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International Debit Card
Initiative
Advanced EFT Corp.
May 27, 2007
Revision: July 8, 2007
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1. INTRODUCTION
1.1 Purpose – The Initiative
The Initiative is about large-scaled deployment of 200 million International Prepaid Debit Cards
(“International Debit Cards”) in multiple countries and regions of the world. Funding required for this
Initiative is $ 600 million.
The countries are selected Developing Countries (such as Central American, Caribbean and some
African countries) and Newly Industrialized Countries (such as South Africa, China, Malaysia, Brazil,
India, Philippines, etc.)
This Initiative calls for partner banks (“Partner Banks”) in different regions to team up with Advanced EFT
Corp. (“AEFT” - See Section 2) to jointly plan, issue and market International Debit Cards in their
respective operating spheres.
Current Cardholder Bases At These Countries
Many banks in these countries currently issue local check cards to checking account holders (with
varying percentages of the countries’ population) for ATM withdrawals and POS purchases, but these
cards cannot be used outside of their issuing locale because the networks accepting them are “Closed
Loop” networks. Many banks in these countries do issue universally networked, branded (Visa and
MasterCard) credit cards, but the credit cards are issued only to smaller number of affluent consumers.
Unsatisfied Mass Consumer Needs
Most of the 6.4 billion consumers in the world are un-banked or under-banked. These people do not
necessarily need checking accounts and credit card accounts, and the banks would also not issue the
accounts to them. However, un-banked people do have the following needs:
To receive payments for the goods and services, including payroll and pay-out, on time without
check cashing hassles
To pay bills more conveniently
Keeping money safely
Having fund available more conveniently
Meeting travel needs, such as currency conversion only when needs arise, purchasing tickets
and paying hotel bills
Conveniently, and at lower costs, transferring money to friends and relatives.
Solution Meeting The Needs
The only solution to meet these collective needs of un-banked and under-banked consumers
worldwide is through “Universally Accepted”, branded (Visa and MasterCard) International Debit
Cards because:
Everyone Qualifies – This is the most significant feature of the International Debit Card. Because
it is "Prepaid", un-banked and banked consumers of most countries in the world can qualify for
the International Debit Card as long as they have valid government issued identifications.
Versatile and Universal Worldwide Applications – The International Debit Card is accepted
wherever Visa and MasterCard are accepted, including 1.5 million ATMs worldwide and signature
transactions at restaurants.
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Card-to-Card Transferring of Funds – Using the phones or the Internet to transfer funds can be
done instantly at low cost, at 24-hours per day without making trips at sending and receiving
ends. For this application, the primary cards will be branded International Debit Cards pairing with
their companion ATM cards, which will be used locally by the remittance recipients within the
regions.
1.2 Compelling Business Reasons for Initiative
To Capture the Window of Opportunity
The partners realize that the Prepaid Debit Card System will soon be the prevalent retail
payment system of the world.
it is important to capitalize on and capture the window of opportunity that may close rapidly
To enjoy the ensuing market share.
To Attain Long Term Revenue Streams for the Partners
The partners will enjoy very long term cumulative and recurring revenue from commission
residuals. The Bank Partners will enjoy significant new deposits as additional incentive.
From this Initiatives’ perspective, long term revenue streams are much more important than
“higher” upfront profits.
1.3 Initiative Objectives
The primary application of the International Debit Card for each region is International Money
Remittance into the region by expatriates and OFW’s (Overseas Foreign Workers – Migrant Workers) of
various countries. The objectives are:
1. To Achieve An Extensive Retail Distribution & Loading Network – To achieve a worldwide
network of retail outlets and banking locations, where the International Debit Cards can be
purchased and re-loaded (topped-up)
The goal is to have International Debit Card retail distribution and loading locations at more
than 150 countries in the world.
This International Debit Card marketing distribution and loading network is referred to, in this
Initiative, as the GIFT (Global Integrated Funds Transfer) network.
In addition to the loading of International Debit Cards, the GIFT network will also provides
international bank-account-to-bank-account transfer of funds at lower fees than the SWIFT
(Society for Worldwide Interbank Financial Telecommunication.)
To this end, $200 million will be spent on technical integration, promotion, training and
operations set-up to create this marketing and top-up network of thousands of bank branches
and retail locations.
2. To Have Massive Consumer Participation – To provide low cost ease of entry for banked and
un-banked consumers in need of the benefits of the International Debit Card everywhere.
The goal is to make the International Debit Card available at a cost of $4 or less each. The
monthly maintenance of the card will be $3.00 or less.
The Initiative will spend $300 million for the issuance and production of 200 million cards. The
cards will be Chip-and-PIN Smart Cards with magnetic stripes at a cost of $1.50 per card.
The consumers’ cost of $4 per card is basically paying for the upfront sales
commission for the banks and the third party distributors.
