trustlink ©) chips’ Money Manager CHIPS®Money Manager Platform Deployment into the East Africa Region In Partnership with iF S ”" ef Ke oy TECHSpheret Innovative. Experienced. Trusted, The information contained inthis document constitutes reshicled ar privileged information Iti furshed to the specified recipients for ihe purpose intended withthe understanding that it willno! be csclosed to ary ‘thetic partes and no par of wil be citculated. quoted. or reproduced for distibution outsce the specified organization without peat written permission frorn TRUSTLINK (Pty) LTD cnc TECHSPHERE liContents Introduction @)chips trustlink @ chips"a @ trustlink TEcHSphere fey Se! INTRODUCTION This document details the deployment requirements of the CHIPS@ Money Manager in East Africa Region - Kenya, Somalia, South Sudan, and Ethiopia. 2.1 What is CHIPS? CHIPS is a new peer to peer payment money management solution - available to all, irrespective of financial status, social standing, of location. It offers ils users a safe custody and Transactional payment service that provides consumers ond organizations with the tools to take control of their finances by encouraging saving and providing transacting capobilty. It encourages saving by storing the user's money safely, out of reach of creditors and free of charge - while eaming interes! at above market rates and enabling users to CHIPS, in realtime and at low cost, including, but not limited to paying for products and services, paying bil; requesting payments; sending to and receiving money from others: witherawing cash and transferring money to bank accounts and vice versa. With CHIPS anyone and any business no matter how small, can get an alkinclusive saving and transacting solution for almost for free. CHIPS is a revolutionary alternative payment service that promises to cut through the traditionally high and opaque cost of transacting by facilitating person-to-person transfers, with the receiver getting immediate access to the funds - whether receiving payment for goods or services, or receiving money from employers, or digital cross border payments (across Africa and initially, which now will be made possible immediately due to our proposed JVA with proposed partners), through the proposed Money Transfer Platform and licenses. Unlike other altemate payment providers already on the market, CHIPS users do not need a bank account to CHIPS, making it a truly financial inclusive payment system. “We are conscious of the need for fee transparency, and we have gone to great lengths to ensure that there are no hidden or complicated fees in our solution, Prior 10 releasing any payment or withdrawal of the user's money fees related to the transaction, if any, are displayed for the user fo authorize,” explains Deon Tromp, CEO of CHIPS and Trustlink (Ply) LI, the licensee of CHIPS in South Africa, Trustlink is a respected, trusted, and licensed payment services provider to banks, other financial institutions, and corporates in Sub Saharan Africa, since 2002. TECHSPHERE & TRUSTINK Pivate & Confidential @)chips Maney Manager 3BN TECHSpherefyyty 0’ trustlink ‘CHIPS offers the same level of convenience as other-app based payment providers and traditional bank accounts, without paperwork, in-person interviews, branch visits, credit cards, or bank accounts. Users simply need the CHIPS Money Manager app on their phone - available to download for free - before transacting.” CHIPS was ‘launched in South Africa in August 2019 after an extended proof of concept period. (CEE 4) =~ Pivate & Gon @)chips Money ManagerTECHSpherefiee” @ trustlink Innovative. Experiences. Trusted," Sg 4 © ‘ é Q & Po! oe @chps: 2.2 Who is behind CHIPS? CHAP AG, a Swiss domiciled software company, was founded by Dr Philip Tromp a seasoned South African, regional, and international payment systems guru - to focus on emerging digital money technologies. Aware of the socio-economic dilemma of consumers and organizations having different levels of payment system access with varying pricing - ranging from fully banked consumers and large businesses through to consumers and micro businesses with no access to transactional systems, he conceptualized CHAP as a truly inclusive safe, cost- efficient, fai, and — transparent = peer-to-peer —ransactional__ platform. Or Tromp is widely credited for playing a key role in the sophisticated South African Payment system of today. To create CHAPS, he brought together a world class development team that has extensive and unique experience in the field of financial system infrastructure development. ‘& TRUSTING 5TECHSphere fMye io 23 trustlink Key members of the were instrumental in creating Perago’s world-leading real-time gross seftlement system, used by central banks in more than 15 countries spread across Souther Africa, North Africa, the middle East, Scandinavia, and Australasia, facilitate real-time, interbank transfers between banks. The robust development approach and security requirements demanded by central banks for their interbank funds-transfer systems, has been cartied through to the core of the CHAPS solution. Why use CHIPS and not a traditional bank account? CHIPS provides more than a bank account. For people with limited means and for small businesses, a traditional bank account isnot necessarily a cost-efficient solution. Typicaly, @ bank