Money2020 Summary

Deutsche Bank Markets Research

North America United States TMT Computer Services & IT Consulting

Industry

Mobile Payments

Date 10 October 2013

Industry Update

Key Takeaways From Money2020 Industry Conf Still early in mobile revolution, but 2014 could begin to sort out players

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Deutsche Bank Securities Inc.

Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. DISCLOSURES AND ANALYST CERTIFICATIONS ARE LOCATED IN APPENDIX 1. MICA(P) 054/04/2013.

Bryan Keane

Research Analyst (+1) 415 617-4246 [email protected]

Ashish Sabadra

Research Analyst (+1) 415 617-3329 [email protected]

Top picks

Visa Inc. (V.N),USD190.48 Buy

MasterCard (MA.N),USD673.33 Buy

Source: Deutsche Bank

Companies Featured

Visa Inc. (V.N),USD190.48 Buy 2012A 2013E 2014EEPS (USD) 6.19 7.58 8.84P/E (x) 18.3 24.2 20.8EV/EBITDA (x) 11.2 15.3 13.3

MasterCard (MA.N),USD673.33 Buy 2012A 2013E 2014EEPS (USD) 22.04 26.11 30.34P/E (x) 19.6 25.2 21.7EV/EBITDA (x) 11.6 15.2 13.1Source: Deutsche Bank

This week, we attended and moderated a panel discussion on Cloud POS at the 2nd annual Money2020 industry conference (4200 attendees vs +2000 last year), which we believe is the best payments industry conference. Key themes from the conference include: the rise of tokenization, opening up API for developers, app marketplaces, software based cloud payments, NFC still being dead, BLE gaining interest, CNP interchange fee to fall, digital gifting set to rise, Judge Leon's ruling changing priorities (consensus was it is more likely to stand), and US EMV interest low. We found Paypal's strategy the most interesting and we are even more confident that Sell rated Verifone is poorly positioned. In this report, we highlight several emerging companies including Paypal, Braintree, Stripe, MCX, Dwolla and profile several up and coming payment companies.

Networks adapting and well positioned As the market strives for frictionless mobile payments (Braintree's processing for Uber the standard), value added services surrounding the commoditized payment becomes critical. We believe the networks V and MA need to adapt to mobile payments and last week's announcement on setting up standards for tokenization is a step in the right direction (emphasis appears to be moving away from promoting hardware based payment solutions like NFC). Merchant network MCX still appears more of a bargaining tool used against the networks for lower rates than any real disintermediation threat. We have heard positive feedback about new CEO Dekkers Davidson and MCX appears confident it will launch a solution in the coming months with the help of FIS and Gemalto so the consortium still bares watching. Overall, we remain confident the networks Visa and MA remain defensible and will benefit from the secular mobile payment movement.

Acquirers have role but need to do more Acquirers cannot find themselves relegated to just payment or its margins will be squeezed. We believe its critical for acquirers need to work with developers to become deep down embedded and customized in the payment process. The acquirers need to continue to stay relevant in the process by adding value added services like data analytics. Value added resellers and ISOs will need to assist merchants in adopting seamless mobile solutions. Vantiv continues to be a leader in merchant acquiring, leveraging its recent acquisition of Litle to take share in ecommerce.

Hardware POS terminal in trouble Merchants deciding on mobile POS solutions are beginning to rethink the need of the traditional POS hardware (causing refresh cycles to get extended). We believe POS hardware terminals are becoming commoditized and must be transformed into software and services. Cloud POS solutions are clearly the wave of the future, with the use of tablets are smartphones continuing to grow. In fact, we believe the traditional hardware terminal market growth market is likely to turn negative (if it hasn't already). We believe Verifone is in disarray internally and continues to conflict its own channels. New PAY CEO Paul Galant has his work cut out for him to rapidly change PAY's business model.

10 October 2013

Computer Services & IT Consulting

Mobile Payments

Page 2 Deutsche Bank Securities Inc.

Key Companies at Money 2020 For a more in-depth discussion on mobile payments, please see our May 16 mobile payments report Payments becoming Commoditized; Value-Added Services the Key In this report, we highlight recent announcements/trends at the Money2020 expo including PayPal, MCX, Braintree, Stripe, Paydiant, Dwolla, and many other compelling emerging private companies.

PayPal At Money2020 on October 8, PayPal announced it had plans to develop a new checkout process for its mobile app incorporating both QR codes and a PIN process at the point of sale in order to authenticate purchases made with its mobile payment app. The announcement expands PayPal acceptance and allows both users and merchants more options in terms of acceptance. Both Starbucks and LevelUp use scanning technology to read QR codes from their mobile payment apps.

In September 2013 PayPal announced the release of its proprietary software solution Beacon, which aims to compete with NFC contactless payment systems. The announcement creates further uncertainty surrounding NFC adoption and provides further disintermediation risk to traditional POS terminal systems while shaking up the remaining players in the payments value chain namely acquirers and networks.

Beacon and Bluetooth LE (BLE) technology can be easily integrated with next gen POS systems such as Erply, Leaf, Leapset, ShopKeep, Revel, Booker and Vend as well as traditional cash based registers such as Micros and NCR. In addition, there are new entrants into the market such as Estimote who now offer 3 hardware Beacons for $99. We expect multiple new entrants to offer BLE hardware and access as the relative lack of adoption surrounding NFC technology provides ample opportunity for new entrants such as BLE technology in contactless payments. An example of the BLE potential, Estimote has a roughly 50 meter range for contactless payment while NFC range is only 4-5cm or about 2 inches. Pricing for Estimote would be 1 beacon for every 100 square meters costing around $5,000.

Paypal has begun to pilot the Beacon enabled shopping experiences in Q4 and the full roll out is planned for early next year. The company has not yet set a price point for the Beacon, but expects the cost of the device will be in the double digits. As part of the announcement of Beacon, PayPal has given developers open access to the mobile in store API. An example of how this benefits retailers, a drugstore could populate your prescriptions using Beacon as you walk into the store, pay for your bill and send you a receipt all without having to swipe a card or open a wallet.

In addition to open access API, Beacon has the potential to extend beyond payments into value-added services such as micro location based targeted offers, coupons and marketing messages.

PayPal has also gained traction with its PayPal Here hardware, emulating a similar dongle device introduced by competitors. PayPal Here uses the same functionality as competitors; relying on a magnetic card reader to convert card data from swiping into an audio signal that is transmitted to the smart phone through the audio jack where the device is plugged in. Once the swipe occurs the data is digitized with the PayPal Here

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Mobile Payments

Deutsche Bank Securities Inc. Page 3

app and routed to the payment processor, or can be directly linked to PayPal accounts. Advantages of PayPals mobile service include its pricing (270bps vs 275bps for competitors), the ability to process and settle checks at no cost, and a dedicated customer service department to fix any issues with the PayPal dongle.

In February 2013, the company announced PayPal here would be rolling out in the UK with a new hardware to accommodate chip based cards prevalent in the European market. The company plans to use the UK as a lever to further expansion throughout the rest of Europe.

Braintree Braintree has quickly established itself as a disruptive online platform for merchant payment processing and mobile payment and billing solutions through its online gateway and mobile platforms.

Acquired by EBay/PayPal for $800m Announced September 26, 2013, Braintree agreed in terms to be acquired by EBay inc. in an $800m all cash deal in an effort to bolster PayPals payment platform and mobile capabilities. The deal provides access to both the data and processing transaction fees from Braintrees impressive network including clients Opentable, Livingsocial, Uber Technologies, and Airbnb. In addition to its processing capabilities, the acquisition provides PayPal with access to Venmo, Braintrees mobile P2P application. Venmo processes over $4bn in mobile payments, which would boost PayPals annual mobile processing to roughly $20bn. Braintree currently charges 290bps and $0.30 per transaction.

Venmo was originally acquired by Braintree in August 2012 for $26.2m. The company has continued to develop Venmo, adding Venmo Payouts for small businesses in April 2013 providing API solutions to pay multiple independent contractors. API removes checks from the payment process allowing for small businesses to pay contractors via email or phone number, with the funds settling the following day. Venmo currently charges $0.25 per transaction. The company has also released Venmo Touch, a one touch payment solution for mobile applications that saves consumers time without the hassle of re-entering card information for each transaction. The service allows you to use card information across multiple apps for payments without requiring the download or use of a separate app.

Braintree has invested in additional platforms for mobile as well including Marketplace, introduced in August 2013. The Marketplace platform, geared towards enabling mobile payments for small, market type businesses simplifies paying and managing vendors and sellers by providing a direct link between buyer and seller. By managing the transaction itself, Braintree removes traditional marketplace operators as well as previous regulatory and compliance burdens. Braintree also manages the 1099 tax reporting inherent with transactions. In addition, merchants can specify collections fees on every transaction, as well as the timing of when funds are received; choosing to pay providers right away or put funds in escrow until delivery or fulfillment is complete.

Stripe Stripe is a developer service that enables businesses to accept online payments as well as allowing developers to build code, APIs and documentation for payment acceptance. Stripe charges a fee structure in line with Braintree; 290bps + $0.30 per transaction. Although higher than traditional processing fees from networks, the company claims that the total cost to customers is lower because of zero setup, monthly fees, minimum charges, validation feeds, card storage fees and no additional charge for failed payments. In addition, the company offers breakpoints or volume

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Mobile Payments


pricing for businesses with transactions exceeding $1m per year (although these breakpoints are not disclosed). Features Stripe has developed include recurring billing functions for arbitrary intervals allowing for whatever frequency desired, subscription quantities on allowing for per seat pricing and prorating based on customer volume.

In June of 2013, Stripe rolled out its Payouts feature, allowing marketplace businesses to send out programmed and scheduled bank transfers to US bank accounts. Companies including Lyft, Sidecar, and Exec have trialed the payout feature which is focused on businesses that want the ability to pay multiple suppliers. Similar to Braintrees API payouts feature, Stripe charges a flat fee of $0.25 per transaction

In August of 2013, Stripe announced it had partnered with Kabbage; an online provider of loans to small businesses. The partnership will allow businesses that process payments online to now apply for financing through the Stripe payments platform. In addition, the company announced it had expanded its service to the UK, now allowing UK merchants and vendors to accept online payments through its platform. The move comes a year after the company successfully moved into Canada in an effort to expand and compete with payment processors from Paypal to banks, networks and card companies. Stripes stated goal is to bring the platform to under banked, underserved and developing markets, although establishing its presence in developed markets is likely the first step.

