1. What Does a Payment Provider Provide?
Ralph Joy
Senior Vice President
Payables & Account Services
Steve Stone
Senior Vice President
Strategic Business Development

2. What Are The Minimum Requirements For Payment Providers?
Process payments
Process only authorized payments
Collect money from the party that owes, pay the party that’s owed: settlement
Handle payment exceptions
Monitor and control risk

3. What Types of Payments Exist?
Coin and currency
Checks
Wire transfer (EFT)
Debit and credit cards
Automated clearing house (EFT)

4. What Are Customers Asking Payment Providers to Provide?
(What Would Payment Providers Need to Do In Any Case?)
Make payments owed: checks, EFT
“Traditional” payment processing services: wholesale vs. retail
Collect payments due: checks, EFT, cards(?)
Open and maintain accounts: Activity & funds repositories
Provide information pertaining to payment activity
Resolve problems, answer questions
Risk management
Transaction / operational risk
Provide liquidity and manage liquidity risk
Balanced legal / compliance risk mitigation
Control credit risk (unique to banks)
Minimize strategic and reputation risk

5. How Do Providers’ and Customers’ Needs Differ?
Provide credit vs Control credit risk
Quality vs Service price
Balanced terms & conditions vs Minimal risk

6. How Do Providers Differentiate Their Services?
Hours of operation and service
Input, output and reporting options
Degree of integration between systems
Multi-currency or global capabilities
Use of the web: reporting, initiation, service
Industry specialization: credit, service capabilities, knowledge
Cost of processing  Service pricing
Comprehensive solutions….not just all types of payments

7. Liquidity
Risk
Why would a customer need $5,000,000,000 of liquidity?

8. Quality...How Will You Know It When You See It?
TQM: what does it mean?
Service standards: agreements, guarantees
Independent assessments: Baldridge awards, ISO9001
Service: when and how?

9. PAYMENTS -- The Next Generation

10. Community of Financial Services Process Chain Value Ease Trading
Lack of full range financial service offerings an
obstacle to e-commerce activity.
How can financial services be used to differentiate
B2B e-commerce interactrion?
What is the best way to integrate settlement solutions?
How can the e-procurement process chain be extended?
Community of
Financial Services
Process Chain Value
Reduce the financial risk associated with B2B e-
commerce
“We’ve never dealt with this company before.
How do I know I will get paid?”
Ease Trading
Partner Anxiety
What do buyers / sellers need to know prior to or
after a payment is made?
How can e-commerce and related payment services
facilitate a customers A/R or A/P management?
Information Value

11. A financial settlement solution for the on-line B2B exchanges that incorporates…..
….. and provides value through the exchange to the end users.

12. e-Commerce Value Matrix
PNC Bank’s Digital Community Settlement Service adds value to the e-commerce experience…...
e-Commerce Value Matrix
Extend Process Chain Beyond Procurement
Use Flexible Settlement Options - Payment Control
Eliminate ‘Off Line’ Activity
Enhance Client Satisfaction
Access to Information
Increase Cash Flow - Reduce Cycle Time
Generate New Revenue - Repeat Business
Differentiates e-Commerce Strategies

13. Are B2B Needs the same as B2C or C2C Needs??
Aren’t Banks Obsolete? Why Use A Bank?
Banks = or ?
Banks can take deposits and make loans
High on trust scale: reliability and confidentiality
Risk management: credit, settlement, liquidity, legal, operational
Access to the payments system: own the card networks
Infrastructure investments: ACH, Chip cards, on line scoring, etc.
Are B2B Needs the same as B2C or C2C Needs??