Utility Payment Conference Mobile Payments: Giving Customers More Choice and Ease of Payment Using Text Messaging Nikki Lappin Remittance Processing Supervisor Lori Beck, Director, Product Management

Agenda 1. Payment Vendor Solution 2. Northwestern Energy Overview 3. Pay by Text Implementation and Results 4. Marketing and Best Practices 5. Next Steps

Payment Solutions Payment Channel Payment Type Consumer Utility Web Banking Payment Type One-Time Biller Direct One-Time & Recurring Consumer Utility Real-Time or Batch Data Centers Posting Funding Reporting Noting © 2010 Western Union Holdings, Inc. All Rights Reserved. All trademarks, service marks, and trade names referenced in this material are the property of their respective owners.

Money Mind Set Index Quarterly study first created in Q4 2008 to understand and longitudinally track how current economic conditions affect consumer behaviors and emotional mindset regarding bill payment, debt, and personal finance issues Online quantitative survey 3,000 targeted respondents based on representative proportions of geography, gender, age, income and ethnicity as compared to the overall US population Plan now for Gen Y payment preferences1 Gen Y’ers prefer less costly self-service channels like online banking, ATMs and mobile banking 2 in 5 Gen Y consumers have already tried mobile banking Mobile banking security less of a concern More likely to carry unlimited wireless phone plans More likely to own a Smartphone (Smartphone owners are the stickiest mobile bankers) 1Gen Y Mobile Banking, by Javelin Strategy & Research, April, 2009 4

Text Messaging SMS (Short Message Service) is most commonly referred to as Text Messaging Text messaging allows a message to be transmitted from one cell phone to another As of March 2010, 74% of the U.S population has a mobile phone The number of smart phones (iPhone, Droid, Blackberry) are up from 20 to 27% of the mobile population. Smart phone users are heavy users of text messaging.

Text Messaging, Web Browsing and Downloading by Segment Text Messaging is the most common use across all consumers

Text Message and Data Plans The number of consumers signing up for unlimited plans is increasing

How Bill Payment is Changing Pay by Text services allow consumers to easily initiate their payment using their phone's text messaging service based on payment information entered online Consumer enrolls via branded IVR or Internet site – no sensitive information is transmitted via text Biller provides service provider a customer (MAM) file containing customer account number, due date and amount owed Text Message can be sent a configurable number of days before due date Consumer replies to the text message to pay their bill

Pay by Text Consumer Experience Consumer enrolls via IVR or Internet Consumer enters cell phone number and email address (optional) into IVR or Internet Consumer enters payment information into IVR or Internet Consumer receives text message on cell phone when payment is due Consumer replies to text message to complete payment

Participating Carriers When the consumer enrolls in the Pay by Text service, a verification is done on the mobile number to confirm the carrier. If the carrier is supported, the plan is saved to the database.

Pay by Text Sample Messages Enrollment Complete Bill Alert. Welcome, you are enrolled. Txt STOP to end, HELP for info or 866-316-3360. Msg freq dpnds on accnt setngs. Std msg chrgs apply.. Payment Due Bill Alert.NWE bill $XXX.XX+$X.XX fee due. Rply YES NWE to cnfrm processing as u specified. 866-316-3360 if dont recve cnfrm msg.Txt STOP 2 end. STOP Bill Alert. 866-316-3360. You will no longer receive any messages from WU to your phone.. HELP Help: Bill Alert. For info 866-316- 3360. Msg Freqncy dpnds on accnt sttngs. Msg&data rates may apply. Text STOP to end. 11

Pay by Text Reporting Sample Report Pay by Text enrollments and payments are available for viewing along with all of your other payments through our current reporting tools 12

Non-Utility Case Study Pilot launched in May of 2009 Marketing used: CSR fact sheet and Internet messaging Data shown is through September of 2010 Enrollment Findings Almost 6000 consumers have signed up By Payment Type ACH: 2746 Credit Card: 1919 ATM: 1277 By Channel Internet: 4546 IVR: 50% of PBT consumers using the Extranet shifted to the Internet as their channel preference. For those receiving notifications, the Internet is the primary channel used for payment. ACH adoption is greater than other payment types. A large number of consumers are using this as an alerting process and then going to the IVR or Internet to pay 13