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Simple for consumers to Participate - Only the use of telephone (without any knowledge of
technology) is required to inquire account information and to perform money transfer
transactions.
The Partner Banks are expected to market the International Debit Cards rigorously within their
spheres of operation. Retail outlet and other high volume Independent Sales Organizations
will also market the International Debit Cards everywhere.
3. To Create A New Generation and More Efficient Worldwide Money Remittance
Infrastructure - To provide lower cost, fast and more convenient ways of transferring money into
each participating country
Basically, the Initiative is creating a newer global and universal money transfer infrastructure
replacing the obsolescent and proprietary Western Union network. As mentioned earlier, in
addition to the International Debit Card Card-to-Card transfer, the GIFT network will also offer
Bank Account-to-Bank Account transfer for a less expensive fee than Western Union and the
SWIFT.
The Initiative will enable Card-to-Card-Transfer of sending several hundred to several
thousand dollars for a fee of less than $5, which includes the sender’s card loading fee and a
local ATM withdrawal fee incurred by the recipient.
To achieve this objective, the Initiative will allow Card-to-Card transfer from an International
Debit Card to a companion ATM card or to an ATM card already in use at the Partner Bank in
the country of the funds transfer recipient.
The Initiative will spend $100 million on technical systems integration and customer services
support provisions with participating banks in the GIFT network and with Partner Banks of this
Initiative across all Visa/ MasterCard regions (For example, In China, the Initiative will have to
technically and settlement-wise interface with several Chinese International Debit Card
issuing banks as well as with China UnionPay, the only interbank network in China excluding
Hong Kong and Macau, linking the ATMs of some fourteen major banks and many more
smaller banks throughout mainland China.)
1.4 Opportunity Considerations
Serving World’s Huge Un-banked Population – As of today, close to 5 billion of the 6.5 billion
people on earth have no bank accounts. The International Debit Card, as a product, will have
the biggest customer base than any other consumer product in the world.
Growing Demand of the International Debit Card with Virtually No Supply - There is little or
no supply for Prepaid Debit Cards that have “Extended Area of Service” approval by Visa and
MasterCard. Because of the Patriots’ Act, U.S. banks cannot issue branded bankcards to non-
U.S. residents. Concurrently, banks in developing countries and less developed countries do not
have the expertise, technology and infrastructure to develop Prepaid Debit Cards for international
applications. The International Prepaid Debit Card market is virtually untapped and enormous.
Growth of the Money Transfer Market - According to the World Bank, the global annual volume
of international remittances via formal channels is currently estimated to approach $300 billion,
and this figure is expected to grow 10 percent per year over the foreseeable future. Of the current
total, $167 billion went to developing countries.
Fragmentation of the Money Transfer Market – The remittance market is fragmented with
many different competitors; each has a portion of the solutions to meet the total needs. To this
extent, Western Union has only 14% of the market share and MoneyGram has only 6% of the
market share. The Initiative, by deploying the new non-traditional International Debit Card, will
achieve unfair competitive advantage. See a comparison of the different approaches below.
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Operation Serving # Of Speed (# of Days) COST
Un- Countries International U.S. Transfer Transfer
banked Initial Subseq Initial Subseq To to
Account? Person?
Western Y 200 1 1 1 1 High High
Union
Ikobo Y 200 3 0 3 0 NA Low
Xoom N 145 2 2 1* 1* Low NA
Initiative Y 200 1 0 1 0 Low Low
Notes:
* = ACH
Ikobo => See http://www.ikobo.com/, Xoom => See https://www.xoom.com/
Meeting the Needs of Migrant Workers - The population of migrant workers is increasing.
According to the United Nations’ International Labour Organization (ILO), migrant population has
doubled between the 1960s and the 1990s. As of today, there are approximately 200 million
migrants worldwide. Under-banked migratory workers need low cost, efficient and trustworthy
ways of transfer money home. The strategies for success is deploy technology for end-to-end
solutions and to develop business alliances and regional partners to achieve “Global Reach.”
Complementing Western Union’s Limitations - For additional consideration, the most efficient
& low cost way of remitting money is through Card-to-Card Transfer from one International Debit
Card to the recipient International Debit Card. An International Debit Card is an efficient person-
to-person transfer rather than a location-to-location transfer. Also, more money can be transferred
using cards; Western Union transfer is limited (example: no more than $500 per day per person)
by sanction.
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2.0 INITIATIVE BENEFITS & INCENTIVES
2.1 Benefits to All Partners
This Initiative offers:
Upfront sales commission revenue - Up to $4.00 commission to all marketing organizations,
including the issuing banks, on the initial sales of International Debit Cards and GIFT money
transfer accounts. On 200 million cards, the sales can amount to $800 million.
