Who Else Can Boast a Network of Over 20,500 Loading Locations With Many More Added Each Day!

Huge Market Opportunity for SMKG
The Domestic USA Stored-value ATM/Debit, Stored-value Debit MasterCard® card, and International Stored-value ATM/Debit card accounts from SMS are early entry products and services in a rapidly developing industry. Approximately 75% of the people in the world cannot obtain a debit card or a checking account. A recent study by PriceWaterhouse Coopers for the United States Treasury department found that over 40% of the U.S. workforce has no bank account. An additional 12% with bank accounts are denied a debit card. This large number of “Lost Consumer” market (“un-banked” and “under-banked”) individuals and families has risen more than 28% in the last three years. These individuals and families are shut out of many basic financial transactions and must pay much higher fees than the banked just to conduct normal financial business.conduct normal financial business.

Carl Pascarella, President and CEO of MasterCard USA characterized the “Lost Consumer” market noting, “… Consumers worldwide spend approximately $8.1 trillion in cash purchases. Twenty-two percent of that amount - or $1.8 trillion represents purchases of $10 or less, indicating an enormous untapped market for new card products like the stored value card”#8221;. Forecasts and current statistical reports by experts indicate Debit Card Account Programs are the future of consumer payment options.

The vast majority of the worlds un-banked are migrant workers from “lower-middle income countries”. The International Monetary Fund reported that “workers’ remittances”, “migrant’ transfers” and “compensation of employees abroad” from the United States had a growing impact in countries around the world. The United Nations reported that remittances are a major source of foreign exchange and are an important addition to these countries gross domestic product, by over 10% for countries like El Salvador, Jamaica and Nicaragua. Worldwide, remittances to developing countries increased from $54.6B in 1995 to $72.3B in 2001, representing a 32% increase over the six-year period. According to the Inter-American Development Bank, remittances grew an additional 17.6% in just 2002. Over three-quarters of these worldwide remittances originate in the US.

Remittances from US migrant workers to Mexico were $9.92B, over 30M transactions averaging $328.00 each in 2002. Remittances from US to Central America per migrant were $1,260.00 per year. The rate of growth of remittances exceeds growth in overall per capita income in US, Mexico and Central America. (Source: Pew Hispanic Center, 2002)

The cost of sending money is a major loss of income for the developing world. Costs vary greatly from country to country and by the method used.  The cost of transferring money can represent a significant loss to immigrants and their families. For example, the Inter-American Development bank estimates that the total cost of sending remittances to Latin America and the Caribbean reached $4B in 2002, or about 12.5% of the remittance total for the region. The Pew Hispanic Center estimated that the total cost of the average remittance transfer ranges between 15 and 20% of the total. Reducing remittance costs in many countries has been inhibited by a lack of banks serving poor and rural populations, lack of confidence in formal channels because of graft or costly financial services markets. SMS, an informal remittance channel, reduces costs and provides more efficient and trustworthy services than banks or formal money-sending services while introducing migrants and their families to a virtual banking system.  

Cost of Sending $300 from the US to Mexico,
By Type of Institution, November 2002 

                                                                 Institution                                                Total Cost %

                                        Western Union                                                                          6.33
                                        Other national money-sending services                                   7.0
                                        Ethnic store                                                                                6.0
                                        Bank as money transfer service                                               3.3
                                        Credit Union                                                                               6.2
                                        Money Order                                                                              5.7 

Source: Manuel Orozco, Washington: Inter-American Dialogue, 2003

Companies, organizations and associations, whether local or international, incur high payroll, expense reimbursement and reconciliation costs. Affinity groups and marketing companies are expanding globally at rapid paces due to advanced technology, shipping and the internet. The Dallas Morning News, July 04, 2002, printed an article that was the Business Section front-page lead, titled: “Moving payroll from paper to plastic” Bankers, newspapers, magazines, trade publications and financial experts are exclaiming - the future of payroll is debit cards. “At the end of the day, Companies want 100% electronic payroll” Joseph Lyons, Bank of America.
 

A Broad Product Mix
SMS either owns or has acquired distribution rights for prepaid products, financial services, loyalty programs and web-based information technology for non-bank, financial businesses that serve customers in niche demographic populations. Smart Card provides cutting-edge products and services that take advantage of the newest Treasury regulations and the company either owns or has acquired distribution rights for the following:
1. Prepaid Debit ATM cards
2. Card-to-card Money Transfers (Domestic and International)
3. Prepaid Debit MasterCards
4. Prepaid Wireless, Long Distance and Bill Payment for carriers like Boost Wireless, Verizon, AT&T, T-Mobile, TracFone and Cingular Wireless
5. Check Imaging and Remittance Processing for Check Cashers
6. Card loading services at any Wells Fargo, Bank of America, BankOne or Fleet Bank branch location (over 10,000 locations in the US)
7. Remittance Processing & Aggregation through electronic checks, paper checks, money orders, MoneyGram and credit cards
8.VelocityMerchant™, a web-based transaction tracking system that allows participating retailers to track all their financial transactions through the system and calculate sales commissions, residuals and fees to individual offices or employees. This software is unique to SMS and gives the company a critical advantage over any competing provider.