Paydiant Paydiant, a cloud based mobile wallet and payment solution provides a means for banks, retailers and processors to enable contactless mobile payment options as well as a cash access platform while skipping intermediaries and effectively reducing payment processing costs and fraud costs for merchants. The mobile wallet and payment solution operates with existing forms of payment including PIN and signature debit, credit and prepaid allowing customers a variety of payment experiences IE pay in store through traditional terminals, pay online, pay at the table or pay a bill. Unlike traditional branded mobile wallets with exclusivity and intermediaries that complicate the payment process, Paydiant allows developers to expand mobile wallet and payment solutions in existing mobile apps through SDK. The API interface provides functionality with apps, smart phones, POS systems and payment terminals to accommodate both existing and new technology without merchants needing to replace expensive payment hardware or devices. A feature separating Paydiant from mobile wallet competitors is its security features. Instead of storing sensitive card data on a users phone, Paydiant keeps payment card numbers and cardholder data securely stored on a PC compliant SAS70 certified data center. With no information on the device, the risk or opportunity for data theft and/or fraud is greatly reduced.

On October 2, 2013 Paydiant announced the company had partnered with Subway to power the sandwich chains mobile payment app. Subway is currently the largest restaurant chain by location with 40k stores globally and 27k domestically. Paydiants app, which will be branded with the Subway tag, is expected to be deployed in a national rollout rather than a pilot later this year and marks a major win for the company.

On October 8, 2013 the company announced it had partnered with CU wallet to provide its recently announced credit union focused mobile wallet offering. CU wallet is one of the first mobile payment options designed for credit unions, with more than 20 unions signed to date ranging from $100m to $6bn in assets and 2.8m members. CU wallet will use Paydiant mobile wallet technology to integrate the companys capabilities into its existing applications including contactless mobile payments, e-receipts, targeted offers and online shopping carts.

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Mobile Payments


Merchant Commerce Exchange (MCX) In April 2013, MCX announced a partnership with Gemalto to build and develop its mobile wallet. Initial design plans for the wallet are cloud based and support barcode technology; another perceived loss for NFC and a further setback for adoption in the US. The wallet will connect directly to users checking accounts which also poses disintermediation risk to the networks by bypassing the traditional payments chain. MCXs new mobile wallet will be built around Gemaltos Allynics Mobile Payment platform which allows mobile wallet software as well as a software development kit or SDK. The SDK provides integration for merchants into existing mobile applications with the added ability to customize offerings.

In July 2013, MCX announced it was partnering with Fidelity National (FIS) to power a secure payments network for the mobile wallet feature. The partnership allows MCX to leverage FISs payment network infrastructure in order to authorize and execute transactions in a secure fashion as well as handling routing and settlement.

MCX named new CEO Dekkers Davidson on July 18, 2013 ending the long awaited announcement. Davidson formerly headed Barclaycard U.S and has been a leader in financial services and mobile technology for 25 years. He was responsible for developing, implementing and launching the first cloud based mobile commerce wallet in the US designed to be merchant friendly, establishing partnerships with more than 50 retailers, card issuers and processors.

Dwolla Dwolla is a domestic focused online and mobile payment system and cash only money transfer platform offering arguably the most competitive fee structure. Dwolla charges $0.25 on transactions over $10 and offer its services free of charge for any transaction under $10. Dwolla is able to remain competitive because it does not process plastic transactions; credit and debit card transactions are not allowed. However, in contrast to the ~2%-3% charged by competing network and mobile money transfer services, Dwolla remains very competitive from a pricing standpoint. Dwolla also allows P2P money transfer with both social network contacts as well as direct phone contacts. Merchants who use a Dwolla enabled point of sale can initiate payments as well. Their POS terminal report nearby customer that have the Dwolla app, and the merchant can select the customer, who then confirms payment through a transaction on his device. The ability to link directly to consumer bank accounts precluding the need to pay interchange keeps Dwolla competitive

On May 25, 2011, Dwolla released FiSync integration which allows instant transactions for financial institutions instead of the standard 2-3 day clearing period associated with ACH transactions. The cost wont be any different than an ACH transaction, but the value-add lies in the fact Dwolla settles the transactions instantly rather than over the course of several days.

In addition to the companys core money transfer business, Dwolla provides additional services to help facilitate money transfer. MassPay allows the payment of up to 3000 people at once; effectively replacing the need for a payroll system by allowing mass money transfer with scalability. Spots, is an application allowing users to identify merchants in proximity to their current location who accept Dwolla. Proxi, similar to spots, is a geo location service that allows Dwolla users to identify other Dwolla users nearby. Grid is a fraud protection service providing security for users to protect their credit and debit card information. Instant is an opt-in feature that allows for a user to borrow up to $500 in a given month.

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Private Companies Below are lists of in our view the most compelling digital wallet, mobile banking/wallet solution, merchant acquiring/transaction processing, mobile marketing/loyalty program, and mobile POS companies at the conference. We believe these firms could influence over the payments industry as they mature, and we will monitor the playing field as the industry continues to evolve.

Figure 1: Select digital wallet companies at Money 2020 Company Overview Key Points/Recent Happenings Backers

Lemon Wallet

-Offers mobile wallet called "The Smarter Wallet" that lets users digitize anything carried in real wallet (credit cards, healthcare cards, IDs, receipts) by using smartphone cameras

-Basic wallet service is free; premium services ($4.99-9.99 per month) include budgeting and data export features

-Opened to third-party developers (first truly open mobile wallet platform that supports multiple branded cards)- passed 4mm users in August.- May 2013 expense reporting tool added. - allows receipts en ereceipts to be saved/sent to expense software.

MaveronLightspeed Venture PartnersDraper Fisher JervetsonCampVenturesSocial Capital Ventures

LevelUp

-QR-code based form of mobile payment (link credit/debit card to LevelUp app to get QR code)

-Scan LevelUp code at merchants to pay

-Offers discount/loyalty programs by small merchants (e.g., spend $50 get $5), takes a percentage of loyalty amounts in lieu of interchange

-Announced white label offering to integrate LevelUp functionality into merchants' apps using an SDK (also provides a custom development offering for merchants)

GoPago

-App that allows for payment from smartphones

-Order items from merchants' virtual storefronts in GoPago app, pay with credit/debit card (card info stored in cloud), and pick up order at store (show receipt)

-Lets consumers skip checkout lines

-Also offers tablet-based payment system (GoPagoLive) that includes pre-configured 4G tablet (charges fixed fee of 2.85% for credit card transactions)

-Available in the SF Bay Area, rolling out "soon" to Dallas and NY-Acquirer is ChasePaymentech- now available on iOS and Android- launch of GoPago Live "solution as a service" - May 2013- GoPago Live is total commerce soltuoin that intergrates POS online e Commerce, mPOS, and mobile ordering from smartphones with an open SDK platform.

JPMorgan

Clinkle - wallet app. No set design

- Founded in 2011 by Lucas Duplan- raised 25m in seed funding- announced september 26, 2013 100k students on college wait lists for mobile wallet app after only 2 months.- initially, app designed with SMS based payments.- plans for release only at select schools to highlight exclusivity.

Accel PartnersAndreessen HorowitzIntuitPeter Thiel

Source: Company data, industry publications

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Figure 2: Select mobile banking/wallet solution/platform companies at Money 2020 Company Overview Key Points/Recent Happenings Backers

Personetics-Offers a predictive virutal assistant solution built for the banking industry (anticipates customers' needs and approaches them w/ tailored solutions)

-Predicts acceleration in Siri-like mobile banking app (voice-interactive) usage in the next 12 months- 11.5m series b funding secured Jun 13- Predictive virtual assistant deployed Jan 13 at MC, V, Amex. Service explains purchasing patterns and anticipates customer financial needs

Carmel VenturesSequoia CapitalLightspeed Ventures

mFoundry

-Provides mobile solutions for FIs and retailers (only mobile banking provider w/ live nationwide mobile payments solution)

-Offers SaaS-based mobile banking products (device support, mobile alerts, account support, etc)

-Launched Fin X (mobile banking platform that incorporates bankings services (P2P money transfer, mortgage rates, auto insurance quotes, etc)) in October 2012

'-sold to FIS in Jan 13 for $120million

MasterCardFISBank of AmericaMotorola MobilityPayPalIntel CapitalApax PartnersNCRGRP PartnersIgnition

CorFire

-Mobile tech platform to FIs, MNOs, payment processors, issues, retailers, and other companies

-Offers mobile wallet (brandable, white-label), TSM services for mCommerce, and mobile marketing services (offers, loyalty programs)

-Customers are Google Wallet, Dunkin Donuts, SK Telecom (powers Dunkin's mobile payment app)-Partnered with First Data- Jul 13 - Arcado and CorFire launch partnership for digital voucher soltuoin "open wallet" which is NFC enabled.- partner with OLO partner for Mobile Commerce solution to restaurants.

SK C&C USA *Subsidiary of SK C&C Co

Sequent

-Offers a software and services platform that allows consumers to download payment cards to their mobile phones

-Allows all cards and credentials in the secure element to work in all approved apps in all types of mobile devices (mobile wallet enablement)

- $12m in series b funding closed in Jul 13- Sep 13, partner with Trub to provide over air provisions and life cycle management for EMV compliant cards

Opus CapitalSK Telecom Ventures

TabbedOut

- Offers a consumer mobile app to open restaurant tabs, monitor tabs, and pay and tip in restaurants

- Integrated with POS provider Micros Corp., and is in talks with NCR

- Ability to integrate Tabbedout's mobile payment app into restaurants' mobile apps

-Announced software developers kit (SDK) to integrate mobile payments into third-party apps

-Announced completion of integration with NCR restauarant POS system in September 2012- May 2013 - partnership with Google Wallet, integrate into company's mobile application

New Enterprise Associates

Paydiant

-Offers cloud-based, white label mobile wallet solution; sells to banks, retailers, and processors for branded contactless mobile wallet deployment-Only mobile payment platform that works w/ existing payment means (PIN debit, credit, sig debit, prepaid) to make payments in-store, online, at the table, and to settle bills-Provides a software developers kit (SDK) that lets customers embed a mobile wallet and contactless payment functions into their own mobile apps-Works with existing smartphones, POS systems, and payment terminals

-Announced new mobile payments platform with VNTV (Vantiv Mobile Wallet)-new $15m round of funding closed Sep 13- Harris Teeter, US grocery chain enters into agreement - August 2013- Debit/ATM network PULSE to implement Paydiant - July 2013- Oct 2013 Paydiant announces it has signed deal with Subway to build its mobile payments app.

