Digitizing SMEs for Trade Enabling CrossBorder Trade for

Digitizing SMEs for Trade Enabling Cross-Border Trade for Small and Medium Enterprises February 27, 2021

Background to Strategic Growth importance of SMEs International exposure for SMEs goes frequently hand in hand with higher productivity, and can be an important driver of employment growth Fostering greater SME participation in a globally integrated economy is a key priority for governments as SMEs account for upwards of 95% of all firms, around two-thirds of total employment in emerging economies. Trade is a key component of global growth, contributing 41%* of global GDP, a key component of driving crossborder trade has been ecommerce, Cross-border ecommerce is emerging as a major driver of world trade, growing at nearly 30%** annually FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE © 2018 Mastercard. Proprietary and Confidential SMEs that export perform much better than SMEs that only serve the domestic market. They pay salaries that are 42% higher. They sell 55% more. They are 54% more productive. Their annual employment growth is 246% higher. 2

Challenges to entering global trade Internet usage in Latin America and the Caribbean grew nearly 891% in the past decade However, SME participation in global trade is limited as they account for slightly less than 13% of international trade in developing markets like Latin America, Africa and the Middle East. Finance is a challenge that is common to all SMEs, but those that engage in trade have further barriers: o Practical information about trade (rules and regulations, demand trends, private standards) o Access to trustworthy counterparties in foreign markets o Transparency into the logistics process o Viable payment alternatives that provide guarantee and favorable payment terms © 2018 Mastercard. Proprietary and Confidential SMEs are the engine of growth in developing markets, but have yet to benefit from the globalization of digital trade The digital transformation is reducing trade costs spawning a new breed of born-global enterprises, specifically e-logistics players are disrupting a trillion dollar business that has processes rooted in the 1970’s o It is estimated that the use of technology can lower the trade DIGITIZING SMES FOR TRADE costs of SMEs by as much as 82% FEBRUARY 27, 2021 3

Compliance as one of the challenges Logistics supply chains have remained unchanged for the last 30 years, creating pain points, specifically for SMEs, that lack the economies of scale of larger counterparts 2. Payment(s) of invoiced goods Where do I find good Sellers? Where are my goods? Buyer Bank Where do I find Buyers? How do I lower shipping costs and improve margins? Buyer Payment process is cumbersome and error prone • • Will the Buyer really pay me if I ship? 1. Logistics Payment Trucking SME (Buyer/Seller) • Seller Bank Seller Lack of access to global customer and knowledge on XB Trust and credibility Complex and costly Cross. Border online payment process and compliance Cross-Border logistics costs and management Access to trade finance Carrier Customs • • Insufficient data to enable SME lending, trade finance High fixed costs to engage with SME traders due to small transaction size Feasibility of LOC for smaller transactions FEBRUARY 27, 2021 Terminal Governments & IDOs Financial Institutions • Cargo • • • See SME trade and growth driver but struggle to reach SMEs, serve them fast at the pace of business Struggle to provide customized service at scale Worried about customs revenue and security amid e. Commerce “tsunami” © 2018 Mastercard. Proprietary and Confidential Getting credit takes and long time Logistics • • • Focused on long-distance shipments spurred by e. Commerce Competitive business with all players struggling to access to fragmented SME base Securing upfront payment process/guarantee DIGITIZING SMES FOR TRADE 4

The Master. Card Value Proposition Improve visibility into the source-topay process—and start seeing results. Created in collaboration with Microsoft, Mastercard Track integrates with a business’s existing procureto-pay processes to bolster third-party risk management, improve cash flow visibility, and reduce the costs of manual Accounts Payable/Accounts Receivable tasks. With Mastercard Track, procure-to-pay networks can provide customers end-to-end transaction and payment visibility—including: enhanced remittance data expected payment timing KYC/KYS compliance monitoring other value-added services Track © 2018 Mastercard. Proprietary and Confidential • • Video FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE 5

