Introducing: Electronic Check Service

1
Introducing Electronic Check Service
Its Your Money. . . Why Wait For It?

• Presented to

2
Agenda

• Market overview and opportunities
• Technology advances
• NOVAs Electronic Check Service
• Competitive Comparison
• ECS Processing Solutions
• Summary

3
The Era of the Electronic Check

• Checks account for approximately half of all
  consumer expenditures in the U.S.
• Estimated 36 billion checks written annually
• Retailers search for more efficient means to
  process checks
• Paper handling and fraud
• Electronic check conversion offers an incredible
  opportunity for retailers
• Checks remain the largest non-cash form of
  payment at the POS

4
The Case for Conversion

• Extensive handling by financial institutions and
  retailers makes paper expensive
• 6 to 12 touches per check, on average
• Check fraud and collected funds are costly for
  retailers and other businesses
• Electronic checks offer reduced handling and risk
• Result in big savings to the bottom-line

5
Its Your Money.. Why Wait for It?

ECS Benefits to Retailers

• Faster Access to Funds
• Reduced Costs Labor
• Single Depository Bank Relationship
• Minimized Risk
• Improved Reporting

6
Sample Cost Savings

• Merchant Profile
• Checks/Year 1,091,175
• Number of Locations 1,795
• Average Check Amt 59
• Check Volume (sales) 25
• ECS Cost Savings
• Costs Savings Total 2,376,872
• Cost Savings/Check 2.18
• Cost Savings () 63.2

Data taken from actual merchant
7
Powerful Market Drivers

• Electronic check market is proven
• 1.3 billion processed in 2003
• Visa estimates 14 billion paper checks still
  written at POS enormous opportunity
• Check 21 Act provides legal recognition of
  electronic checks
• Opens door for electronic checks

8
Technology Advances AccelerateMove to Electronic
Checks

• Frequent MICR rejects and poor imaging quality
  hindered early acceptance of electronic checks
• Recent advances in high-quality, image-capture
  technology have greatly increased the success
  rate for conversion at the POS
• Quality images are essential for collection
• Lower-cost storage and faster CPU speeds make it
  practical for retailers to store and access
  digital receipts

9
NOVA ECS Solution Offering
10
NOVAs Electronic Check Service

• Innovative product that supports full portfolio
  of flexible solution and service level options
• Not a one-size-fits-all solution
• Provided in partnership with leading financial
  institutions
• Extension of services from bank partner, not
  third-party provider
• Retailer gets one-stop solution for debit and
  credit cards, electronic check, consolidated
  statements and even online reporting
• Can by integrated into Analysis System
• Extensive image storage and reporting capabilities

11
Only NOVA ECS.

• Process any type of check
• Consumer
• Business / Corporate
• Convenience
• Presented any way
• At the point of sale (POP)
• Through the mail / drop box (ARC)

• Through the appropriate rail
• Direct DDA Access
• ACH conversion
• Check Replacement Document
• With the proper risk mitigation / protection
• Conversion with Guarantee
• Conversion with Verification and Collections
• Conversion with Verification
• Conversion Only

12
Checks Supported with ECS

• Consumer checks
• Business Checks
• Corporate Checks
• Convenience Checks

• Checks NOT Supported with ECS
• Money orders
• U.S. treasury checks
• Cashiers checks
• Federal Reserve checks
• Government Checks
• Payroll checks
• Third-party checks
• Travelers checks

13
Point of Purchase (POP) Solution

• Enables merchants to convert consumer check
  payments received in a face-to-face environment
  into electronic transactions
• Consumer present/Check present
• Online real-time or batch delivery
• Utilizes combination of Visas POS Check network,
  the ACH network and Check Replacement Documents
  (CRDs) for presenting and clearing
• Real-time access to more than 35 million accounts
  representing 30 of DDAs nationwide with a
  potential for 90 of the DDAs in the U.S.