North Bridge Venture PartnersGeneral Catalyst PartnersStage 1 Ventures

Roam Data

-Mobile commerce platform provider

-Offers a service to process payments through mobile phones (converts cell phones into POS terminals; provides an API and optional mag-stripe card reader)

-Also offers mobile wallet API to let merchants embed secure payment inside mobile apps/offers (keeps cardholder info in the cloud)

-Additionally offers a mobile marketing solution (integrated w/ mobile wallet API) that lets merchants/advertisers create mobile offers

-Southwestern Advantage selects ROAM to power mobile POS solution - Sep 2013.- Cynergy Data chooses ROAM to power its Vwalaa mobile pay offering. Sep. 2013. First company to the US market ROAMpay X4, only US acquirer to offer features of offline processing, configurable inv. management and purchase recognition.-

IngenicoChase PaymentechFirst DataUnited Check ServicesPalm Desert National BankGlobal PaymentsNABSageIntuitFISStrategic Merchant Solutions

CardFree

- integrated merchant solutions for mobile and online through POS terminal. - leverage existing POS terminals to add data analytics, end to end capabilities, better look at customer base and behavior.- Focus is building out mobile commerce

- launched in December 2012. Funding from Jeff Katz- Payments component allows for creation of digital prepaid cards, enable mobile payments. - functions on 90% of existing POS terminals; can be rendered using 2D barcodes, cloud payments, NFC.- Tools for loyalty, online recharging of prepaid cards, order ahead services and data analytics- partners include Starbucks (Dec 2012)and Sonic drive in (Oct 2013).

- Jeff Katz

Revel Systems

- POS system operates on iPad. - backend is managed via mobile or web browser. Includes hardware IE receipt printing, cash drawer and card swipe capabilities.- Order features for specific industries IE restaurant, grocery, food truck shipping, stadium POS, quick serve

- May 7th 2013 - company adds photo based identity theft security- Nov 2012 - signs Goodwill Industries and Belkin - Sep 2013 - Debuts Stadium iPad POS for ASU- Partners with mobile payments startup SumUp for card reader technology April 2013

DCM

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Figure 3: Select merchant acquiring/transaction processing companies at Money 2020 Company Overview Key Points/Recent Happenings Backers

Braintree

-Lets online businesses process credit card payments from their websites/apps (payment gateway)-Handles businesses' recurring billing-Stores credit card info for the online businesses (keeps businesses out of PCI compliance scope)-Accepts payments in 130+ currencies-Pricing: 2.9% + $0.30 per transaction

- Reaches $10b processed annually. 25% originiating outside the US. July 2013.- Collaborates with Venmo Touch for banking customers. Direct integration into Venmo wallet- Launched Braintree Marketplace for owners to pay and manage sellers while decreasing admin and regulatory burdens. Aug 2013- Offers advanced fraud protetction. Sep 2013- Acquired by Paypal in Sep 2013 for $800m

Accel PartnersNigel Morris *QED Investors, Co-Founder of Capital One

Corduro

-Combines competitors mobile device capability with social networks and enterprise-level functionality (solves compliance and enterprise issues)-Provides enterprise-grade payment support for organizations anywhere in the world (businesses, nonprofits)-Allows customers to pay invoices/checkout over their phones with mobile app (PayMobile Pay and PayMobile Checkout)-Uses members' social networks to provide retailers and organizations with network reach (people can refer friends to a business over Facebook/Twitter)-Processes at significant savings compared to other processing platforms (PayPal)

- Announced launch of Paymobile. Allows Corduro users to pay a Corduro retailer wihtout phyically carrying a phone, credit card, check or cash. Use omni channel platofrm for accepting payment via any internet or mobile connected device- As of May 2013, roughly 1 mm users

Google VenturesWTIFounders CollectiveHeartland Capital

PaySimple

-ACH and credit card merchant account processor for small businesses-Offers cloud-based receivables automation services (sells to ISOs, large FIs, companies that sell to small businesses)

-Supports AcceptPay for AmEx and Zip for Ink (Chase)-Partnered with Chase, AmEx (Open), Vantiv, Western Union, and Jack Henry

Stripe

-Developer service that enables businesses to accept payments online (developers describe it as the payment service that "doesn't suck")-Provide software and service to process online credit and debit card payments (Stripe works w/ the payment processors to verify merchant info)-Build code, APIs, and documentation for payment acceptance-Pays merchant for transactions less fess (funds typically sent to merchant bank in 7 days)

- Stripe charges fee structure of 2.9% + 0.30 per successful charge. Higher than other rates, yet company claims total cost to customers may be lower because stripe has no setup, monthly fees, no minimum charges, no validation fees, no card storage fees and no charge for failed payments. - $20m funding from Seqouia in Jan 2013

Peter TheilElon MuskSequoia CapitalAndreesen HorowitzSV Hangle

Dwolla

-Provides a online payment system and mobile payments network (cash option for e-commerce, bypasses traditional networks and eliminates transaction costs)--merchants pay a flat $0.25 fee per transaction-Merchants enroll in mobile payment service to allow consumers to pay with smartphones-Also offers bank account-based payment system to people (charges a flat fee per transaction instead of a percentage; credit card payment systems charge up to 3.5%)

-The Members Group processes Dwolla's transactions

-Has significant interest from Bitcoin (digital currency) users (many Bitcoin exchanges take place via Dwolla)--Dwolla does not officially endorse Bitcoins- Aug 2013 company now supports wire transfers- $16m round of funding from Andreessen Horowitz May 2013-

Union Square VenturesVillage VenturesThrive CapitalArtists and InstigatorsPaige Craig (Betterworks)

Merchant Warehouse-Offers a unified platform for merchants, POS developers, VARs and agents for transaction processing and value-add programs.

-LevelUp integrated with Merchant Warehouse's Genius customer engagement platform in October 2012-

Parthenon Capital Partners

Xoom

-Online international money transfer service-Recipients don't need bank account or internet connection to receive funds; senders can fund money transfer w/ credit card, debit card, or bank account-Offers a mobile website and apps for no additional fees

-Announced Bank-to-Bank ULTRA service (a higher-tiered level of servcie that provides confirmed bank deposits in less than an hour) in October 2012- files amended s1, offers 3.7m shares - Sep 2013- July 2013 - XOOM can now offer transfer service to all sprint subscribers. MVNO cusotmers can sign up for XOOM from mobile phones and transfer money.-

Sequoia CapitalNew Enterprise AssociatesSVB CapitalFidelity Ventures

Slidepay

API app for 3rd party developers allowing for both card not present and card present transactions. enables developers to build there own payment to commerce solutions on top of secure infrastrcuture Accept through a reader- card present 2.9% + 30c- Card not present 2.5% + 10cOwn the merchant account and handle underwriting and identity verification, which increases company risks and liabilities.

receives $1.3m seed funding (6/25/12)-

YC combinator


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Figure 4: Select mobile marketing/loyalty program companies at Money 2020 Company Overview Key Points/Recent Happenings Backers

PlaceCast

-Geofencing mobile marketing service (sells to brands, mobile operators, and payments companies)

-Runs mobile loyalty programs

-Starbucks listed as a customer; other prominent customers are The North Face, L'Oreal, Kohl's, Kmart, JetBlue and others- Sep 2013 - unveils PlaceAd, mobile advertisings first locastion based DSP- Oct 2012 - laucnhes 'card linked ShopAlerts' leveraging powerful patent, geofencing technology to deliver perforamnce based mobile marketing.

Voyager CapitalQuatrex CapitalOnset Ventures

Proxama

-NFC mobile commerce company focused on mobile marketing and mobile payments

-Offers NFC mobile wallets (to issuers, banks,and MNOs) and NFC marketing services (e.g., vouchers, loyalty programs, app downloads)

-Announced it will enable NFC on iPhone 4/4S in June 2012- March 2013 partners with Logic Group to deliver NFC based services to retailers. - March 2013 announces NFC smart poster partnership with Signbox- announced partnership with ISIS to build wallet for Blackberry

Movenbank

-Service that helps consumers spend and save more intelligently (works with banking and payments providers, mobile manufacturers, consumer credit groups, social media partners, merchants, and others)

-Says it's "working toward a launch "

-No specific info on its products/services yet, but says that it will make service offers based on achievements associated with spending and saving smarter

Anthemis GroupRaptor VenturesKevin Plank *CEO of Under Armour

Syndicated Singaporean investors

Gyft

- digital gift card platform to web and mobile.- mobile application - built in geo targeting in apps top send messages to shoppers when near stores.- also allow card swapping option between users.

- gift card market $100b.- Gyft raises $5m in funding Sep 2013- supports 300 + retailers- Already seen $10m in card value uploaded to Gyft platform, over 200,000 cards. Adding one new card every 2 minutes

- karlin ventures- A-Grade Investments- Google Venture- Founder Collective

FastPay

- finance acceleration platorm that helps digital businesses overcome long receivables cycle by providing specialized lines of credit- uses propretietary software to assess credit profile of business and provide loans from $100k to several million- loans accessible in under 48 hours

- Feb 2013 - announces milestone of placement of $100m with digital ad and media companies- alternative to VC funding; focus on companies with short term liquidity issues-

Cardlytics

- card -linked marketing platform based on analytics surrounding consumer behavior.- company ahs unmatched access to ~70% of US household data across multiple stores, categories and demographics- information provided by secure network of 400+ financial institution partners.- leader in card linked marketing; target offers

- Feb 2013 - company launches transaction linked banked statement ads from Facebook data- June 2013 - company announces it has reached 33m active users at 400 banks- Sep 2013 - announces plans for push notification for location based offers.

