ACH to Credit Card Conversions A Merchants Perspective Your source for payments education ACH to Credit Card Conversions A Merchants Perspective John Aglialoro, Verizon – Director Payments

Speaker Panel John Aglialoro joined Verizon in 2016 and leads Verizon’s Payments Strategy, Partnerships and Check Processing Operations for the Consumer & Business segments. His team is responsible for developing the multi-year merchant payments strategy roadmap for Verizon, managing relationships for 50+ payments partners including card association networks, processors and digital partners. In addition to payments strategy, John also manages the national operations for check remittance processing centers for Verizon. Prior to joining Verizon, John held leadership positions at MasterCard, American Express & GM across market development, strategic partnerships, marketing and finance. John Aglialoro Verizon Corporation Director of Payments Strategy & Partnerships   Grant has decades of experience designing subscription based billing systems and is an industry expert on virtual card fraud, authorization optimization, ACH, and lockbox payment processing. Grant Olson ADT Security Services Sr IT Payments Specialist

Speaker Panel Lisa Akahoshi joined Verizon in 2004 and is responsible for developing the multi-year merchant payments strategy roadmap for Verizon, managing and growing relationships with payments partners including card association networks, processors and digital partners. Prior to joining the Payments Strategy team, Lisa held positions in Finance, Reporting & Analytics, CRM, and Business Transformation with Verizon Lisa Akahoshi Verizon Corporation Manager of Payments Strategy Sopi Mitil joined Verizon in 2013. Sopi is currently a Sourcing Manager responsible for the Financial Services category within the Global Strategic Sourcing Organization. Her team plays a lead role in identifying and negotiating with Partners in the Payments, Investor Relations, Risk Management, Treasury, Credit and Fraud space.   Prior to assuming this role, Sopi worked as a Legal and Regulatory Support Liaison serving as a subject matter expert on Credit and Collection matters relating to Verizon’s Corporate Finance Department.   Sopi Mitil Verizon Corporation Global Strategic Sourcing Manager

Speaker Panel Bill Hurley has been a part of the Verizon Payment Strategy team since 2007 and is responsible for developing the multi-year merchant payments strategy roadmap for Verizon, managing and growing relationships with payments partners including card association networks, processors and digital partners Bill Hurley Verizon Corporation Manager of Payments Strategy

Key Takeaways What is ACH to Credit Card Conversions What is the Customer’s Perspective What is the Merchant’s Perspective What is the Bank Perspective? Issues and Challenges with Conversions? Path Forward

What is an ACH to Credit Card Conversion? BAU Home Banking Customer Receives monthly bill Customer Uses Home Banking to Pay Bill Bank ACH Payment on Customer Request Merchant Receives ACH Payment Merchant Easily Reconciles Customer Account 3rd Party Home Banking Service Providers Home Banking Provider works with Payment Processors Payment Processor makes ACH payment for bank to merchant

What is an ACH to Credit Card Conversion? Mutated Home Banking Customer Receives monthly bill Customer Uses Home Banking to Pay Bill Bank Converts Customer ACH to a Credit Card Payment Merchant Receives Credit Payment Merchant Difficulty to Reconciles Customer Account 3rd Party Home Banking Service Providers Home Banking Provider works with Payment Processors Payment Processor Takes Customer ACH Payment from Bank Payment Processor uses their own credit card to make payment Merchant receives Incomplete Customer Information

Customers Perspective They are making a Home Banking Payment to pay their bill They are logging in and processing their payment the same as they’ve done They are expecting the payment to be made the same as before They have no idea that their payment is being converted to a credit card They call into customer service teams very confused why their account was paid with a credit card & ask for reversal & home banking payment made They call their banks to ask why their home banking payment was converted to a credit card only to be told that wasn’t the bank and they made a bank payment They are losing potential customer discounts related to preferred payment discounts Customers receiving no value from a payment schema built off their bill payment

Merchants Perspective Customer payments are being made on credit cards not owned by customers Customer payments are against the terms and conditions of the payments venue Customer payments doesn’t always include proper reconciliation information Customers call into customer service more frequently Increased level of Payments investigations required to resolve customer issues Customers not eligible for all discounts as result of credit payment vs ACH Credit Card Payments costs much more than home banking payments

Banks Perspective Bank is providing their customers with the ability to pay bills from their account Bank is utilizing 3rd party home banking providers to present and pay their customer bills Banks aren’t always aware that customer payments are being converted Customer Terms and conditions of the home banking solution are modified to allow the 3rd party home banking providers to make a Faster payment on behalf of the customer Their customers are very confused and don’t believe this is happening

Issues & Challenges Customer Doesn’t Know What’s Going On Banks Often Time Don’t Know What’s Going On Credit Card Payments are Not What Customer Intended Customers are at risk of losing Merchant Discounts tied to Home Banking Merchants Have Increased Customer Service & Reconciliation Problems & Costs Merchants Have Increased Costs as Result of ACH to Card Switching

Path Forward Deliver on the Customer Promise Ensure customers understand the mutation of their ACH payment

Summary & Key Takeaways First objective Second objective Third objective

Thank you Don’t forget to submit your session evaluation! John Aglialoro, Verizon – Director Payments