REAPCHAIN.Inc Contents 1. Abstract 03 2. ReapPay Business Overview 04 2-1. Overview and status of the simple payment/remittance market 2-2. Simple payment/remittance market technology overview 2-3. Necessity of ReapPay 3. Definition of service (business) content and technology 11 3-1. O2O platform service - ReapPay / ReapPick / ReapOrder 3-2. O2O platform additional service - Integrated settlement and sales omission prevention service/ Next day payout (pre-settlement) service/Customized advertisement (Push) service 3-3. Cryptocurrency deposit and microloan service 3-4. Overseas simple payment and remittance service 4. ReapPay Ecosystem 23 4-1. ReapPay Ecosystem 4-2. Use of ReapPay for Pay 4-3. Business and revenue model 4-4. ReapPay Reward Policy 5. Target market and entry strategy 28 5-1. Global market status 5-2. Chinese market analysis and commercialization strategy 5-3. Detailed strategy for entering China - Establishment of foreign-funded companies and partnerships with local companies 6. Expected Sales and Profitability 34 6-1. Expected sales and profits according to the strategy to enter China 6-2. Expected domestic sales and revenue 1. Abstract 1. Abstract With the development of digital technology and various changes in the financial system, we are now living in a society where mobile payments such as Internet banking, Samsung Pay, and Alipay are common. However, the modern financial system has various side effects such as security, information cost, transaction stability, and maintenance cost due to its centralized system, and enormous technical and cost matters must be maintained and built. In other words, since the current financial payment system consists of a complex network that is organically coupled with each other, such as various institutions and companies, it is necessary to build a payment system that is compatible with each other, an authentication system for internal information exchange, and a messaging network. In addition, due to the structure of such a complex financial system, security threats due to personal information infringement or hacking occur, and it is difficult to secure the reliability of a lot of information exchanged between relay means. Network encryption technology is required to solve the above problems in the digital payment market, and blockchain encryption technology enables open distributed network systems in a single centralized enterprise- centered system. Blockchain technology is a distributed computing technology that provides reliable and efficient data based on non-interference and time evidence records and is a fourth industrial technology defined as P2P network activity based on mutual trust between participants. As a result, the introduction of blockchain technology is accelerating in the financial sector. The modern financial system is still unstable and complex, and it is difficult to converge blockchain technology with the modern financial system. However, to solve these problems, ReapPay wants to overcome the limitations of payment services based on the existing financial system and build a new financial infrastructure that does not require cash or cards by increasing security based on the safe value of blockchain. The emergence of fintech is attributable to the environment in which consumers' consumption behaviors are shifting towards mobile-centric due to the widespread use of smartphones and in which customized financial services are available to consumers through big data analysis, etc. ReapPay aims to provide customized financial services in line with changing financial trends and secure financial payment services with enhanced security based on blockchain technology. In addition, as a global payment system, we want to think and move forward to complete a financial infrastructure without currency exchange anytime, anywhere. 3 2. ReapPay Business Overview 2. ReapPay Business Overview 2-1. 2-1. Overview and status of the simple payment/remittance market Since the 2008 global financial crisis, competition and innovation have been Overview and spreading in the banking-oriented payment industry, with the emergence of various financial services, financial channels, and business models such status of the as mobile payment, foreign currency remittance, financial platform, P2P, simple payment/ public investment (crowdfunding), personal asset management, security certification, and financial data analysis. remittance market As a result, a new type of fintech industry based on various technologies and platforms is rapidly emerging. Many non-financial companies fiercely compete for market preoccupation and expansion based on Pay-type simple payment methods and prepaid simple remittance methods. ① Overseas market status - (Market size) According to the ‘Global Fintech Trends and Supervision Policy’ announced by the Financial Supervisory Service, the global Fintech market has grown from $1.6 trillion in 2014 to about $5 trillion in 2020. It is also projected to increase to $9.8 trillion by 2023. In the global fintech