MSP Sales & Operations Training Class 2009

PPS Sales & Operations Training

Class

An Elavon Payments Partner

About PPS, Elavon and the Bankcard Industry

Best in Class Value Proposition– Systems Leadership– Operations and Services Leadership

Product Leadership


Profile

Elavon Founded in 1991 – Became a wholly owned subsidiary of U.S. Bancorp in July 2001

A top global merchant processor:– Processing in 30 countries– Ranked #1 in merchant locations – over 1,000,000– Ranked #1 in network speed and reliability– Ranked #3 in U.S. merchant processing

volume – almost $200B Partnered with Pinnacle Payment Solutions in 2003.

– Serving over 1,500 bank clients with more than 15,000 branches– Converted more than 150 merchant portfolios

Developed own proprietary processing network– Authorization, settlement, and all operations functions


PPS & Elavon: Best in Class Value Proposition


End-to-end Proprietary Global Network

One source for all payment processing and service needs - from point of sale to settlement

24-hour funding on most transactions and payment types

Consolidated reports and statements Quick and seamless conversions Support for a variety of front-end authorization

methods and back end settlement options – optimize pricing and service levels

Comprehensive network monitoring and management– Automated system sends an alert if a component in the

network has failed, then re-directs traffic so processing time is not affected


Service Excellence

Relationship Management Team– PPS has an assigned Relationship Manager to help grow the

business– Internal business advocates

Support Team– An entire call center support team to assist with Operational

tasks on a daily basis Industry-leading Customer Service

– Call center available 24/7 Risk Management and Fraud Control

– Automated Risk Management System (ARMS) Reports Tailored to Merchant’s Needs

– Standard and custom reports– Desktop access and periodic account reviews

Everyone at PPS & Elavon is Focused on You and Your NeedsEveryone at PPS & Elavon is Focused on You and Your Needs


PPS & Elavon Transaction Processing and Settlement


http://www.americanexpress.com/

http://www.discovercard.com/

The Credit Card Industry Players

Card Issuer Consumer Merchant Processor Card Assoc. Acquirer


Important Components of a Transaction

The Host

Merchant Processing System (MPS)

Interchange

The Depository Bank


The Transaction Process

The Two Parts of The Transaction Process:

– Authorization – The permission of the Issuing Bank to the merchant to accept a credit card for payment

– Settlement – The process of clearing the credit card transactions through Interchange in order to fund the merchant


Transaction Authorization

Merchant

Issuing Bank


Settlement

Merchant NOVA Host Merchant Acct. System

Interchange

Issuing Bank

Automated

Clearing House

Cardholder

Merchant’sDDA(Checking)Account

Host


Voice Authorization and Code 10

A possible response from the Host is “Call Auth.” This response should prompt the merchant to call Elavon’s Voice Authorization Center for an authorization. This response indicates that the Issuing Bank wants the merchant to call where the Center will either give an approval code or ask for additional information.

A Code 10 is a term used by the Associations to refer to suspicious or questionable transactions. The merchant can call into the Voice Authorization Center and request a Code 10 for an added level of verification.


Interchange

What is Interchange?


Definition of Interchange and Interchange Fees

Interchange refers to the money paid from the Acquirer to the debit or credit card issuer for every transaction. In certain circumstances Interchange may be paid from the issuer to the acquirer. The level of interchange is determined by many different factors according to the way the transaction occurred and the type of card used. Interchange balances the card payment system.

Interchange Fees are one component of the Merchant Discount Rate, which is paid by merchants to their Acquirer when they accept credit and debit cards for purchases.


Interchange

Transactions start at the lowest possible category of Interchange and move up in qualification based on the information provided with the transaction.

The Qualified, Check Card and Rewards Qualified rates reflect the best Interchange categories (lowest rate) that the merchant can obtain based on their industry and card type.


So, what does Interchange have to do with terminals?


Terminals and Interchange

Terminal programs and features are designed and added by our Terminal Management department to help merchants be more secure and meet their needs based on entry method and card type.– Address Verification Service (AVS) – Last 4 prompt– Key vs Swipe – Settlement (Time frame and Auto Close)– Customer Code / Tax– Folio Number (Lodging)

Educate the merchant on how his / her transactions can better qualify through Interchange.


Interchange

SIC/ MCCVisa and MasterCard have assigned codes to each type of merchant industry. MasterCard calls these codes Merchant Category Codes (MCC) and Visa calls them Standard Industry Codes (SIC). These codes are transmitted with the transaction to help determine qualification requirements.


