Electronic Payments: Increasing Volume Through Supplier Enablement Dean M. Leavitt, Chairman & CEO Boost Payment Solutions, LLC

The B2B Landscape 1) 2010 Federal Reserve Retail Payments Study 2) 2009 funds transfer data (wire data) processed by Fedwire and CHIPS derived from multiple sources. U.S. B2B Spend: $109.5 trillion U.S. B2B # Payments:13.4 billion U.S. B2B Paper-based Spend:$21 trillion U.S. B2B # Paper-based Payments:7.5 billion U.S. B2B ACH/Wire Spend:$88.1 trillion U.S. B2B # ACH Payments:2.7 billion 2

After 60+ Years… B2B Opportunity Dwarfs B2C 3 Source B2B - HSBC Global Commercial Products, Nilson Report, US Government records U.S. B2B Paper Payments (Virtually Untapped) U.S. B2C Card Payments (Mature and Saturated) $21T _______________________________________________ $2.6T

Market Overview: Changes Are Afoot Source: First Annapolis Navigator, RPMG study – June 2011 Electronic Payments are on the Rise But… Supplier Enablement is Still a Challenge! 4

5 An Evolving B2B Technology Landscape “Walking Plastic” “Walking Plastic” Transaction Size Technological Advancement Spend per Supplier “Ghost” Cards “Ghost” Cards Single Use “V-Cards” Single Use “V-Cards” Buyer Initiated Payments Buyer Initiated Payments

The History of Supplier Enablement is Littered with Failure 6

Why? Because the DNA of Acquiring Industry is “B2C” 7

Technology & Solutions POS Terminals Time-consuming Settlement Procedures Paper Statements 8

Sales & Marketing Strategies Merchant Centric Retail Store Orientation Untrained Sales Organizations Selling “Rates” to Store Managers 9

Risk Evaluation One Time Retail Store – Consumer Encounter Merchant Has Access to Card Number Multiple Transaction Capabilities –Face-to-Face –Online/MOTO 10

Chargebacks Based on Chance Encounter Between Consumer Cardholder and Retailer 11

Interchange Rates $67 Average Ticket 12

What’s Changed 13

Technology & Solutions Buyer-Initiated Payment Programs PCI Compliant B2B Gateways EIPP/EIP Vendors EDI Records AP/AR Systems Automation 14

Sales & Marketing Strategies Buyer Centric Corporate Orientation Trained and Dedicated Sales Force Selling to CFO/CPO/CIOs Expanded Use of P-cards 15

Risk Evaluation Based on Existing Vendor - Vendee Relationship 16

Chargebacks Global Card Brands Adjusting Rules 17

Interchange Rates $500,000+ Ticket 18

19 It’s Time to Leave Old Technologies Behind

20 And It’s All About Supplier Enablement! Develop Game Plan & Analytics Educate & Communicate Pre- Campaign Supplier Outreach Reporting Acquiring Wrap-up Recap & “Clean-up” Enhanced Data & Progress Reports Supplier Enablement

Value Proposition For Purchasers Rebates Elimination of check writing and delivery costs Increased efficiencies across all procurement/AP activities Enable superior reporting Easy accounting for adjustments Ability to combine mission-critical data with payments Compliance with “Green” strategy 21

Value Proposition For Suppliers Retain or enhance relationship with customers Earlier payment reduces DSO and frees up working capital Elimination of check receipt and processing costs Increased efficiencies across AR activities Complete integration of payments into AR system EDI 820 or 823 BAI or BAI 2 CTX Ability to combine mission-critical data with payments Compliance with “Green” strategy 22

The Perfect Candidate for a Migration 23 Large LOB Procurement Spend Large # of Suppliers Utilization of Checks & EFT

The “Nuts & Bolts” of a Successful Campaign 24

Buyer Commitment Is Key 25

Best Practices for a Successful Campaign Secure Buy-In at Every Level of Client Establish Milestones & Set Expectations Mandate Acceptance Whenever Possible Adjust Payment Terms (“Carrots & Sticks”) Well Thought-out Communication Strategies and Materials Educate Suppliers – Dispel Myths and Misinformation Detailed Progress Reports (Call an “Audible” if Needed) P-card Acceptance “Baked” into New Contracts, Renewals, RFPs… 26

Best Practices for a Successful Campaign Implementation of Best Practices Conversion Rate 27

& 28 Mandate Whenever Possible Reward Supplier for Participation Penalize Supplier for Non-participation Combination = Successful Campaign Carrots & Sticks

Pre-Campaign “Must Dos” Segment Supplier List “Scrub” Supplier List Financial Tools to Determine Impact to Client & Suppliers Establish Communication Strategy Develop Communication Message(s) Establish Time Frames and Milestones and Reports 29

Financial Analytics Understand Client’s AP Culture Apply Filters based on Client’s Goals Identify Outliers and “Ripe Fruit” Project Financial Win or Loss  Client/Buyer  Suppliers Make Recommendations 30

Communicating the Message 31

Multifaceted Approach Good Old Fashioned Letter Face-to-Face Meetings Outbound Telephone Inbound Telephone Webinars Online Set-up 32

A True Mandate We are directed under the Debt Collection Improvement Act of 1996, Section 3720C, to change to electronic vendor payments. As a result, future payments are to be made by an electronic credit card process. It is our intention to begin the process of reevaluating our procurement activities with respect to those suppliers that refuse to accept our procurement card immediately. ” “ ” “ 33

Getting Suppliers On-Board Carefully Study Your Prospective Supplier Anticipate Objections Always Engage the Decision Maker (Scrubbing Key!!) Know Exactly What Their Costs Will Be Understand Their Current and Future Options Teach Them that Card Acceptance is Not a Penalty Make Signing Up Easy for Them Follow-up!!! 34

Reports, Reports, Reports… 35

Critical Tool Lack of Reports = Biggest Complaint From Stakeholders Spot Trends Before they Occur Keep Client and Issuer Up To Speed Analyze Success of Campaign Ability to Call an “Audible” 36

Campaign Progress Reports 37

Post-Campaign Wrap-Up Analyze Data on Campaign To Date Develop Communication Strategy for Non-Participants Develop Communication Materials and Implement “Final” Outreach to Non-Participants Recap Campaign results with Purchaser and Issuing Bank But… 38

A Successful Campaign Never Really Ends… Establish Strategy and Procedures for New Suppliers Alert Purchaser of Non-Participating Suppliers’ Acceptance From Other Purchasers Advise Purchaser of Changes in e-Payables Marketplace 39

40 Q & A