account does not empower the afore mentioned fo save and to manage their financial atfairs but rather discourages people from saving due to monthly fees, high transaction fees and no or very low interest eamed on their account. Although industry bodies and reguiators have done a ot of work to ensure that banking customers are treated fairly, not everyone Understands the nature of a bank. The typical relationship between the depositor and the bank is that of lender and borrower, not custodian. Once deposited, the bank becomes the owner of the money, allowing it to use the money however it sees fi. within regulation. Typically. the bank uses these ‘borrowings’ to grant loans to other customers and charge interest and fees more than that paid by the depositors. This relationship exposes depositors to unnecessary isk, which can result in the bank using the depositor's funds for their own benefit and losing the depositor’s money because of internal fraud or incompetence. To overcome these problems, CHIPS is built on two separate but interoperable pillars, both reguiated. The salient points of CHIPS are described below (kindly note that the material is the subject of a South Alrican provisional patent application, No 2018/0399). 2.3.1 Pillar : Funds management platform (the CHIPS Valve Store) CHIPS utilizes proven and regulated practices and institutions to provide for the management and safe custody of the user's money - be it a consumer or an organization, All funds deposited into CHIPS® are held in fiduciary or money market accounts, where the funds are owned by the CHIPS® user as principal but managed by an approved Administrative Financial Service Provider (FSP) as an agent, for the benefit of the user. SPHERE & TRUSTLING Pivate & Confidential @)chips Maney Manager 6TECHSphere fMye io Itisimportant to note that under this legal construct any claim would be against the Bank {8 deposit-taking institution and not against the Administrative FSP, acting as agent on behalf of the User. An Administrative FSP is licensed to hold long and short-term cash deposits and other financial products on behalf of a wide range of other FSPs and clients as well as 10 buy and sell various financial instruments (unit trusts, bonds, shares etc.) - Real Image Pay- Gate and Interchange in the case of Eswatini, Funds held on behalf of the users are pooled with that of other users and invested under an approved mandate, on their behalf, in financial products including but not limited to low-risk bank deposits and collective investments schemes, to obtain the highest possible interest for the users, The CHIPS Administrative FSP is a licensed Financial Service Provider, as defined in the various Acts, under a client mandate approved by in the case of East Africa, The user's funds are held by an approved Nominee Company - Which for instance can be Umelusi Capital (Pty) Ltd in the Case of East Africa, Once accepted into the CHIPS Value Store, the users’ holdings are digitalized into transactional units, in order fo ensure that the users’ proportional ownership of the Value Store is identifiable, clearly measurable, easily redeemable, and instantly transferable to other users within the Vaive Store (a closed-loop arrangement). A proportional ownership management system administers the intraday real-time exchange of transactional units between users and reconciles with the Administrative FSP system periocically 2.3.2 Pillar 2: Transaction initiation applications CHIPS utilizes software applications (mobile apps and internet portals.) to enable consumers and organizations to register as CHIPS users, taking care of the Financial Intelligence Centre (FICA] Act of 2001 in the Republic of South Africa and otherreguiatory requirements. Once registered, an investment account is opened for each user and the user is enabled to give digital instructions to the Administrative FSP to transfer funds to his/her Value Store account, transfer a part of their holdings to other users or to cash out their holdings in port or in full. The applications enable users to see the running balance of their holdings whenever required, all instructions processed on their behalf, a complete history of all deposits and withorawals, as well as any transactional units transferred to them from other parties, or by them to other parties. trustlink SPHERE & TRUSTLING Pivate & Confidential @)chips Maney Manager 7TECHSphere fMye trustlink An Administrative FSP is licensed to hold long and short-term cash deposits and other financial products on behaff of a wide range of other FSPs and clients as well as to buy {and sell various financial instruments (unit trusts, bonds, shares etc.) - TECHSPHERE’s Pay- Gote. Funds held on behalf of the users are pooled with that of other users and invested under an approved mandate, on their behalf, in financial products including but not limited to low-risk bank deposits and collective investments schemes. in order to obtain the highest possible interest for the users, The CHIPS® Administrative FSP is a licensed Category Financial Service Provider, as defined in the various jurisdictions. The user's funds are held by an approved Nominee Investment Company- Which for instance can be Umelusi Capital (Pty) Lid in the Case of South Sudan. Once accepted into the CHIPS® Value Store, the users’ holdings are digitalized into transactional units, to ensure that the users’ proportional ownership of the Valve Stores identifiable, clearly measurable, easily redeemable, and instantly transferable to other users within the Value Store (a closed- loop arrangement). A proportional ownership management system administers the intraday real-time exchange of transactional units between users and reconciles with the Administrative FSP system periodically. 