© 2012 First Data Corporation. All rights reserved. All trademarks, service marks and trade names used in this material are the property of their respective owners.

How innovative companies around the world are using technology to transform the customer experience.

Around The Globe: Universal Commercein Action

What is Universal Commerce?Universal Commerce is commerce that happens

anytime, anywhere, and on any type of device.

It is commerce in which many activities are

seamlessly integrated into one experience—

shopping, payment, marketing, loyalty, money

management, offline and online experiences.

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Whether they are shopping for merchandise, making financial services decisions, installing a

virtual wallet on their mobile device, or deciding what payment accounts to use, consumer

expectations for the Universal Commerce experience share a common thread. They want to

know what their friends like. They want to find the best value. They want to know they are

buying the right things. And they want it all now.

Merchants and financial institutions often think of their products and services according to

the channels they use to promote and deliver to their retail customers. The physical store or

the bank branch anchors the business. The online store or Web site is frequently operated as

a different business organization. Offers and coupons are often considered advertising, and

loyalty programs serve yet a different purpose. Each channel determines its own mission with

customers. Then there are the new players in the online space, including offer publishers that

provide daily deals and group buying opportunities; alternative payment services providers

such as PayPal; and competing virtual wallets coming from entirely different entities like

Google, Visa, mobile network operators, and others.

Merchants and financial institutions are navigating this still-unfamiliar territory. For consumers,

however, it’s all very simple or, rather, it should be very simple. Whether they are looking at a

camera in one store and at the same time purchasing it at another store, or buying groceries

while standing on a subway platform, in the mind of the modern consumer, anything should be

possible. And today, nearly anything is possible.

Meeting consumer expectations

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In many ways, Universal Commerce is a

fulfillment of what consumers want and expect.

Create Headline that summarizes goalsof RFP here.

This second decade of the new millennium is a transformational time for merchants and financial

institutions. Smart devices, greater ease in the creation of integrated applications, an advanced

transaction infrastructure, and a partner ecosystem enabled by Web services have combined to

change how we shop, buy, and sell. That is Universal Commerce.

Universal Commerce is already a global phenomenon. Hundreds of pilot programs and full

production deployments are underway.

In this report, we highlight examples of highly personal, mobile-enabled interactions among

consumers, merchants, and financial institutions. Each approach illustrates an aspect of either the

consumer’s emerging purchase journey or the evolving relationship between financial institutions

and the account holder’s deeper ability to access and manage her finances.

Universal Commercetoday

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Except for any products that are specifically identified as being provided by or associated with First Data, the nominative examples provided are not otherwise sponsored or endorsed by First Data.

Key themes to look for throughout these examples include context-based transactions, system flexibility, and customer intimacy via mobile devices:

ContextAn important characteristic

of many Universal Commerce

applications is a focus on

delivering the optimum

user experience for every

transaction. Smart devices,

mobile apps and cloud-based

services give merchants and

financial institutions new

ways to tailor the customer

experience to very particular

transaction contexts (at home,

in a store or elsewhere), with

the payment itself embedded

within the larger transaction

context.

FlexibilityGiven the swift rate of change

in these technologies, smart

investment in flexible solutions

that produce measurable results

is paramount. The mobile-

based, app-driven model

of commerce and payments

encourages experimentation to

improve program performance.

It also allows a program or

product to “pivot” in an entirely

new direction. Flexibility is,

therefore, an essential attribute

of the products or platforms

used.

Customer IntimacyThe relationship between

consumers and merchants

now operates across multiple

channels—brick-and-mortar

stores, eCommerce, the

telephone, and via mobile

devices. Leading retailers have

reported that consumers who

download their apps are among

their most loyal, most profitable

customers. If the app delivers

value and increases the intimacy

of the relationship, then the

consumer will transact more

often.

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Universal Commerce in ActionUniversal Commerce is a global phenomenon. The following Universal Commerce scenarios were produced by an international scan performed by Mercator Advisory Group and First Data to illustrate the range, the specificity, and the potential for new ways of gaining customer loyalty.

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United Arab Emirates

Pizza at the Touch of a Single ButtonRed Tomato Pizza in Dubai just made ordering a pizza as easy as pushing a single button.

