www.boku.

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BILLING AND PAYMENTS PROCESS

Boku Payment Operations

Version February 22, 2012

Copyright 2009, BOKU. All rights reserved. Confidential information. Do not copy or distribute without prior permission.

Table of Contents
1 MONTHLY TRANSACTION AND REVENUE REPORTS ..................................................... 3 1.1 1.2 1.3 2 2.1 BACKGROUND ................................................................................................................ 3 HOW TO ACCESS YOUR MONTHLY TRANSACTION SUMMARY REPORT ....................................... 3 HOW TO READ YOUR MONTHLY TRANSACTION SUMMARY ..................................................... 3 BACKGROUND ................................................................................................................ 5 Expected Payouts ................................................................................................. 5 Actual Payout ....................................................................................................... 5 Timing ................................................................................................................... 6

MONTHLY TRANSACTION STATEMENT ....................................................................... 5 2.1.1 2.1.2 2.1.3 2.2 2.3

FORMAT ........................................................................................................................ 6 EXPLANATION OF ITEMS ON THE STATEMENT ....................................................................... 7 TIMELINES ..................................................................................................................... 8 PAYMENT CURRENCY ....................................................................................................... 8 PAYMENT METHOD ......................................................................................................... 9 PAYMENT REMITTANCE ADVICE......................................................................................... 9

PAYMENTS ................................................................................................................ 8 3.1 3.2 3.3 3.4

APPENDIX 1 COUNTRY CODES ....................................................................................... 10 APPENDIX 2 WITHHOLDING TAX RATES......................................................................... 11

Copyright 2009, BOKU, Inc. All rights reserved.

1 Monthly Transaction and Revenue Reports

1.1 Background
There are several reports available in the Reports section of the merchant portal. These give you details of performance for all your markets and services (transactions and revenue). One of the reports is called the Monthly Transaction Summary and gives you a breakdown of transactions and revenue by month for each market. This report will give you an approximate amount you may expect to receive from Boku for each month and market. Please refer to your billing statements for information on the actual amounts successfully billed.

1.2 How to access your Monthly Transaction Summary report

i. ii. iii. iv. Log on to your merchant portal using the ID and Password you created as part of your sign up process. Click on the Reports tab on the menu bar at the top of the screen. Click on Statistics, and then on Monthly Transaction Summary. The Monthly Transaction Summary report will be displayed on the screen. You can also export the report to CSV.

1.3 How to read your Monthly Transaction Summary

The monthly transaction summary has several headings: i. ii. iii. Month This is the month in which the transaction was completed. Boku uses GMT to timestamp all transactions. Market This is the country code for the market. A list of country codes mapped to Market name can be seen in Appendix 1. Currency This is the local currency of each market. It is also the currency that will be reported on your billing statements.

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iv. v. vi. vii. viii. ix.

Unique Consumers This is the number of unique subscribers who initiated a payment transaction. Total Transactions This is the total amount of transactions that have taken place in each market in a particular month. Successful Transactions This is the total amount of transactions that were successful and completed in a particular month. Failed Transactions This is the total amount of transactions that failed in a particular month. Success % - This is the total amount of successful transactions as a percentage of the total amount of transactions in a particular month. Part Paid Transactions In some markets, a transaction can complete with the total billed amount less than the total transaction amount but still greater than zero. All such transactions are counted as part paid transactions.

x.

Part Paid Revenue This is the total gross revenue that is earned from part billed transactions in a particular month. Total gross revenue, sometimes referred to as Total Payment Volume (TPV), is defined as the total amount billed to end users.

xi. xii.

Total Revenue This is the total gross earned in a particular month, including part paid revenue. Gross Payout This is the estimated total payout to Boku for all completed and billed transactions. The payout to Boku is calculated as the payout received from suppliers in each market net of any messaging fees. Note this includes payouts from part paid transactions as well. The Gross Payout for a part paid transaction is computed based on the part paid revenue.

xiii.

Net Payout This is the estimated total payout to you for all completed and billed transactions, after Boku has assessed their fee. The fee is generally applied as a percentage of Gross Payout.