2.3.3 Closed-loop transactions (transactions between Interchange and CHIPS users) The system enables users to electronically instruct the Administrative FSP through o software application, to transfer their beneficial ownership or any part thereof, to another user (also an investor in the Value Store] and the system executes these instructions immediately by means of an automated straight through process, with end-of-day reconciliation with the Administrative FSP's system. The instructions are executed in real-time, at any time of the day, and the receiver of the transactional u' becomes the new beneficial owner of the underiying funds/assets with immediate effect. 2.3.4 Open-loop transactions For users to exchange par! of their Value Store holdings to send money to, of transact with, people and organizations that are not users of the system, transactions need to be affected through the national payment system (NPS), utilizing existing interbank Payment mechanisms, provided by banks and licensed third-party payment service providers. & TRUSTLNKTECHSphere& By! trustlink 24 25 26 Investing into the Value Store For users to move funds into their Value Store accounts (subscribe], or to move funds out of their accounts (redeem), itis necessary 0 utlize the NPS infrastructure. Depositing funds into the Value Store would require transferring money from a bank ‘account via electronic funds transfer, debit card, credit cord or by depositing cash at @ fill of a participating merchant of which Trust-link is bringing to the table an already countless network of direct POS integrations of especial chain stores Point of Sales platforms that can be used by the various valve retaiers and larger public transportation Industry. To give effect to such an instruction from a user, the intermediation of a bank ora licensed payment service provider would be triggered. Withdrawing funds from the Value Store Similarly, to withdraw funds (redeem) from the user's holdings, in part or in full, would: require the intermediation of NPS participants. The user can issue an end to end encrypted digital instruction to the Administrative FSP to either transfer to a bank ‘eccount or enable the funds fo be withdrawn at an ATM provided by a bank, oF to cash out at a fill points of a participating merchant as well as all Chips miBusiness authorized resellers empowered wilh the Trustink multi-functional Master pass enabled Smart POS hand held devices and or the use of the miBusiness instaPay Eswatini Application that can be downloaded for free registrations by the business owner for Android Based Smart phones on the Google Play Store and or Apple Store of iPhones. In such instances, CHIPS interfaces with NPS intermediaries to give effect to the User's instruction to the Administrative FSP, 1oredeem their holdings or a part thereof. Transacting with entities in the National Payment System (NPS) For users to exchange part of their Value Store holdings for goods or services, provided by people and organizations that ore not CHIPS users, Iransactions need to be executed through the NPS, utlizing existing interbank payment mechanisms, provided by banks and third-party payment service providers. In such instances, CHIPS interfaces with NPS intermediaries to give effect to the user's digital instruction to the Administrative FSP to redeem a part of their holdings to enable the transaction to be executed in the NPS. & TRUSTLNK ale & Confidential @)chips Maney Manager 8TECHSphere fry! trustlink To give effect to the above instruction, Trustlink uses its NPS services or that of other third-party service providers, to facilitate the transaction as well as providing liquidity to give the receiving party immediate finality, while Trustiink awaits the interbank clearing processes fo run ils course. In the CHIPS model the user's funds clways remain the property of the user and can only be used as instructed by the user, and all funds are insured against internal theft, raud, ‘or mismanagement. 2.7. The user experience - consumer and informal operators The CHIPS Money Manager app is available for free download from Google Play or the Apple Store. We propose merging the Apps and then running one user interface Chips Interchange Application for the rich fully customized automated interoperable local South Sudan Instance / version, powered by the advanced interchange local Fintech Payment switch engine from the TECHSPHERE Poy-Gate Payment Switch Platform. 