1. 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

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

3. 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.

4. Money Mind Set Index
Quarterly study first created in Q 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

5. 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.

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

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

8. 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

9. Pay by Text Consumer Experience
Consumer enrolls via IVR or Internet
Consumer enters cell phone number
and 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

10. 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.

11. Pay by Text Sample Messages
Enrollment Complete
Bill Alert. Welcome, you are enrolled. Txt STOP to end, HELP for info or 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 if dont recve cnfrm msg.Txt STOP 2 end.
STOP
Bill Alert You will no longer receive any messages from WU to your phone..
HELP
Help: Bill Alert. For info Msg Freqncy dpnds on accnt sttngs. Msg&data rates may apply. Text STOP to end. 11

12. 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

13. 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

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

15. 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

16. 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

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

18. 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

19. 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

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

21. Available Marketing Touchpoints
Web Messaging
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 and select ‘Pay My Bill’.”
IVR Messaging
Envelope Messaging
Statement Messaging

22. Best Practices Employees were encouraged to enroll
Where an address is available, each new enrollee also receives a confirmation enrollment 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

23. 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

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

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

26. 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

27. Thank you! Nikki Lappin Northwestern Energy 406-497-3210
Lori Beck
Western Union Global Business Payments
©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.