- Gold Hill Capital- Canaan Partners- Polaris Venture Partners- Kinetic Ventures


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Figure 5: Select mobile POS companies at Money 2020 Company Overview Key Points/Recent Happenings Backers

Breadcrumb

-Restaurant POS devices for iPads (available to all hospitality businesses in the US)-No server required, no PCI audits, -Costs less upfront and every month, eliminates hidden training & support cost of legacy POS systems-Handles menus, inventory, etc. for restaurants (essentially handles back-office functions)

-Acquired by Groupon in May 2012-Integrated with Groupon Payments (1.8% per swipe + $0.15 per txn for V, MA, and DFS; 2.3-3.5% and $0.00-0.15 per txn for AXP)- 2013 - launches Breadcrumb PRO - $99/month

ShopKeep

-POS company-Sells iPad-based POS devices ($49/month) to small businesses-Tracks sales and inventory, generates reports

-Accepts PayPal (2.7% rate)- partners with LevelUp Feb 2013- 2013 ETA tech innovator of year

Contour Venture PartnersTribeca Venture PartnersTTV Capital

Infinite Peripherals

-mPOS company-Offers mobile barcode scanners, magnetic card readers, portable printers, and signature capture pads for use with iPod Touches & iPads-Supplies to gaming, medical, hospitality, ATM, retail, amusement, security, time and attendance, and industrial measurement markets

-Apple, REI, Nordstrom are key clients- introduces linea pro mobile POS device in Jun 2013.- linea adds 1d or 2d barcode scanner and magnetic stripe reader- Barneys NY adds Infinea Tab

iZettle

-mPOS company with social payment aspect (headquartered in Stockholm)-Offers chip-card reader that plugs into iPhones/iPads and free iPhone/iPad app -Offered in Sweden, Norway, Denmark, Finland, and the UK (will roll out to more countries in Europe and other continents)--handles international markets

-Launched Android sevice compatible with Samsung Galaxy SII, SIII, and Galaxy Note (August 2012)- Aug 2013 - partners with Banco Santander in Brazil - Aug 2013 -iZettle chip and pin and signature mobile payments approved by V- July 2013 firs mPOS in europe to offer JCB card acceptance- June 2013 partners with banco santander in Mexico

Greylock PartnersCreandumNorthzoneMasterCard

PayLeven

-mPOS company-iPhone/iPad app, dongle that plugs into iPhones/iPads-Available in Brazil, Germany, Italy, The Netherlands, Poland, and the UK

-Will offer mobile chip-and-PIN sleeve/sled (pre-registration for readers open now)-- May 2013 - enters Belgian market- May 2013 - Payleven and BIXOLON offer prinster system bundle

Holtzbrinck VenturesNew Enterprise AssociatesRuNet

Anywhere Commerce

-Offers line-busting solutions to merchants (readers for smartphones), chip-and-PIN solutions, and a solution that converts a PC w/ a mag-stripe reader to a PIN-entry POS terminal

- Aug 2013 - signs agreement with Spindle to procide secure and reliable mobile POS tech.- April 2013 - teams with mobilepaid- Feb 2013 - Secures EMV l2 certification- Feb 2013 - signs deal with Heartland mobile POS deal

Lightspeed

-Mac-centered POS company focused on the retail vertical -Offers Mac-based POS hardware and software at brick-and-mortar stores, trade shows, pop-up locations, conferences, etc. (eliminating any discontinuity of service when a shop moves from one type of location to another (or to online)). -Provides dongles for iPads/iPhones/iPod Touches so that the devices integrate seamlessly with the a Mac-based cash stand running Lightspeed software

-Announced partnership with Braintree to offer a flexible monthly payment option to retailers (helps retailers manage cost structure)- July 2013 - laucnhes light speed cloud, web based POS app for iPad- July 2013 - announces new web store platformw/ customizable template engine- April 2013 - storemaster launched. mobile command center for retailers- April 2013 - partners with Moneris Solutions

Accel Partners

Leapset

Commerce platform connects small merchats to customers with mobile and online POS-Basic services cost $3 per day for merchants ( primarily restaurants, looking to expand) providing services such as order taking and processing as well as data automation benefits.Premium services (OrderPad) allows servers to send orders to kitchens electronically.- collective bargaining service on behalf of merchants it represents to try to drive down card charges.- based in Silicon Valley, development & engineering team in Sri Lanka.

Partners with Sysco food distribution (Oct 2012) - Partners with Paypal in December 2012- Seed Funding 6/2011 - $1m- Series A 7/2012 - $6m- Series B 6/2013 - $25m

- Commerce Ventures

Clover

POS terminal purchased by First Data- offline mode allows transactions when internet down- open APP marketplace allows integration of advanced POS/business solutions- merchant analytics- Card data stored securely in cloud with tokenization service- 24x7x354 customer support.

- Clover originally purchased by FirstData in 2012 -October 2013 announced release of Clover Station at Money2020- Partner with Bank of America Merchant Services to offer to small business banking clients- introduce Patent pending swivel arm allowing for both merchant and customer facing positions.

- Purchased by First Data- Sutter Hill Ventures- Lightspeed Venture Partners


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Figure 6: Visa Income Statement 1Q: Dec 2Q: Mar 3Q: Jun 4Q: Sept 2012 1Q: Dec 2Q: Mar 3Q: Jun 4QE: Sept 2013E 1QE: Dec 2QE: Mar 3QE: Jun 4QE: Sept 2014E

Service fees 1151.0 1241.0 1216.0 1264.0 4872.0 1300.0 1369.0 1298.0 1378.9 5345.9 1418.2 1520.5 1459.3 1550.8 5948.8Data processing fees 951.0 922.0 1040.0 1062.0 3975.0 1115.0 1150.0 1191.0 1209.6 4665.6 1256.6 1239.6 1345.5 1355.1 5196.8International transaction fees 748.0 733.0 748.0 796.0 3025.0 805.0 831.0 854.0 885.9 3375.9 897.6 928.2 954.8 992.3 3772.8Other revenues 178.0 179.0 175.0 172.0 704.0 179.0 175.0 179.0 177.2 710.2 184.4 180.3 184.4 182.5 731.5

Gross operations fees 3028.0 3075.0 3179.0 3294.0 12576.0 3399.0 3525.0 3522.0 3651.6 14097.6 3756.8 3868.6 3943.9 4080.7 15650.0

Volume and support incentives (481.0) (497.0) (614.0) (563.0) (2,155.0) (553.0) (567.0) (521.0) (639.0) (2,280.0) (616.1) (607.4) (627.1) (673.3) (2,523.9)

Operating revenues 2,547.0$ 2,578.0$ 2,565.0$ 2,731.0$ 10,421.0$ 2,846.0$ 2,958.0$ 3,001.0$ 3,012.6$ 11,817.6$ 3,140.7$ 3,261.2$ 3,316.8$ 3,407.3$ 13,126.1$

Personnel 389.0 431.0 435.0 471.0 1,726.0 454.0 486.0 493.0 497.1 1,930.1 508.8 522.2 530.4 562.2 2,123.5 Network, EDP, and communications 98.0 103.0 102.0 111.0 414.0 110.0 119.0 117.0 129.5 475.5 111.6 120.7 126.0 132.9 491.2 Advertising, marketing, and promotion 190.0 170.0 242.0 271.0 873.0 193.0 195.0 252.0 310.3 950.3 248.1 264.2 272.0 310.1 1,094.3 Professional and consulting fees 70.0 82.0 99.0 134.0 385.0 88.0 91.0 103.0 106.9 388.9 125.6 120.7 116.1 121.0 483.3 Administrative and other 102.0 106.0 112.0 131.0 451.0 106.0 108.0 108.0 132.6 454.6 113.1 120.7 122.7 139.7 496.2 Litigation provision - - 2.0 2.0 3.0 1.0 (1.0) - 3.0 - - - - -

EBITDA 1,698.0 1,686.0 1,575.0 1,611.0 6,570.0 1,892.0 1,958.0 1,929.0 1,836.2 7,615.2 2,033.5 2,112.9 2,149.6 2,141.5 8,437.6

Depreciation and amortization 80.0 80.0 84.0 89.0 333.0 92.0 98.0 101.0 101.0 392.0 101.5 101.5 101.5 101.5 406.0 EBIT 1,618.0 1,606.0 1,491.0 1,522.0 6,237.0 1,800.0 1,860.0 1,828.0 1,735.2 7,223.2 1,932.0 2,011.4 2,048.1 2,040.0 8,031.6

Other income (expense), net (1.0) 1.0 (1.0) (39.0) (40.0) 1.0 (3.0) 5.0 (5.0) (2.0) 1.5 1.5 1.5 1.5 6.0 Income before income taxes 1,617.0 1,609.0 1,491.0 1,545.0 6,262.0 1,801.0 1,857.0 1,833.0 1,730.2 7,221.2 1,933.5 2,012.9 2,049.6 2,041.5 8,037.6

Income tax expense 590.0 524.5 436.0 510.5 2,061.0 508.0 587.0 608.0 536.3 2,239.3 599.4 624.0 635.4 632.9 2,491.6 Minority interest - - - - - - - - - - - - - - Net income 1,027.0$ 1,084.5$ 1,055.0$ 1,034.5$ 4,201.0$ 1,293.0$ 1,270.0$ 1,225.0$ 1,193.8$ 4,981.8$ 1,334.1$ 1,388.9$ 1,414.2$ 1,408.6$ 5,545.9$

Diluted EPS from continuing operations 1.49$ 1.60$ 1.56$ 1.54$ 6.19$ 1.93$ 1.92$ 1.88$ 1.85$ 7.58$ 2.09$ 2.20$ 2.27$ 2.28$ 8.84$

Nonrecurring charges, net of taxes - - - - - - - - - - - - - - - Diluted EPS as reported 1.49$ 1.60$ 1.56$ 1.54$ 6.19$ 1.93$ 1.92$ 1.88$ 1.85$ 7.58$ 2.09$ 2.20$ 2.27$ 2.28$ 8.84$

Cash dividends per share 0.22$ 0.22$ 0.22$ 0.22$ 0.88$ 0.33$ 0.33$ 0.33$ 0.33$ 1.32$ 0.33$ 0.33$ 0.33$ 0.33$ 1.32$ Diluted shares outstanding 690 676 675 672 678 669 660 651 646 657 638 631 624 617 628

1Q: Dec 2Q: Mar 3Q: Jun 4Q: Sept 2012 1Q: Dec 2Q: Mar 3Q: Jun 4QE: Sept 2013E 1QE: Dec 2QE: Mar 3QE: Jun 4QE: Sept 2014E% of Revenues

