1. DEXIT – A MARKETING OPPORTUNITY
Easier than cash, faster than debit

2. Content DEXIT the company Concept – Technology and Benefits Demand
Competitors
Company concerns and the final decisions
Target market
Product
Revenue
Promotion

3. Dexit the company Formed as new company in 2001
Started as private, became public in 2004
Bell Canada as partner in 2004
Get a stake in Canada’s low-value cash transactions
Deciding how and who to target with their service
Before/After approach

4. Concept and Technology
To provide easy & fast payment through RFID technology
Over the counter small cash payments.
Tags held by consumers
Readers on merchants counters
Wireless link between reader and tag
Withdraw money from consumers Dexit account

5. Benefits Benefits for merchants
Lower cash-handling costs (both theft and shrinkage)
Reduce line-ups
Turn walk-aways into customers
Reduced need to check for counterfeit money
Benefits for consumers
Faster than credit cards
No more messing with coins
Can track their transactions online

6. Demand
Two prior attempts had shown an interest from both consumers and merchants
Mondex and Scotiabank
Canadians among the world’s heaviest users of electronic payment systems
350,000 retailers in Canada accepted payment via IDP in 2001
17,6 million monthly IDP users were counted in Canada in 2001
IDP: Interac Direct Payment

7. Interac Direct Payment Transactions by Province (in millions)
Demand
Interac Direct Payment Transactions by Province (in millions)
Ontario (ON), Quebec (PQ) and British Columbia (BC) top three markets
Toronto (ON) Accounting for close to 30% of their province’s respective debit transaction market.

8. Competitors
Retailers that issued their own proprietary payment cards or gift cards
Credit and Debit card issuers
More towards Dexit than Dexit is towards them
ExxonMobil Speedpass (1997) and Oyster (the new and developed)
Both using RFID

9. Company concerns and the final decisions

10. Product - Thoughts Confident on using RFID
Consumers too accustomed to using cards?
Key chain fob or other kind of gadget?

11. Product - Decision

12. Target market - Thoughts
Target national or in a specific geographic area?
Target group of individuals who were comfortable with newer technologies (Like the Dexit tag)?
Who where the heavy users?
Better for low-value transactions
Target merchants based on the demographics and lifestyles of the consumers?

13. Target market - Decision
Small target area within Toronto
Targeting areas with a high consumer-to-merchant ratio
Hospitals
College campus’
Subway stations
office towers
Various take-away food and convenient shops
Target a younger consumer base (students)
“Pendlers” on their way to work (potential heavy users)?
Should they have target another area/group?
Public transportation
Taxi
Parking

14. Revenue model - Before launch
Decision for finding revenue
Merchants
Transaction fee and how much?
Set subscription fee?
Consumers
Fee for each transaction?
Willing to pay if cost is transparent?

15. Revenue model - Solution
Fees from merchants, based on a percentage of the transaction value.
Consumers pay 1.5$ each time they allocate new funds to the Dexit account.
Licensing fees from organizations (royalties).
Interest rates on prepaid accounts
Income from sales of Dexit point-of-sale terminals, RFID tags/readers

16. Partners in crime In mid 2004 Dexit partnered with Bell
Bell have exclusive rights to market and sell in Canada
Getting access to Bells relations to merchants
and 15 mill. customers.
Leads to lower marketing costs:
Sales and Marketing costs having gone from almost 1.5 million$
in Q to less than $ in Q2 2005)
Licensing of system to other organizations

17. Promotion - Before launch
Limited marketing budget
Push or pull?
Posters, TV, radio, newspaper, Webpage
Hire sales force?

18. Promotion - Solution Posters in the geographical area of service
Subway station, side of busses.
Special offers using Dexit’s webpage
Marketing surveys for existing customers
Ineffective webpage (show the bugger)

19. SWOT - Not Forgot STRENGTH Reliable system Propriety system
B2B and B2C target market
Bell (strong partner)
Fast transactions
High entry cost
WEAKNESS
Webpage not consumer-centric
High consumer acquisition cost
Expensive hardware for merchants
OPPORTUNITY
Licensing of system (Royalties)
Possibility to port the system to online sales
Profit by substitute the cash market with e-cash so big competitors don’t see it as a threat – Investors
THREAT
Adoption conservatism (Like Euro in DK)
New entries
Not yet reached critical mass (lack of awareness)
Other technologies (mobile phones)

20. Wrap - Up The status of Dexit, today, is still uncertain.
Only gained consumers over the last 2 years
Only gained 460 new merchants since launch
Many investors
Their license agreements with Bell
First-mover advantage in Canada
Will they survive on the market?
Have they done it right?
Thank you for your time