Interchange – Requirements By Industry

Retail

Restaurant

Mail Order / Telephone Order & E-Commerce

Lodging

Supermarket


Some Highlights from the Terms of Service

Processing Limit – page 3 Term and Termination – page 10 Honoring Cards – page 17 Glossary of Industry Terms – page 43


Some Highlights from the Merchant Operating Guide Planning Ahead for Monthly Fees and Chargebacks – page 3 Electronic and Manual Transaction Components – page 9 Processing Recurring Payments – page 14 Code 10 for International Shipments – page 19 Code 10 Procedures – page 29 Identifying Valid Cards – page 21 Chargebacks – page 32 Additional Resources – page 53 Glossary – page 55


Chargebacks

• A Chargeback occurs when a Cardholder or an Issuing Bank disputes a charge.

• Tips for Preventing Chargebacks• Work with the cardholder to resolve disputes regarding the quality of merchandise

or services rendered. • Refuse to process a transaction when you receive a Declined Code during

Authorization. • Include a description of the goods or services on the transaction Receipt. • Deliver merchandise or services before charging the Card. • Include the CVV2/CVC2 and AVS codes for card not present transactions, if

applicable.


Retrievals

A retrieval is a request to the merchant through the Acquirer to provide the sales slip. A sales slip can be requested for a number of reasons including:– The cardholder is questioning a sale– The cardholder needs a copy for tax purposes – The Issuing Bank is questioning the sale– Retrieval requests can be made by a cardholder’s bank for up

to 18 months from the original sale date, making it crucial for merchants to hold onto their receipts until this time


The Elavon Chargeback Department

101 Employees and 11 Managers in Knoxville

Receive approximately 51,360 chargebacks monthly totaling $14.9 million

Receive approximately 20,500 retrievals monthly totaling $9.5 million

Average retrieval fulfillment rate for last year - 89.5%– Approximately 10% of all chargebacks received are auto

decisioned


PPS & Elavon Product Leadership Solutions


Product Excellence

Payment Solutions– Credit, debit, EBT, fleet, purchasing cards

Value-added Solutions– Electronic Check Service– Electronic Gift Card– Dynamic Currency Conversion

Point-of-Sale Solutions– POS equipment, software, Internet– Custom and VAR interfaces

Reporting Solutions– Online reporting, ACS, Custom reports

Support/Operations– Risk Management & Fraud Control– Chargeback Research & Retrievals

If You Have a Processing Need, PPS & Elavon Has the SolutionIf You Have a Processing Need, PPS & Elavon Has the Solution


Solution Delivery

Hardware– Terminals– PIN pads– Peripherals

Software – PC Software– Internet Solutions

Interface Solutions– Gateway – VAR interfaces

Reporting Tools – MerchantConnect


Questions?


PPS Point of Sale Terminals and ARU


VeriFone

– Vx510LE multi-merchant capable– Vx570 multi-app/multi-merchant (10

MIDs)• Dial or IP• Internal Pinpad

– Vx610 Wireless Solution • Sprint CDMA • Multi-Merchant capable• Supports Store And Forward• Internal Pinpad

PIN pads and Peripherals– VeriFone PP1000SE– RDM Check Imager 6014F


Hypercom Hypercom– T7 Plus– Optimum T4210

• Dial • Internal Pinpad

– Optimum T4220• Dial or IP (Dual

Comm Module)

PIN pads and Peripherals– Hypercom P1300– RDM Check Imager 6014F


RDM Synergy II

All-In-One terminal Built in Check Imager and

Printer Multi-merchant capable (10

MIDs Max) Dual Side Imaging Capability

Supports Retail and MOTO industries

**Requires VeriFone PP1000SE to process PIN Debit/EBT transactions


Blue Bamboo Wireless Solutions

Blue Bamboo specializes in providing fast, reliable and industry compliant wireless electronic payment technology that enhances mobile workforce productivity and security without the premium cost.

SIMPLE& RELIABLEWith its sleek design, the H50 wireless POS Terminal is ideal for businesses operating in mobile environments who need to secure electronic payments in an easy, portable and affordable manner. The H50 has a large menu driven LCD display to quickly navigate through your POS payment applications along with mag-stripe and smart card readers that enable acceptance of credit, debit, gift and loyalty, and stored value cards as required in the field.

AFFORDABLEOut of the box, the Blue BambooH50 gives merchants the rich feature set they expect from a wireless payment device without paying the premium cost. By swiping cards at the point -of-sale, merchants benefit from time savings and enhanced customer experience while increasing sales, reducing processing fees, reducing fraud- and minimizing losses occurring from non-swiped transactions; all of which contribute to a quick return on investment.


Other Class A Certified Terminal Solutions including Non-Preferred:

VeriFone Tranz series without Debit Omni-3200/3210 (SE) without Debit Omni-3730LE/3750 (SE) without Debit All Hypercom T7 series (except T7Plus 19-key) Hypercom T8 Nurit 2085 with NOS7 Nurit 8320 (Dial and IP) Synergy I

Additional supported terminal solutions and information are available on the MSP InfoCenter at www.Elavon-msp.com. Key words: Product Matrix


http://www.elavon-msp.com/

Audio Response Unit (ARU)

Telephone Processing Visa, MasterCard, Amex,

Diners and Discover ONLY.