2.7.1 Consumers and small businesses ‘Step 1: Download the joint Money Manager app The CHIPS Money Manager will be downloaded from Google Play or the Apple Store for free. Step 2: Digital Registration as a user ‘Once the app is downloaded the person follows a user register process. The process requires the person to provide his/her local mobile number as well as well as a seltie in order to comply with KNOW Your Client (KYC) regulations identity details- in the local instance. TECHSPHERE has already fully digitized this process for any jurisdiction and can link it io any Government Home Affairs system (AFIS). We also have created a digital KYC hub, digital link of existing JVA KYC partners in part or full date base file transfers for shored value and at times at a minimal cost to the original KYC owner or based on potential lucrative revenue sharing massive user base trigger usage on joint value chain products and services offerings. We will also offer the data analylics inteligence as a local ful-fiedged Data Centre host in this regard ‘& TRUSTING Pivate & Confidential ‘10 @)chips Maney ManagerTECHSphere fMye a trustlink Step 3: insfer money to CHIPS, Money can be made available to CHIPS in several ways, for example: 1. The user can money transfer from their bank account in the CHIPS account by using CHIPS function that transfers the amount requested in a matter of seconds The TECHSPHERE Pay-Gate Platform will easily be Integrated with any mobile money platforms which makes it easier to derive value from the local virtual wallets as well. 2. Another person can transfer money into the user’s CHIPS account by using the CHIPS Money Manager or from credit or debit cards using any Masterpass enabled mobile Payment solution (e.g., bank apps and Zapper, Pay@, Snap Scan etc.) 3. A CHIPS registered organization can transfer an amount into the user's CHIPS ‘account by using ils miBusiness portal in the form of a salary/wage payment, @ social grant, a discount on a purchase, etc. This can even be done before the receiving person has registered as a CHIPS user, 4, The user can deposit cash into CHIPS at a store (currently available at through Pay@ participating stores or retailers. Talks are underway with merchants and identified service stations, in East Africa jurisdictions to become cash in and cash out outlets for CHIPS Users, this process is currently riven by the TECHSPHERE, 5. An integration into the mobile money operators wil provide an additional capability 10 Mobile Money users fo transfer funds from their mobile money ‘account into a CHIPS Value Store. Step 4: Transact Pay for goods and services 1. The user can pay goods and services at any organization that displays a payment code (a so-called QR code} showing the following logo or at their place of business, e.g., at pay points, tills, cashiers, and merchants empowered with the Trustlink Smart POS handheld devices ‘ond or iBusiness Chips Money Manager App. The payment code can be displayed as an image or as @ number. The payment code can also be received for payment via printed invoices and or in email, SMS, and WhatsApp messages etc. There is no cost to the User for these payments, 2. The user can also buy at selected outlets using a payment code generated within the Chips Money Manager App. ISPHERE & TRUSTLING Pivale & Confidential 14 @)chips Maney ManagerTECHSphere fMye a trustlink 3. The user can buy airtime, SMS bundles and data bundles within the app without any transaction costs. A rebate of 2.5% (RSA only] is given to each user for any successful Girfime purchase back into the user’s CHIPS Value Store in real-lime. Receive payments a. Any user can also display a payment code for other mobile payment app users fo scan and pay using their credit or debit card using any Masterpass enabled mobile payment solution (¢.g.. bank apps and Tapper) ©. Send money to family, fiends, other contacts within Eswatini and South Aica ond the rest of the continent as well as global online shopping cc. The user can send money to other CHIPS users, who will receive the money instanteneously in thei CHIPS account. d. The user can also send money to any of their contacts (or key in the recipient's mobile number) to withdraw cash at an FNB or Nedbank ATM, ©. Users that are eligible for a government grant / relief / payment can receive their grant instantaneousy in their CHIPS account Step 5: Transfer money out of CHIPS: 1. The user can transfer from the CHIPS account to a bank account by using a CHIPS function that transfers the amount in a matter of second at a low transaction fee. 2. The user can withdraw money in cash at participating Eswatini Merchants by providing a payment code fo the cashier at a minimal fee, independent of amount. 3. The user can create an ATM withdrawal voucher to Nedbank or FNB ATMs \draw cash at 2.7.2 Formal enterprises and other organizations Formal enterprises and other organizations (i.e. government, universities, schools, churches, clubs, etc.) can utilize Transact CHIPS to improve efficiency and lower costs. For the above entities, the process to get started is the following: An internet portal is available for organizations to provide the necessary details to comply with Financial Services Regulatory requirements in all jurisdictions. The process would necessitate the provision of supporting documents that needs to be scanned ‘and submitted via the registration portal which has been fully digitized by TECHSPHERE. TECHSPHERE & TRUSTLINE Pivate & Confidential ‘12 @)chips Maney ManagerTECHSphere fMye a trustlink Step 2: Registration as a miBusiness user ‘Once the KYC registration process is completed a Chips / Pay-Gate Value Store ‘account willbe opened for the organization and aalink and access codes willbe emaied fo the organization 10 access the miBusiness portal. miBusiness internet-based pplication that has been designed to fulfll the basic needs of an organization regarding the acceptance, reconciliation and making of payments through CHIPS, 5 well as providing other financial administration functionality. miBusiness also ‘enables the assigned administrator to allocate functions to the various system users within the organization as well as set authorization levels Step 3: Transfer money into Value Store account Money can be transferred into the organization's CHIPS account in the following ways: ‘An authorised user can transfer money from the organization’s bank account into its CHIPS Transact account in near real-time, using functionality available in miBusiness. 