Net Element to Acquire Quickpay, a Proprietary Payment Terminal Network That Provides Consumers with a Convenient Way to Pay for

  Net Element to Acquire Quickpay, a Proprietary Payment Terminal Network That
  Provides Consumers with a Convenient Way to Pay for Goods or Services

  Acquisition Expected to Give TOT Access to Cash-Based Economies Through an
Interface Easily Localized to Fit the Lifestyle and Language of Target Markets

Business Wire

MIAMI & MOSCOW -- July 3, 2013

Net Element International (NASDAQ: NETE), a technology-driven group
specializing in electronic commerce and mobile payment processing is pleased
to announce today that they have entered into a binding term sheet to acquire
Quickpay, a proprietary payment terminal network that provides consumers with
a convenient way to pay for goods or services, and operate it through TOT
Group (“TOT”), Net Element International’s mobile payments and transaction
processing holding company. This proposed acquisition is expected to give TOT
access to cash-based economies through an interface easily localized to fit
the lifestyle and language of target markets.

Quickpay Multinational Payment Terminal (Photo: Business Wire)

Quickpay Multinational Payment Terminal (Photo: Business Wire)

TOT is a multinational mobile payments and transaction processing company that
provides a range of groundbreaking online and offline payment solutions. TOT’s
mission is to be an innovative provider of revenue enhancing payment
solutions. Clients include wireless carriers, content providers and merchants.
TOT delivers end-to-end payment solutions that enable merchants to reliably
accept cashless transactions at the point of sale (POS). From processing of
electronic payments at the POS to mobile commerce transactions to managing
merchant terminals and providing information management services, TOT offers
innovative solutions that allow merchants to streamline their payments
resources.

Quickpay is an alternative pathway in the backbone of the global payment
ecosystem. It targets participants in the cash-based economy worldwide,
allowing buyers to pay for their goods and services via cash remittances made
at terminals, similar in look and feel to ATMs, without the need for plastic
cards or bank accounts. Payments can also be made on the Quickpay network via
WAP, Web, and SMS Terminals – or via XML protocols that integrate external
payment systems. Those goods and services run the gamut, from home utility
bills to cell phone tariffs and cash transfers. Quickpay’s proprietary
technology platform is highly secure and customizable: it provides an
intuitive interface easily localized to fit the literacy, language and customs
of the target markets. McKinsey & Company described the market for consumer
bill payments as follows: “Consumer bill payment is a large and potentially
attractive market for payments providers. Globally, consumers pay 75 billion
to 100 billion bills annually, generating $25 billion to $30 billion in
payments revenue, often at healthy operating margins of more than 25 percent”
in its 2010 report Consumer bill payment: Learning from global archetypes.

“Russia is just one of many regions that represent a clear opportunity as it
alone has over 4 billion transactions annually with 80 percent of that volume
comprised of walk-in payment channels,” said Oleg Firer, CEO of Net Element.
“In many Eastern European markets, banks and post offices are where
approximately two-thirds of these transactions take place requiring the
completion of forms and often resulting in long lines.”

“The system is designed to reliably process all payments made within seconds
of consumers cash entries,” said Ilya Shurygin, the founder of Quickpay. “Our
proprietary payments acceptance network offers security, convenience and an
indispensable on-ramp to the connected global economy via the most simple and
common monetary form: cash.”

Improving the cash-based customer’s experience is also an opportunity for
merchants that place a Quickpay terminal in their convenience stores, gas
stations and other highly trafficked areas. By either renting space to
Quickpay or by taking a portion of the transaction fees, merchants are
financially incentivized to participate – plus cash payment terminals are a
proven means of attracting new customers to retail locations allowing
merchants to build their core business.

The payment terminals (Quickpay Machines) can be used for paying for:

  *Mobile top-ups
  *Utilities
  *Internet
  *E-money
  *TV
  *Bank loans
  *Money transfers
  *Tickets

The terminal’s looks and bright colors are eye-catching:

  *Straightforward and user-friendly interface for customer's convenience
  *A built-in coin acceptor
  *Additional accessories are available
  *Can be equipped with additional features, such as scanner, card reader,
    Chip and PIN-PAD
  *Easy access due to front opening panel
  *Can be fitted with an alarm

For those that consider a cash-based payment system limited to emerging
economies, consider this view of Italy as presented by the same 2010 McKinsey
& Company report. In this highly developed economy, ‘20 percent of households
are unbanked and over 40 percent of bills are paid in cash.’ Quickpay is
currently operating in the USA, Panama, United Arab Emirates, Russia,
Kazakhstan, and Kyrgyzstan with expansion plans in place for Ukraine, Latin
America, Turkey and the Philippines.

