THE MOBILE-CENTRIC CORE BANKING SYSTEM

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Dina Patrick
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1 THE MOBILE-CENTRIC CORE BANKING SYSTEM

3 From Legacy to Mobile YVES EONNET TagPay CEO Operating on legacy information technology, retail banks are at the end of a cycle. At TagPay Inc., we have developed technology to help banks succeed in this disruptive phase of their development, capitalizing on the latest innovations in software architecture (cloud), telecommunication technologies (mobile) and business models (SaaS). Innovation in banking technology is fundamentally changing the retail banking landscape. New players, from telecom operators, FinTechs and GAFA, have an opportunity to enter the market. TagPay is designed to give a competitive advantage to retail banks. The key quality of the TagPay CBS is its extreme agility. It allows banks to develop new offers and new services with minimal investment and very short time to market. Nevertheless, security and compliance remain a strategic focus. A new generation of banks is being invented in emerging markets, where there are fewer legacy systems and the need for financial inclusion is high. Western banks will soon be looking towards mobile digital banking solutions to transform their operations as well. TagPay Inc. has innovation at its core. Our patented Near Sound Data Transfer technology turns any mobile phone into a contactless payment tool without changing its hardware or software. Our ongoing success is materialized by our presence in 20+ countries all over the world. This success gives our team an invaluable expertise in designing, developing and implementing digital mobile banks everywhere.

DESIGNED FOR THE NEXT-GENERATION BANK The TagPay Core Banking System is designed to power digital financial services on any mobile phone in a given country, independently from telecom

With a complete range of digital financial services at its fingertips, the bank s marketing team can seamlessly develop new products, launch pilots, adjust and scale.

The TagPay CBS s open architecture encourages the bank to connect with important players of the local economy and create an ecosystem to enable transactions.

4 DESIGNED FOR THE NEXT-GENERATION BANK The TagPay Core Banking System is designed to power digital financial services on any mobile phone in a given country, independently from telecom operators. It operates in real-time and is hosted in the cloud. Freed from its legacy system, the bank that uses the TagPay CBS can launch a new banking product in less than three months. With a complete range of digital financial services at its fingertips, the bank s marketing team can seamlessly develop new products, launch pilots, adjust and scale. Agent management and merchant payments are key features of the TagPay CBS. The TagPay CBS s open architecture encourages the bank to connect with important players of the local economy and create an ecosystem to enable transactions. Points of service and points of sale can be easily monitored across the country. Built on a SaaS model, the bank can implement a TagPay CBS, and the entire digital mobile banking service, at very reasonable cost. Building the banking infrastructure of the last mile has never been so accessible. OPERATOR AGNOSTIC AGENT NETWORK & KYC MANAGEMENT CLOUD BASED

5 COMPLETE PORTFOLIO OF DFS HIGHLY SECURE REAL TIME

Digital Financial Services The TagPay CBS was developed as a fundamentally inclusive system.

WALLET/ACCOUNT The end-user s mobile phone number is her wallet/account number.

The end-user then has easy access to her balance and transaction history.

To create a wallet/account, clients are onboarded by an agent, with KYC tools.

securely perform a cash-in or a cash-out, crediting or debiting her wallet/account.

phone or mwallet app, or by paying with cash at a point of service.

with her smartphone, through the web portal or with the TagPay mwallet.

P2P TRANSFERS End-users can send money in many different ways, be it over the counter with an agent

It is also possible to use IVR, USSD, app and web channels for transfers without the assistance of

When receiving cash from another individual, the recipient can choose to leave it on her