Recurring residual commission revenue - There will be approximately $4 total for each card per
month of residual commission on card maintenance fee and transaction usage fees for all alliance
parties of banks and distributors. For 200 million cards, this can amount to $800 million per
month.
Revenue from card loading – Assuming 150 million cards reloading per month, revenue in this
category can amount to $600 million per month.
2.2 Benefits to the Countries & the People
Improving the Quality of Life for the Consumer Account Holders
Safety and security of the individuals and their loved ones are the paramount and most
basic needs of people everywhere.
Convenience and savings on un-necessary, time wasting drudgeries (as in check
cashing, paying bills, etc.) and the pitfalls of dealing with cash and checks can also help attain
the better enjoyment of life.
Enhancing Remittances Into the Nations - Many countries’ economies rely on remittances into
their countries from expatriates; therefore, easier, faster, more convenient and lower cost method
of debit card “Card-to-Card” Money Transfer helps the economies.
Stimulating National Economies – With Prepaid Debit Cards, more of the consumers’ funds are
readily available through ATM’s and POS’ for purchases of products and services. When Prepaid
Debit Cards become more prevalent, there will also be more Mail Orders, Telephone Orders and
online purchases taking place.
Facilitating External Trades – With branded (Visa/ MasterCard) debit cards, more international
trading will take place because there are no boundary issues and currency conversion hassles.
Improving Gross National Products - Savings on un-necessary expenses, efforts and
resources (handling of checks, papers, cash, etc.)
2.3 Benefits to Partner Banks
The Initiative anticipates one or more Partner Banks in each region.
Partner Bank Profiles
International Consumer Bank - A Partner Bank will issue the branded Debit Card to the
primary cardholder, who may be the expatriate, and a companion card, which may be a
branded card or an ATM card.
Partner Bank As A Principal Card Issuing Member – The Partner Bank shall be a Principal
Issuing Member of Visa or MasterCard or both. With the Card-to-Card method of Money
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Transfer, the balances and deposits of both cards stay in the Partner Bank as well as
stay in the remitted country.
Acquiring Network Access - The Partner Bank will be a bank with its own large ATM network
or belonging to an extensive ATM network in the country or region.
Partner Bank Incentives
Significant bank deposit increase from the balances on the cards
Surge of new customers & customer base
Surge of new customers and resulting deposits from promoting the cards as payroll cards
Increase of market share in both retail and commercial banking
Publicities and enhanced images.
3.0 Use of Funds & Payback
A total of $600 million will be required to fund this Initiative. The use of funds is indicated by the following
table.
Use of Fund Amount Purpose Comment
$200 Million Building of the worldwide GIFT Technical integration, promotion,
network for International Debit Card training and operations set-up to
marketing distribution and loading create this network of thousands of
network bank branches and retail locations
$300 Million Issuance and production of 200 Smart Card cards at $1.50 each
million cards
$100 Million Interfaces with Partner Banks Technical systems integration and
customer services support provisions
with Partner Banks of this Initiative
across all Visa/ MasterCard regions
Payment for the Loan
Payback payment to the funding organization can be at least $0.20 per card per month. At an eventual
total of 200 million cards, the payback can amount to $40 million per month.
4.0 INITIATIVE MANAGEMENT
4.1 Alliance Advantages
The International Debit card project is spearheaded by the Initiative Manager (Advanced EFT Corp.) and
its alliance companies. All alliance companies have been in the Prepaid Debit Card business for several
years and are doing businesses together in several different forms. The alliance companies bring the
following contributions and advantages to the Initiative.
In-depth knowledge and years of aggregated expertise in Electronic Payment Systems
Complementary expertise in marketing, operations, processing and support of debit card systems
Low International Debit Card processing cost through volume piggy-back with existing processing
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4.2 Advanced EFT (http://www.onedebit.com/) And Jack Chang
Advanced EFT is the Program Manager of the Initiative. It is a business developer and wholesale
marketer (with agents worldwide) of advanced Electronic Payment Systems products. Advanced EFT
products & services include:
1. Prepaid Debit Cards – For end user groups & co-branding issuers
2. Money Transfer System – Bank account to bank account transfer in 145 countries
3. Remote Deposit Capture - Check clearing services for U.S. and international companies
4. Merchant Account Processing – Worldwide utilizing 6 payment gateways
5. Credit & debit card processing outsourcing - for financial institutions
6. Design, program manage & outsourcing of “Transaction Acquiring Networks” for banking as well
as retail (bill payment & prepaid top-up) transaction switching & processing
The company is managed by Jack Chang, who revolutionized banking as the co-inventor of the ATM. He
is also a pioneer in the use of magnetic strips on bankcards; electronic funds transfer systems and PC-
based in-bank systems. With a formal education in technology and a MBA in marketing, he has been
CEO of payment services corporations and business/ marketing strategist for Global 500 banks &
corporations.
