Processing

Company Profile

quipu | contents

Qui | pu [khipu]
A quipu was a device invented by the Incas for storing information by means of knots tied in string or wool.

QUIPU CONTENTS
05 09 14 18 20 22 25 Quipu The Company Products and Services Systems and Security Best Practice Customer Comments Quipu Management Team Contact Us

quipu | the company

LOCATION
Quipu Processings operational centre is situated in Germanys financial capital, Frankfurt, near the TV tower.

QUIPU THE COMPANY

Quipu Processing is the card transaction processing division of Quipu GmbH, the Frankfurt-based IT services provider. Quipu GmbH was set up in 2004, when the prominent German consulting firm Internationale Projekt Consult (IPC) GmbH decided to spin off its IT operations to form a separate company. IPC has over 25 years experience in the implementation of financial institution building projects in developing countries and transition economies, and Quipus expertise and business orientation are built on that tradition.

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quipu | the company

RESPONSIBILITY
A PASSION FOR PROBLEM-SOLVING

LOCALISED SERVICE ON A GLOBAL SCALE

INTERNATIONAL SCOPE
Quipu is an international company in every sense of the word. Our main customers to date are the members of the ProCredit group, an expanding network of banks dedicated to serving micro, small and medium-sized enterprises and low-income households. Today there are 20 ProCredit Banks operating successfully in as many different countries in Africa, Latin America and Eastern Europe. The vast majority of them are running the banking software developed by Quipu, and receive support on all IT-related matters either from Quipus headquarters in Germany, or from one of our 5 regional offices in El Salvador, Kosovo, Macedonia, Russia and Ukraine. In addition to our presence on three continents, our international character is also reflected in our staff of hand-picked experts, with more than 20 different nationalities represented. This puts us in a unique position to offer a localised service on a global scale. 06

At Quipu Processing as in the other divisions of Quipu we relish the opportunity to implement ambitious projects in challenging environments. It is no coincidence that our first project to set up a card processing system was undertaken in Kosovo, only a short period after the province had emerged from bloody ethnic conflict. And more recently, we installed the first ATM ever to go into service in the Democratic Republic of Congo. We fervently believe that by providing technologically advanced cashless payment facilities which conform to stringent standards of efficiency and security we can make a significant contribution to stabilisation and development.

By providing technologically advanced cashless payment facilities which conform to stringent standards of efficiency and security we can make a significant contribution to stabilisation and development.

WHAT DOES QUIPU MEAN?

The word quipu refers to a mnemonic device consisting of knotted strands of wool or cotton which was used by the ancient Incas to record and transmit information. The choice of name not only reflects Quipu GmbHs international background; it also expresses our constant striving for simple yet ingenious solutions which can function even in environments that do not have a sophisticated technological infrastructure.

quipu | products & services

Quipu Processing is a dynamic, innovative service provider with a commitment to supporting our business partners in every aspect of their card-based operations both today and in the future.

PRODUCTS

PRODUCTS AND SERVICES

Service tailored to your needs Quipu Processing is a dynamic, innovative service provider with a commitment to supporting our business partners in every aspect of their card-based operations both today and in the future. Our experience in widely varying environments, coupled with our ability to anticipate market developments, form the solid basis on which we build productive and rewarding partnerships with our clients. You can be sure that our guidance is sound, and that our processing technology is fast, efficient, secure and reliable. Quipu offers a comprehensive and highly flexible service package that can be tailored precisely to your needs.

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quipu | products & services

PROJECT IMPLEMENTATION
Quipu Processing is the ideal partner for banks and other service providers that are planning to build a card business from scratch. We advise you throughout the implementation of the project, from the initial definition of requirements to your customers first card transactions on a fully functioning system.
. Project planning

. Licensing and certification We advise you on all aspects of the product licensing process, assisting directly in the submission of applications to VISA, MasterCard, American Express, and any other payment system you wish to join. We prepare our products for testing by the payment systems and ensure that the entire certification process is completed smoothly.

CERTIFICATIONS All of our procedures are fully compliant with the rigorous security standards imposed in Germany, as well as the international Payment Card Industries Data Security Standard, as required by MasterCard, VISA, American Express and other card systems.

