2. Improving Card Production and Distribution Presenter/Moderator: Art Aldridge Panelists: Tom Hedrich — Vice President of Business Development, EFT Source Alan Hill — Senior Vice President, Armstrong Bank

3. Continued Breaches will cause additional Massive Reissues But not Improving Card Production and Distribution

4. These reissues caused delays in getting cards out The impact was substantial to your clients Current Provider had Contract Exclusivity Clause DataPath has been searching for a new Partner that doesn’t make empty promises – Great Track Record – Extremely small catch up window when they got behind – They have to deliver what they promise so we can give real answers to all of you – More to come on this later in the presentation Improving Card Production and Distribution

5. Europay, MasterCard, and Visa (EMV) EMV Cards might soon become a major reissuance problem Improving Card Production and Distribution

6. Europay, MasterCard, and Visa (EMV) Even though the adoption of the EMV initiative is voluntary, you don’t want to be the one looking for a chair when the music stops. Missing the October 2015 deadline for implementing Chip and PIN could come with a costly price tag for banks and merchants. That date denotes what is commonly called “the liability shift.” After that date, when credit card fraud takes place, liability for the costs will fall on the entity using the lesser technology. In 2015, that liability in the United States is estimated to total more than $10 billion. Improving Card Production and Distribution

7. Europay, MasterCard, and Visa (EMV) After the liability shift: If a merchant is still using the “swipe and signature” methodology and the customer has a smartcard, the merchant is liable. If the merchant has the new Chip and PIN technology but the bank hasn’t issued the customer a Chip and PIN card, the bank is liable. If the merchant uses Chip and PIN technology on a customer’s smartcard and fraud still takes place, the credit card company bears the liability, as is the case today. Improving Card Production and Distribution

8. DataPath experiences very little Card Fraud – 2012 -.0026% – 2013 -.0059% – 2014 -.0041% – 2015 -.0009% Improving Card Production and Distribution

9. Validating Purchases - MCC A merchant category code (MCC) is a four-digit number assigned to a business when they begin accepting Debit or Credit Cards. We use MCC classifications as a way to allow specific business types. Improving Card Production and Distribution

10. Validating Purchases – IIAS Inventory Information Approval System (IIAS) These Products are on the Approved IRS list of Eligible Medical Expenses We process a purchase based on the inventory control information (e.g., UPC or SKU number) This information is constantly updated by Special Interest Group for IIAS Standards (SIGIS) Improving Card Production and Distribution

11. Europay, MasterCard, and Visa (EMV) (continued…) Many merchants and banks simply aren’t aware Organizations may be scrambling to acquire and deploy smartcard technology Merchants will – need new readers – update their applications Banks in the U.S. have to replace more than 800 million credit and debit cards. Logistics of converting cards and recording PIN data Lack of urgency Solid Card Production Plan is in Place Improving Card Production and Distribution

12. Tom Hedrich Vice President, Business Development EFT Source Alan Hill Senior Vice President Armstrong Bank (formerly Benefit Bank) Improving Card Production and Distribution

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