Target Merchants: Mobile and small merchants with limited transactions

Interchange pricing should be based on NON-Qualified interchange categories


Questions?


PPS PC and Internet Software Solutions

ViaWarp

Smart Plug-In for QuickBooks

Virtual Merchant


viaWARP is a PC-based point-of-sale solution that uses a high-speed Internet connection to efficiently and cost-effectively process payments and other transactions

viaWARP

viaWARP Supports 1 – 50 Users / MID’s simultaneously

viaWARP Deluxe Supports 1 – 150 Users / MID’s simultaneously OR can be used as an Integration Tool


viaWARP Benefits Speed

– Processes transactions in as little as three seconds over a high-speed Internet connection

– Allows MO/TO merchants to send multiple transactions in large batches rather than individually

Versatile and Scalable– Provides ability to consolidate information from multiple

MID’s or market segments (Retail, MO/TO and Internet) into one reporting and tracking system

– Handles a full array of payment types – Connects with a broad range of peripherals – Supports real time or batch processing– Maintains a detailed transaction history – up to 999 days

worth– Payment information can be integrated with existing

business applications


Efficient and Cost-Effective– Can be quickly and easily installed on a merchant’s

PC or network server eliminating costly charges for multiple terminals and dedicated phone lines

– Up front investment is less than the cost of a single, average-priced terminal

– Includes all software upgrades, new releases, and technical support for a nominal monthly fee

Reliable and Easy to Use– Uses the familiar Windows-based Internet Explorer interface

– easy to navigate– Provides merchants with a single source for all their

payment needs– Utilizes the Elavon network, rated #1 for availability and

reliability by Visa® and MasterCard®

viaWARP Benefits


How viaWARP WorksInternet

Client Point of Sale Computer PPS & Elavon

- Or -

Trusted

Network

Internet

Server PPS & Elavon

Client Point of Sale Computer(s)


Payment Types Supported by viaWARP

– Credit Card– Electronic Gift Card– PIN-based Debit– PIN-based EBT– Point-of-Purchase (POP)

Electronic Check Service– Accounts Receivable (ARC)

Electronic Check Service


viaWARP Features Fraud protection through Address Verification Service

(AVS) and Card Verification Value (CVV2)– Protects against fraud on non face-to-face key-entered

transactions– Qualifies mail and telephone order merchants for the best

discount rate available

Merchants have the ability to customize receipts– Customer receipts can be imprinted with

coupons, advertisements, etc.

Allows storage of recurring and installment payment information

– Transactions will be automatically authorized according to the selected billing cycle eliminating the need for manual re-entry of billing information


Automatic Settlement Feature– viaWARP can be programmed to send authorized transactions to the Elavon

Network at a designated time each day– Merchants never have to worry about transactions downgrading if they forget

to settle a batch

Purchasing Card Capability– Prompts for Customer Code and Tax Amount (Level II Purchasing Card data)– Allows transactions to qualify correctly at Interchange, saving merchants the

cost of transaction fees

Correlates MO/TO authorizations with settlements to ensure that cards are not billed until products are shipped – meeting Visa and MasterCard requirements

Easily configures so that each user only has access to relevant data and reports

viaWARP Features


Peripherals Supported by viaWARP

Magnetic Stripe Readers

Printers– Serial– P250 Format

Check Imaging Devices – MICRImager MSR

PIN pads – PINpad 1000SE– PINpad 5000SC


viaWARP Technical Requirements

Computer: Pentium® II 333 MHz (minimum) RAM: 64+ Mb (minimum) Disk Space: 100 Mb (minimum) OS: Windows® NT 4.0, XP or 2000 Browser: Microsoft® Internet Explorer 4.0 SP2+


Main Menu


Credit Card Main Authorization Screen

The Credit Card Main Authorization screen is where all credit card activity is entered into the program. Each of these values will only be displayed if the current user has the appropriate rights to access the transactions.


Once a transaction type is selected, the Enter Card Data screen will be displayed. Key enter or swipe the card through a Magnetic Card reader device (Retail Only) to proceed to the transaction entry screen.


Credit Card Sale Transaction


Credit Card Sale Transaction Response


Credit Card AVS Only Transaction


Credit Card Recurring Response Screen


Main Batch Settlement Transaction List


Credit Settlement Daily Activity

GBOK BBBMMDDHHMM – GB = good batch, settlement received OK BBB = batch number 001 through 999 MMDD = month and day of settlement

HHMM = Time of settlement


Main Batch History Transaction List


Questions?


SmartPayments Plug-in for QuickBooks

Allows merchants using most versions of Intuit’s QuickBooks accounting software to efficiently and cost-effectively process both credit and PIN debit card transactions through the PPS & Elavon Network.