With its VIP Pizza Magnet, customers simply press a button and a preprogrammed pizza

order is submitted via a Bluetooth connection to a smartphone or tablet (which relays the

order over the Internet). When the order is received by the pizzeria,

a confirmation text message is transmitted to the customer,

allowing him to cancel or modify the order.

Set-up is simple: the customer requests a free pizza

box-shaped magnet through the pizzeria’s Web site,

and when it arrives he syncs it to a mobile device.

Once payment details and a delivery address are

entered into the Web interface, the customer chooses a

customized default order for each press of the button. This pre-set order

can be changed at any time by visiting the Web site.

Red Tomato Pizza has supported the launch of its one-touch ordering system with two

clever viral videos promoting the gadget and explaining the set-up process. The pizzeria

has received a flurry of publicity from local and international press coverage, and was

inundated with so much customer demand that it added a second delivery line. The

success of the program has led to the forthcoming launch of a customer loyalty program

that will further enhance the company’s customer engagement activities.

Solution Attributes

• Streamlines ordering and

capitalizes on impulse

purchasing behavior

• Simplifies operational

processes associated

with order taking

• Transforms a timeworn

marketing tactic by

creating a compelling

reason for customers

to display and use a

promotional giveaway

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Mobile banking apps demonstrate the evolution of mobile solutions from

single purpose to a richer service delivery experience and multiple functions.

Mobile banking began with simple balance inquiry and mini-statements

displaying the last five or six transactions, typically via an SMS-based interaction.

The UK’s Barclays bank has launched the Barclays Pingit mobile banking app

that demonstrates a next level of capabilities and functional integration.

First, the Barclays Pingit app does the basics well. With mobile devices,

convenience is measured by speed across two dimensions: ease of use and

access to data. Once the user enters a five digit PIN to open the app, it’s a matter

of seconds before the account balance is displayed. This is important for those who

navigate their spending path based on their current balance.

But the Barclays Pingit app goes beyond simple balance inquiries. The service

supports person-to-person funds transfer—in a way that is easy for the customer: the

recipient’s phone number is the only data required for the transfer. And the app’s ATM

finder, rather than simply presenting a list generated based on local postal code entry,

uses GPS to locate the nearest ATMs and places them on a Google map featuring the

search giant’s Street View facility.

It’s Not Your Father’s Mobile Banking App

United Kingdom

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Solution Attributes

• Convenient access to

specific information

via well-designed

user interface

and efficient

communications

• A basis for future

enhancements to

the customer service

experience

For global retailers, out-of-stock items and the activities

required to remedy customer frustration are responsible for

billions of dollars of costs and lost revenues. Often, a simple

solution is the most effective. During the 2011 holiday shopping

season, the Guess?, Inc. company took a pragmatic and

effective approach to the out-of-stock dilemma.

Operating in some 1,600 locations across 85 countries,

Guess? is a leader in global lifestyle apparel and accessories.

Innovative use of its existing Web site helped drive revenue

during the all-important 2011 holiday season. Rather than

issuing rain checks, Guess? installed iPad tablets in various

departments of their brick-and-mortar stores. While in the

store, consumers used the devices to access the Guess?

Web site and purchase sale items that were out-of-stock

in their brick-and-mortar stores. By installing a popular and

unmodified device at the point of frustration, Guess? took

a low cost method directly to its customers and generated

additional sales that could otherwise have been lost to

competitors.

Run Out of the Hottest Jeans?

Global

Solution Attributes

• Uses inexpensive

tablets and existing

Web site to address

serious customer

satisfaction concern

• Captures sales that

would otherwise

be lost to brick-

and-mortar stores’

having items out-of-

stock

• Simple, effective,

and highly context-

specific

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For patrons visiting a busy bar or restaurant, waiting for

the check and making the payment can be frustrating

and time-consuming. Tabbedout is a mobile app that

allows patrons to open, view, and pay bar and restaurant

bills (“tabs”) directly through their smartphones, without

requiring a server to check them out.

Initially, the customer downloads the app and enters his

payment card information into the app. The card data

and personal information is encrypted and stored on

the phone. When the customer enters a participating

establishment, he opens the Tabbedout app, which

provides him with a five-digit code that the server enters

into the restaurant’s POS system. Every time an item is

added by the server to the customer’s bill it appears on

the customer’s app in real time.

He’s Leaving without Paying His Tab!