6 Digital Financial Services The TagPay CBS was developed as a fundamentally inclusive system. All digital financial services powered by TagPay can reach an end-user with a basic feature phone. WALLET/ACCOUNT The end-user s mobile phone number is her wallet/account number. The optional mwallet app for the end-user can be downloaded onto any Android or IOS device. The end-user then has easy access to her balance and transaction history. The wallet/account is mutli-currency. To create a wallet/account, clients are onboarded by an agent, with KYC tools. OTC CASH-IN & CASH-OUT The end-user can visit an agent, representing the bank in the field, to securely perform a cash-in or a cash-out, crediting or debiting her wallet/account. BILL PAYMENT / VOUCHERS The end-user can pay her bills securely and conveniently on her feature phone or mwallet app, or by paying with cash at a point of service. The TagPay CBS connects to the partner s billing back-office to verify reference numbers and authorize transactions. For this service it is possible to use IVR, app or USSD channels, as well as the responsive web portal. AIRTIME TOP-UP The end-user can top-up her airtime by using her feature phone, with IVR or USSD, or with her smartphone, through the web portal or with the TagPay mwallet. The end-user can also visit an agent to perform this service. P2P TRANSFERS End-users can send money in many different ways, be it over the counter with an agent or directly from their feature phone or mwallet app. It is also possible to use IVR, USSD, app and web channels for transfers without the assistance of an agent. When receiving cash from another individual, the recipient can choose to leave it on her wallet/account. SAVINGS* Real-time transactions are transforming the end-user s behavior around saving. She can credit a savings account as soon as she receives money (salary, pension, transfer). This flexibility, with the balances of her different accounts, gives her the opportunity to organize and manage her savings in a completely new way. LOANS* Real-time technology and wide scale mobile phone deployment will transform the loan distribution process. With new forms of scoring and risk management, end-users will be able to obtain loans directly on their phones in a fraction of the time classically required. TagPay will power microcredit and meso-finance loans. * for release with TagPay V5

SALARIES & PENSIONS (BULK2P) End-users can receive their salaries directly on their wallet/account.

SMS, USSD and the mwallet app are used for this service.

Any cell phone can be used, no matter the telecom operator or type of phone.

convenient contactless payment experience that is extremely secure and user-friendly.

NSDT is used for securing transactions at the point of sale. E-PAYMENTS End-users can pay online with their wallets/accounts.

E-commerce companies can partner with the TagPay client bank to offer a secure and simple payment experience to their

TagPay includes a Prestashop payment module that allows any e-commerce website powered by Prestashop to accept payments online

This service is only available in countries with a TagPay client bank.

The recipients of the subsidies are notified and can then visit a network of dedicated merchants in order to buy the

The administrator of the service decides what percentage, if any, the beneficiary of the service must personally pay.

7 SALARIES & PENSIONS (BULK2P) End-users can receive their salaries directly on their wallet/account. Companies can partner with the TagPay client bank to send payroll to their employees. SMS, USSD and the mwallet app are used for this service. MERCHANT PAYMENTS End-users can securely and conveniently pay in stores with their phones using their wallets/accounts. Any cell phone can be used, no matter the telecom operator or type of phone. Merchants can partner with the TagPay client bank to accept TagPay payments in their stores, offering their customers a convenient contactless payment experience that is extremely secure and user-friendly. The merchant downloads the TP1600 app from Google Play or from the App Store, onto a POS terminal or Android device. NSDT is used for securing transactions at the point of sale. E-PAYMENTS End-users can pay online with their wallets/accounts. At checkout on the e-commerce website, the enduser is redirected to the TagPay Online Payment System. E-commerce companies can partner with the TagPay client bank to offer a secure and simple payment experience to their customers. TagPay includes a Prestashop payment module that allows any e-commerce website powered by Prestashop to accept payments online by incorporating the TagPay payment solution into its website. This service is only available in countries with a TagPay client bank. SUBSIDIES The TagPay client bank can partner with non-governmental organizations to distribute subsidies digitally. The recipients of the subsidies are notified and can then visit a network of dedicated merchants in order to buy the subsidized goods. The administrator of the service decides what percentage, if any, the beneficiary of the service must personally pay. During the transaction in the store, the merchant is paid in real-time for the full cost of the product, directly on his TagPay account. The TagPay client bank partners with non-governmental organizations and merchants in order to set up the service. CASH2GOOD Coined by TagPay Inc. s client AfriMarket, Cash2Good enables P2P transfers that can be used in a dedicated network of stores. An end-user receiving Cash2Good will only be able to spend the money at a specific network of merchants, chosen by the sender. Such transfers are typically used in networks of pharmacies for health. CASH COLLECTION The network of agents set up by the TagPay client bank can be used for cash collection for third parties. For example, a loan recipient of a local MFI can visit a point of service to perform weekly loan repayments. This is done over the counter. ATM End-users can withdraw cash from their wallets/accounts at an ATM. TagPay s APIs enable simple integration with existing ATMs. For smartphones with the TagPay app or from the dedicated web portal, a one-time passcode is generated, that is then immediately used to withdraw cash from the ATM. With a feature phone, USSD is used to generate the passcode. It is also possible to install a solution that works directly with NSDT on the ATMs.