Payment Types, Peripherals & Environments

– Credit Card• Retail (with mag swipe)• MO/TO

– PIN-based Debit• VeriFone PIN Pad 1000SE• VeriFone 5000SC

– Single Client/PC Installation

Internet

Client Point of Sale Computer PPS & Elavon


Hardware and Software Requirements Intuit QuickBooks 2004 (Pro or Premier Editions); 2005, 2006, 2007 or 2008

(Pro, Premier or Enterprise Editions only)

PC with Microsoft® Windows® 2000, Windows XP or Windows 2003 Server

– 128 MB minimum of RAM, 256 MB recommended

– 100 MB free space on hard drive, 300 MB recommended

– 400 mhz or faster processor

Microsoft Internet Explorer® v.6 or higher installed

Latest Microsoft service pack updates installed

Internet connection

CD-ROM drive


Default view presented by QuickBooks. This is the home screen where a merchant would manage their business.


Merchant process invoices and sales using the standard QuickBooksnative screens.


Merchants place items or services on the invoice as shown above


Once the items or services are added to the invoice (or sales receipt in this example) then the merchant selects the method of payment from the drop down menu. The merchant then selects the Save & Close button at the bottom of the QuickBooks window.


The transaction window pops up and allows the merchant to enter card information. The information can be keyed, swiped or pulled directly from the QuickBooks customer database. The merchant then clicks the Process button


Then Elavon returns transaction response


Questions?


VirtualMerchant

Secure Hosted Software Solution


Introducing VirtualMerchant

Complete hosted payment solution that instantly transforms PCs into “virtual” payment terminals.

Accept a full range of payment types—from credit and debit cards to electronic checks and gift cards.

Process transactions in physical face-to-face, mail order/telephone order, or e-commerce environments.

Easily handle recurring and installment payments. Reduce the risk and compliance headaches by letting PPS & Elavon protect

financial data and ensure that merchants are in compliance with the latest industry security standards and regulations.


Face-to-Face and/or E-Commerce Support

“Virtual Terminal” an easy, economical hosted software solution that lets you use any PC with an Internet connection to efficiently and cost-effectively process payment transactions

“Buy Button” efficiently and affordably integrates with a shopping cart to securely process e-commerce transactions


Hosted Convenience and Versatility Fully hosted by minimizing your security

liability and ensuring PCI, CISP and other card association regulations and standards are met – without the need for expensive compliance audits

No hardware specifications, network infrastructure or software installation required. Can be quickly and easily accessed from any Internet enabled PC

Software enhancements and updates are received automatically – no software downloads or installation needed


Efficient and Cost Effective

Utilizes your existing hardware and technical infrastructure, up front investment is less than the cost of a single, average-priced terminal

Processes transactions in as little as three seconds over a high-speed Internet connection

Provides capability to process payments in Retail, MO/TO or Internet environment

Supports an unlimited number of users and Merchant ID’s – serving organizations of any size

Connects with a broad range of peripherals, such as card swipes, PIN pads and check imagers for acceptance of virtually all payment type

Maintains a detailed record of up to 12 months of transaction activity Eliminates costly charges for multiple terminals and dedicated telephone line


VirtualMerchant Features Fraud protection through Address Verification

Service (AVS) and Card Verification Value (CVV2)– Protects against fraud on non consumer-no-present

key-entered transactions– Qualifies mail and telephone order merchants for the best discount rate

available Correlates MO/TO authorizations with settlements

– Ensures that cards are not billed until products are shipped, meeting Visa and MasterCard requirements

– Eliminates the need to re-key transactions for settlement Purchasing Card Capability

– BIN Level Prompting for Customer Code and Tax Amount (Level II Purchasing Card data)

– Allows transactions to qualify correctly, minimizing interchange expense


VirtualMerchant Features (cont.)

Receipt Customization– Customer receipts can be printed with, user defined fields, custom

headers, custom footers, advertisements, etc.– Can be configured to print receipts on traditional “roll” type printer,

network printer– Receipts can be delivered electronically through e-mail or can be turned

off altogether Allows storage of recurring and installment payment information

– Transactions will be automatically authorized according to the selected billing cycle eliminating the need for manual re-entry of billing information

Multi-entry feature for easy and quick entry of multiple credit or check transactions on one screen


VirtualMerchant Features (cont.)

Easily configures so that each user only sees or has access only to relevant accounts, transactions, data and reports

Customizable payment screens– Unlimited number and size of User Defined

Fields available– Ensures only desired fields are seen, minimizing screen clutter– Field labels and order can be tailored for individual environments to

maximize usability– Fields can be made mandatory to help minimize downgrades or ensure

User Defined Fields are always provided Exports common separated value (CSV) data for import into other

applications or further analysis, tracking or storage Supports “Business Rules” for e-commerce environments


Payment Types Supported

Credit Card Electronic Gift Card PIN-based Debit PIN-based EBT Point-of-Purchase (POP)

Electronic Check Service Accounts Receivable (ARC) Electronic Check Service Dynamic Currency Conversion (retail only)


Peripherals Supported by VirtualMerchant

Magnetic Stripe Readers

Printers– All network/parallel Printers– P900 and all P250 roll Printers

Check Imaging Devices – RDM EC6111f with MSR– MagTek MICRImager MSR

PIN pads – VeriFone PINpad 1000SE– MagTek IntelliPIN with MSR– VeriFone PINpad 5000SC


Questions?


