Investor Presentaiton

Payments Glossary Acquiring Bank / Sponsor Bank BANC OF CALIFORNIA The bank that sponsors the merchant into the card payments ecosystem, underwrites the risk of the merchants and holds the merchant's account, and accepts the settlement funds arising from the merchant's transactions. Acquiring Banks/Sponsor Banks must be members of the Card Networks. An Acquiring Bank/Sponsor Bank may directly solicit merchants to receive the Bank's payment services, or the Bank may engage ISOS/MSPs to solicit merchants on the Bank's behalf. Card Networks The Card Networks (American Express, Discover, Mastercard, Visa) are a critical piece of the payments puzzle, providing the infrastructure needed to clear and settle transactions between Issuers and Acquiring Banks/Sponsor Banks (each of which are members of or otherwise authorized to submit transactions into the Card Networks). Gateways A gateway sits between the merchant and the Processor, and its function is to collect, package, and encrypt transaction data, including the card account details, for routing to the Card Network. The gateway then translates the response back to the cardholder at the point of interaction (i.e., whether the transaction is approved or declined). ISOS/MSPS Independent Sales Organizations (ISOs) / Merchant Service Providers (MSPs) are the intermediaries between merchants and the Processor and/or the Acquiring Bank/Sponsor Bank. ISOS/MSPs solicit merchants to receive payment processing services of the Acquiring Bank/Sponsor Bank. ISOS/MSPs may provide point-of- sale terminals or other equipment to merchants, but ISOS/MSPs are not generally in the transaction funds flow and generally do not physically manage merchants' money. ISO8583 Connectivity ISO 8583 is an international standard for financial transaction card originated interchange messaging so that different systems can exchange transaction requests and responses. The vast majority of transactions made when a customer uses a payment card use ISO 8583 at some point in the communication chain. In particular, the Mastercard and Visa networks base their authorization communications on the ISO 8583 standard and require this capability for direct connection. Issuers Financial Institutions that issue debit or credit cards to consumers or businesses on behalf of the Card Networks. Like Acquiring Banks/Sponsor Banks, Issuers must be members of and/or otherwise approved by the Card Network to engage in issuing activities. ISVS An independent software vendor ("ISV") is an organization specializing in making and selling software products that run on one or more computer hardware or operating systems. ISVs are aggregants of other merchants who typically operate within a specific industry such as real estate, technology, media, entertainment, and healthcare. ISVs may incorporate an Acquiring Bank/Sponsor Bank's payment card processing services in the ISV's software products. Payment Facilitator A company that provides the infrastructure necessary for their sub-merchants to begin accepting payment card payments. Payment Facilitators (i) contract with an Acquiring Bank/Sponsor Bank to provide payment services on the Bank's behalf, (ii) underwrite and onboard the sub-merchants, (iii) enter into a direct contract with the sub-merchants in order to provide payment services, and (iv) may provide the sub-merchants with the technology they need to process electronic payments and receive the funds from those payments. Acquiring Banks/Sponsor Banks deposit settlement funds to the Payment Facilitator's account, and the Payment Facilitator subsequently settles those funds to the relevant sub-merchants. Processors Entities that handle the movement and verification of transaction data between the merchant and the other parties (Acquiring Banks/Sponsor Banks, Card Networks, Issuing Banks) involved in the execution and settlement of payment card transactions. Processors provide the technical capabilities and connectivity to the Card Networks for transaction authorization, clearing, and settlement. 7

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