FEATURES Secure, authenticated and permissioned only to appropriate counter parties, Mastercard Track provides companies with unprecedented visibility into the sourceto-pay process. Compliance Business identity Payment ledger Proactively monitors KYC/KYS and credit reporting. Defends against invoice fraud and streamlines AP processes by acting as secure, centralized repository for supplier details. Captures critical data from POs, invoices and batch payment files and compiles into a single source visible to both parties. ✓ Searches 120, 000+ business registry records ✓ Provides rich remittance details for reconciliation ✓ Stores business details including: payment credentials; business entity information; key contacts; and tax IDs ✓ Shows payment status and timing ✓ Monitors and sends alerts from over 3, 400 sanction, watch and law enforcement lists—as well as adverse media ✓ Notifies user of critical changes in compliance or business registry information, e. g. ownership changes ✓ Scans data from 75+ countries ✓ Aggregates payments across procure -to-pay networks for suppliers © 2018 Mastercard. Proprietary and Confidential Gathers the valuable information buyers and suppliers need—all in one place. ✓ Tracks credit worthiness of businesses ✓ Leverages patented data-matching technology FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE 6

Introduction to NTP Background: © 2018 Mastercard. Proprietary and Confidential Singapore objective of adapting to the changing business and technological landscape to retain competitive edge FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE 7

Mastercard’s Participation in the NTP Context: Mastercard was part of Accenture’s RFP submission in July 2015 • As the Payments value-added service (VAS) provider • Accenture was awarded tender in March 2016 • Accenture has connected Mastercard with Singapore Customs for Trade Payments and Financing Why Master. Card: 2. 3. 4. Positioning Mastercard as an important global cross border trade facilitator o Singapore Government/ Customs is an excellent anchor partner for this new business Deliver on financials and drive key metrics for 2018 & beyond ü Digital by default ü Alternate payment flow ü Bundling Singapore NTP is the first use case for global trade services on Mastercard Track platform Deliver against EDB (Singapore Economic Development Board) – Mastercard MOU o Trade is one of the pillars of collaboration FEBRUARY 27, 2021 © 2018 Mastercard. Proprietary and Confidential 1. DIGITIZING SMES FOR TRADE 8

NTP as a global catalyst for Trade Opportunity to drive cross-border B 2 B with Singapore Customs’ NTP Leverage Singapore’s G 2 G relationships to drive B 2 B commercialization for Mastercard Trade Finance Multi-Bank Portal Singapore : NTP TRACK Data repository Doc Digitization User Registration Countries Banks Logistics provider Other VAS User Interface Others Trade Directory User Permission s Ledger / Identifier Trade Networks Trade Finance e. Docs providers Others FEBRUARY 27, 2021 B 2 B Payment Banks Logistics providers • • Multi-bank portal to facilitate trade financing Enhanced visibility and trustworthiness Ease of bank participation Reduce cost to serve, especially for SMEs B 2 B Payments • Facilitate payments between payer and payee, including but not limited to: • Buyers & sellers • Users & VAS providers • Integrated financial and trade data flows DIGITIZING SMES FOR TRADE © 2018 Mastercard. Proprietary and Confidential Users e. Docs provider 9

Using the NTP to connect globally Moving ahead: © 2018 Mastercard. Proprietary and Confidential Connecting globally across the wider trade ecosystem(s) seamlessly FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE 10

SME Trade Appendix

Digital Freight Forwarders are revolutionizing the shipping global value chain with increased transparency and competitive rates Digitalization is particularly impactful because the aforementioned pain points are easily addressed with software. Research by Transport Intelligence, a think tank, indicates there is substantial demand from shippers forwarders to offer online interfaces. FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE © 2018 Mastercard. Proprietary and Confidential “A trillion-dollar industry is ripe for disruption, is now reinventing itself” Harvard Business School Review, November 2017 12

SMEs as importers SMEs can increase their productivity by drawing on cheaper and more sophisticated imports; while exporters can expand their markets beyond local demand Merlene Coffee Exporter Manizales, Colombia Key Attributes • Small Business • 12 employees • $1 MM/$2. 5 MM Total sales are Cross. Border • Sells to US, Chile, Argentina, Brazil Tech Usage/Preference • Has a website, but does not transact • Uses Intuit software for accounting • Uses Connect. Americas (CA) to seek customers (reflects 15% of CA base) Clients • Grupo Britt on large order via CA • Small independent buyers Key need to expand the business • “Transparency and the cost of logistics are a key problem for me, as a small trader I do not have the leverage to negotiate and therefore spend a lot of time getting my goods to the customers and simply understanding where they are in the process. . I also sometimes worry that the foreign customer will not pay me – but getting a letter of credit from a bank is hard, so I sell on open account and take a chance. ” FEBRUARY 27, 2021 Apparel and Textile Business Kingston, Jamaica Key Attributes • Small Business • 8 employees • $75 K/$1. 2 MM Total sales are Cross-Border • Sells to US, UK, Mexico, DR • Buys textiles from Mexico, China, but mostly local sourcing Tech Usage/Preference • Has a website, but limited sales • Uses excel spreadsheet for accounting • Trying out the Caribshopper but limited • Gets emails from CA’s women exporter program Clients • Jaipur Star General trading • Direct to in-store consumers, customers that call after seeing products on Facebook © 2018 Mastercard. Proprietary and Confidential Jairo Key need to expand the business • “Tourists love my products when they come into my store. I market also on Facebook and Instagram – but we do not yet have an online store with well-working online payments, foreign customers to buy from us online. I would like to set up an online store with online payments that my foreign customers like to use. I could sell directly to individual buyers and increase my margins. ” DIGITIZING SMES FOR TRADE 13