Value Added Services


Quickly Growing Industry - Electronic Gift Card - EGC

Gift Card Sales– $55 billion in 2004– $85 billion in 2006– $97 billion in 2007

Adult Consumers Received…– 3.2 gift cards on average in 2004– 4.6 gift cards on average in 2007

Gift cards were the #1 gift during the 2007 holiday season– 61% of gift cards received during the holiday season were redeemed by

the end of January– 37% of holiday gift cards remain unused

• Average overall breakage can range from 4-15%



Gift Card Facts and Figures

Increased Spend– Most consumers spend 25% more than the

face value of the card when redeeming a card received as a gift

Industry Averages– 3 transactions per card– 1,000 cards annually per location

More than 1 in 10 consumers said they will buy a gift card for their own use

– Coffee shops, Auto detail, Convenience store, Movie theater Reduced Costs

– More efficient and cost effective than paper, where the industry average is $1.22 to issue and $1.22 to redeem

Increased Security & Reduced Fraud– Cards have no value until activated– Retains full face value = no cash back



Elavon’s Gift Card Statistics – as of 12/31/08

4588 Gift Card Orders completed in 2008 – 14% growth over 2007 – 54% Basic, 39% Standard, and 7% Custom Orders

11,374 gift card relationships equaling 20,895 merchants offering gift cards

4,299,507 transactions processed (3,420,233 processed transactions in 2007)– 24% growth over 2007 YTD comparison

4,272,789 gift cards in circulation, 1,688,007 active with an outstanding balance of $72,717,738.14


Target Markets

Specialty Retail– Gift shops– Book/CD/Electronics stores– Wine/Liquor stores

Restaurants– Fine dining– Coffee shops

Entertainment– Movie theaters– Amusement/recreation– Video/game rentals

Personal Services– Auto detail– Beauty salon/spa

Non-Traditional Targets– Business to Business– Physicians– Public Waste Disposal


It’s Much, Much More than a Gift…

Promotional Marketing Tools– Discount cards mailed to target

prospects– Gift with purchase

Fund Raisers– Sell cards at a discount to

schools/non-profits– More feet on the street selling your

brand Prepaid Card

– Pay in advance for discount– Speed at checkout

Corporate Incentives– Sell to companies to use as employee

incentives– Use internally for rewards or spiffs

Customer Appreciation– Turn service issues into a retention

opportunity Budgeting Tool

– Limit spend by the cardholder to the value of the card

– Create a “savings” account and add value when able to achieve balance for “goal” purchase


Transaction Types

Activation– Notifies the host that the card

has been purchased and specifies the card value

Sale/Redemption– Card redemption at the

merchant notifies the host of the amount to be deducted from the value of the card

Balance Inquiry– Provides the current card

balance

Reload/Increment– Allows value to be added to an

active gift card Credit/Adjustment

– Credits an active gift card for returned merchandise

Refund/Cash Back– Issue cash for a remaining

amount on the card or bring the value down to zero for administrative purposes


Basic Cards

One card style DBA name, street address and phone

printed on card from system information 100 cards Envelopes included Recommended for single location

merchants Cards shipped within 5 business days!

MERCHANT NAMESTREET ADDRESSPHONE

Quick SimpleEffortless


Ten card styles (double cards) One color logo OR 3 lines of text

– 3 text-style options– 10 imprint color options

Order the quantity needed– 200, 500, 1000

Envelopes included Cards shipped within 2-3 weeks from

proof approval

Standard Cards

Fast Easy Flexible


Custom Cards

Totally customized design – Full color front/black back– Design services available ($75/hr)

Minimum order quantity of 500 Cards only (carriers and envelopes sold

separately) Cards shipped within 4-6 weeks from

proof approval for orders less than25,000 cards

Branded Unique Variable


Standard Features

No Preset Card Limit One Display Rack Per Location Online Balance Inquiry Portal

– Can be added to merchant website to allow consumers to check balances and view card history

Consumer IVR/ARU– Cardholders can call automated

service to check balances – FREE!

