PSD 2 RTS 3 DS 2 0 What

PSD 2 – RTS – 3 DS 2. 0 What is new for the merchants ? dd-mm-yyyy © Atos - For internal use

3 major domains covered by the PSD 2 Introduction of 3 new roles/rules : - Payment Initiation service - Account Information service - Confirmation of balance to PII | Author | © Worldline GBU | Division | Department New obligations in the payment process : - Strong Customer Authentication - Payer Consent - Information of the payer - Many more… Rules and obligations for Payment Service Providers

Secure Online Credit Transfer Access to Consumer Account

PSD 2 regulation and PISP opportunity Online Credit Transfer as a new payment method for merchants Payer Payee • The Payment Initiator Service Provider - PISP allows to access the account of customers to initiate a payment (Credit Transfer) on their behalf. • A legal PISP status exists to give a legal framework to new and existing providers. PISP Bank/ASPSP Issuer bank Regulation | Author | © Worldline 4 GBU | Division | Department Payee Bank/ Acquirer bank • The possibility to propose new customer payment experience on e -commerce and in-store

E-Commerce Credit Transfer payment 1 Purchase | Author | © Worldline 5 GBU | Division | Department 2 3 4 Validate basket and choose payment means Select bank Validate credit transfert and SCA near the bank

In-app Credit Transfer payment with mobile 1 Consumer orders and pays with his wallet | Author | © Worldline 6 GBU | Division | Department 2 3 Enter PIN Confirmation for delivery

Why Credit Transfers and PIS are an opportunity for retailers More freedom and confidence for the consumers • Easy to use ; no enrolment • At home payments • consumers control their payments vs card on files or direct debit • have a better management of their account balance • No risk of penalties on chargebacks • Replace cheques or Direct Debit | Author | © Worldline 7 GBU | Division | Department Universal payment means for the merchants • Credit Transfers can answer to user payment experience with innovative solution (e. g. large amount on ecommerce, payment at delivery, …) • European-wide account based payments (more than i. Deal, than Belgian paybuttons, …) • A unique merchant wallet solution combining payments, loyalty and coupons. Cheaper and secure for merchants • Payment is irrevocable • More secured than Direct Debit • less expensive than card (no association fees ; no interchange) • Less chargeback costs • Processing costs (vs paperbased)

Main challenges for the merchants 1 Provide a smooth payment experience within the shopping experience 2 Propose an attractive SCA (Strong Customer Authentication) 3 Re-think the accounting process • Benefit of integration tools to Merchants’ shop, ERP and accounting system • Benefit of reporting (reconciliation) and features (refund) to Merchants to support existing back-office procedures • Avoid impacts on till systems and online shops 4 Promote the payment methods for a large and quick adoption • Define a simple customer experience • Depend also on value added service ecosystem (Voucher, loyalty, fund availability before initiating the payment - AISP, choice of account. . ) | Author | © Worldline 8 GBU | Division | Department • Deploy a homogenous customer experience multi-channels with an attractive user onboarding (single registration process) • Rethink the sales process • Find the right balance between regulator requirements, security and customer experience in-store, in-app and on-line

Strong Customer Authentication

Strong Customer Authentication - SCA (Strong Customer Authentication) is mandatory when the payer initiates an electronic payment There a couple of exemptions of SCA defined in the Regulatory Technical Standards (RTS) (e. g. Velocity rules, Risk Based Analysis, …) Out of scope SCA does not apply to • electronic payments initiated by the payee only (eg direct debit) • Electronic payment at an unattended payment terminal for the purpose of paying a transport or parking fare • cross-border transactions where payment instruments issued under a national legal framework that does not require the use of SCA 10 | Author | © Worldline GBU | Division | Department

Example of SCA exemptions based on Velocity calculations Contactless payments Remote payments Transaction amount 50€ max 30€ max Cumulative amount 150€ max 100€ max Number of transactions 5 max NB: Low value payment : Difficult to manage the limits (e. g. merchant applies exemption, but issuer detects it is already the 5 th transaction) 11 | Author | © Worldline GBU | Division | Department

Example of SCA exemptions Based on Transaction Risk Analysis - TRA Reference Fraud Rate ▶ Amount and fraud under Reference Fraud rate ▶ Abnormal spending of the payer ▶ Unusual information about payer’s device identified ▶ Previous spending patterns and history of the PSU per value - calculated per rolling quarter Exemption Threshold Value Remote cardbased payments Credit Transfers > 500€ - - 250€ - 500€ 0, 01% 0, 005% 100€ – 250€ 0, 06% 0, 01% < 100€ 0, 13% 0, 015% Average rate for non-3 D Visa and MC trx estimated ~0, 5% 12 | Author | © Worldline GBU | Division | Department

SCA will change the payment experience 1 The double authentification for merchant wallet 2 “Card on file” 3 Differed payments and split payments 4 Multi-merchants baskets 5 Payments when the amount is not known in advance 6 Differed strong authentification 7 Guarantees 8 Tips 13 | Author | © Worldline GBU | Division | Department (eg: Amazon) (eg: i. Tunes) (ex: renting) (eg: Travel agencies, marketplaces) (eg: withdraw to SNCF kiosk) (eg: Uber) For many merchants: how will I be able to process frictionless payments?

Stakes on Authentication & Frictionless payments Stakes Solution New RTS rules Impact on user experience Impact on conversion rates Strategic management of the authentication Think new purchase experience « Frictionless » payments For frictionless payments, Worldline as an acquirer and as a provider internet payment services will provide tools and capabilities to help merchants to do frictionless payments like: • Scoring • 3 D-Secure 2. 0 (1 st pilot in Q 2 2018) 14 | Author | © Worldline GBU | Division | Department

Thanks For more information please contact: T+ 33 1 34 34 95 39 didier. barre@worldline. com Atos, the Atos logo, Atos Codex, Atos Consulting, Atos Worldgrid, Worldline, Blue. Kiwi, Bull, Canopy the Open Cloud Company, Unify, Yunano, Zero Email Certified and The Zero Email Company are registered trademarks of the Atos group. April 2016. © 2016 Atos. Confidential information owned by Atos, to be used by the recipient only. This document, or any part of it, may not be reproduced, copied, circulated and/or distributed nor quoted without prior written approval from Atos.