Singapore Government Initiative Vision: A national trade info-ecosystem that provides the foundation for Singapore to be the world’s leading trade, supply chain and trade financing hub IT ecosystem connecting G 2 G, B 2 G and B 2 B Core Capabilities: Etc. Document Exchange Social Networks Tasks, Notifications & Messages Developers’ Sandbox & Data Library Trade Documents Digitization App Store What does NTP want? © 2018 Mastercard. Proprietary and Confidential Company Dashboard FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE 14

Mastercard TRACK Trade Directory • Identifies companies (KYC 1 / KYS 2). • Maintains company information, payment details and compliance data in one place • Secure, authenticated and permissioned to appropriate counterparties. Ledger • Captures B 2 B data flows, statuses and ‘ownership’ of transactions by enabled business participants. • Provides suppliers with enhanced visibility into their transactions and integrates rich remittance details on Alpha-enabled payments. Payment • Helps reduce risk for buyers and suppliers in moving money globally in multiple currencies. • Deeply integrated to Trade Directory and Ledger to ensure monies move to the right party. Service (post-MVP) © 2018 Mastercard. Proprietary and Confidential Directory Ledger Service Layer Payments TRACK • Enables third-party developers to build new services. • Developers may include: software providers, B 2 B Networks, financial providers, government agencies, independent developers, or others. FEBRUARY 27, 2021 DIGITIZING SMES FOR TRADE 15

Providing B 2 B Payments capabilities for Users and Value Added Service (VAS) Providers BACKGROUN D Currently, payments and data flows for trade transactions are not integrated, often leading to manual processes OBJECTIVE Enabling key stakeholders in the trade community to interoperate by digitizing and combining goods flows, trade data, payments & financing Buyer s Seller s FEBRUARY 27, 2021 B 2 B Payments • Facilitate payments between payer and payee, including but not limited to: • Buyers & sellers • Users & VAS providers • Integrated financial and trade data flows Value Added Service Provider s © 2018 Mastercard. Proprietary and Confidential What is Mastercard’s role? Banks PRIVATE & CONFIDENTIAL 16

Track-NTP will facilitate card based payments initially Singapore NTP Track MPGS (UBL format) 7. Payment Response 1 Buyer + Remittance Advice Document Repository 2. Invoice (Buyer | Mastercard | Supplier) 6. Payment Response + Remittance Advice Core Track Processin g 4. If Payment is approved, request is sent to MPGS 5. Payment Response Pay request API Data Management MPGS Pay API 1. Approved Invoice Client API (PULL) Trade Portal MPGS Core Processing Value Added Services Supplier 3. Validate invoice & trade/pay relationship; Present payment request to buyer for approval Other Components FEBRUARY 27, 2021 © 2018 Mastercard. Proprietary and Confidential 7. Remittance Advice 1 17

Reinvent Consumer Experience • Multi-factor Authentication (a. k. a. RBA) • Biometrics • Decision Intelligence Validate Consumers’ Identities Online • EMV 3 DS / ID Check • • NU Data • • New Chargebacks with “Compelling” Evidence against • Friendly Fraud Solutions Set will allow us to address key Ensure Payment Continuity Automatic Billing Updater Account Status Inquiry to validate Account Management Protect Payment Credentials • MDES for Merchants (M 4 M) • Early Detection Service (EDS) Cyber Defence & Attack • Safety Net– I&A • Threat Scan • Key new Platforms: Stand. In & Master. Com • Cyber Assist © 2018 Mastercard. Proprietary and Confidential Digital Security - Innovative challenges 18