Generic

Customized – additional set up fee applies


Merchandising Materials

Additional Display Racks Posters/Buttons Kit

– 2 posters– 10 buttons

Card Badge– Standard is same style as gift card ordered,

NO customization– Custom badges MUST be ordered at the

time of cards and matches custom card design


Card Carriers and Envelopes

Mix/Match in Increments of 100 5 Occasions, 12 Styles


Primary Reporting

Transaction Report– Summary of activity by transaction type– Emailed daily to primary location

Liability Report– Outstanding balance on all cards issued– Can be run by card group to obtain balances for

different card types, promos, etc.– Emailed monthly to primary location


Cardholder Self-Service

Online Balance Inquiry and Transaction History– Link to merchant website– Window customized with look/feel

Transaction history information– Card number– Card balance– Transaction type– Date/time of transaction– Transaction amount– Currency exchange (if applicable)– Expiry date (if applicable)– Store location

Toll-Free Balance Inquiry– Obtain current balance information


Cardholder Self-Service

Card Loss Protection– Report lost card – Check balance– Add/delete card– Edit profile– Change password


Conversation Starters

Do you currently offer paper gift certificates? How are merchandise returns handled in your

business? What percent of your business comes from repeat

customers? How do you promote your business? Have you considered selling gift cards to corporate

clients to use as employee incentives?


How to contact EGC Boarding

Email– Artwork Submission: [email protected]– Boarding Questions: [email protected]

Phone: Ext: 8045; 865-403-8045 (Team Extension) Fax: 865-403-5335

Mail: 7300 Chapman Highway (MK-TN-NOK1)Knoxville, TN 37920


Questions?


Electronic Check Service


The Era of the Electronic Check

Checks account for approximately half of all consumer expenditures in the U.S.– Estimated 36 billion checks

written annually Retailers search for more efficient

means to process checks– Paper handling and fraud


The Case for Conversion

Extensive handling by financial institutions and retailers makes paper expensive– 6 to 12 touches per check, on average

Check fraud and collected funds are costly for retailers and other businesses

Electronic checks offer reduced handling and risk


ECS Benefits to Retailers

Faster Access to Funds Reduced Costs & Labor Single Depository Bank

Relationship Minimized Risk Improved Reporting


Sample Cost Savings

Merchant Profile Checks/Year

1,091,175 Number of Locations 1,795 Average Check Amt $59 Check Volume (%sales)

25%

ECS Cost Savings Costs Savings Total $2,376,872 Cost Savings/Check $2.18 Cost Savings (%)

63.2%

$3,763,622

$1,386,751

$0

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

$3,500,000

$4,000,000

Current ECS

Data taken from actual merchant


Only PPS & Elavon ECS….

Through the appropriate “rail”– Direct DDA Access– ACH conversion– Check Replacement Document

Presented any way– At the point of sale (POP)– Through the mail / drop box

(ARC)


Checks Supported with ECS

Checks Supported with ECS –ONLY if using the RDM Synergy II with dual side imaging

Money orders U.S. treasury checks Cashier’s checks Federal Reserve checks Government Checks Payroll checks Third-party checks Travelers checks

Consumer checks Business Checks Corporate Checks Convenience Checks


Point of Purchase (POP) Solution

Enables merchants to convert consumer check payments received in a face-to-face environment into electronic transactions– Consumer present/Check present– Online real-time Utilizes combination of Visa’s POS Check network, the

ACH network and Check Replacement Documents (CRDs) for presenting and clearing

– Real-time access to more than 35 million accounts representing 30% of DDA’s nationwide with a potential for 90% of the DDAs in the U.S.


Accounts Receivable Conversion (ARC) Solution

ARC is used for check present/consumer absent transaction environments

– receivable payments– mail order receivables– drop-box/lock-box environment

Customers are provided a notice explaining that checks will be processed electronically

Offer Consumer Opt Out Service with PC Solution Utilizes the ACH network and Check Replacement

Documents (CRD’s) presenting and clearing– Online real-time or batch delivery of transactions


ECS Service Level Options

Conversion with Guarantee– Checks are converted into electronic transactions and all funds are guaranteed– All paperwork is eliminated – no follow-up needed from merchants– The retailer assumes no risk for all qualified and approved transactions

Conversion with Verification– Checks are imaged and converted into electronic transactions– Routed for verification either through the participating Visa bank or through

EnCircle for ACH submission – Retailer retains the risk of returned items for all transactions

Conversion with Verification and Collections– Offers all the advantages of conversion and verification, while eliminating the

need for businesses to perform their own collection activity – Retailers retains the risk on returned items, but will have all monetary returned

items automatically handled by EnCircle Collections after the first resubmission.


ECS Service Level Options (cont’d)

NSF Service Fee Processing– All service levels except Conversion with Guarantee support the ability to

electronically resubmit transactions that have been returned for non-sufficient funds, electronically collect an NSF service fee from the consumer’s account, and automatically fund the business’s account with these fees—eliminating the labor and lengthy time-to-collection of manual systems.

– NSF Service fee not available with ARC.


Competitive Comparison


PPS & Elavon ECS: The ONLY Flexible Solution Provider

Service PPS &Elavon Certegy Telecheck

ECS with Guarantee ECS with Verification ECS with Verification and Collections All in one processing check/credit/debit

Funding in 24-48 hours

Consolidated reporting

All at a Competitive Price!