Personnel 15.3% 16.7% 17.0% 17.2% 16.6% 16.0% 16.4% 16.4% 16.5% 16.3% 16.2% 16.0% 16.0% 16.5% 16.2%Network, EDP, and communications 3.8% 4.0% 4.0% 4.1% 4.0% 3.9% 4.0% 3.9% 4.3% 4.0% 3.6% 3.7% 3.8% 3.9% 3.7%Advertising, marketing and promotion 7.5% 6.6% 9.4% 9.9% 8.4% 6.8% 6.6% 8.4% 10.3% 8.0% 7.9% 8.1% 8.2% 9.1% 8.3%Professional and consulting fees 2.7% 3.2% 3.9% 4.9% 3.7% 3.1% 3.1% 3.4% 3.6% 3.3% 4.0% 3.7% 3.5% 3.6% 3.7%Administrative and other 4.0% 4.1% 4.4% 4.8% 4.3% 3.7% 3.7% 3.6% 4.4% 3.8% 3.6% 3.7% 3.7% 4.1% 3.8%EBITDA Margins 66.7% 65.4% 61.4% 59.0% 63.0% 66.5% 66.2% 64.3% 61.0% 64.4% 64.7% 64.8% 64.8% 62.9% 64.3%

Operating Margins 63.5% 62.3% 58.1% 55.7% 59.9% 63.2% 62.9% 60.9% 57.6% 61.1% 61.5% 61.7% 61.7% 59.9% 61.2%

Income taxes (as % of pretax) 36.5% 32.6% 29.2% 33.0% 32.9% 28.2% 31.6% 33.2% 31.0% 31.0% 31.0% 31.0% 31.0% 31.0% 31.0%

Net income 40.3% 42.1% 41.1% 37.9% 40.3% 45.4% 42.9% 40.8% 39.6% 42.2% 42.5% 42.6% 42.6% 41.3% 42.3%

% Growth 1Q: Dec 2QE: Mar 3Q: Jun 4Q: Sept 2012 1Q: Dec 1Q: Dec 3Q: Jun 4QE: Sept 2013E 1QE: Dec 2QE: Mar 3QE: Jun 4QE: Sept 2014EService fees 14.2% 13.5% 15.3% 14.4% 14.3% 12.9% 10.3% 6.7% 9.1% 9.7% 9.1% 11.1% 12.4% 12.5% 11.3%Data processing fees 12.7% 12.0% 17.4% 14.8% 14.3% 17.2% 24.7% 14.5% 13.9% 17.4% 12.7% 7.8% 13.0% 12.0% 11.4%International transaction fees 18.7% 17.5% 13.0% 5.0% 13.1% 7.6% 13.4% 14.2% 11.3% 11.6% 11.5% 11.7% 11.8% 12.0% 11.8%Other revenues 10.6% 14.7% 4.8% 0.6% 7.5% 0.6% (2.2%) 2.3% 3.0% 0.9% 3.0% 3.0% 3.0% 3.0% 3.0%

Gross operations fees 14.6% 14.1% 14.8% 11.3% 13.6% 12.3% 14.6% 10.8% 10.9% 12.1% 10.5% 9.7% 12.0% 11.8% 11.0%

Volume and support incentives 18.8% 10.2% 37.1% (2.3%) 14.6% 15.0% 14.1% (15.1%) 13.5% 5.8% 11.4% 7.1% 20.4% 5.4% 10.7%

Revenues 13.8% 14.8% 10.5% 14.6% 13.4% 11.7% 14.7% 17.0% 10.3% 13.4% 10.4% 10.3% 10.5% 13.1% 11.1%

ExpensesPersonnel 9.0% 22.8% 19.8% 21.4% 18.3% 16.7% 12.8% 13.3% 5.5% 11.8% 12.1% 7.4% 7.6% 13.1% 10.0%Network, EDP and communications 22.5% 28.8% 12.1% 4.7% 16.0% 12.2% 15.5% 14.7% 16.7% 14.9% 1.4% 1.4% 7.7% 2.6% 3.3%Advertising, marketing and promotion (3.6%) (7.1%) (3.6%) 13.4% 0.3% 1.6% 14.7% 4.1% 14.5% 8.9% 28.6% 35.5% 7.9% (0.1%) 15.2%Professional and consulting fees 14.8% 6.5% 17.9% 16.5% 14.2% 25.7% 11.0% 4.0% (20.2%) 1.0% 42.8% 32.6% 12.7% 13.1% 24.3%Administrative and other (7.3%) 11.6% (1.8%) 37.9% 8.9% 3.9% 1.9% (3.6%) 1.2% 0.8% 6.7% 11.7% 13.6% 5.4% 9.2%

IncomeEBITDA 18.5% 16.0% 11.0% 12.0% 14.4% 11.4% 16.1% 22.5% 14.0% 15.9% 7.5% 7.9% 11.4% 16.6% 10.8%EBIT 18.4% 16.1% 10.9% 11.7% 14.3% 11.2% 15.8% 22.6% 14.0% 15.8% 7.3% 8.1% 12.0% 17.6% 11.2%Net income 16.2% 23.1% 19.2% 17.8% 19.1% 25.9% 17.1% 16.1% 15.4% 18.6% 3.2% 9.4% 15.4% 18.0% 11.3%Diluted EPS 21.1% 30.0% 24.3% 21.3% 24.2% 29.9% 19.9% 20.3% 20.0% 22.5% 8.2% 14.4% 20.6% 23.5% 16.5%

2012

2014

2014

2012 2013

2013

Source: Company data, Deutsche Bank estimates

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Figure 7: MasterCard Income Statement

1QA 2QA 3QA 4QA 2012A 1QA 2QA 3QE 4QE 2013E 1QE 2QE 3QE 4QE 2014EDomestic assessments 840.0$ 893.0$ 908.0$ 945.0$ 3,565.0$ 901.0$ 940.0$ 1,003.2$ 1,052.4$ 3,896.6$ 1,021.4$ 1,053.0$ 1,117.9$ 1,170.8$ 4,363.2$ Cross-border volume fees 531.0$ 566.0$ 630.0$ 616.0$ 2,343.0$ 607.0$ 677.0$ 735.2$ 710.2$ 2,729.5$ 696.8$ 773.8$ 837.4$ 807.6$ 3,115.6$ Transaction processing fees 714.0$ 753.0$ 763.0$ 787.0$ 3,017.0$ 775.0$ 818.0$ 849.4$ 896.0$ 3,338.4$ 867.3$ 927.4$ 959.0$ 1,008.0$ 3,761.6$ Other revenues 262.0$ 269.0$ 294.0$ 329.0$ 1,154.0$ 280.0$ 315.0$ 318.7$ 365.8$ 1,279.5$ 301.3$ 339.9$ 344.5$ 400.2$ 1,385.9$ Gross revenues 2,347.0$ 2,460.0$ 2,595.0$ 2,677.0$ 10,079.0$ 2,563.0$ 2,750.0$ 2,906.5$ 3,024.5$ 11,244.0$ 2,886.8$ 3,094.2$ 3,258.8$ 3,386.6$ 12,626.3$

Rebates and incentives (589.0) (661.0) (677.0) (782.0) (2,688.0) (657.0) (654.0) (776.0) (892.2) (2,979.3) (730.4) (816.9) (844.0) (985.5) (3,376.7)

Revenues 1,758.0$ 1,820.0$ 1,918.0$ 1,895.0$ 7,391.0$ 1,906.0$ 2,096.0$ 2,130.5$ 2,132.3$ 8,264.7$ 2,156.4$ 2,277.3$ 2,414.8$ 2,401.1$ 9,249.6$ General and administrative expenses 579.0 591.0 620.0 639.0 2,429.0 608.0 621.0 677.5 707.9 2,614.4 677.1 703.5 741.3 794.8 2,916.7 Advertising and market development 125.0 179.0 176.0 295.0 775.0 129.0 186.0 183.2 313.4 811.7 153.1 207.2 212.5 345.8 918.6 Merchant lawsuit / legal settlements / etc - - - - - - - - - - - - - - - EBITDA 1,054.0 1,050.0 1,122.0 961.0 4,187.0 1,169.0 1,289.0 1,269.8 1,110.9 4,838.7 1,326.2 1,366.6 1,460.9 1,260.6 5,414.3 Depreciation & Amortization 54.0 56.0 58.0 62.0 230.0 62.0 61.0 64.0 68.0 255.0 70.0 73.0 75.0 65.0 283.0

EBIT 1,000.0 994.0 1,064.0 899.0 3,957.0 1,107.0 1,228.0 1,205.8 1,042.9 4,583.7 1,256.2 1,293.6 1,385.9 1,195.6 5,131.3

Investment income, net 9.0 9.0 9.0 10.0 37.0 8.0 11.0 11.5 12.0 42.4 13.5 14.0 14.5 15.0 57.0 Interest expense (6.0) (3.0) (4.0) (7.0) (20.0) (5.0) (5.0) (5.0) (5.0) (20.0) (4.0) (4.0) (4.0) (4.0) (16.0) Minority interest in losses (earnings) of subs - - - - - - - - - - - - - - Other income (expense), net (4.0) (7.0) (3.0) (8.0) (22.0) (8.0) (1.0) (3.0) (3.0) (15.0) (3.0) (3.0) (3.0) (3.0) (12.0) Income before income taxes 999.0 993.0 1,066.0 894.0 3,952.0 1,102.0 1,233.0 1,209.2 1,046.9 4,591.1 1,262.7 1,300.6 1,393.4 1,203.6 5,160.3 Income tax expense 318.0 280.0 294.0 289.0 1,181.0 336.0 385.0 379.7 328.7 1,429.4 395.2 407.1 437.5 377.9 1,617.8 Net income 681.0$ 713.0$ 772.0$ 605.0$ 2,771.0$ 766.0$ 848.0$ 829.5$ 718.1$ 3,161.7$ 867.5$ 893.5$ 955.9$ 825.6$ 3,542.5$

Diluted EPS from continuing operations 5.36$ 5.65$ 6.17$ 4.86$ 22.04$ 6.23$ 6.96$ 6.88$ 6.02$ 26.09$ 7.34$ 7.62$ 8.21$ 7.15$ 30.33$