United States

Solution Attributes

• Delivers value to

customer beyond

the payment: no

waiting for the

check

• Integrates with

merchant’s existing

ordering and

payment systems

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Tabbedout lets the customer leave the restaurant or bar

without having to wait for the server to bring the check.

Using the app, the customer can make the payment at

the table, as he walks out the door, or once he gets home

for the night. If a customer forgets to settle a tab within

a certain period of time, the app automatically closes the

tab and adds a preset gratuity. Once the bill is settled, a

receipt is e-mailed to the consumer.

The application does not require the merchant to acquire

any additional hardware: it is integrated directly into its

POS system, so that Tabbedout transactions are handled

the same way as a standard ticket. In addition, the app

is integrated with social media sites such as Facebook,

Twitter, and Foursquare, to encourage customers to check

in or comment on their experience at the bar or restaurant.

Consumers love daily deals, electronic coupons and other discount

offers, and merchants rely on them to attract new customers and

drive return visits. However, redemption of these offers is usually

paper-based—a cumbersome and inconvenient process for

consumers and merchants alike.

First Data’s OfferWiseSM solution simplifies offer redemption

by letting consumers link their discounts to a payment card or

mobile wallet and redeem them automatically at a participating

merchant’s point of sale. No longer do they have to print out

copies of their purchased online offers or other coupons and bring

them to the merchant’s location. Merchants can take advantage

of this solution with no changes to their points of sale, operations

or infrastructure—and over 500,000 merchant locations are now

enabled to accept these card-linked redemptions.

The solution’s open application programming interface (developed

by CardSpring) has allowed hundreds of developers and offer

publishers—including Boutiika, Cardify, Choicepass, FanPlayr, Giftly,

ifeelgoods, Key Ring, Local Bonus, Mirth, ParkMe, Place Points,

Roximity, Savored, Scout Mob, Tello and Toodalu—to use the

OfferWise platform to create innovative new types of ecommerce,

loyalty, daily deal, mobile, and CRM applications to help retailers

create high-value, digital relationships with their customers.

Discount Redemption Made Easy

United States

Solution Attributes

• Streamlines

checkout process,

reduces back-

office costs and

improves analytical

capabilities

• Open platform

simplifies merchant

and publisher

integration

• Requires no

changes to

merchant’s POS

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Japanese retailer Tokyu Hands has partnered with tech company Tonchidot to integrate the layout of Tokyu Hands

department stores into the tech company’s augmented reality (AR) app, SekaiCamera. The AR function enables

customers to use the camera function of their smartphones to obtain information about products relevant to their

current surroundings. For example, if a customer is at the beach, the app would provide information for towels and

swimwear that can be purchased from Tokyu Hands. If a customer is in his kitchen, the app would show which pots

and pans are currently on sale.

SekaiCamera also functions at restaurants (showing menus for restaurants on screen), museums (providing

information on exhibits), public transportation (displaying maps), and more. This information can be contributed by

manufacturers, retailers, or consumers. Users can also save information to specific geographical locations referred to

as “airspots.” When a friend uses the app from the same location, the saved information will be portrayed.

A Customer Learns about Your Towel Sale by Taking a Picture

Japan

Solution Attributes

• Advanced mobile

app blends location

with product

placement via

augmented reality

interface

• App supports social

commentary with

location

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Social Networking + Payments = A Smart Solution

The Netherlands

Dutch social network Hyves offers features similar to Facebook, with an added bonus: the ability to make both

peer-to-peer (P2P) payments and retail payments via the network itself.

Hyves Payments enables users to send up to €150 to their friends, as well as to merchants. Hyves integrated

payments by teaming up with Rabobank, which created MiniTix, an early version of a mobile wallet designed to

enable small payments via the mobile network. With the MiniTix application, users connect their bank accounts to

their mobile numbers, allowing them to use their phones as payment credentials. The partnership between Hyves

and Rabobank extended this MiniTix model, allowing consumers to use their Hyves accounts in place of their

mobile phones.

To begin using Hyves Payments, users need only to

connect any Dutch bank account to their Hyves

account via the MiniTix mobile wallet. There is

no charge for P2P payments, but merchants must

pay €0.15 per transaction processed.

Hyves Payments also has access to the agreements

between MiniTix and both the Eijsink cash register

system and the MyOrder mobile application,

enabling 30 percent of restaurants and

bars in the Netherlands to accept

Hyves Payments.