2. Cash can be deposited at any participating Merchants in Eswatini. The funds will thereatter be available in the organization's CHIPS account. 3. Where available, a CHIPS-enabled drop-safe can be used to automatically credit the organization's CHIPS Transact account with cash deposited into the drop-safe. The deposited funds are immediate available for the organization once the process is completed. 4. An integration into the mobile money operators will provide an additional capability to Mobile Money users to transfer funds from their mobile money account into their CHIPS Valve Store. Step 4: Transact The money available in the organization's CHIPS account can be utilized for the following transactional purposes: 1. The organization can purchase goods and services from any organization that displays a payment code (a so-called QR code] showing the following logo or (at their place of business, e.g., at pay points, tls, cashiers, eCommerce site, etc.) or on their invoices. The payment code can be received for payment via invoices or in email, SMS and WhatsApp messages and paid by scanning the code or by ISPHERE & TRUSTLING Pivate & Confidential ‘13 @)chips Maney ManagerTECHSphere fMye a trustlink entering the numerical representation of the code. There is no cost to the organization for making such payments. 2. The organization can pay wages and salaries by importing a formatted payment file into miBusiness and authorizing the transfer to the recipients. Wage and salary Poyments to CHIPS users can be made at no cost. 3. The organization can also do disbursements to its customers. for example. dividend payments, cash back, awards, prizes, grants, claim refund, etc, The same methodology applied to wage & salary payment apply in this case. These disbursements are also free of charge. 4. Inthe case of Government revenue services, The JVA will provide revenue service centerswith — MasterpassTrustlink Smart Mulfifunctional Android based POS devices to receive and make payments and fransaction authenticated by authorized administrators in the case of customer refunds, 5. The above service will be the fist ofits kind and come very handy especially to the Enforcement Departments for the collection of traffic spot fines. 6. The platform is integrated to the TECHSPHERE Public Transportation Industry Turn- key Automated Fare Collection system (AFC) for cashless commuter travel rights, transportation Desfire closed loop card system top ups. 7. The platform will also provide a QR Code and or EMV based fleet card solution for the payments of fuel and the fleet owner will enjoy the ease of remote transacting during the allocation of funds to his respective vehicles as per the desired need 8. The Platform will also provide a paperless government vehicle traveling authority digitized system as the Smart POS handheld device can be used by the inspectors from the Ministry of Public works and transport to determine timely authorization of use and routes deviation the same card scanned for authorization can also be used for re-fuel at participating merchants on the Chips eco-system in any jurisdiction 9. We will also provide as per request from our last meeting The Road Freight Association formerly known as (the Truckers Association) EMV fleet Cards enabled to pay for fuel, toll fees, border road freight fees etc. which cards are also linked to the Chips Platform for value top ups and allocation of funds to a specific vehicle card at the fleet's owners figure tips TECHSPHERE & TRUSTLINE Pivate & Confidential ‘14 @)chips Maney ManagerTEcHSphere Se! trustlink Step 5: Payment acquirin: 1. The organization can receive payments from CHIPS users as well as from any other person using a Masterpass enabled mobile app, including such opps made available by the banks, Zapper, Visa etc. These payments attract a standard acquiring fee of 2% [VAT excluded). 