Nonrecurring charges, net of taxes - - - - - - - - - - - - - - - Diluted EPS as reported 5.36$ 5.65$ 6.17$ 4.86$ 22.04$ 6.23$ 6.96$ 6.88$ 6.02$ 26.09$ 7.34$ 7.62$ 8.21$ 7.15$ 30.33$

Dividend 0.30$ 0.30$ 0.30$ 0.30$ 1.20$ 0.30$ 0.30$ 0.30$ 0.30$ 1.20$ 0.30$ 0.30$ 0.30$ 0.30$ 1.20$

Diluted shares 127.0 126.0 125.0 125.0 125.8 123.0 122.0 120.5 119.2 121.2 118.2 117.2 116.4 115.4 116.8

1QA 2QA 3QA 4QA 2012 1Q 2Q 3Q 4Q 2013E 1Q 2Q 3Q 4Q 2014E% of Revenues

G&A 32.9% 32.5% 32.3% 33.7% 32.9% 31.9% 29.6% 31.8% 33.2% 31.6% 31.4% 30.9% 30.7% 33.1% 31.5%A&M 7.1% 9.8% 9.2% 15.6% 10.5% 6.8% 8.9% 8.6% 14.7% 9.8% 7.1% 9.1% 8.8% 14.4% 9.9%EBITDA 60.0% 57.7% 58.5% 50.7% 56.6% 61.3% 61.5% 59.6% 52.1% 58.5% 61.5% 60.0% 60.5% 52.5% 58.5%

Operating Margin 56.9% 54.6% 55.5% 47.4% 53.5% 58.1% 58.6% 56.6% 48.9% 55.5% 58.3% 56.8% 57.4% 49.8% 55.5%

Income taxes (as % of pretax) 31.8% 28.2% 27.6% 32.3% 29.9% 30.5% 31.2% 31% 31% 31% 31% 31% 31% 31% 31%Net income 38.7% 39.2% 40.3% 31.9% 37.5% 40.2% 40.5% 38.9% 33.7% 38.3% 40.2% 39.2% 39.6% 34.4% 38.3%

1QA 2QA 3QA 4QA 2012 1Q 2QA 3Q 4Q 2013E 1Q 2Q 3Q 4Q 2014E% Growth

Domestic assessments 16.2% 7.8% 7.7% 8.5% 9.8% 7.3% 7.8% 10.5% 11.4% 9.3% 13.4% 12.0% 11.4% 11.3% 12.0%Cross-border volume fees 14.9% 10.8% 8.4% 14.1% 11.9% 14.3% 19.6% 16.7% 15.3% 16.5% 14.8% 14.3% 13.9% 13.7% 14.1%Transaction processing fees 21.0% 19.5% 10.1% 15.4% 16.3% 8.5% 8.6% 11.3% 13.8% 10.7% 11.9% 13.4% 12.9% 12.5% 12.7%Other revenues 29.1% 7.2% 10.9% 17.1% 15.4% 6.9% 17.1% 8.4% 11.2% 10.9% 7.6% 7.9% 8.1% 9.4% 8.3%

Gross revenues 18.7% 11.8% 8.9% 12.8% 12.8% 9.2% 11.8% 12.0% 13.0% 11.6% 12.6% 12.5% 12.1% 12.0% 12.3%

Rebates and incentives 23.5% 19.9% 20.0% 21.1% 21.0% 11.5% 2.2% 14.6% 12.1% 10.8% 11.2% 24.9% 8.8% 10.5% 13.3%

Revenues 17.1% 9.2% 5.5% 9.7% 10.1% 8.4% 15.2% 11.1% 12.5% 11.8% 13.1% 8.6% 13.3% 12.6% 11.9%

ExpensesG&A 17.2% 9.4% 9.7% 7.0% 10.6% 5.0% 5.1% 9.3% 10.8% 7.6% 11.4% 13.3% 9.4% 12.3% 11.6%A&M (3.1%) (7.3%) (12.0%) (7.5%) (7.8%) 3.2% 3.9% 4.1% 6.3% 4.7% 18.7% 11.4% 16.0% 10.3% 13.2%Operating expenses 14.0% 5.6% 4.7% 2.9% 6.2% 5.4% 5.1% 8.3% 9.4% 7.2% 12.7% 13.3% 11.3% 10.7% 11.9%

Net IncomeEBITDA 20.0% 12.4% 6.6% 18.3% 13.9% 10.9% 22.8% 13.2% 15.6% 15.6% 13.4% 6.0% 15.1% 13.5% 11.9%EBIT 19.6% 12.3% 6.2% 18.3% 13.7% 10.7% 23.5% 13.3% 16.0% 15.8% 13.5% 5.3% 14.9% 14.6% 11.9%Net income 21.2% 17.3% 7.8% 17.7% 15.7% 12.5% 18.9% 7.5% 18.7% 14.1% 13.2% 5.4% 15.2% 15.0% 12.0%EPS 25.0% 18.7% 9.6% 20.6% 17.8% 16.1% 23.2% 11.6% 24.0% 18.4% 17.8% 9.5% 19.3% 18.7% 16.2%

2012 2013 2014


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Figure 8: Vantiv Income Statemnet 1Q 2Q 3Q 4Q FY12 1Q 2Q 3QE 4QE FY13E 1QE 2QE 3QE 4QE FY14E

Merchant 157.5 176.9 177.0 188$ 699.8 191.6 210.8 213.0 226.2 841.6 215.1 238.1 241.3 256.9 951.5 Financial Institutions 75.1 83.4 81.5 83$ 322.8 81.3 86.1 85.3 89.1 341.9 87.1 92.2 91.2 95.3 365.8

Revenues 232.6$ 260.4$ 258.5$ 271.2$ 1,022.6$ 272.9$ 296.9$ 298.4$ 315.3$ 1,183.5$ 302.2$ 330.3$ 332.5$ 352.3$ 1,317.4$

Sales and Marketing Expense 72.8 70.5 69.3 68.0 280.6 76.0 76.4 76.0 78.2 306.6 84.5 85.5 84.7 87.8 342.5 Operating Expense 38.6 39.1 39.8 38.4 155.8 48.5 47.3 44.9 45.8 186.6 51.4 51.7 48.5 52.1 203.8 G&A expense 18.3 19.7 17.5 20.8 76.3 23.1 21.8 20.0 24.0 88.9 24.8 23.8 22.9 25.0 96.5 Stand-Alone Costs - - - - - - - - - - - - - - - Adj. EBITDA 102.9 131.0 131.9 144.0 509.8 125.2 151.3 157.6 167.2 601.4 141.5 169.3 176.3 187.3 674.5 Depreciation 9.6 10.4 11.0 12.1 43.1 12.8 14.1 15.5 16.7 59.1 16.8 16.5 16.2 15.9 65.4 Adj. Operating Income 93.3 120.7 120.8 131.9 466.7 112.4 137.2 142.1 150.5 542.3 124.7 152.8 160.1 171.4 609.1 Interest expense (24.5) (10.2) (10.1) (9.9) (54.6) (9.7) (9.9) (11.4) (11.5) (42.5) (11.3) (11.1) (11.0) (10.8) (44.2) Pretax income 68.9 110.5 110.8 122.0 412.2 102.7 127.3 130.7 139.0 499.8 113.4 141.7 149.1 160.6 564.9 Income taxes (benefit) 26.5 42.5 42.6 47.0 158.7 39.5 49.0 50.3 53.5 192.4 43.7 54.6 57.4 61.8 217.5 Income taxes adjustments - - - (6.5) (6.5) (4.2) (4.4) (4.0) (4.0) (16.6) (4.0) (4.0) (4.0) (4.0) (16.0) Fully Distributed Cash Net Income 42.4$ 68.0$ 68.1$ 81.6$ 260.0$ 67.4$ 82.7$ 84.4$ 89.5$ 324.0$ 73.8$ 91.2$ 95.7$ 102.8$ 363.4$ Adjusted Diluted EPS 0.20$ 0.32$ 0.32$ 0.38$ 1.22$ 0.31$ 0.40$ 0.42$ 0.44$ 1.57$ 0.36$ 0.45$ 0.47$ 0.50$ 1.78$

Diluted shares outstanding 212.3 214.0 215.0 213.7 213.8 214.6 207.9 202.1 203.2 206.9 203.7 204.2 205.2 205.7 204.7

% of RevenuesMerchant 67.7% 68.0% 68.5% 69.5% 68.4% 70.2% 71.0% 71.4% 71.7% 71.1% 71.2% 72.1% 72.6% 72.9% 72.2%Financial Institutions 32.3% 32.0% 31.5% 30.5% 31.6% 29.8% 29.0% 28.6% 28.3% 28.9% 28.8% 27.9% 27.4% 27.1% 27.8%

Adjusted GAAP (% of Revs)S&M 31.3% 27.1% 26.8% 25.1% 27.4% 27.8% 25.7% 25.5% 24.8% 25.9% 28.0% 25.9% 25.5% 24.9% 26.0%Operating Expense 16.6% 15.0% 15.4% 14.2% 15.2% 17.8% 15.9% 15.0% 14.5% 15.8% 17.0% 15.7% 14.6% 14.8% 15.5%G&A 7.9% 7.6% 6.8% 7.7% 7.5% 8.5% 7.3% 6.7% 7.6% 7.5% 8.2% 7.2% 6.9% 7.1% 7.3%EBITDA 44.3% 50.3% 51.0% 53.1% 49.9% 45.9% 51.0% 52.8% 53.1% 50.8% 46.8% 51.3% 53.0% 53.2% 51.2%Depreciation 4.1% 4.0% 4.3% 4.5% 4.2% 4.7% 4.7% 5.2% 5.3% 5.0% 5.6% 5.0% 4.9% 4.5% 5.0%Operating Income 40.1% 46.3% 46.7% 48.6% 45.6% 41.2% 46.2% 47.6% 47.8% 45.8% 41.3% 46.3% 48.2% 48.7% 46.2%Interest expense 10.5% 3.9% 3.9% 3.6% 5.3% 3.6% 3.3% 3.8% 3.6% 3.6% 3.7% 3.4% 3.3% 3.1% 3.4%Pretax income 29.6% 42.4% 42.8% 45.0% 40.3% 37.6% 42.9% 43.8% 44.1% 42.2% 37.5% 42.9% 44.9% 45.6% 42.9%Corporate Income Tax Rate 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5% 38.5%Adjusted Tax Rate 38.5% 38.5% 38.5% 33.2% 36.9% 34.4% 35.1% 35.4% 35.6% 35.2% 35.0% 35.7% 35.8% 36.0% 35.7%Net income 18.2% 26.1% 26.4% 30.1% 25.4% 24.7% 27.9% 28.3% 28.4% 27.4% 24.4% 27.6% 28.8% 29.2% 27.6%

