminal

Today s Challenge Merchants Promote Products Increase Loyalty Short Payment Cycle Consumers Best Product at the lowest price Optimize Cash Flow Great Service 34

Smart Mobuy & e-wallet Boost Up Transaction Smart Mobuy Increase Stickiness 35

Service Modules Bargain Pay Register Deal Daily Deals ` Local Collective Buying in a Secure way e-wallet Secure e-wallet Built-in with Multiple Credit Cards and Certificates 36

User Experience Enroll Activate ewallet Shop Register Smart Mobuy Email shopper@mail.com Phone No. 852-9876 5432 Password ********* Download Coupon Receive Deals 37

Three Way Added Value Merchant Consumer Bank Low-cost and diverse marketing channels on a single platform to promote products Increase customer retention by a smart loyalty system Optimized cash flow with short payment cycle Secure payment method ensured with double authentications Daily and local deals at the fingertip Reliable merchants verified by third party organization Agreeable user experience to store all the credit cards, membership cards and coupons on a single app Handy Mobile App to promote contactless payment Transaction Boost-up via Online Shopping Cost reduction on administration and paper handling Fraud decrease in a secure payment method Powerful Cost-effective Secure

Thank You!