Haddad Efma Sept 2008

Copyright 2008 © Welcome Real-time

All rights reserved. Material in this presentation can be copied on condition that

“Source : Welcome Real-time” is included in a clearly visible fashion next to the copied material.

How to reduce pricing pressure from merchants and generate new

revenue streams for banks

Aneace Haddad Chairman & Founder Welcome Real-time

Paris, September 2008

Interchange revenues of all banks worldwide: $64B Revenues of all publicly traded biotech companies worldwide: $70B

Interchange is as big as

biotech

2x Global interchange industry: $64B Global microprocessor industry: $35B

…and twice as big as the microprocessor industry

$16Billion

Annual R&D spending by US biotech companies

1964

1967

1967

“I can present it and sign the bill in 35,000 shops, garages, restaurants etc., throughout Britain.”

“Instead of making dozens of separate payments, I can make just one a month. To you.”

“I get all these advantages, yet the card and the service cost me nothing.”

“BARCLAYCARD is all I need to go shopping.”

1969

1982

Source: http://thehistoryof.net/history-of-credit-cards.html

1979 A turning point in the credit

card processing industry

“In 1979, magnetic stripes on the back of credit cards allowed retailers to swipe the customer’s card through an electronic dial-up terminal, which accessed the bank’s cardholder information.

“The advantage of this system, besides saving paper, was the increased speed of processing authorizations – one to two minutes. It also decreased credit card fraud.”

29 years

Source: 24th April 2006 BusinessWeek, BCG.

Internet payments

Mobile payments

Contactless Biometrics

Prepaid

Loyalty

Micropayments

EMV

P2P

NFC Mobile

banking

“What problem does this innovation solve?”

“What pain does it alleviate?”

“What value does it deliver?”

“Who cares?”

The key questions

Source: The Paradox of Pain, www.chrisoleary.com

“A great idea eliminates a significant source of pain for a large number of people.”

Source: The Paradox of Pain, www.chrisoleary.com

Contactless: a card innovation

that benefits merchants?

1 out of 133 “There are 6 million places where you can use your credit card, 45,000 (contactless locations) doesn’t excite me.”

John Suchanec, Bank of America

“Waving a card in front of a reader takes about as much time as swiping one through.”

Manager, Sheetz, Inc.

Contactless forecasts for 2007

230 million

Jupiter Report (2004)

37 million

Jupiter Report (2006)

25 million

Card Technology (June 2007)

WHERE’S THE PAIN ?

US$16 billion

Return Fraud (US)

US$3 billion

Card Fraud (US)

Newspaper ad, half page:

9,000 - 12,000

Co-op package mailing,

1 insert: 350

Local coupon book,

1 page: 350

Europe Pakistan China

Promotional marketing is huge ($342 billion in the US alone!)

“Introduce payment information value-added services to reduce pricing pressure from merchants and convince them of the real value of bank-sponsored retail payment networks.”

“The retailer will have a platform to deliver tailored promotions

at the POS.”

“The promotion or message can be delivered via a POS receipt.”

He has obviously been filling

up somewhere else.

----------------------------

Coupon

TRY OUR NEW EZ CAR WASH AND

ENJOY A COFFEE WHILE YOU WAIT

CAR WASH+COFFEE

SPECIAL $2.00

Expires Nov. 15, 2007

Since he is here now, why not print an offer at the bottom of his card receipt?

A feature that is simple, low cost and valuable for all types of merchants.

1st visit

----------------------

M---R---S--

Use your Visa payWave card at McDonald’s. When all the

letters above are filled,

win your McSurprise!

2nd visit

----------------------

MC--RPR-S--

Use your Visa payWave card at McDonald’s. When all the

letters above are filled,

win your McSurprise!

3rd visit

----------------------

MC--RPRISE-

Use your Visa payWave card at McDonald’s. When all the

letters above are filled,

win your McSurprise!

4th visit

----------------------

Coupon

MCSURPRISE!

Congratulations! Present

this ticket to any clerk

and get your McSurprise!

Not valid with any other

offer. Expires 31 Jan 2008

Card receipts don’t have to be boring.

London Apr 2008

“The profit margin for solving the merchants’ commerce problems and delivering new customers and/or closed sales is two to three times that of the payments transaction fee.”

“Data shows merchants will pay 7-9% for delivery of a sale vs. 2% for merely processing the payment.”

FREE PAYMENT PROCESSING !

“For every $1 you spend on AdWords each month, you can process $10 in sales the following month for free.”

+

Copyright 2008 © Welcome Real-time

All rights reserved. Material in this presentation can be copied on condition that

“Source : Welcome Real-time” is included in a clearly visible fashion next to the copied material.

Thank you

Aneace Haddad

Chairman & Founder, Welcome Real-time

a.haddad@welcome-rt.com

http://aneace.blogspot.com

www.welcome-rt.com