% GrowthRevenuesMerchant 36.0% 26.2% 25.6% 12.5% 24.0% 21.7% 19.1% 20.3% 20.1% 20.3% 12.3% 13.0% 13.3% 13.6% 13.1%Financial Institutions 2.2% 8.8% 7.3% 10.1% 7.1% 8.2% 3.2% 4.8% 7.6% 5.9% 7.2% 7.1% 6.8% 7.0% 7.0%Revenues 22.9% 20.0% 19.2% 11.7% 18.1% 17.3% 14.0% 15.4% 16.3% 15.7% 10.8% 11.3% 11.4% 11.7% 11.3%

% Growth (Expenses)S&M 29.5% 18.3% 23.3% 6.1% 18.9% 4.4% 8.4% 9.6% 14.9% 9.3% 11.2% 11.9% 11.5% 12.3% 11.7%Operating Expense 22.4% 24.0% 15.4% 14.2% 21.5% 25.9% 21.1% 12.6% 14.5% 15.8% 6.0% 9.2% 8.1% 14.8% 15.5%G&A 30.9% 21.0% 6.8% 7.7% 22.1% 26.3% 10.6% 14.2% 7.6% 7.5% 7.1% 9.0% 14.8% 7.1% 7.3%

% Growth (Adjusted Earnings)EBITDA 17.6% 19.7% 18.4% 10.4% 16.1% 21.7% 15.5% 19.5% 16.1% 18.0% 13.0% 11.9% 11.9% 12.0% 12.2%Operating Income 17.5% 19.0% 17.0% 9.1% 15.2% 20.4% 13.7% 17.6% 14.1% 16.2% 11.0% 11.4% 12.7% 13.8% 12.3%FD Net income 30.5% 47.7% 44.4% 39.5% 41.2% 59.1% 21.7% 23.8% 9.7% 24.6% 9.4% 10.2% 13.5% 14.8% 12.2%EPS 30.4% 46.5% 42.5% 38.5% 40.2% 57.4% 25.3% 31.8% 15.4% 28.7% 15.3% 12.2% 11.8% 13.4% 13.4%


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Figure 9: VeriFone Income Statement 1Q12A 2Q12A 3Q12A 4Q12A 1Q13A 2Q13A 3Q13A 4Q13E 1Q14E 2Q14E 3Q14E 4Q14E

Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14Geographic Revenue

US and Canada 120.0 129.2 138.4 145.3 532.9 132.7 122.1 115.8 122.4 492.9 142.7 131.6 127.6 134.8 536.7Europe 159.0 205.1 203.4 204.0 771.5 172.9 172.7 179.0 185.4 710.0 172.1 175.2 193.0 204.7 745.0Latin America 100.3 96.2 94.4 80.0 370.8 73.0 85.3 69.9 62.0 290.2 69.2 85.3 75.1 67.8 297.5Asia 45.9 48.9 57.0 59.3 211.1 51.0 49.7 52.8 55.0 208.5 50.9 51.3 57.4 60.2 219.8

Total Geographic Revenue - Adjusted 425.2 479.4 493.2 488.6 $1,886.3 429.7 429.7 417.5 424.8 $1,701.7 434.9 443.4 453.2 467.5 $1,799.1

Total Cost of Revenue - Adjusted 242.7 265.3 269.2 272.5 $1,049.7 242.7 248.3 247.2 252.3 $990.4 252.5 256.6 260.9 265.7 $1,035.7

Gross Profit - Adjusted 182.5 214.0 224.0 216.1 $836.6 187.0 181.5 170.3 172.5 $711.3 182.5 186.8 192.3 201.8 $763.4Research & development - Adjusted 32.0 35.6 36.1 35.5 139.1 36.6 39.8 43.9 43.6 163.8 43.1 41.8 40.6 41.0 166.5Sales & marketing - Adjusted 34.9 41.5 40.3 41.7 158.4 41.1 42.2 45.1 48.3 176.6 46.3 44.3 43.3 45.4 179.3General & administrative - Adjusted 28.5 34.8 35.4 27.9 126.5 31.0 33.1 37.7 33.2 134.9 36.1 34.9 34.5 32.0 137.5Amortization of purchased intangible assets 0.0 0.0 23.2 23.2 46.4 24.7 23.1 23.9 24.0 95.7 26.0 26.0 26.0 26.0 104.0

Operating Expenses - GAAP 134.7 156.5 151.4 148.1 590.7 150.2 223.9 157.7 153.2 685.0 160.0 165.6 176.1 167.3 669.0Operating Expenses - Adjusted 95.3 111.9 111.7 105.1 $424.0 108.6 115.0 126.7 125.0 $475.4 125.5 121.1 118.4 118.4 $483.4

Operating Income - Adjusted 87.2 102.2 112.3 110.9 $412.6 78.4 66.4 43.6 47.5 $235.9 57.0 65.7 73.9 83.4 $280.0Interest expense - Adjusted (8.0) (14.1) (13.8) (12.7) (48.5) (12.4) (11.7) (11.5) (11.4) (47.0) (11.5) (11.6) (11.7) (11.7) (46.5)Interest income 1.5 1.1 1.2 1.2 $5.2 1.2 0.8 0.0 0.0 $2.0 0.0 1.3 1.3 1.3 $3.9Other income (expense), net - Adjusted (2.0) -2.3 -2.3 -0.9 (7.5) (1.4) -0.6 -0.9 (0.9) (3.8) (0.9) (0.9) (0.9) (0.9) (3.6)

Pre-Tax Income - Adjusted 78.7 86.9 97.4 98.6 $361.7 65.7 55.0 31.2 35.2 $187.1 44.6 54.5 62.6 72.1 $233.8Income taxes - Adjusted 14.7 15.7 13.5 13.6 57.5 9.2 7.6 4.3 4.9 26.0 6.2 7.6 8.8 10.1 32.7

Net Income - Adjusted 64.0 71.3 83.2 83.5 $302.0 56.6 46.8 26.9 30.3 $160.5 38.3 46.9 53.8 62.0 $201.0

Adjusted EPS - Diluted $0.58 $0.64 $0.75 $0.76 $2.74 $0.51 $0.42 $0.24 $0.27 $1.45 $0.35 $0.42 $0.48 $0.56 $1.81

Weighted Average Shares - Diluted 109.6 111.1 110.4 110.3 110.4 110.6 110.5 110.7 110.8 110.6 110.9 111.0 111.1 111.2 111.1

Adjusted Margin Analysis (% of revenue)System Solutions - cost of net revenue 57.2% 55.4% 55.5% 57.6% 56.4% 57.2% 59.2% 63.0% 62.6% 60.4% 58.5% 59.3% 60.5% 59.9% 59.5%Services - cost of net revenue 56.6% 55.2% 52.4% 51.8% 53.8% 56.6% 55.1% 53.4% 53.0% 54.4% 57.2% 55.2% 52.1% 51.4% 53.8%

Total costs of net revenue 57.1% 55.4% 54.6% 55.8% 55.6% 56.5% 57.8% 59.2% 59.4% 58.2% 58.0% 57.9% 57.6% 56.8% 57.6%Gross profit 42.9% 44.6% 45.4% 44.2% 44.4% 43.5% 42.2% 40.8% 40.6% 41.8% 42.0% 42.1% 42.4% 43.2% 42.4%

Research & development 7.5% 7.4% 7.3% 7.3% 7.4% 8.6% 9.3% 10.5% 10.3% 9.7% 9.9% 9.4% 9.0% 8.8% 9.3%Sales & marketing 8.2% 8.6% 8.2% 8.5% 8.4% 9.7% 9.8% 10.8% 11.4% 10.4% 10.7% 10.0% 9.6% 9.7% 10.0%General & administrative 6.7% 7.3% 7.2% 5.7% 6.7% 7.3% 7.7% 9.0% 7.8% 8.0% 8.3% 7.9% 7.6% 6.8% 7.6%

Operating income 20.5% 21.3% 22.8% 22.7% 21.9% 18.2% 15.5% 10.4% 11.2% 13.9% 13.1% 14.8% 16.3% 17.8% 15.6%

Growth (Y/Y)US and Canada -6.5% 7.0% 13.6% 25.5% 9.5% 10.6% -5.5% -16.3% -15.8% -7.5% 7.5% 7.8% 10.2% 10.2% 8.9%Europe 102.0% 119.9% 109.3% 36.0% 84.1% 8.7% -15.8% -12.0% -9.1% -8.0% -0.4% 1.5% 7.8% 10.4% 4.9%Latin America 100.1% 71.1% 45.3% -23.8% 34.2% -27.2% -11.3% -25.9% -22.5% -21.7% -5.2% 0.0% 7.5% 9.4% 2.5%Asia 72.6% 119.9% 71.9% 31.9% 66.3% 11.0% 1.6% -7.4% -7.2% -1.2% -0.2% 3.3% 8.8% 9.4% 5.4%

Total Revenue 49.7% 63.7% 55.5% 17.5% 44.0% 1.0% -10.4% -15.4% -13.1% -9.8% 1.2% 3.2% 8.5% 10.1% 5.7%Total Cost of Net Revenue 45.3% 60.2% 47.8% 9.1% 37.3% 0.0% -6.4% -8.2% -7.4% -5.7% 4.0% 3.4% 5.5% 5.3% 4.6%Gross Profit - Adjusted 56.1% 68.3% 65.9% 30.2% 53.5% 2.4% -15.2% -24.0% -20.2% -15.0% -2.4% 2.9% 12.9% 17.0% 7.3%

Research & development 54.0% 45.6% 36.4% 9.3% 33.6% 14.3% 11.7% 21.7% 22.8% 17.7% 17.9% 5.2% -7.5% -6.0% 1.7%Sales & marketing 39.0% 50.8% 42.2% 16.3% 35.6% 17.8% 1.7% 11.9% 15.6% 11.5% 12.8% 5.1% -4.0% -5.9% 1.5%General & administrative 57.1% 82.4% 81.0% 19.3% 57.9% 8.9% -4.9% 6.6% 18.9% 6.7% 16.5% 5.6% -8.5% -3.5% 1.9%