14
Accounts Receivable Conversion (ARC) Solution

• ARC is used for check present/consumer absent
  transaction environments
• receivable payments
• mail order receivables
• drop-box/lock-box environment
• Customers are provided a notice explaining that
  checks will be processed electronically
• Offer Consumer Opt Out Service with PC Solution
• Utilizes the ACH network and Check Replacement
  Documents (CRDs) presenting and clearing
• Online real-time or batch delivery of transactions

15
CHECK CLEARING RAILS

• Direct DDA (VISA POS Check) Consumer checks
  drawn on Visa POS participating banks are routed
  to their bank, ensuring that the funds are
  available. This reduces the risk typically
  associated with check acceptance. Real-time
  access to more than 35 million consumer accounts
  nationwide with access to over 30 of the DDAs in
  the U.S.
• ACH Network Consumer checks drawn on
  non-participating banks are processed via ACH.
  The ACH network is a safe reliable system used by
  hundreds of thousands of companies for Direct
  Deposit of payroll and by the Federal government
  for benefits payments, such as Social Security.
  The ACH system is a closed, private network that
  is not accessible to the general public.
• Check Replacement Documents Business, corporate
  and convenience checks are electronically
  captured and recreated as Check Replacement
  Documents. These CRDs run through the
  traditional banking system in accordance with the
  Check Clearing Act for the 21st Century, also
  known as Check 21 legislation.

16
Direct DDA Market Share August 05
Participating DDAs g Up to 10
g 10 to 19 g 20 to 29 g 30
WA
ME
MT
ND
MN
VT
OR
NH
MA
ID
NY
SD
WI
MI
WY
RI
PA
IA
NV
NE
CT
NJ
OH
IN
IL
UT
WV
DE
CO
CA
VA
KS
MO
KY
HI
DC
NC
TN
MD
OK
AZ
NM
SC
AR
AL
GA
MS
LA
TX
AK
FL
Source Visa Member DDA Market Share Data
17
Direct DDA Access Banks
Source Visa U.S.A. POS Check Service Production
Data August 2005
18
ECS Service Level Options

• Conversion with Guarantee
• Checks are converted into electronic transactions
  and all funds are guaranteed
• All paperwork is eliminated no follow-up needed
  from merchants
• The retailer assumes no risk for all qualified
  and approved transactions
• Conversion with Verification
• Checks are imaged and converted into electronic
  transactions
• Routed for verification either through the
  participating Visa bank or through EnCircle for
  ACH submission
• Retailer retains the risk of returned items for
  all transactions
• Conversion with Verification and Collections
• Offers all the advantages of conversion and
  verification, while eliminating the need for
  businesses to perform their own collection
  activity
• Retailers retains the risk on returned items, but
  will have all monetary returned items
  automatically handled by EnCircle Collections
  after the first resubmission.

19
ECS Service Level Options (contd)

• Conversion only
• Checks are imaged and converted into electronic
  transactions, retailer performs own authorization
• Retailer retains the risk of returned items for
  all transactions
• ECS Custom Combination
• Custom-designed risk programs are available,
  consisting of any combination of the above
  services, triggered by a predetermined dollar
  threshold.
• Retailers retain the risk of loss on returned
  checks, depending upon the specific combination
  and dollar thresholds selected
• NSF Service Fee Processing
• All service levels except Conversion with
  Guarantee support the ability to electronically
  resubmit transactions that have been returned for
  non-sufficient funds, electronically collect an
  NSF service fee from the consumers account, and
  automatically fund the businesss account with
  these feeseliminating the labor and lengthy
  time-to-collection of manual systems.
• NSF Service fee not available with ARC.

20
(No Transcript)
21
Competitive Comparison
22
NOVA ECS The ONLY Flexible Solution Provider
Service
NOVA
Certegy
Telecheck
ü
ü
ü
ECS with Guarantee
ü
ECS with Verification
ü
ECS with Verification and Collections
All in one processing check/credit/debit
ü
Funding in 24-48 hours
ü
Consolidated reporting
ü
Business check acceptance and conversion
ü
All at a Competitive Price!
23
(No Transcript)
24
ECS Processing Solutions
25
ECS Solution Options

• Terminal/imaging solutions
• VeriFone Omni 3730LE, 3750 3750 IP
• VeriFone Omni 3200, 3210, 3200SE 3210SE
• Hypercom T7Plus, T7PT T77T
• Nurit 2085, 8320 8320IP
• RDM 6000i Imager
• PC-based software solutions
• viaWARP with Magtek Imager/MSR
• Integrated POS solutions
• IBM imager IBM ACE software
• Epson imager
• VAR interface solutions

26
ECS Image Management Solutions

• POS Image Capture
• Image Batch Archival, Retrieval and Reporting
• Remote batch submission timing
• Local batch capture option
• Participating and Non-Participating Items
• Retrieval with reported transaction data

27
EnQuire - Items Reporting
Return Detail Store, MICR data, lane, status,
ACH date, tracking, ACH history
Return QueriesLook for patterns of specific
checks, export to spreadsheet or database and get
data ready for collections
ImagesStored securely on Payment Archive
28
Questions Answers
Thank You!