First Ecom

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First Ecom

• Global E-Payment Processing http//www.firstecom.c
  om

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E-Commerce

• E-commerce boom started in 1998
• Yahoo, Amazon.com, eBay, etc
• Only the U.S. is participating in this boom
• Explosive growth expected in Asia
• Major limitation is lack of processing
• capabilities, multiple currencies

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E-Commerce Worldwide

• According to Forrester Research
• Currently valued at US12 billion
• Expected to be US1.1 trillion by 2002

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E-Commerce in Asia

• According to Goldman Sachs
• End of 1998, 15 million Internet users and an
  e-commerce market of 700 million
• By 2003, 64 million Internet users and 32
  billion in e-commerce sales expected
• Twice the growth rate expected in the U.S. during
  the same period

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Internet Evolution

• Phase I
• Static web site - Glorified Brochure
• Marketing Driven
• HK 78K - 390K
• US 1995/96
• Europe 1997/98
• Asia 1997/98/99

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Internet Evolution

• Phase II
• Moving from static to basic interactivity
• Content becomes more important
• Marketing IT driven
• HK 390K - 2.0M
• US 1997/8
• Europe 1998/99
• Asia 1999

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Internet Evolution

• Phase III
• Fully interactive web site
• Revenue source - ROI
• Requires new business model
• Driven by Upper Management
• HK2.0 Million
• US 1999
• Europe 2000
• Asia 2000/2001

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Challenges

• Lack of online credit card processing
  capabilities in Asia and Europe
• Banks missing E-commerce processing partner
• Internet penetration still low
• Perception of security risks

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Positioning Statement

• First Ecom provides a global, secure, easy to
  implement, low cost, electronic payment
  processing gateway.

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Why First Ecom?

• Idea developed out of necessity
• Tremendous pent-up demand in the market
• Many different disciplines came together to
  create the First Ecom concept

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Why First Ecom?

• Solutions for both banks and merchants
• Offshore Payment Processor
• 3rd Party Processor
• In-Country Processor

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Offshore Payment Processor
Card Network
Bank of Bermuda (Acquirer)
First Ecom Payment Gateway
Card Issuers
First Ecom - Master Merchant
Shopping / Payment
Internet
Approval / Due Diligence / Merchant Account
/ Money Transfer / Merchant Service
Cardholder
Cardholder
Merchant
Merchant
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Offshore Payment Processor

• Key Benefits to Merchant
• Quick time to market
• Multi-currency support
• Tax neutral jurisdiction
• Easy to implement
• Low cost

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3rd Party Processor
Card Network
First Ecom Payment Gateway
First Ecom Processor
Card Issuers
3rd Party Processor
Merchant Acquirer
Shopping / Payment
Internet
Approval / Merchant Account / Settlement
/ Merchant Service
Cardholder
Cardholder
Merchant
Merchant
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3rd Party Processor

• Key Benefits to Acquiring Bank
• Quick time to market
• Bank retains control on merchant evaluation,
  selection, and pricing
• Minimal modifications to merchant operations
• No modification to Bank Credit Card System
• Transparent to merchant
• Easy to implement
• Low cost

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In-Country Processor
Card Network
First Ecom Payment Gateway
First Ecom Processor
In-Country Processor
Card Issuers
Shopping / Payment
Internet
Cardholder
Merchant Acquirer
Cardholder
Approval / Merchant Account / Settlement /
Merchant Service
E-Commerce Channel
Traditional Channel
Merchant
Merchant
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In-Country Processor

• Key Benefits to Banking Consortium
• Zero cost for system development
• Member Bank retains control on merchant
  evaluation, selection, and pricing
• No modification on Member Bank Credit Card System
• Transparent to merchant
• Support of local credit debit authorization
• Support of local clearing and settlement
• Provides EBPP capability

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Purchase Process
1) Buyer browses Internet adds items to
shopping cart
Merchant Web Site
Web user (Buyer)
4) Authorization details sent to Merchant
First Ecom Gateway
2) Merchant sends Order Form to buyer with order
details
3) Completed Order Form card details sent to
Gateway
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Process First Ecom
Payment Network (Visa Net/I.Net etc.) routes
inquiry to issuing bank
Sends to payment network via payment switch
Payment Network
Issuing Bank
First Ecom
Inquiry routed back with authorization/rejection
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Authorization Advice
First Ecom
Via Secure Email to Merchant
Merchant Account Reporting System (MARS)
Online to Merchant
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MARS

• Accessible via Internet
• View transaction history and records
• Secure access
• Four functions
• Authorization
• Settlement
• Cancellation
• Refunds

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Merchant Payment Process
Funds are deducted from the Buyers card by the
issuing bank
Money available to Merchant in chosen currency
Card Association pays the money into the Bank
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Secure Sockets Layer (SSL) versusSecure
Electronic Transaction (SET)
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SSL vs. SET
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Security

• Online Authorization using SSL with 40 128 bit
  encryption prevents card fraud
• Content authentication and encryption OpenPGP
  (RFC2440) - prevents buyer fraud
• The credit card number is not disclosed to the
  merchant - prevents merchant fraud

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Opportunities

• Asia has many entrepreneurs who will take
  advantage of the low start-up costs for online
  businesses
• A global processing solution now exists

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Partnerships

• Expert Web
• FedEx
• HKSite
• HLB
• Inter-Merchant
• Intershop
• Microsoft

• Modem Poppe
• Sterling Commerce
• Sun Microsystems
• Sybase
• Topsoft
• USWeb/CKS
• UUNET

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Goal

• For Asia to fully participate in the e-commerce
  revolution sweeping the world.

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First Ecom

• Global E-Payment Processing http//www.firstecom.c
  om