ATM Patent
Achievements
Magnetic Participated in the earliest development and use of magnetic stripe based
Stripped Bank data on plastic cards
Cards Participated in the development of the earliest manual magnetic striped
card-encoding machine
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Implemented the first high speed, high volume magnetic striped card
encoding machine
ATM Design and developed ATM (Automated Teller Machine) as a full function
(Automated automated banking machine and was awarded the patent of the ATM
Teller Machine) First person to put ATM’s online to financial institutions’ authorization
databases
EFT (Electronic First person to develop an ATM and POS (Point of Sale) network system
Funds that can interface to more than one financial institution for financial
Transfer) transaction authorizations
Network Pioneer in developing, marketing and deploying modern day electronic
banking, ATM interchange, clearing and settlement systems
Developed and marketed bank wire transfer systems, IVR (Interactive Voice
Response systems, credit card authorization and collection systems
Pioneer in putting gasoline dispensers online to authorization networks
First person to develop and deploy encryption devices for bank transaction
data
Developed a GUI based application generator and database system in 1987
Bank Teller and
and, subsequently, marketed vertical industry applications, such as bank
Platform
teller systems, contact management systems created by the generator
Systems
Developed one of the earliest LAN gateway systems, interfacing IBM, Unisys
and NCR mainframes
Developed and marketed a business process redesign tool that can analyze
Business
business processes and make redesign recommendations
Process
Marketed and developed Lotus Notes and other groupware applications in
Enhancement
the earlier stages of Notes
Systems
Served as architect and designed wide area networks and intranets for
major corporations
Developed production high volume Laser printer control systems that can
increase the printing speed and reduce the need for font and image
management for most print processes
Developed a statement management system that combined the need for
paper printing, Electronic Bill Presentment, information archiving and
viewing.
Developed and integrated automated customers care management systems
that deploy CTI (Computer Telephony Integration), IVR (Interactive Voice
Response), Unified Messaging (integrating FAX, voice mail with email) and
the Web-based paradigm of doing business.
Developed a powerful software tool (code named “Silverado”) that can
automate, reduce the complexity and rapidly create, change or “re-
engineer” intelligent, database-driven Web sites and Internet-based
business processes.
Silverado also reduces costs by reducing the need for programmers,
speeding up the capabilities of business managers and analysts. Because
Silverado saves time, reduces the difficulties associated with database
applications and allows easy entry of business logic and rules, a business
(or even a Web site development company) can potentially create many
intelligent Web applications rapidly without needing extensive technical
resources.
Wireless Data In late 1999, Mr. Chang began working with an alliance of Japanese
industrial giants that includes Hitachi, Sanyo Electric, Fujitsu and Infineon
(the semiconductor part of Siemens of Germany). The result of the
collaboration is the development and production of a semiconductor chip
containing a smart card computer, a cryptographic engine and capable of
high-density storage. Mr. Chang’s goal is to incorporate the chip in various
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devices (such as cell phones) for various applications, including wireless
payment systems.
As the business developer and Program Manager of the Initiative, Advanced EFT will:
Develop, customize and implement the International Prepaid Debit Card business in each region
working in conjunction with the Partner Banks, Visa and MasterCard associations and ground-
based supporting alliances.
Secure the necessary funding and or the initial orders (working with distributors) for the Initiative
in each region.
Help and attain the necessary relationships with Visa and MasterCard for the Partner Banks to
issue cards, possibly as Principal Members, acquire and process card-based transactions
Advanced EFT and its processing and card production partners will set up all required
infrastructures for card issuance, production and processing in each region.
Advanced EFT and its partners will support the creation of infrastructures for marketing and
customer support in each region.
4.3 Stord LLC – Operations Support (http://www.stord.com/)
U.S.-based Stord has been in the prepaid debit (stored-value) card business since late 1990’s. Stord
works with U.S. and international banks and processors on Electronic Payment System products that
include U.S. debit cards, International Prepaid Debit Cards and International Money Transfer service. For
this initiative, Stord will provide:
Bank operations interaction and support
Coordination between the banks, the processor and distributors
Training of all operations and marketing personnel, including distributors
Commission infrastructure set-ups and management.
4.4 ECS (ElectraCard Services) – Transaction Processor of the Initiative
(www.Opussoft.com)
ECS is the service operation of Opus Soft Corporation, which derives its revenues entirely from
processing, products & projects in the Electronic Payment Systems arena. Opus Soft has more than 500
employees in all continents, 80 plus installations in more than 20 countries.
ElectraCard’s processing suite of services include comprehensive and integrated credit card and debit
card acquiring and issuing functionalities provided in redundant data center operations located in Atlanta
(U.S.A.), Mumbai and Bangalore, India. ECS’ support locations are in Atlanta, Mumbai, Pune, Indonesia,
UAE and the U.S.