Business check acceptance and conversion


ECS Solution Options

Terminal/imaging solutions– VeriFone Omni 3730LE/VX510, 3750 & 3750 IP/VX570- Hypercom T7Plus, T4100– RDM 6014f Imager

PC-based software solutions– viaWARP with RDM 6111f Imager– Virtual Merchant with RDM 6111f Imager

Integrated POS solutions– IBM imager & IBM ACE software– Epson imager– VAR interface solutions


Dynamic Currency Conversion


Dynamic Currency Conversion

Allows U.S. merchants to offer international Visa and MasterCard cardholders the option to pay in their home currency

Conversion is done at a competitive exchange rate at the POS Receipt reflects:

– Sale amount in USD– Conversion rate for the day– Home currency equivalent

Cardholder’s credit card is billed in exactly the amount that appears on the receipt


Currency Conversion ComparisonCurrency Conversion ComparisonIS

SU

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NV

ER

SIO

NE

lavo

n D

CC

ACTUAL POS RECEIPT STATEMENT FEE $$$

88.66(IncludesConversion fee)

Issuer

Shares % with Merchant/Partners

1 US Dollar = 0.854199 Euro

1 US Dollar = 0.854199 Euro

88.66

Keeps Conversion Fee

Includes Conversion

Fee


CURRENCIESAustralian dollar (AUD)Canadian dollar (CAD)

euro (EUR)Japanese yen (JPY)British pound (GBP)

DCC ReceiptsDCC Receipts

Amount in Merchant’s Currency

Amount in Cardholder’s Currency

Exchange Rate

RETAIL RESTAURANT


DCC Merchant Statement / RebateDCC Merchant Statement / Rebate

Fee/Charges Category Fee SummaryVisa/MasterCard Charges 6.32DCC Rebate 1.54 –Total Charges and Fees 4.78


DCC Value Proposition – Consumer & Merchant Consumer

– Instant conversion to prices they can easily understand– Very competitive exchange rates updated daily– No shocks when credit card bill is received – No additional hidden foreign exchange commission

charges to the cardholder Merchants

– New source of revenue• Elavon will rebate a percentage of the foreign exchange

conversion back to the merchant

– Fewer Chargebacks – since the Cardholder is not disputing an amount that he/she does not recognize


DCC Value Proposition - MSP

Retention hook for existing customers– Add DCC and you and your merchants share in a new revenue

stream New hook to attract new merchant processing customers

– Swipe rates are minimized when you’ve got 50-75bp to play with!– Removes the “me too” offers by adding a differentiator for the

right target audiences


PPS & Elavon’s DCC Product Offerings All preferred terminals except Synergy

– Retail application– Restaurant application

Virtual Merchant POS Free Service

– No upfront service cost– No monthly fees– No per-item transaction fees

MSP/Merchant Rebate– MSP receives 1% rebate to be shared with merchant– Recommend 50bp-75bp merchant rebate– Merchant Rebate reflected on monthly statement; balance credited to

MSP residuals


DCC Terms of Service

Restricted MCC Categories– Direct marketing/catalog merchants– Auto rental– Lodging– Cash Advance

MO/TO Rules– Must auth & settle same day – no delayed shipping– Clerks must communicate the USD amount, conversion rate, and home

currency amount verbally (from the receipt) prior to completing the sale E-Commerce

– Customer is presented with total amount in USD and home currency and is prompted to approve the conversion


Foreign Travel Market Statistics

International visitation to the U.S. in 2002 was 41.9 million– #1 United Kingdom– #2 Japan

International travelers generated $80.2 billion in travel expenditures in the U.S. in 2003


DCC Target Markets

Retail / Restaurant Merchants in tourist areas

Colleges/Vocational Schools Medical Services Theme parks Ski resorts Golf resorts Marinas Tour operators – helicopter,

trolley, horseback, bus, walking

Adventure sports – rafting trips, balloon rides, skydive, scuba/snorkel, boat rentals

Museums and Art Galleries Specialty Retailers

– Jewelry– Auto/motorcycle

parts/accessories/dealers– Computer/camera/photo

supplies– Golf equipment– Home furnishings (for part-time

residents with second homes)


PPS & Elavon DCC Sample Merchant 1

Location: Las Vegas, NV Business: Helicopter Tours

Average Monthly Bankcard Volume: $591kForeign Convertible Volume: $408k

Average Monthly Processing Costs: $12,500Actual DCC Rebate: $3,000


PPS & Elavon DCC Sample Merchant 2

Location: San Francisco, CABusiness: Dentist, Orthodontist

Average Monthly Bankcard Volume: $47.9kForeign Convertible Volume: $39.5k

Actual Monthly Processing Costs: $1,278DCC Rebate: $297


The Right Merchant Can Be Very Profitable!

and that doesn’t even include U.S. bankcard volume!!