2. The organization can link several payments acauiring mechanisms to their miBusiness portal, including - 2. A static or dynamic QR cede that can be displayed to customers for scanning with their smart phones or entering on their phones at point of sale, or the code can be printed on invoices or sent to the customers using SMS, WhatsApp, etc. The code can be in the form of a QR code image or a unique 10-digit number that is specific to that payment. b. A dynamic QR code can be generated as a request for payment, specifying the amount to be paid and presented to customers for payment. These codes are be created by miBusiness. TRANSACT apps or other TRANSACT-enabled applications, The paying customer can modify the amount if they so wish to pay more or less than the requested amount. Also see payment request generation. ¢. Mobile phone based mobile payment collection app (PayNow) d, Smart POS mobile payment acauiring devices (PayNow Smart POS) fe. Physical cord and QR payment acquiring devices, this forms part of the “Retail in a Box" concept where POS Systems and Payment Accepting devices will be provided, hereby allowing merchant to accep! multiple forms of payment, ‘& TRUSTING 15Vv rN TECHSphere (te 7 trustlink MERCHANT PAYMENT ACCEPTANCE — GROW YOUR BUSINESS 2) sec oe (2): 1 The user can transfer from the CHIPS account to their bank account(s} by using a CHIPS function that transfers the amount in a matier of second at a low transaction fee. 2. The user can withdraw money in cash at participating Eswatini merchants nationwide by providing a payment code to the cashier at a minimal fee, independent of amount 3. The user can create an ATM withdrawal voucher fo withdraw cash at approved CHIPS Banks or ATMs. 16 @)chips Money ManagerVv ~ TECHSphereiigty 0’ nnovatve Cxpriences Tastes, SM trustlink 3.1 CHIPS and Businesses 3.1.1 Enable more customers to pay electronically To communicate the amount payable by a customer, a QR code is utilzed. Your business therefore needs the capability to create QR such codes for users to scan with their mobile phone apps. With CHIPS you can create QR codes, as follows: + QR codes can be generated as static or dynamic codes, the difference being that static codes do not cisplay the value to be paid (payer has to enter the payment amount on their Chips or Bank app). ‘and dynamic codes contain the amount to be paid. + QR codes can be displayed to customers in any of the following ways: © QR codes can be provided on invoices or bills. © the POS system can display the QR code for payments at the fill or the checkout of online stores. © the CHIPS PayNow app can be used fo generate and display the code. PayNow is particularly suited to delivery situations, for example, at restaurant tables or for remote deliveries. © @ mobile payment-method-agnostic acquiring device can be used to display a dynamic QR code. © Via Retai-in-a-Box concept integrated with a point-of-sale system, can create, and display the QR code [could also display © static @R code). Accept both EMV bank issued cards present, or online details input to finalize the transactions}. 3.2 Receive electronic payments from all customers AS a registered CHIPS merchant your customers can pay you using their CHIPS enabled mobile ‘apps, that is: 3.2.1 Any customer who has downloaded a CHIPS-enabled app (like Money Manager) and registered as a user, can pay your business with their app - the customer does not need to have a bank account to pay you electronically. & TRUSTLNK Pivate & Conf @)chips Maney Manager 7trustlink TECHSphere fMye io 3.2.2 Bank customers who are not registered to use CHIPS™, can still pay you into your CHIPS account if they have access fo intemet banking. If they do, they can use the CHIPS InstaPay app to pay you directly from their bank account using the internet banking process that they are familar with. This app can be downloaded by customers in under I minute and does not need any registration by the customer - they download and pay directiy from their bank account in reaHtime Using the miBusiness portal you can view and analyze all payments made to the business’ CHIPS account, 3.3. Pay out cash to customers Your business can pay out cash to customers in exchange for them transferring CHIPS to your CHIPS account. This will be of significant benefit to customers and assist your business to dispose of excess cash holdings. This function can also be used by the miBusiness owner as a multiple mobile money cash out function to eam income as value transactions commissions from various service providers and making full use of the Smart POS functionality 3.4 Access history of payment receipts and payments Using miBusiness, the CHIPS transaction history can be viewed or exported to other ‘ppiications. 3.5. Pay salaries and wages Using miBusiness, money can be transferred from the business’ CHAPS holdings, as single transactions or in bulk, to pay salaries and wages to staff, directly into their personal CHIPS™ accounis or using the CHIPS Send Cash via SMS function. 3.6 Disburse money to beneficiaries Using miBusiness, money can be transferred from the business’ CHIPS holdings, as single transactions or in bulk to external CHIPS users, for example, customer rebates, grants, study aid, dividends, claim settlements, etc., to CHIPS users. 3.7 Pay for goods and services Using miBusiness, goods and services can be bought and paid for using CHIPS, if the supplier is a CHIPS - enabled business or individual. TECHSPHERE & TRUSTLINE Pivate & Confidential ‘18 @)chipsTECHSphere fMye trustlink 3.8 Transfer money to the business’ bank account Using miBusiness, money can be transferred from the business’ CHIPS account to a designated bank account. 3.9 Business benefits of using TRANSACT 3.9.1 Reducing operating cos!s (all fees quoted exclude VAT) With CHAPS will save your business a substantial amount on receiving and making payments, including: 3.9.2 Reduced equipment expenses to accep! payments To take CHIPS payments the business would need a means of creating and displaying the payment request (QR code). Refer to options described in Section 6. However, this cost is low compared to other interfaces required to ‘accept bank issued EMV cards. 