We draw up the project implementation plan in close consultation with you, outlining each step in the process and defining a realistic schedule. . Requirements definition If requested, we provide advice on which card products to offer, which hardware to install, which connection method is best for the local environment, etc. All solutions are scalable and flexible. . Hardware and network setup We oversee the installation and configuration of all hardware involved in EFT operations, including network connections. . Interface management We develop customised solutions to ensure that EFT operations are integrated seamlessly into your current banking business, providing guidance on the design and implementation of interfaces to your existing systems. . New product launches If you already have a card business, we advise you on the introduction of new products, and manage the full product certification cycle. 10

LICENSED SAFETY

TRANSACTION PROCESSING
Once your card business is up and running, we make sure that your account-holders can use their cards at any time of day, every day of the year not only on your terminals but also on those operated by other banks. Thanks to our expertise, your customers both private individuals and companies will be able to order debit cards or credit cards or both. They can maintain accounts and conduct transactions in a range of different currencies. And our multi-language systems allow them to interact with your terminals in their preferred language. . Transaction types supported Quipu Processing supports a wide range of EFT operations, including: ATM withdrawals, ATM balance enquiries, ATM ministatements, ATM utility payments, ATM scratch code sales, POS manual cash advances, POS purchases, customer notification of transactions, etc.

. Authorisation Our system performs instantaneous authorisation on all types of card, including both magnetic stripe and chip cards. Each time a card is used, the system runs authentication checks on the PIN, validity/expiration date, account balance, CVV2, and LUHN check digit. The Quipu system also checks to ensure that the requested transaction does not conflict with any limits. Balance and limit checks are not currency-specific the system supports multicurrency transactions and accounts. . Routing Not-on-us card transactions are routed to the appropriate payment systems for authorisation.

. Clearing and settlement File exchange with the relevant payment systems and associated transaction processing are carried out on a daily basis. The transactions are then presented to you for reconciliation. . Dispute management We undertake chargeback processing and second presentments/representments processing. . ATM driving The Quipu host system maintains real-time communication with the ATM at all times. The system also manages the ATMs multi-currency, multi-language and screen navigation functions, and performs terminal key management. 11

quipu | products & services

. ATM monitoring Terminal status control is active on a 24/7/365 basis. The host system performs terminal monitoring and auto notification. . POS acquirer processing and monitoring In connection with POS operations, our system supports multi-currency and multi-language functionality, and performs terminal key management, transaction monitoring, merchant reporting and reconciliation.

FRAUD DETECTION
To protect you against all attempts at fraud, our servers automatically detect suspicious transactions and immediately send you an alert. . Fraud monitoring and alerting Our fraud detection system is in full compliance with international standards. When a suspicious transaction is detected, the system automatically sends the bank immediate notification. . Systems and security - See page 15 for detailed information on our systems and security standards.

SUPPORT
Our help desk is always there to offer you technical support on any matter related to card-based operations. If any urgent problems arise, you can contact our hotline around the clock. Quipus support unit can also provide reports to meet your specific needs. . Purchasing support We provide detailed technical specifications of devices and card types which your bank should purchase, based on your specific requirements. . Reports We provide a standard set of reports on transactions, network activity, cards, etc. On request, we also develop customised reports on any aspect of the card business. . Statistics On request, we can provide statistics based on source data.

24/7 AVAILABILITY

. Card management Our system monitors card status throughout the life-cycle of each card. We process customer applications received from your bank, issue new card numbers, and forward the relevant data to the card personalisation department. There the actual card is embossed before shipping to your bank. Once the card has been issued to the customer (i.e. activated), you can use our system to monitor the status of the card on an ongoing basis, including monitoring for approaching expiration dates. . Card personalisation The personalisation department takes care of every step of the process of applying the individual cardholders data to the physical cards. This includes PIN generation, PVV/CVV/CVV2 calculation, magnetic stripe and/or chip encoding, and embossing and/or indenting. . Stoplist processing We manage the submission of stoplist files to the payment systems, and process the stoplist files received from them.

CONSULTING AND TRAINING

Our ongoing consulting services include comprehensive advice on product policies and strategies. Our in-house experts are always ready to advise on defining and introducing new products and services. Training is another integral part of our package. Our experts provide basic and advanced training to your bank personnel engaged in operating the card business at all levels. The courses take place both on site at your bank, and at our own offices in Frankfurt and around the world. In the initial phase of a project, we also train your technical staff to operate and maintain the new systems. And as electronic payment technology advances, we offer additional courses on the latest developments, and product-specific courses on newly launched products.

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quipu | systems & security

SYSTEMS AND SECURITY

Our IT infrastructure is designed to ensure continuous availability, maximum flexibility and watertight security.