market, the digital payment sector is growing thanks to the development of technology and the spread of smartphones rapidly. It is closely related to consumer life, so the number of users is high, and its frequency is high. In addition, due to the wide range of applications, it accounts for more than 77% of the total market. < Graph1. Global Fintech Market Size > (Unit: trillion dollars) 6 5.0 5 4.2 4 3.5 3 2.8 2.3 1.9 2 1.5 1 0 2014 2015 2016 2017 2018 2019 2020 Digital payment Corporate finance Personal finance Source: Financial Supervisory Service, Global Fintech Trends and Supervisory Policy, December 2020 4 2. ReapPay Business Overview - (structural growth background) Although the US, Europe, and Japan are 2-1. classified as advanced financial countries, the proportion of cash settlements in personal consumption expenditures is still high. In Overview and particular, the proportion of cash use is high in small business owners status of the (small and medium-sized stores), lifestyle-related industries, and micropayments. Recently, due to technological developments, policy simple payment/ efforts in each country, and the impact of COVID-19, the cashless nation remittance market is accelerating worldwide. (The trend of changing from cash payment to non-cash/digital payment) - (Major operators) Pay companies representing non-cash payments to include Kakao Pay, Samsung Pay, Alipay, Google Pay, and Apple Pay. Due to fierce competition among global companies, the payments market had grown rapidly from $2.9 billion in 2013 to $8 billion in 2018, management consulting multinational company Accenture announced. In the case of China, the number of investments and loans further decreased due to the aftermath of COVID-19 and the effect of tightening regulatory policies for the fintech industry. Nevertheless, the investment amount in the first half of 2020 was $2.1 billion (RMB 13.8 billion). this is equivalent to 25% of the total investment in the Asia/Pacific region. ② Status of the domestic market - (Market size) The domestic fintech market, which has recently been rapidly increasing, recorded 7.31 million daily transactions and an average daily usage amount of USD 190 million (213.9 billion KRW) as of the first half of 2020, up 8% and 12% from the previous year, respectively. According to the Bank of Korea, the size of the simple payment market soared to $35.9 billion in 2017, $71.9 billion in 2018, and $107.7 billion in 2019. < Graph2. 2017-2020 Domestic average daily simple payment service usage amount > (Unit: KRW billion) Information & Communication 213.9 Distribution/Manufacturing 190.9 158.0 135.1 107.1 164.3 152.8 84.3 124.7 107.9 50.7 85.8 66.5 37.9 49.6 33.2 38.0 12.8 17.8 21.3 27.1 2017 H1 2017 H2 2018 H1 2018 H2 2019 H1 2019 H2 2020 H1 Note) Information & Communication : Kakao Pay, Naver Pay, KPAY, Source: Bank of Korea (2020.09) Paynow, UBpay, Payco, SPC Networks, SS Pay, Toss Pay Distribution/Manufacturing : Smile Pay, SSG PAY, L PAY, Samsung Pay, LG Pay, One Pay, Baemin Pay, Coupay, SK Pay, WeMakep Pay 5 2. ReapPay Business Overview - (Proportion by a business operator) According to the '2018 Financial Informatization Promotion Status' report published by the Bank of Korea, non-face-to-face transactions accounted for 91.2% of financial transactions in 2018 (based on deposits and withdrawals and money transfer transactions), and face-to-face transactions through bank windows Transactions were only 8.8%. In particular, the number and amount of use by information and telecommunication operators have increased due to the impact of social distancing due to the spread of COVID-19. - (Major operators) As a result of confirming the domestic simple payment market through IR data (accumulated number of subscribers, monthly active users, and transaction amount) published by each company, 8 out of 10 service users are Kakao Pay (81.9%), or Naver Pay (81.4%) was found to be in use. However, in terms of the main platform used the most in real life (1st place), Samsung Pay (30.2%) occupies the lead by a narrow margin, followed by Naver Pay (29.1%) and Kakao Pay (14.6%). 2-2. ① Service procedure and technology type Non-financial companies use PIN or biometric information and various Simple payment/ authentication technologies online, and provide simple payment and remittance services offline using mobile phone-based MST, NFC, QR/ remittance market Barcode technology. technology - (Simple payment) When paying at an online merchant, the customer selects overview a simple payment method and pays easily with a PIN or biometric information authentication method, or completes the payment with a mobile phone touch or QR-code, etc. - (Simple remittance) The customer selects a simple remittance method, withdraws money from the financial company account to the prepaid account and charges it, then fills in the recipient's contact information (mobile phone number, SNS ID, etc.) or financial company account number and enters the amount before remittance easy to complete with the push of a button.