Type of Business

MAR Monthly Foreign

$$

APR Monthly Foreign

$$

MAY Monthly Foreign

$$ Merchant

Rebate

Helicopter Tour Operator $152,656 $368,771 $310,432 $6,239

Vocational School $0 $67,408 $38,331 $793

Golf Shop $9,533 $33,671 $20,445 $477

Jeans Store $0 $0 $17,461 $130

Skydive Adventure Operator $6,469 $8,518 $15,290 $227

Camera Shop $6,749 $11,537 $11,970 $227

Jewelry Store $0 $0 $7,132 $53

Automotive Parts Dealer $0 $0 $5,950 $44

Surf Shop $0 $375 $5,255 $42

Clothing Boutique $0 $0 $4,750 $35


Questions?


Contactless Payments


Contactless and Quick Payment Service

The card data is read via a secure chip, and often times the account number on the chip is different than the number on the mag-stripe or front of card. This is an added security feature. For this reason Contactless read cards do not require last 4 digit prompting (which speeds up the transaction).

Contactless program requires contactless reader (i.e. VIVOpay 4000 or 4500)

With Contactless transactions under $25, consumers do not need to hand their card to the clerk. This reduces the possibility of employee fraud and / or the consumer simply forgetting to retrieve their card before leaving the merchant location.

Contactless Target markets include Quick Service Restaurants (QSR), Fuel, Parking Facilities, Supermarkets, Drug Stores, Mass Transit and Theaters


Top US Card Issuers Started Issuing Contactless

*

*

More Than 30 Million Cards Have Been Issued


http://www.mbna.com/index.html

http://www.charteronebank.com/home/

https://www.firstusa.com/cgi-bin/webcgi/webserve.cgi?card=4W3J&mkid=60FU&partner_dir_name=sheetz&option=&page=apply

Questions?

Thank you.


Value Added Resellers


Select Value Added Resellers

Authorize.net Go Software Micros Plug & Pay Skipjack Shift 4 Squirrel VeriSign Payment Services Exadigm Way Systems


VAR- Database (Value-Added Reseller)

https://certification.elavon.com


https://certification.elavon.com/

New VAR Requirements All applications submitted with a distributed software product must

include the “VAR Vendor”, “VAR Product”, “VAR Version”, and “VAR Gateway”

Any application that includes a distributed software product found on the Visa prohibited payment application list will be pended.

Any application that includes a VAR Vendor, Product and Version NOT listed on the Visa approved payment application list will be pended (Beginning November 10, 2008). If you have a document from an assessor or Visa showing certification, please provide with application submission.


New VAR Requirements

If using MSP FAST, below is an example of the requirement for Distributed Software.



All applications submitted with a Host or Web based (Non Distributed) product must include the VAR Service Provider on page two of the merchant application. The VAR Software and VAR Version will not be required.



If using MSP FAST, below is an example of the requirements for Host or Web Based Service Providers.



Both the Visa Approved Payment Application List and Service Provider List are available through the following link:

https://www.pcisecuritystandards.org/


https://www.pcisecuritystandards.org/

Credit Underwriting


Application Packet

Merchant Application Voided Check Proof of Business Existence Signed MPA Processing Statements (moto/internet currently processing) Applicable Financial Statements


Proof of Existence

Completed on-site survey Business license Yellow page advertisement Photos of business signage Three months of current processing statements 3rd party prepared business financials or tax returns 12 months of business checking account history Internet website registered to merchant (internet only) Phone bill or utility bill Proof of tax exempt status Articles of Incorporation Copy of Federal Tax Identification paperwork


Decision Factors

Products/services? What environment does merchant conduct business? Average Ticket & Monthly Volume? Business Structure for Tax Purposes? Can business or owner support risk exposure? Tax Liens or bankruptcy? Does the business exist? Is their an Additional Location? Is the business seasonal?


Internet Requirements

Merchant’s DBA Products with prices in U.S. dollars Customer service number or email address Return/refund policy clearly stated Delivery methods and timing clearly described Privacy policy is outlined Secure check out page (where credit card info is entered)

** Conditional approval for missing secure check out page


TIER II Guide

• Annual sales volume up to $6 million (estimate)• Average Ticket Maximum $500 • No prohibited business types; restricted considered as credit exception. Focus

is on restaurants, grocery, bakeries, hair/nail/beauty salons, retail clothing, card and gift shops

• Swipe business is preferred, Non-Swipe merchants acceptable as an exception to policy

• Delayed delivery merchants not acceptable (cards processed before goods provided)

• No credit or low credit score considered (low credit score does not include negative credit). (E2 Visa required for foreign nationals)

• Start-up retail businesses acceptable. (MOTO/Internet must be in business 1 year, and is an exception to policy)

• Merchants are Capped with no potential for increase until 6 month Elavon processing history established

• Merchants will be placed on daily discount


Restricted vs Prohibited


Thank You


Education

MSP Sales & Operations Training Class 2009