The fields marked with a star (*) are converted into your reference currency at the current exchange rate. Boku sources exchange rates from http://www.xe.com on a daily basis. Exchange rates are provided for indicative use only. The exchange rate used for settlement is likely to be different.

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2 Monthly Transaction Statement

2.1 Background
2.1.1 Expected Payouts

After the end of each month you will receive a monthly transaction statement which shows the net expected payout for each market for transactions completed and billed in a particular month. This expected payout is net of all messaging fees and commissions and is shown in the local currency of each market.

2.1.2

The actual payout may differ from the expected payout for a variety of reasons. i. Billing Adjustments Operator statements are received and reconciled against Boku internal billed volumes. These statements can differ from internal volumes due to a variety of reasons, including bad debt, timing differences, chargebacks or operator billing discrepancies. Once the statements are reconciled, Boku may pass a billing adjustment percentage to be applied against the expected payout. The billing adjustment is calculated as a percentage as follows: [(Actual Payout - Expected Payout) / Expected Payout]. This billing adjustment percentage is called the Monthly Adjustment and can be seen in the Adjustment column on your statement.

Actual Payout

ii.

Withholding Taxes Withholding taxes occur when funds are transferred between countries. A percentage of the transfer is required to be paid to the originating government as a withholding tax, and this percentage is then applied against your payout. A list of all countries and their corresponding withholding tax rate, if applicable, can be seen in Appendix 2. Withholding tax rates are subject to change from time to time.

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iii.

Chargebacks a. Operator initiated chargebacks - In the US, operators may issue refunds to end users and pass a chargeback to Boku. Boku receives detailed information from the operators about these chargebacks, which are then matched to the original transaction. The revenue share of that original transaction is passed to you as a chargeback. b. Boku initiated chargebacks and credits - Boku Customer Support Representatives sometimes need to issue credits or chargebacks to your account if there is a problem during the transaction process.

The actual payout is computed as follows: Expected Payout * (1 Billing Adjustment %) * (1 Withholding Tax %) Chargebacks. The actual payout amount will be communicated on your statement after the reconciliation process is completed between Boku and mobile operators. This is the final amount you will receive for transactions in the indicated month and market.

the prior month, as well as an account summary including actual payouts and payment dates for prior months. The account summary will include all months that had activity during the previous billing cycle or in which payments have not been completed.

2.1.3

Within 7 days after month end, statements are issued showing the expected payout for

Timing

2.2 Format

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2.3 Explanation of items on the statement

The monthly transaction statement has several headings: i. ii. iii. iv. v. vi. Month This is the month in which the transaction was completed. Boku uses GMT to timestamp all transactions. Year This is the year in which the transaction was completed. Market This is the country in which the transaction was completed. Currency This is the local (transaction) currency of the market. Total Payment Volume Total payment volume, sometimes referred to as Total Gross Revenue, is defined as the total amount billed to end users. Gross Network Outpayment - This is the estimated total payout to Boku for all completed and billed transactions. The payout to Boku is calculated as the payout received from suppliers in each market net of any messaging fees. This may also be referred to as Gross Payout. vii. viii. Boku Fee This is Bokus fee for processing transactions, generally applied as a percentage of Gross Payout. Expected Payout - This is the estimated total payout to you for all completed and billed transactions, after Boku has assessed their fee. This may also be referred to as Net Payout. ix. x. xi. Adjustment This is the discrepancy percentage as defined in 2.1.2.i above. Withholding Tax This is the withholding tax percentage as defined in 2.1.2.ii above. Chargebacks These are the chargebacks as defined in 2.1.2.iii above. Positive numbers represent a deduction in payout, and negative numbers represent an increase in payout. xii. xiii. Adjusted Payout - This is the final amount you will receive for transactions in the indicated month and market. Date Paid After payment has been made for the Adjusted Payout, the date of transfer from Bokus account is noted here.