8 At the core of the TagPay CBS CENTRAL PROCESSING Account management The bank can easily decide how to manage its operations and what parts of the process will be automated. Through a web-based interface, the admin can define classes of service for various profiles, customize user experiences, define hierarchies of agents and calculate their commissions. Database TagPay uses MariaDB, an enhanced, drop-in replacement for MySQL and one of the most popular databases in the world. TagPay uses MariaDB because it is fast, scalable and robust, with a rich ecosystem of storage engines and plugins, among other tools. Transaction engine TagPay offers a wide portfolio of digital financial services, processed in real-time. The transaction engine supports all back-office operations. TagPay s digital financial services are all available and accessible at product delivery. (TagPay currently manages more than 50 different types of transactions to support a full range of digital financial services.) Strong authentication engine TagPay is committed to secure all of its electronic core banking transactions and integrates strong authentication and encryption mechanisms throughout its system, including NSDT, 3DES and biometry.

TELECOM LAYER, WITH SPECIFIC CHANNELS AND ENABLERS Channels TagPay is an omni-channel platform, built to be fundamentally inclusive, while remaining independent from telecom operator channels.

9 TELECOM LAYER, WITH SPECIFIC CHANNELS AND ENABLERS Channels TagPay is an omni-channel platform, built to be fundamentally inclusive, while remaining independent from telecom operator channels. End-users can activate their wallets/accounts with any phone, even with a feature phone that only handles audio, IVR, SMS and USSD. They can also use the TagPay mwallet app (IOS or Android), as well as a responsive web portal. TagPay agents and merchants can use a wide range of devices, with the TagPay TP1600 app, from an entry level Android smartphone to Mobiwire and Ingenico terminals. TagPay uses enablers to integrate and manage channels supplied by third parties. Add-on modules TagPay provides a set of business-specific modules. Fully independent from the central processing engine, these modules are easily adaptable and do not require to change the core system. They enable the management of the full life cycle of various products with integrated, easy-to-use interfaces. Companion Card A companion card can be issued for the TagPay end-user, linked to her wallet/account. This allows the end-user to pay in MasterCard and VISA networks.

10 SECURITY LAYER Full redundancy and backup To ensure ultimate availability of the bank s operations, TagPay s architecture applies the most advanced rules. All the capabilities of cloud hosting are used to prevent and react in case of failure. Mirroring and online real-time backup technologies, with multi-site operations guarantee the bank with the most reactive recovery procedure. Regulation tools TagPay has Know Your Customer (KYC) and anti-money laundering (AML) tools. The TagPay client bank can easily adjust these tools to the requirements of local regulations to ensure strict compliance with local laws. APIs Third party integration TagPay s open architecture provides a large set of APIs. They create an ecosystem of services around TagPay s core offering. Reporting and exporting tools TagPay traces & reports all transactions and allows alarm configuration and audit. REAL TIME & CLOUD BASED Real time backup Potential disruptions to core banking operations are mitigated thanks to TagPay s real time backup of all transactional and operational data that fuel the system. Cloud hosting With its OVH* cloud-based solution, TagPay provides extensive flexibility and robustness. It uses state of the arts hosting and server management tools that directly benefit TagPay client banks at very low cost. Our OVH and VMWare partnership gives our clients access to the latest hosting technology and the most advanced level of service in the world. *OVH is the European leader in hosting services. OVH is based in the north of France. For more information visit

12 Near Sound Data Transfer Technology Enabling universal payments through sound NSDT turns any phone into a contactless payment device. The end-user can make contactless payments with any mobile phone, be it a feature phone or a smartphone, no matter the telecom operator. No changes are made to the hardware or software. HOW TO MAKE A PAYMENT WITH NSDT The merchant enters the amount owed on his TP1600 app. The end-user then enters her phone number and 4 digit secret code. The TagPay CBS calls the end-user s phone. The end-user takes the call and places the phone next to the merchant s device. A one-time encrypted password is exchanged between the two devices and the transaction is complete By using the phone s microphone as a captor and the standard mobile network channel as a transporter, NSDT secures transactions between any phone and a variety of accepting devices (with the TP1600 app).

security mechanisms Error detection and correction algorithms Acoustic optimization and performance With NSDT the TagPay client bank

13 UNIVERSAL SOUND PAYMENTS NSDT ENABLES SIMPLE AND SECURE PAYMENTS AND AUTHENTICATIONS NSDT signal processing technology is the result of more than 7 years of intensive R&D efforts focusing on 4 fields: Speed of communication and data compression Cryptographic and security mechanisms Error detection and correction algorithms Acoustic optimization and performance With NSDT the TagPay client bank can offer operability at the point of sale and build a network of merchants that can accept payments from any mobile device in the country.

