Meeting the need. Research & insights. Results FACT SHEET

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2 FACT SHEET Meeting the need The solution for customers looking for a payment vehicle that is secure, not linked to a bank account, that allows the cardholder to shop (online) while always giving the consumer full control of their budgets and risk levels by loading the card just prior to a transaction. The program took advantage of the extensive Post Office network with approximately 700 locations to issue prepaid cards. It was aimed at the mass market, but also applicable for those who were underbanked, and those who frequently shop online or have security concerns The program targeted those who don t have access to credit card capability for whom bpaid would be a good alternative, and people who want the prepaid card as complementary alternative to their existing card Research & insights KEY CARD FEATURES bpaid prepaid card is instantly issued in branch, allowing immediate use Innovative design portrait vs. standard bank cards Equipped with chip and Paypass technology CLEAR PRICING STRATEGY WITH FREE ALTERNATIVES DISTRIBUTION The bpost network is an excellent distribution asset which is easily accessible TRUSTED BRAND bpost is a trust brand in Belgium Closer to everyday life than banks bpost launched the project itself, taking on the responsibility of MasterCard issuer and BIN owner COMPREHENSIVE COMMUNICATION MARKETING Almost ¾ of the 4 million bpost postal boxes received leaflet and information about the new prepaid solution All bpost outlets had extensive marketing materials Coverage in bpost s own bhappy magazine Nationwide poster campaign Overall Benelux prepaid market is projected to grow 20% per annum in 2017 There is a predominance of prepaid cards used online (42% of the open loop GEV) Regulation initiatives look favorable to boost prepaid category 66% of Belgians do not have a credit card Results Launched Februari 2012, the program is already a huge success and exceeded expectations Positive press coverage 2

3 Presentation content / agenda Context bpost Belgium Launching bpaid Results Lessons learned 3

4 Context bpost As so many Postal operators, bpost is faced with volume declines in its traditional core (mail) volume. Competition, economic crises and electronic substitution are asking their toll. Confronted with that reality, bpost is actively looking for innovative new sources of structural revenu Traditionally, financial services have always been an important part of bposts offering. This not only includes financial services that are embedded in its management contract with the belgian government, but extends to a joined ownership bpostbank, and to being the single most important partner of Western Union on the belgian market. Key success factors have been the extensive network of 670 bpost owned Post Offices and 670 postal presences in retail outlets, together representing over 40 Million customer contacts per year (to be compared to total population of 10 Million inhabitants) the trusted brand. Survey after survey proves the trust the bpost brand instills with the Belgian population. This has for instance proven to be a significant factor during the banking crisis Belgian market: some characteristics According to a 2010 study, over 75% of payment transactions in Belgium are done with cash Less than 50% of belgians own a credit card. Many applicants see their request denied, because of solvability issues. bpost is well placed to testify to that, as its Post Offices act as bpostbankbranches, trying to sell Mastercard (ao.) Compare this to over 95% penetration rate of debet cards. Belgium has seen a slow adoption of ecommerce. Only 2 % of consumer retail spent passes via the web. When asked why not, typical respondent answers evolve around trust and security issues (31%) and restrictions (41%, things like accessibility to internet ánd credit card) 4

5 New category -> credit card -> debit card -> prepaid card -> cash money 5

6 2.load/reload the card banktransfer credit card (?) cash at the counter 1.Buy bpaid card in the post office (KYC) 3. use the card in the MasterCard network in shops on the internet (ecommerce) at ATM machines national & international 6

7 Authorisation, Clearing, Settlement Issuer Processor Physical Issuer BIN Owner License Scheme Issuer Acquirer Cardholder Merchant Public tendering Complexity Running with the Big Dogs 7

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9 Safety MC network Privacy Budget Control No credit approval Not linked to Bank account 9

10 Results and achievements Roll out 16 months after conception of idea Validation of initial assumptions: Power of the sales network, with over motivated employees Fit of the product and its positioning with the Post Office customer base Positive impact on bpost image Focus now gradually moving to increasing the profitability of the product, rather than on just launching and selling Key success factors and lessons learned (almost) First mover (dis)advantage Market attention Market education Market acceptance Benchmark Journey of discovery Off line payments / transparency on fraud rules It s not easy being the new kid on the block Focus 10