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3 Payments
3.1 Timelines
Boku generates payments twice a month, usually around the 10th and 25th of each month. Boku then takes approximately 3 business days to process and issue payments. All payments received from operators prior to the generation date that have not already been remitted will be included in this payment. Payment timing varies from market to market, but generally ranges between 45-120 days. Determination of when a market and month of transactions will be paid is not made until payments are generated. Boku imposes a $500.00 minimum on every payment. Any payments that do not meet the minimum requirement will be carried over to the next payment cycle.

3.2 Payment currency

Boku makes payments in the currency received at the rate received after collecting from mobile operators. If an additional conversion is needed before reaching your bank account, it will be handled by our forex provider. If for any reason Boku needs to do an exchange rate conversion, a spread is applied to the current days mid-market rate from http://www.xe.com. This spread reflects the buy/sell rates achievable to Boku on the market to convert those funds on your behalf. Boku currently supports the following currencies: USD, EUR, GBP, CAD, AUD, NOK, and DKK. For all other transaction currencies, payments are first converted into one of the supported currencies prior to settlement. The majority of such conversions will be made into USD.

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3.3 Payment method

Payment will be made to your designated bank account. You may update your banking information in the merchant portal, and confirm that changes were made to payops@boku.com. As a security measure, you may be asked to respond to an additional email to verify these changes. The method of payment depends on the payment currency and your designated bank account. Possible payment methods include: i. ii. iii. iv. ACH: USD payment to USD account, within USA. Wire: USD payment to USD account, outside USA. Foreign Exchange Wire: non-USD payment to same currency account. UKForex: if the payment currency differs from your bank account currency.

3.4 Payment Remittance Advice

Upon settlement, Boku will issue a remittance advice to confirm and to provide details for the payment. You will receive a separate remittance advice for each method of payment. Each remittance advice contains the following headers: i. ii. iii. iv. v. vi. vii. Payout Currency This is the currency in which payment leaves Bokus account Country This is the country in which transactions were completed. Local Billing Currency This is the local (transaction currency) of the country. Month, Year This is the month and year in which transactions were completed. Net Payout This is the Actual Payout for the Country, Month and Year indicated which will tie to your Monthly Transaction Statement. FX Rate This is the exchange rate between Local Billing Currency and Payout Currency. Payment in Payout Currency This is the amount to be paid, rounded to 2 decimal places. If you will be receiving a payment from UKForex, an additional table is included on the remittance advice detailing the conversion of funds between the Payout Currency and your bank account currency. You will also receive a separate confirmation from UKForex directly.

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Appendix 1 Country Codes

Country Code AE AR AT AU BE BG BH BR CA CH CL CN CO CY CZ DE DK DO EC EE EG ES FI FR GB GR GT HK HN HR HU ID IE IL Country UAE Argentina Austria Australia Belgium Bulgaria Bahrain Brazil Canada Switzerland Chile China Colombia Cyprus Czech Republic Germany Denmark Dominican Republic Ecuador Estonia Egypt Spain Finland France UK Greece Guatemala Hong Kong Honduras Croatia Hungary Indonesia Ireland Israel Country Code IN IT JO KR LB LT LV MA MX MY NI NL NO NZ PE PH PL PS PT RO RU SA SE SG SI SK TH TR TW UA US VE VN ZA Country India Italy Jordan Korea Lebanon Lithuania Latvia Morocco Mexico Malaysia Nicaragua Netherlands Norway New Zealand Peru Philippines Poland Palestine Portugal Romania Russia Saudi Arabia Sweden Singapore Slovenia Slovakia Thailand Turkey Taiwan Ukraine USA Venezuela Vietnam South Africa

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Appendix 2 Withholding Tax Rates

Country Brazil* Chile Colombia Dominican Republic Ecuador Guatemala Honduras India Indonesia Lebanon Nicaragua Peru Qatar Taiwan Venezuela Vietnam Withholding Tax 15.00% 35.00% 33.00% 29.00% 24.00% 3.10% 10.00% 10.55% 20.00% 7.50% 10.50% 30.00% 5.00% 20.00% 15.00% 9.75%

* Brazil payments are made from Paymo Brazil. Withholding is done by the local bank and tax certificates are provided to the Merchant with remittance.

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