AVAILABILITY
Cardholders are entitled to expect instant access to their money at any time, every day. To ensure this level of availability, we have built our network infrastructure and server platforms exclusively with hardware supplied by vendors with a proven reputation for reliability. Our transaction processing software also leads the market in combining speed with stability. And our 24/7 monitoring system is designed to detect and eliminate errors long before our customers experience any drop in performance. . Servers Our server farm natively consists of high quality Hewlett Packard servers. Our Online Authorisation System runs primarily on three HP BL20p server nodes in a Microsoft Clustering environment. This enables us to perform maintenance tasks on one node at a time, which means maximum availability for our customers. . Network Quipu Processings networking infrastructure is engineered on the basis of Cisco technology, which is among the highest quality hardware available in the market today. All critical layer 2 and 3 networking devices are physically duplicated in our data centre to ensure redundancy. . Software As our core software we have chosen a multilayer application especially designed for the Microsoft Clustering environment. This ensures maximum availability by uncoupling the application from direct connection to the operating system. . Database In this area too, Quipu Processing follows its rule of using only high quality products offered by well-known suppliers. That is why we have opted for Oracle, which has proven to be one of best DB products in the market for medium-to-large enterprises. 15

BROAD MONITORING
We attach the highest priority to protecting our customers data. All of our offices and data centres are monitored by cameras 24/7, and independent inspectors audit our physical security and data security arrangements on an annual basis.

quipu | systems & security

FLEXIBILITY
Our clients can choose from among several methods for connecting to Quipu Processings networks, allowing you to apply the technology that is best suited to your local communications environment. And the flexible software architecture allows us to respond quickly to your requests for modifications to accommodate any new card-based products you may wish to introduce. . Servers Our Blade server farm enables us to maximise scalability at a manageable TCO. In this environment we can respond quickly to performance demands. . Network Knowing that our customers might have widely differing connection requirements, we offer a broad selection of connection technologies, ranging from secure Internet VPN to our own autonomous system, from Global Frame Relay to GPRS Host connectivity. Our systems are permanently able to handle a very high volume of simultaneous global traffic, and capacity levels are kept under constant review to ensure that our systems will never become overloaded. . Software The modular structure of the software which runs our systems makes it easy to adapt to new products and new features of existing products. 16

SECURITY
We know that security is a primary concern for both banks and cardholders, and at Quipu Processing we attach the highest priority to protecting our customers data. All of our procedures are fully compliant with the rigorous security standards imposed in Germany, as well as the international Payment Card Industries Data Security Standard, as required by MasterCard, VISA, American Express and other card systems. And to ensure that we remain in compliance, our operations are subjected to an annual audit: independent inspectors scrutinise the physical security arrangements in our buildings, designed to prevent any kind of unauthorised access. They also verify the logical security of our data handling systems, including encryption, PIN safety and other access control features. Another key aspect of our security package is a highly efficient automated fraud detection system. . Physical Security Security at Quipu Processing starts at the very front door of our premises: stringent entry control procedures are in force, and all of our offices and data centres are monitored by cameras 24/7. Dual control rules are strictly enforced, ensuring that no individual staff member has physical access to customer-related data unless another authorised person is also present. And every single new employee is thoroughly screened before assuming his/her duties. The dual control principle is applied rigorously throughout our operations.

. Data Security All customer information stored in our servers as files or in databases is kept in encrypted format. Employee access to such data is kept to a minimum, on a need-to-know basis. Log servers continuously monitor every attempt to gain access, whether successful or unsuccessful.

. Fraud Monitoring Our certified fraud monitoring solution is directly hooked up to our online system, enabling it to detect suspicious activities almost in real time. Our client banks also have direct access to this software via their own GUI, enabling them to take immediate action in the event of suspected fraud. 17

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BEST PRACTICE
SETTING UP CARD PROCESSING IN KOSOVO
Today Kosovo can justifiably claim to be one of the best covered markets for debit and credits cards in Southeastern Europe there is at least one banking card in almost every household, and people have come to rely on the services that card ownership offers. Challenging environment This is all the more remarkable when one remembers that as recently as the year 2000 the banking sector was in a state of total collapse. The military conflict had destroyed much of the existing infrastructure eventually bringing financial operations to a complete standstill. In this context, ProCredit Bank , to this day one of Quipus largest clients, opened its doors in the winter of 2000, and for almost two years it was the only bank to operate in post-conflict Kosovo. A pioneering venture in itself, the bank soon faced an overwhelming response from the general public. Need for automated services The long queues in its offices were a stark reminder of the urgent need for streamlining. In particular, the bank rapidly had to find a way to automate its cash handling and cash-related customer 18 services. Quipus technology played a crucial role in this process, and was soon to become the backbone of Kosovos ATM operations and cashless payments . The project to implement banking cards in ProCredit Bank Kosovo was initiated in summer 2001, and by the winter of that year the first ATMs were already on-line. Flexible and creative solutions The difficult post-conflict environment, characterised by a lack of technological infrastructure, IT services and internet providers not to mention the breakdown of public order required a high degree of flexibility and creativity on the part of all the parties involved. Quipus project managers and technicians, who are today in charge of setting up processing services all over the world, led this ground-breaking project from conception to successful implementation. It is thanks to their expertise and dedication that the banks card business continues to thrive today. Adding new products and services Since 2000, more than 300,000 cards have been personalised by Quipu and distributed to clients of ProCredit Bank.

