Payment Cards Payment Cycle Introduction bsbulentsenver com 1

Payment Cards Payment Cycle Introduction bs@bulentsenver. com 1

Card Payment Cycle bs@bulentsenver. com 2

Across The Payments Spectrum bs@bulentsenver. com 3

Supported card product types Support issuance of Magnetic stripe and Chip (VSDC/M/Chip) cards: Credit Revolving Charge Debit Corporate Pre-paid Instalments Affinity Cards Proxy / Virtual Cards (e-Card) Private label (profiled cards) Co-Branded Cards Payroll Cards Health Cards Remittance Cards Travel Cards Gift Cards Custom Electronic bs@bulentsenver. com Purse 4

Credit Card Authorisation and Clearing System Flow bs@bulentsenver. com 5

Credit Card Authorisation and Clearing Types • • 1. Local Card used in Counrty On-Line 2. Local Card used in Counrty On-Line- On-Us 3. Local Card used in Counrty Off-Line 4. Local Card used outside of Counrty - Method 1 5. Local Card used outside of Counrty - Method 2 6. Foreign Card used in Counrty – Method 1 7. Foreign Card used in Counrty – Method 2 bs@bulentsenver. com 6

BKM Switch System BANK-A BANK-B ISSUER ACQUIRER BANK-C bs@bulentsenver. com 7

Local Card used in Turkey Credit Card On-Line Authorisation BANK-B BANK-A BKM A. Ş. ACQUIRER ISSUER Approve/Reject Card Holder Merchant I want to pay with my Credit Card Approve/Reject bs@bulentsenver. com POS machine of A Bank 88 Credit Card of B Bank

Local Card used in Turkey Authorisation if Issuing Bank can not respond to BKM query BANK-A BKM A. Ş. ACQUIRER Approve/Reject Merchant Based on Predetermined Limits Approved by Issuing Bank to be used in case of lack of communication of BKM with the acquiring bank I want to pay with my credit card Approve/Reject İŞYERİ bs@bulentsenver. com POS machine of B Bank 99 Credit Card of B Bank

Local Card used in Turkey On-Us Transactions BANK-A ACQUIRER Approve/Reject Merchant Credit Card of POS machine of A A Bank I want to pay with my credit card Bank 10 10 bs@bulentsenver. com Card Holder

Local Card used outside of Turkey Issuing Bank routes it first to. BKM and BKM routes it to Visa or Master. Card Method 1 VISA/MC BANK-B BKM A. Ş. ISSUER Approve/Reject Local Card Holder I am a Turkish citizen. I want to use my card outside of Turkey Approve/Reject International Authorisation Process is executed BKM can only handle the Authorisation. Cleaing and Settlement should be done with VISA and Master. Card Approve/Reject Foreign Merchant bs@bulentsenver. com 11 11

Local Card used outside of Turkey Issuing Bank routes it directly to Visa or Master. Card Method 2 VISA/MC BANK-B ISSUER Approve/Reject Local Card Holder I am a Turkish citizen. I want to use my card outside of Turkey International Authorisation Process is executed Approve/Reject Foreign Merchant bs@bulentsenver. com 12 12

Foreign Card used in Turkey If Issuing Bank is not a Local Bank the Acquiring Bank routes it first to. BKM and BKM routes it to Visa or Master. Card Method 1 VISA/MC BANK-A BKM A. Ş. ACQUIRER Approve/Reject Merchant Approve/Reject İŞYERİ bs@bulentsenver. com POS machine of A Bank Approve/Reject I am a foreigner. I would like to pay with my credit card in Turkey 13 13 Credit Card of a Foreign Bank

Foreign Card used in Turkey If Issuing Bank is not a Local Bank Acquiring Bank routes it directly to Visa or Master. Card Method 2 VISA/MC BANK-A ACQUIRER Approve/Reject Merchant Approve/Reject bs@bulentsenver. com POS machine of A Bank I am a foreigner. I would like to pay with my credit card in Turkey. 14 14 Credit Card of a Foreign Bank

Domestic Reconciliation/Settlement BKM - YTHS AS OI K A GT A BANK S KA S A T RT NG EPO I OM /I R C IN + O TA DA B BANK NG T AK DA AS TA IN O TG U O TA DA OU TG Central Bank IN DA COM TA IN +O GT /I R AKA EP OR S S TCMB BKM FUND TRANSFER SA ISSUER T LE ACQUIRER S EN IN HESABI T EN T A ST Y PA M N O TI T A EN M R M Y FO PA BKM EM CREDIT CARD TRANSACTION 15 15 PRODUC/SERVICE bs@bulentsenver. com MERCHANT CARD HOLDER

Debit Card Online POS Authorisation Flow (Domestic & International) International Authorisation Visa/Master. Card International Purchase Cardholder Merchant Domestic Purchase International Authorisation Acquirer Domestic Authorisation (BKM ISO 8583 format) Payment Schemes: Master. Card Visa International Authorisation BKM Domestic Authorisation (BKM ISO 8583 format) International Authorisation (BKM ISO 8583 format) Issuer (Authorisation Institute) bs@bulentsenver. com 16

Debit Card Online Clearing & Settlement Flow (Domestic) Cardholder Domestic Purchase Domestic Clearing (BKM format) Acquirer Merchant Net Settlement Domestic Clearing (BKM format) BKM Net Settlement Central Bank* Net Settlement Domestic Clearing (BKM format) Issuer * All Acquirers & Issuers including BKM have Clearing Bank accounts within the Central Bank, therefore funds simply transfer between accounts. bs@bulentsenver. com 17

Secure e-Payment Infrastructure Banks Customer Payment Fraud Protection Reporting Storefront API’s 3 D Secure EST Secure e-Payment Gateway bs@bulentsenver. com 18

Future of Payments • • • Further erosion into cash and other non card payments Need to ensure balance between parties to foster growth Risk will continue to be major concern Regulators will continue to oversee New technologies and channels – Mobile – Voice – Contactless – E-payment – Maximisation of the chip on the card bs@bulentsenver. com 19