Solution Attributes

• Social network combines

with financial institution

to offer P2P and in-store

payments

• Mobile phone provides

interface to digital wallet

• Integration with leading

POS provider establishes

broad acceptance footprint

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The London-based fashion brand Ted Baker is taking a multifaceted approach towards connecting the in-store

shopping experience with online, mobile, and social platforms.

• After a trial period in three stores during October 2011, the retailer Ted Baker decided to install WiFi in all 38 Ted

Baker stores in the UK and Ireland.

• The retailer is contacting fashion bloggers and challenging them to take photos of customers trying on clothes at

the retail outlets. These photos are then uploaded to the Ted Baker Facebook page enabling fans to vote on which

shots are the best.

• Ted Baker hosts QR code-based giveaways in its stores. Customers use their smartphones to capture codes that

direct them to a dedicated site where they can win weekend getaways and access exclusive digital content.

• In the near future, Ted Baker brick-and-mortar stores will have tablets installed, allowing customers to access the

Ted Baker online store and order items that are out-of-stock at the retailer’s physical locations. Customers can also

watch videos and view other interactive digital content via the tablets.

By providing a rich digital experience, Ted Baker hopes to guide the consumers’ use of mobile to support its own

marketing and merchandising needs. Ted Baker believes that an engaged customer is more likely to buy.

Connected Consumers Buy More

United Kingdom

Solution Attributes

• Retailer creates a

rich, multi-channel

digital relationship

with the shopper

• High engagement

levels convert into

sales instead of

price comparison

battles

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Sweden

Solution Attributes

• Combines prepaid

funding with SMS

and 2D barcode-

based payments

• Integration with

dominant POS

terminal supplier

produces broad

acceptance

footprint

• Scheme supports

agent- and ATM-

based cash access

services

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Seamless is a provider of prepaid mobile phone transaction services in 25 countries

around the world, and is based in Stockholm, Sweden. Using the company’s

solutions, consumers can make payments from prepaid mobile accounts or from

their bank account.

The Seamless Mobile Money product is centered on its mobile wallet,

named the “Mollet.” The solution does not require a smartphone since it

is designed for Short Message Service (SMS) messages. Working with the

Seamless prepaid reload network, users can add money to their accounts

using cash or cards at a Mollet outlet, which is a merchant or a bank with

an agreement with Seamless.

The Mollet can be used for POS payments, to add minutes to a mobile

phone account, to pay utility bills, or to transfer money person to person—

regardless of whether the receiver has a Mollet account. Users can

withdraw money from their accounts by visiting any Mollet outlet and

showing transaction identification or by using the ATM of a partner bank.

SEQR, another Seamless mobile payments system, is based on QR

code technology. A consumer scans a QR code at a point-of-sale

register, confirms the transaction via her mobile device, and then

inputs a PIN on her device to authorize the transaction. Payment for

the purchase is debited directly from the customer’s bank account.

Consumers Know What They Want: Ease-of-use, Security, Reliability.

United States

Solution Attributes

• Cloud-based

technology that

provides opportunities

for integration with

other value-added

services

• Integrates payments

with loyalty and

marketing programs

• Multi-layered

security through

PIN protection, data

encryption and remote

disablement

A Wallet in a Phone and a CloudIn 2011, Google became the first global brand to release a virtual wallet application

for use on mobile devices. Consumers with certain NFC-enabled mobile phones

were able to store Citi MasterCard and Google Prepaid card account information in

a Google Wallet app and make payments directly from their phones at merchants

with contactless POS terminals. The successful launch of Google Wallet was made

possible through collaboration between key industry leaders, including Citigroup,

MasterCard, Sprint and First Data (which enables provisioning and management of

virtual cards in the wallet through its Trusted Service Management solution).

Google has since released a new, cloud-based version of the Google Wallet app

that supports credit and debit cards from Visa, MasterCard, American Express

and Discover. Google Wallet users can now utilize nearly any card when they shop

in-store or online with Google Wallet. This update makes Google Wallet more

practical for consumers and is expected to increase penetration across a wider

base of users.

The app also features Google’s SingleTap™ functionality, which supports automated

redemption of discounts and loyalty points at participating retailers. For businesses,

Google Wallet is an opportunity to strengthen customer relationships by offering a

faster, easier shopping experience enhanced with relevant deals, promotions and

rewards. Meanwhile, consumers are provided with technology that lets them save

both money and time while they shop.