Build the banking infrastructure of the last mile Legacy banks have to manage a large number of brick-and-mortar branches, with many employees and high operation costs.

With the TagPay CBS, it is possible for banks to develop a network of agents, who bring digital financial services close to where people live.

14 Build the banking infrastructure of the last mile Legacy banks have to manage a large number of brick-and-mortar branches, with many employees and high operation costs. In emerging markets, the cost of legacy banking prevents traditional banks from catering to end-users in areas with less than 100,000 inhabitants. With the TagPay CBS, it is possible for banks to develop a network of agents, who bring digital financial services close to where people live. The TagPay CBS gives the bank the necessary tools to be inclusive and build the banking infrastructure of the last mile. When moving from a cash-based economy to digital financial services, the agent network plays an important role. The agents enable cash-ins and cash-outs to the end-user s wallet/account. With a credited wallet/account, the agent can guide the end-user through the various transactions, without having to revert to cash. Agents can also explain the different banking products and give the end-users information on their accounts/wallets. All transactions are done in real-time. From the bank s headquarters, the TagPay admin can oversee all operations in the field. HOW DOES IT WORK? - The agent needs an entry-level smartphone that can power TagPay s TP1600 Android app. - The float used by the agent is self-financed. The bank takes zero risk by not advancing the float.

OPEN ARCHITECTURE ECOSYSTEM Thanks to TagPay s open architecture, the client bank can easily connect with important players of the local economy and facilitate

TELECOM OPERATORS BANKS & CARD PROCESSORS BANKS THE STATE NGOs MICROFINANCE INSTITUTIONS UTILITY COMPANIES SMEs MERCHANT & AGENT NETWORKS Mobile digital banking,

15 OPEN ARCHITECTURE ECOSYSTEM Thanks to TagPay s open architecture, the client bank can easily connect with important players of the local economy and facilitate transactions. TELECOM OPERATORS BANKS & CARD PROCESSORS BANKS THE STATE NGOs MICROFINANCE INSTITUTIONS UTILITY COMPANIES SMEs MERCHANT & AGENT NETWORKS Mobile digital banking, with its open architecture, offers an opportunity for the client bank to become the center of an ecosystem, managing transactions for the local economy. The goal of the new mobile digital bank is to enter into the value chain of the business of its clients, from the local SMEs to nongovernmental organizations.

THE POWER OF SPINOFFS The transition from legacy information technology to a mobile-centric CBS that operates in real-time is complex. At TagPay Inc.

16 THE POWER OF SPINOFFS The transition from legacy information technology to a mobile-centric CBS that operates in real-time is complex. At TagPay Inc. we have successfully accompanied banks in their digitalization process, with spinoff projects. After the client bank identifies a market segment with specific needs, it creates a new banking product and sets up a mobile digital bank, powered by the TagPay CBS. This mobile digital bank is run independently from pre-existing IT, with its own database. New clients are enrolled on the new TagPay CBS. With this spinoff approach, banks can experiment and deploy innovative services without jeopardizing their existing operations. They benefit from all of the features of a mobile digital bank, with very low financial and operational risks. View the field report on the Trust Merchant Bank in the Democratic Republic of Congo. It set up a TagPay CBS to launch its digital financial service called Pepele Mobile. vimeo.com/ IMPLEMENTATION A TagPay CBS, hosted in the cloud, can be set up in three months. Implementation costs vary depending on the complexity of the installation. Specific developments, such as interconnection to local ecosystems are evaluated on a case by case basis. TagPay Inc. accompanies the bank in the installation of its servers, the customization of the services it wants to launch, and the training of its team. The TagPay CBS is then licensed on a per user basis, with distinctions made for the administrators, the agents, the merchants and the end-users.

17 TAGPAY INC. TagPay Inc. began as a mobile payment technology provider. It then became one of the first mobile money platforms, targeting banks with financial inclusion goals. TagPay Inc. is now the first mobile digital banking platform provider, with all the features of a Core Banking System, centered around the mobile phone. TagPay Inc. was founded by Yves Eonnet and Hervé Manceron in It set up its first mobile money platform in Namibia in Société Générale aquired a minority stake in the company in June TagPay is headquartered in Boulogne-Billancourt, in the Paris metropolitan area, and has an office in Bogota, Colombia. THE TAGPAY CBS POWERS DIGITAL FINANCIAL SERVICES IN 20+ COUNTRIES