Best Practices for Driving ePayment Adoption R. Braden Short, Vice President, Biller Solutions, FIS Paul Hugg, Director of Product Development, Government Payments, FIS Title Slide Title and Date Font: Calibri, 28 pt Color: 85 percent black Subtitle & Presenter Name Font: Calibri, 16 pt Color: 79/111/25 Optional Copyright Should only be included on title slide and only if necessary No Page Number Click on the corner of this text box to delete Title Slide Title and Date Font: Calibri, 28 pt Color: 85 percent black Subtitle & Presenter Name Font: Calibri, 16 pt Color: 79/111/25 Optional Copyright Should only be included on title slide and only if necessary No Page Number Click on the corner of this text box to delete Utility Payment Conference

2 Agenda Defining the Model Current Participation Levels Options for Driving eBill/ePayment Adoption Case Studies Q&A

Defining the Model Transition Slide Header Font: Calibri, 28 pt Color: 85 percent black No Page Number Click on the corner of this text box to delete Transition Slide Header Font: Calibri, 28 pt Color: 85 percent black No Page Number Click on the corner of this text box to delete

1. Biller Direct Utility (biller) branded Web site – Consumer comes directly to the utilities Web site – Elects to view bill electronically – /mobile notifications – Multiple payment options ACH – from any DDA account Credit/debit card One-time, scheduled, recurring, automatic 4

2. Bank Bill Pay Financial Institution Branded – Internet banking portal accessed by consumer – Elects to receive bill(s) electronically (if available) – /mobile notifications – Multiple payment options ACH account registered with the bank One-time, scheduled, recurring, automatic 5

Current Participation Levels Transition Slide Header Font: Calibri, 28 pt Color: 85 percent black No Page Number Click on the corner of this text box to delete Transition Slide Header Font: Calibri, 28 pt Color: 85 percent black No Page Number Click on the corner of this text box to delete

Biller Direct vs. Bank Bill Pay Biller Direct Services Continue to Attract More Payers than Bank Sites – Biller Direct can offer detailed bill presentment – Biller Direct can provide confirmation of payment – Biller Direct can offer multiple payment methods 7 Source: Paystream Advisors Inc. Feb 2009

Analysis – Biller Direct / Bank Bill Pay 16 percent of electronic bills are viewed at the biller site 3 percent of electronic bills are viewed at a consolidator (bank) site – Present at your site and distribute to gain further eBill penetration and savings 8 Source: Aite Group

Options for Driving eBill / ePayment Adoption

How to Push Adoption 1. Incent Desired Behavior – eBills Consumers need to be motivated The “What’s in it for me” motivator Financial incentives are a strong motivator of behavior Offer rebates for eBills – ePayments Free ACH Same day account posting Discounts for automatic payment program 10

How to Push Adoption 2. Green Factor – 34 percent of consumers said they switched to electronic statements to reduce their impact on the environment. (Javelin Research) – 43 percent of consumers said they are more likely to do business with companies they perceive to be green. (Javelin Research) – Demonstrate the value Carbon footprint calculators, number of trees saved – NACHA research If only 20 percent of American households switched from paper to electronic billing and payment, a staggering 151 million pounds of paper, 100 million gallons of gas and 2 million trees would be saved annually. 11

How to Push Adoption 3. Adoption Marketing – "Many a small thing has been made large by the right kind of advertising.“ Mark Twain – Maintain constant focus on your objective Remittance stub Statement stuffers Banner ads Contests 12

How to Push Adoption 4. Personal Choice – Deliver eBill to the consumers desired channel Your Web site Internet banking portal Mobile device – Provide multiple ePayment options Web, IVR, CSR Mobile payments Unenrolled/enrolled models 13

Case Studies

Return on Investment Average cost of a paper bill is anywhere from $0.60 – $1.55 – Depending on volume – Postage, paper, envelope, document composition software 1.Average utility – 100,000 customers – Industry adoption rate 8 percent – 8,000 x 0.60 = $4, per month savings in print and mail expenses 2.Average utility – 100,000 customers – Aggressive adoption marketing program – 20 percent – 20,000 x 0.60 = $12, per month savings in print and mail expenses 15

Benton PUD Benton PUD, a municipal corporation of the State of Washington, began providing electrical service in Today, Benton PUD supports 45,000 electric customers Rebate Program – $5.00 credit on next bill for enrolling to eBill – 9 percent increase in eBill adoption in six months Success Measured – Paper bill Cost of paper stock, postage, design, handling ~$ $2.00 depending on volume – eBill ~$ $0.20 depending on volume 16

Tampa Electric Tampa Electric is an investor-owned electric utility. Its West Central Florida service area covers 2,000 square miles and approximately 700,000 customers. Aggressive Marketing Campaigns – Printed mail – Remittance stub – White space management Industry Average eBill Adoption Rate = 8 percent Tampa Electric eBill Adoption Rate = 29 percent 17

Oct Government Payments: Security & Compliance Strategy Workshop

Agenda Security and Compliance – Payment fraud detection and prevention – Payment Card Industry (PCI) Data Security Standards – Regulatory compliance Government Payment Needs and Requirements – One step ahead or two? – Unique requirements from the government Conclusion

Security and Compliance Payment fraud detection and prevention – Tools Scrubbing accounts when setup Prevention of transactional fraud Start with the basics Speed and flexibility – Best practices Cultivate a prevention mindset Seek to exceed requirements – First-party fraud is still the greatest threat

Payment Card Industry (PCI) Data Security Standards – Are you required to be PCI compliance if you take credit cards for payments; or is your vendor? – Who requires these audits and what do they mean? – What are the ramifications of not complying? – Self-assessment (SAQs) versus PCI DSS or PA DSS – Careful selection of partners – Seek partners, not vendors Security and Compliance

Regulatory Compliance – Housing and Economic Recovery Act (HERA) of 2008 History Rule Impact – Dodd-Frank Act and Durbin Provisions of 2010 History Rules Impact – Data Security and Breach Notification Act of 2010 (BILL) – Data Security Act of 2010 (BILL) – Data Accountability and Trust Act of 2010 (BILL) – Data Breach Notification Act of 2010 (BILL) – Personal Data Privacy and Security Act of 2010 (BILL) – Boucher Bill of 2010 (BILL) – Forty-six State Laws Security and Compliance

One step ahead or two? – If you are one step ahead you are a leader, if you are two steps ahead you are a footnote in history – Chance to leapfrog ahead, and learn from the lessons of the last 10 years, but have to be careful of the bleeding edge – Develop a payment strategy – Channels – Standard payment methods – Alternative payment types – Social media Government Payment Needs and Requirements

Unique Requirements from the Government – Payments with wide ranges (from small to large payments within one application) – Regulated Cannot raise the fees just because the cost of doing business goes up Must collect 100 percent of an obligation Limitations on partial payments or over payments Unique refund workflow requirements – Traditionally slow to react to swiftly changing industry – Turn these into positives Government Payment Needs and Requirements

Conclusion Unique Requirements from the Card Networks Unique Requirements if you are Regulated vs Non-Regulated PCI Standards Best Practices Legislation It isn’t one size fits all

Thank You Closing Slide Header Font: Calibri, 28 pt Color: 85 percent black Subhead Font: Calibri, 16 pt Color: 79/111/25 No Page Number Click on the corner of this text box to delete Closing Slide Header Font: Calibri, 28 pt Color: 85 percent black Subhead Font: Calibri, 16 pt Color: 79/111/25 No Page Number Click on the corner of this text box to delete R. Braden Short, Vice President, FIS Biller Solutions Paul Hugg, Director of Product Development, FIS Government Solutions