3.9.3 Minimal transaction fees To collect a CHIPS payment will cost you a fraction of what a credit/debit card receipts would cost you. The minimal fee of 1.0% of the transaction value, capped at $5.00, is way cheaper that other over the counter or ecommerce: payment methods. For example: A customer purchasing goods or a service from for say $5 000, will cost the business $5.00 when received from a CHIPS user, while the same. purchase using a credit/debit card could cost between 2% and 4%, or more, of value equaling to $100, assuming 2.5%, This means that with CHIPS you increase your margin by a healthy $50.00 on this transaction. Please note that instaPay attracts a higher fee of 1% of transaction valve, capped at about $8.00. 3.9.4 Zero to low cost to pay salaries and wages to CHIPS users, CHIPS provides a very cost-effective way to pay salaries and wages. Using miBusiness a batch of, Payments can be imported, and the money can be transferred to the staff. The fees applicable to salary payments are structured in volume bands (determined by the number of payments in the batch], the first band (less than 100 payments) being free. Individual payments, where necessary, can also be made, using miBusiness. 19 & TRUSTLNKTECHSphere fMye a trustlink 3.9.5 Minimal tee to transfer your CHIPS takings to your bank account Transfering money from your CHIPS account to your bank account, imespective of where you bank, would cost you a fixed fee of R3.50, per transfer. You could expect to see the money in your bank account within 2 hours. 3.9.6 Reduction in cash handling costs The fact that more customers are enabled to pay (also the unbanked ones), means that over time cash takings will reduce, resulting in less trips to the bank and lower cash handling fees payable to the bank. 3.9.7 Immediate finality and imevocobilty All payments made using CHIPS are final and irrevocable, meaning that once a payment has been confirmed, the payment cannot be cancelled. This means that the business will not be subject to payments being rejected, payments not been made as promised by the customer, customers providing fraudulent proof of payment, payment returned as unpaid by the bank, etc. 3.9.8 Money received immediately availabilty for use The moment the customer has completed the payment transaction. the money 1s available in business’ CHIPS account. In this respect CHIPS emulates cash (bank notes). With cash and with CHIPS, the transaction is concluded when the money moves from the customer's wallet to businesses fil, fo putin simple terms, with CHIPS, the ownership of the money transfers, with immediate effect. from the customer to the business 3.9.9 Accepting very low payments electronically The business can accept a CHIPS payment of as litle as $5 Dollars. All payments below $10 will cost the business only | cent in transaction fee. For payments above $10, the normal transaction fee of (1.0% of value, capped at $15.00) applies. 3.9.10 Convenient payment of staff (normally paid in cash) Staff who do not have bank accounts, smart phones or do not want to use apps, can easy be paid without the need to hold cash on premises or withdraw cash to make such wage payments. 3.9.11 Safer trading environment with less risk to staff and customers The use of CHIPS will over lime reduce the need to hold cash on the business’ premises. It will also lead to a reduced need to deposit cash. Also, should the business pay staff through CHIPS™ their risk of being robbed is also reduced. TECHSPHERE & TRUSTLINE Pivate & Confidential 20 @)chips Maney ManagerTECHSphere fMye a trustlink 39.12. Enabling payments for intemet sales Where the business has an internet commerce site, goods paid using CHIPS will be received instantaneously when the buyer clicks pay. In addition, the normal transaction. fee (5% of value, capped at $15.00) will apply, increasing the margin of the business on such transactions, 3.9.13 Reduced payment fraud With CHIPS payments the business and its customer are protected against fraud. All payments effected on 2 registered CHIPS participants, the identities of which have been verified. The payments take place in real-time when the ‘ownership of the money (the transaction value] is transferred from the customer to the business. This means that theres no way any of following eventualties can, eccur: 3.9.13.1 The business believes it has received payment, but the payment has in fact been rejected due to insufficient funds, fraud detected, etc. By the time the business gets this information the customer is long gone. 39.132 The card of a customer is skimmed or cloned, and the card information is used to do fraudulent transactions. The onusis on the business to prove that the transactions are not fraudulent. Organizations can utilize miBusiness to accept and make chips payments. The registration process is paperless and can be initiated from the intemet at www.chips.atrica Depending on their specific requirements, small and micro businesses can simply download CHIPS Money Manager and register. to utilize CHIPS for receiving and making payments. Registered businesses and other organizations can be paid in CHIPS by their customers, members, etc. They then utilize the miBusiness portal to view and