Agenda 1. Payment Vendor Solution 2. Northwestern Energy Overview 3. Pay by Text Implementation and Results 4. Marketing and Best Practices 5. Next Steps

Northwestern Energy Overview Service Population 395,500 electric customers 265,200 gas customers Customer accounts 492,079 Number of bills 6.1M annual bills and notifications Revenue $971M Billing frequency Monthly 15

Northwestern Energy Payment Goals Provide additional self service payment options (targeting the younger generation) Experience (We wanted to gain experience while we had the opportunity with SMS, we felt that by doing this project we could gain experience using a smaller carrier list. We feel that this option will grow and more carriers will be added). We had a great deal of concern about Verizon not being a carrier but felt it was best to move forward with smaller carriers Reduce mail payments which reduces costs We believe the more mail costs increase the more electronic payments will increase With reduced mail payments and increased electronic payments we believe when we need to purchase knew equipment that our cost for replacement will be much lower Over the past 5 years NorthWestern Energy has seen a yearly 2% decrease in mail payments and an increase with electronic payments 16

Agenda 1. Payment Vendor Solution 2. Northwestern Energy Overview 3. Pay by Text Implementation and Results 4. Marketing and Best Practices 5. Next Steps

Implementation Process Launched on 7/29 IVR and Internet were modified to include Pay by Text enrollment Product certified with wireless carriers so no 3rd parties were involved in implementation Thoroughly tested with employee enrollments during UAT cycle Added same day online banking payment option Added American Express as a payment type 18

Northwestern Energy Pay by Text Data Payment Types Enrollment Findings All payment types available on the IVR and Internet are available through Pay by Text ACH Credit Card ATM By Payment Type ACH: 112 Credit Card: 49 ATM: 4 By Channel Internet: 21 IVR: 144 The payment type preference is ACH. Channel with most adoption is IVR. There is not enough data to show consumer trends and behavior changes. 19

Agenda 1. Payment Vendor Solution 2. Northwestern Energy Overview 3. Pay by Text Implementation and Results 4. Marketing and Best Practices 5. Next Steps

Available Marketing Touchpoints Web Messaging Email Messaging “Say goodbye to envelopes and stamps! With our web and phone bill payment options, paying your ABC Company bill is quick and easy. Press 4 now to be transferred to our automated payment system or go to www.abccompany.com and select ‘Pay My Bill’.” IVR Messaging Envelope Messaging Statement Messaging

Best Practices Employees were encouraged to enroll Where an email address is available, each new enrollee also receives a confirmation enrollment email in addition to the text message Notify consumers in multiple ways about new offering. We have utilized the following marketing options to date: Statement Messaging Web Banner CSR Promotion 22

Future Marketing Campaign A new campaign has been created Use existing consumer communication touch points: Web Banner Statement Messaging Payments Brochure Newsletter Article CSR Q&A Flyers/Posters 23

Agenda 1. Payment Vendor Solution 2. Northwestern Energy Overview 3. Pay by Text Implementation and Results 4. Marketing and Best Practices 5. Next Steps

Next Steps Add Verizon as a supported carrier Continue marketing to increase adoption Research additional mobile channels

Pay by Text Benefits Summary Additional self-service payment channel Convenient option for consumers on the go Simple enrollment process Easy for consumers to use Cutting edge service

Thank you! Nikki Lappin Northwestern Energy 406-497-3210 monique.lappin@northwestern.com Lori Beck Western Union Global Business Payments 212-361-5655 lori.beck@westernunion.com ©2010 Western Union Holdings, Inc. The WESTERN UNION name, logo and related trademarks and service marks, owned by Western Union Holdings, Inc., are registered and/or used in the U.S. and many foreign countries. This material is confidential and is proprietary to Western Union and is not to be reproduced, disclosed, or used except in accordance with program license or other written authorization of Western Union. Any use, copying, manipulation, or reproduction of Western Union trademarks, logos, or material created by Western Union, its subsidiaries, affiliates or its business units, in whole or in part in any medium for any purpose whatsoever, is strictly prohibited without the prior written permission of Western Union. This information piece shall not be considered an offer, final terms shall be reflected in the Agreement signed by both parties.