HELPING HANDS FOR BUSINESS

ProCredit Bank Kosovo has been able to sustain its leading role in the local banking sector, due in large part to its ability to keep adding new banking card products and services to its range. Now this includes POS transactions, international debit and credit cards, payments via ATM, and payback schemes. Quipu too has continuously broadened its range of services and upgraded its technological infrastructure. Its highly efficient help desk has always provided invaluable support, and the close cooperation between Quipus advisers and the banks management has been crucial in enabling ProCredit Bank to run its exemplary banking card operations in Kosovo. 19

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GLOBAL CONNECTIONS
Quipus experts have enabled banks in widely varying environments to launch successful card operations. Our main customers to date are the banks belonging to the ProCredit group, who especially appreciate our flexibility, creativity and efficiency.

CUSTOMER COMMENTS
The performance of the technology supplied by Quipu Processing has been absolutely remarkable, especially considering that it was set up in the immediate aftermath of a war that had destroyed Kosovos communications infrastructure. In the past five years, we have never experienced any downtime problems. Quipu also assisted us in introducing chip technology to Kosovo in record time. - Ilir Aliu, Deputy CEO, ProCredit Bank Kosovo

To meet our customers growing demand for cashless payments, we needed to introduce card services but we werent sure how to approach this task. Thanks to the sound advice we received from Quipu Processings consultants, who walked us through every step of the project, we were able to launch our card business much more quickly than we had expected. - Solange Arely Lainez, Head of Retail, Banco ProCredit El Salvador

Within the space of only four months, Quipu Processing provided us with everything we needed to offer our customers a full range of card services. They helped us to install the countrys very first ATM, which is already proving invaluable in relieving the pressure on our overcrowded cashiers booths. - Louis-Odilon Alaguillaume, Deputy General Manager, ProCredit Bank Congo

In Georgias dynamically developing card market, we knew that our bank would need to be innovative in order to succeed. Thanks to Quipu Processing, we were not only able to keep pace, but can reasonably claim to be the market leader in terms of our technology and the range of card products we now offer. - George Margania, Head of Card Department, ProCredit Bank Georgia 21

quipu | management team

quipu | management team

SUPPORT AT A PERSONAL LEVEL

Mark-Oliver Horst Chief Technical Officer

Tel.: +49 69 / 50 69 90-237 Fax: +49 69 / 50 69 90-220 eMail: horst@quipugmbh.com

Ejup Biqkaj Chief Operations Officer

Tel.: +49 69 / 50 69 90-215 Fax: +49 69 / 50 69 90-220 eMail: biqkaj@quipugmbh.com

Ralf Niepel. Managing Director

Tel.: +49 69 / 50 69 90-214 Fax: +49 69 / 50 69 90-220 eMail: niepel@quipugmbh.com

Gleb Stolyarov Risk Manager

Tel.: +49 69 / 50 69 90-212 Fax: +49 69 / 50 69 90-220 eMail: stolyarov@quipugmbh.com

Gnana Vali Vale Customer Service Manager

Tel.: +49 69 / 50 69 90-228 Fax: +49 69 / 50 69 90-220 eMail: vale@quipugmbh.com

HIGHLY MOTIVATED
All Quipu employees receive comprehensive training in our regional offices and training centres, and remain in constant contact with their colleagues all over the world.

quipu | contact

CONTACT US

MORE INFORMATION
Processing If you are interested in our services and products and/or want to know more about Quipu, do not hesitate to contact us: Quipu Processing Am Eisernen Schlag 31 60431 Frankfurt am Main Germany Tel. +49-69-50 69 90 0 quipu@quipugmbh.com www.quipu-processing.com

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PUBLISHED BY
2007 Quipu GmbH, Frankfurt Am Eisernen Schlag 31, 60431 Frankfurt, Germany www.quipu-processing.com, quipu@quipugmbh.com Concept and production Eva Thelen, Marcel Sekula, Reinold Nvermann and Huy Pham

www.quipu-processing.com