The terms of the proposed acquisition are disclosed in Net Element
International’s Form 8-K filed with the SEC today.

The proposed acquisition is subject to Net Element International’s
satisfactory completion of due diligence, the execution of an acquisition
agreement and ancillary agreements and documents satisfactory to the parties,
and other customary closing conditions.

About Net Element International (NASDAQ: NETE)

Net Element International (NASDAQ: NETE) is a global technology-driven group
specializing in electronic commerce, mobile payments and transactional
services. The company owns and operates a global mobile payments and
transaction processing provider, TOT Group, as well as several popular content
monetization verticals. Together with its subsidiaries, Net Element
International enables ecommerce and content-management companies to monetize
their assets in ecommerce and mobile commerce environments. Its global
development centers and high-level business relationships in the United
States, Russia and Commonwealth of Independent States strategically position
the company for continued growth. The company has U.S. headquarters in Miami
and international headquarters in Moscow. More information is available at
www.netelement.com.

About Quickpay

Quickpay is an alternative pathway in the backbone of global payment ecosystem
and is designed to save customers time when transferring their money or paying
for various services. It targets participants in the cash-based economy
worldwide, allowing buyers to pay for their goods and services via cash
remittances made at terminals, similar in look and feel to ATMs, without the
need for plastic cards or bank accounts. Payments can also be made on the
Quickpay network via WAP, Web, and SMS Terminals – or via XML protocols that
integrate external payment systems. Those goods and services run the gamut,
from home utility bills to cell phone tariffs and cash transfers. Quickpay’s
proprietary technology platform is highly secure and customizable: it provides
an intuitive interface easily localized to fit the literacy, language and
customs of the target markets. More information is available at
www.mpsquickpay.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Any statements contained in this
press release that are not statements of historical fact may be deemed
forward-looking statements. Words such as “proposed,” “will,” “may,” “would,”
“could,” “should,” “expect,” “expected,” “contemplated,” “plan,” “project,”
“intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,”
“continue,” and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements include, without
limitation, Net Element International’s plans, intentions and expectations
with respect to the proposed acquisition of substantially all of the business
assets of Quickpay; Net Element International’s satisfactory completion of due
diligence with respect to Quickpay and its business, financial condition,
assets and operations; the execution of an acquisition agreement and ancillary
documents satisfactory to Net Element International; the satisfaction of
customary closing conditions; the extent that the proposed acquisition gives
TOT Group access to cash-based economies and the extent that TOT Group is able
to realize benefits from any access that it obtains to such cash-based
economies; and whether Net Element International or its business continues to
grow. All forward-looking statements involve significant risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in the forward-looking statements, many of which are
generally outside the control of Net Element International and are difficult
to predict. Examples of such risks and uncertainties include, but are not
limited to: (i) the failure for any reason of TOT Group to satisfactorily
complete due diligence with respect to Quickpay and its business, financial
condition, assets and operations; (ii) the failure of TOT Group to enter into
an acquisition agreement and ancillary documents with respect to the
acquisition of substantially all of the business assets of Quickpay; (iii) if
such acquisition agreement is entered into, the failure of the proposed
acquisition to close for any reason; (iv) risks relating to the consummation
of the contemplated acquisition, including the risk that required consents to
the acquisition might not be obtained in a timely manner or at all or that
other closing conditions are not satisfied; (v) the impact of the proposed
acquisition on the markets for Net Element International’s and its
subsidiaries’ products and services and on the markets for Quickpay’s products
and services; (vi) operating costs and business disruption following the
proposed acquisition, including adverse effects on business relationships with
third parties; (vii) the future performance of Net Element International
following the closing of the proposed acquisition; and (viii) local, industry
and general business and economic conditions. Additional factors that could
cause actual results to differ materially from those expressed or implied in
the forward-looking statements can be found in the most recent annual report
on Form 10-K and the subsequently filed quarterly reports on Form 10-Q and
current reports on Form 8-K filed by Net Element International with the
Securities and Exchange Commission. Net Element International anticipates that
subsequent events and developments may cause its plans, intentions and
expectations to change. Net Element International assumes no obligation, and
it specifically disclaims any intention or obligation, to update any
forward-looking statements, whether as a result of new information, future
events or otherwise, except as expressly required by law.

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Contact:

Net Element International
Dan Bruck, 305-507-8808
dbruck@netelement.com
www.netelement.com
 
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