Adjusted Operating Expenses 49.0% 57.5% 50.3% 14.6% 40.8% 14.0% 2.8% 13.4% 18.9% 12.1% 15.5% 5.3% -6.6% -5.3% 1.7%Adjusted Operating Income 64.7% 81.9% 84.9% 49.6% 69.1% -10.1% -35.0% -61.2% -57.2% -42.8% -27.3% -1.1% 69.5% 75.6% 18.7%Adjusted Pre-Tax Income 59.3% 62.1% 69.2% 38.6% 56.0% -16.5% -36.8% -68.0% -64.3% -48.3% -32.2% -0.8% 100.6% 104.9% 25.0%Adjusted Net Income 62.0% 66.1% 80.7% 46.6% 62.8% -11.7% -34.4% -67.7% -63.8% -46.9% -32.2% 0.3% 100.1% 104.9% 25.3%Adjusted EPS 35.0% 39.6% 52.7% 43.9% 42.4% -12.5% -34.0% -67.8% -63.9% -47.0% -32.4% -0.1% 99.4% 104.2% 24.8%

Adjusted Tax Rate 18.7% 18.0% 13.9% 13.8% 15.9% 13.9% 13.8% 13.8% 14.0% 13.9% 14.0% 14.0% 14.0% 14.0% 14.0%

FY14EFY12A FY13E


10 October 2013


Mobile Payments


Appendix 1

Important Disclosures Additional information available upon request Disclosure checklist

Company Ticker Recent price* Disclosure

Visa Inc. V.N 183.85 (USD) 9 Oct 13 7,14,15

MasterCard MA.N 657.23 (USD) 9 Oct 13 8,14,15 *Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies

Important Disclosures Required by U.S. Regulators

Disclosures marked with an asterisk may also be required by at least one jurisdiction in addition to the United States. See Important Disclosures Required by Non-US Regulators and Explanatory Notes.

7. Deutsche Bank and/or its affiliate(s) has received compensation from this company for the provision of investment banking or financial advisory services within the past year.

8. Deutsche Bank and/or its affiliate(s) expects to receive, or intends to seek, compensation for investment banking services from this company in the next three months.

14. Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from this company within the past year.

15. This company has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services.

Important Disclosures Required by Non-U.S. Regulators

Please also refer to disclosures in the Important Disclosures Required by US Regulators and the Explanatory Notes.

7. Deutsche Bank and/or its affiliate(s) has received compensation from this company for the provision of investment banking or financial advisory services within the past year.

For disclosures pertaining to recommendations or estimates made on securities other than the primary subject of this research, please see the most recently published company report or visit our global disclosure look-up page on our website at http://gm.db.com/ger/disclosure/DisclosureDirectory.eqsr Analyst Certification

The views expressed in this report accurately reflect the personal views of the undersigned lead analyst about the subject issuers and the securities of those issuers. In addition, the undersigned lead analyst has not and will not receive any compensation for providing a specific recommendation or view in this report. Bryan Keane

10 October 2013


Mobile Payments


Historical recommendations and target price: Visa Inc. (V.N) (as of 10/9/2013)

1 2 3

45

6

7

89

0.00

50.00

100.00

150.00

200.00

250.00

Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13

Sec

uri

ty P

rice

Date

Previous Recommendations

Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating

Current Recommendations

Buy Hold Sell Not Rated Suspended Rating

*New Recommendation Structure as of September 9,2002

1. 05/04/2011: Buy, Target Price Change USD105.00 6. 10/19/2012: Buy, Target Price Change USD150.00

2. 08/08/2011: No Recommendation, Target Price Change USD0.00 7. 01/22/2013: Buy, Target Price Change USD177.00

3. 10/06/2011: Upgrade to Buy, Target Price Change USD107.00 8. 05/14/2013: Buy, Target Price Change USD196.00


5. 05/03/2012: Buy, Target Price Change USD135.00

Historical recommendations and target price: MasterCard (MA.N) (as of 10/9/2013)

1 23

4 5

67

8

9

10

0.00

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12 Apr 12 Jul 12 Oct 12 Jan 13 Apr 13 Jul 13

Sec

uri

ty P

rice

Date

Previous Recommendations

Strong Buy Buy Market Perform Underperform Not Rated Suspended Rating

Current Recommendations

Buy Hold Sell Not Rated Suspended Rating

*New Recommendation Structure as of September 9,2002




4. 08/08/2011: No Recommendation, Target Price Change USD0.00 9. 01/22/2013: Buy, Target Price Change USD590.00

5. 10/06/2011: Upgrade to Buy, Target Price Change USD415.00 10. 07/15/2013: Buy, Target Price Change USD756.00

10 October 2013


Mobile Payments


Equity rating key Equity rating dispersion and banking relationships

Buy: Based on a current 12- month view of total share-holder return (TSR = percentage change in share price from current price to projected target price plus pro-jected dividend yield ) , we recommend that investors buy the stock. Sell: Based on a current 12-month view of total share-holder return, we recommend that investors sell the stock Hold: We take a neutral view on the stock 12-months out and, based on this time horizon, do not recommend either a Buy or Sell. Notes:

1. Newly issued research recommendations and target prices always supersede previously published research. 2. Ratings definitions prior to 27 January, 2007 were:

Buy: Expected total return (including dividends) of 10% or more over a 12-month period Hold: Expected total return (including dividends) between -10% and 10% over a 12-month period Sell: Expected total return (including dividends) of -10% or worse over a 12-month period

47 %51 %

2 %

55 % 44 %

39 %0

50100150200250300350400450500

Buy Hold Sell

North American Universe

Companies Covered Cos. w/ Banking Relationship

10 October 2013


Mobile Payments


Regulatory Disclosures

1. Important Additional Conflict Disclosures

Aside from within this report, important conflict disclosures can also be found at https://gm.db.com/equities under the "Disclosures Lookup" and "Legal" tabs. Investors are strongly encouraged to review this information before investing.

2. Short-Term Trade Ideas

Deutsche Bank equity research analysts sometimes have shorter-term trade ideas (known as SOLAR ideas) that are consistent or inconsistent with Deutsche Bank's existing longer term ratings. These trade ideas can be found at the SOLAR link at http://gm.db.com.

3. Country-Specific Disclosures

Australia and New Zealand: This research, and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act and New Zealand Financial Advisors Act respectively. Brazil: The views expressed above accurately reflect personal views of the authors about the subject company(ies) and its(their) securities, including in relation to Deutsche Bank. The compensation of the equity research analyst(s) is indirectly affected by revenues deriving from the business and financial transactions of Deutsche Bank. In cases where at least one Brazil based analyst (identified by a phone number starting with +55 country code) has taken part in the preparation of this research report, the Brazil based analyst whose name appears first assumes primary responsibility for its content from a Brazilian regulatory perspective and for its compliance with CVM Instruction # 483. EU countries: Disclosures relating to our obligations under MiFiD can be found at http://www.globalmarkets.db.com/riskdisclosures. Japan: Disclosures under the Financial Instruments and Exchange Law: Company name - Deutsche Securities Inc. Registration number - Registered as a financial instruments dealer by the Head of the Kanto Local Finance Bureau (Kinsho) No. 117. Member of associations: JSDA, Type II Financial Instruments Firms Association, The Financial Futures Association of Japan, Japan Investment Advisers Association. Commissions and risks involved in stock transactions - for stock transactions, we charge stock commissions and consumption tax by multiplying the transaction amount by the commission rate agreed with each customer. Stock transactions can lead to losses as a result of share price fluctuations and other factors. Transactions in foreign stocks can lead to additional losses stemming from foreign exchange fluctuations. "Moody's", "Standard & Poor's", and "Fitch" mentioned in this report are not registered credit rating agencies in Japan unless Japan or "Nippon" is specifically designated in the name of the entity. Reports on Japanese listed companies not written by analysts of Deutsche Securities Inc. (DSI) are written by Deutsche Bank Group's analysts with the coverage companies specified by DSI. Russia: This information, interpretation and opinions submitted herein are not in the context of, and do not constitute, any appraisal or evaluation activity requiring a license in the Russian Federation.

David Folkerts-Landau Group Chief Economist

Member of the Global Executive Committee

Guy Ashton Global Chief Operating Officer

Research

Marcel Cassard Global Head

FICC Research & Global Macro Economics

Richard Smith and Steve Pollard Co-Global Heads Equity Research

Michael Spencer Regional Head

Asia Pacific Research

Ralf Hoffman Regional Head

Deutsche Bank Research, Germany

Andreas Neubauer Regional Head

Equity Research, Germany

Steve Pollard Regional Head

Americas Research

International locations

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Opinions, estimates and projections in this report constitute the current judgement of the author as of the date of this report. They do not necessarily reflect the opinions of Deutsche Bank and are subject to change without notice. Deutsche Bank has no obligation to update, modify or amend this report or to otherwise notify a recipient thereof in the event that any opinion, forecast or estimate set forth herein, changes or subsequently becomes inaccurate. Prices and availability of financial instruments are subject to change without notice. This report is provided for informational purposes only. It is not an offer or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. Target prices are inherently imprecise and a product of the analyst judgement.

As a result of Deutsche Banks March 2010 acquisition of BHF-Bank AG, a security may be covered by more than one analyst within the Deutsche Bank group. Each of these analysts may use differing methodologies to value the security; as a result, the recommendations may differ and the price targets and estimates of each may vary widely.

In August 2009, Deutsche Bank instituted a new policy whereby analysts may choose not to set or maintain a target price of certain issuers under coverage with a Hold rating. In particular, this will typically occur for "Hold" rated stocks having a market cap smaller than most other companies in its sector or region. We believe that such policy will allow us to make best use of our resources. Please visit our website at http://gm.db.com to determine the target price of any stock.

The financial instruments discussed in this report may not be suitable for all investors and investors must make their own informed investment decisions. Stock transactions can lead to losses as a result of price fluctuations and other factors. If a financial instrument is denominated in a currency other than an investor's currency, a change in exchange rates may adversely affect the investment. Past performance is not necessarily indicative of future results. Deutsche Bank may with respect to securities covered by this report, sell to or buy from customers on a principal basis, and consider this report in deciding to trade on a proprietary basis.

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