analyze transactions, to pay their suppliers and staff as well as transact with other participating merchants, service providers, government entities, etc. as well as transfer funds to individuals. Through miBusiness the organization can move money from its CHIPS account to their bank account. ‘A domestic curency jurisdiction model is applied as far as the implementation of CHIPS is concemed. This implies that each country or jurisdiction (in this case South Sudan and or Ethiopia}, or region using the same currency, needs to deploy a separate instance of CHIPS. The contribution parties in each country or region are the following: ISPHERE & TRUSTLING Pivate & Confidential 21 @)chips Maney ManagerY =~ TECHSphere’ oe os trustlink 4.1 CHIPS AG - the software provider AS owner intellectual property owner CHIPS AG makes the software evailable to currency jurisdictions through partnerships or license ‘arrangements. CHIPS AG is also responsible for the ongoing development of the product suite as well as maintaining the software. In every country where CHIPS is deployed, it is necessary to integrate with the domestic payment system and the local banks. CHIPS AG also provides such integration services in collaboration with companies providing payment services in the country. Due to the fight links between the banks in the identified jurisdictions this is beneficial when it comes to the integrations done in currently operating jurisdictions. 4.2 The East Africa operating entities (TECHSPHERE Ltd & ) To successfully deploy CHIPS in any country or region it is necessary to establish an operating entity that takes care of domestic licensing requirements and the day-to- cay operational management of the CHIPS service to ils users. The operational management role includes but is not limited to the following: 4.2.1 Support * First level support 4.2.2 Technical services * Infrastructure management * Connectivity management * 31d party services management 4.2.3 Administration * Accounting and reconciliation * Fee distribution * Reporting 4.3. Regional service provider (Irustlink (Pty) Ltd) Trustiink is @ South African company, established in 2002. Since its inception, Trustlink has served financial institutions in Sub Saharan countries with payment related software solutions ‘end subscription services to get access to world class software at affordable rates. As a sister company of CHIPS AG, Trustlink offers complementary software solutions and services to CHIPS operating entities in Sub Saharan Africa, Get more information on Trustiink at yoww trustlink.co.za, ential & TRUSTLINK Pivate & Conf @)chips 2TECHSphere fry! trustlink 4.3.1 Safe custody service management 43.2 Treasury operations * Bank accounts management . ‘Cash management * Liquidity management . End-of-day 4.3.3. Processes Monitoring Screening AML monitoring and sanction Transaction monitoring © Usage 4.3.4 monitoring Support © Second level support © Operational 43.5 support Administration Accounting and reconciiation © Fee distribution © Reporting All fees indicated are excluding of TAXES. Participant / Merchants’ rates in the table below ‘exclude VAT or TAXES. Pricing is subject to CHIPS 3 party service providers’ price changes. TECHSPHERE & TRUSTINK Pivate & Confid @)chips Maney Manager ial «23Ny TECHSphere (te 7 Administration miBusiness portal / Merchant account Vv trustlink $20 per month Activation fee $20 Gateway fee $20 Fixed term contract Linked fo the enhanced Refai-in-a box offer Funds in Card not present CHIPS to CHIPS + Option 1: 3% of value. Includes loyalty provision, i.e. the payer (CHIPS user) can receive up to 1,5% back on purchases - credited automatically to his/ her CHIPS account. Merchants have the option to participate or not. + Option 2: 1% of value capped at $15.00 (no loyalty* applicable). MasterPass, Zapper, SnapScan On transactions initiated by Card not-present mobile payment aps (MasterPass enabled) to CHIPS enabled merchant: 2% uncapped (includes poyments using Zapper. Masterpass apps of banks, Mobile network platforms, etc.) Card Present 2% (uncapped) Of value plus a switch fee fo be communicated Settlement Fee No settlement fee. Transfer from Merchant's Bank | 1% capped at $25 Account into CHIPS account Funds out Transfer funds fo Merchant's bank | §3,50 (fixed) account EFT payments fo 3% party bank | $3.50 (fixed) accounts Refund / Chargeback fee 1% capped $3.50 Paying salaries/wages Paying salaries/wages in bulk to employee CHIPS accounts No transaction fee for miBusiness buk payment fo CHIPS accounts Paying salories/wages in bulk to employee bank accounts Payment fo employee bank account via EFT - Charge as per EFT payments to 3¢ party bank ECHSPHERE & TRUSTONI @ Favale & Confidential chips” Maney Manager, TEcHSphere Se! trustlink Paying out cash to non-CHIPS users (using Nedbank’s Cash Send function) 0.5% capped $3.50 Bonk withdrawal cost: $3.50 to $30.00 depending on value you withdraw Paying for purchases Pay supplier businesses * Fee of $3.50 per transaction using © miBusiness - CHIPS to CHIPS * EFT to 3¢ party bank accounts- * Charge as per EFT payments to * 3° party bank accounts. * No fee for paying Masterpass / © Zapper/ SnapScan GR code on «invoice RE & TRUSTLINK '& Confidential @)chips Maney Manager 25TECHSphere Sy’ ‘ @trustlink TECHSPHERE & TRUSTING Pivate & Confidential “Weneu Manager