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Germany

Solution Attributes

• Cloud-based technology

that provides opportunities

for integration with other

value-added services

• Integrates payments with

loyalty and marketing

programs

• Multi-layered security

through PIN protection,

data encryption and

remote disablement

Grocery Coupons for the New MillenniumGrocery shoppers at REAL hypermarkets throughout Germany can now use their

smartphones to browse for electronic coupons as they walk through the aisles. They select

relevant coupons from the REAL website or mobile app, and when they checkout, they

simply flash their loyalty program membership card and the discounts are automatically

applied to their purchase.

REAL already operates Germany’s largest paper coupon program, with monthly coupons

distributed to millions of consumers. Its new electronic couponing solution, however, seeks

to modernize this model by streamlining both distribution and redemption, and making

the entire process more useful and convenient for consumers.

In addition to being significantly less costly to distribute than paper coupons, electronic

coupons enable REAL to collect and analyze a wealth of data on individual customers’

shopping behaviors. The electronic coupons also provide greater flexibility, allowing REAL

to instantly issue or remove coupons based on inventory levels and market conditions.

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Global

Bringing a Print Catalog to LifeGlobal home furnishings retailer IKEA has stepped up its mobile

program by launching a new catalog app that seeks to enhance its

print catalog experience. Customers who download the app can

hold their smartphones and tablets over mobile-enabled catalog

pages and gain access to enhanced content such as videos, images

and 3D product models. According to a company spokesperson,

“With the addition of the extended content, we are looking to

enhance the experience our customers have with our catalogue.

While the printed version continues to be the cornerstone of our

global marketing strategy, we want our customers to be able to

interact with our catalogue and experience our products in a

unique and creative way.”

This catalog app is part of a wider effort by IKEA to better engage

with tech-savvy consumers through mobile technology. It recently

launched a mobile-optimized Web site, and it is also piloting

a shopping app that customers can use to find nearby stores,

check product availability, schedule in-store pick-ups and compile

shopping lists. The retailer hopes to drive downloads of its shopping

app through a targeted mobile advertising program, as well as an

increased presence on Facebook and Twitter.

Solution Attributes

• Enhances customer

shopping experience by

building on an existing

marketing asset

• Helps drive both online

and brick-and-mortar

sales, especially among

younger, tech-savvy

consumers

• Increases cohesiveness

of IKEA’s multiple

shopping channels

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With customers moving into the the central role, service providers, financial institutions, and merchants must look carefully at the user context, determine what the customer is trying to accomplish, and build to that goal. That’s the path to increased revenues.

Mobile communications is increasing the interconnectedness of individuals, companies, and nations. While developed markets may undergo the Universal Commerce transformation first, developing markets will follow swiftly as the cost of smartphones continues to drop and mobile broadband access rises.

Given the rate and scale of these changes, the ability to create customer-focused solutions requires flexibility, processing scale, and a broad range of capabilities to meet the growing complexities of payment and transaction handling. Flexibility is especially important at the point of interaction, where the business meets the customer at what is becoming the new front door. How these experiences are designed and deployed will change—often swiftly. The reliability attributes of scale are required, regardless of how many transactions are handled. Finally, access to a wide portfolio of back-end services provides the merchant or issuer with an expanding range of tools to further cement the end customer relationship.

The breadth of the scenarios reviewed here also suggests the opportunity for integration of new capabilities. Based on success with a single function version, experimentation with expanded capabilities can drive higher engagement and transaction volume. For example, a simple payment app could be augmented with couponing or manufacturer-sponsored advertising. A financial institution’s mobile banking app could provide a location-based offers program linked to a merchant-funded discount network. The possibilities are, indeed, almost endless.

Creating customer-focused solutionsAs these scenarios demonstrate, value is generated at the intersection of payment capability, commerce acceleration, and improved user experience.

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Universal Commerce and your businessUniversal Commerce is not a “one size fits all” approach. As each scenario demonstrates, its expression varies depending upon the specific use case. Merchants, issuers, and service providers must look to skilled partners with the breadth of experience and technical capabilities to deploy their own Universal Commerce solutions. First Data offers the flexibility, scale, and capabilities range needed to meet these Universal Commerce needs.

Because of the emergence of Universal Commerce, industry observers including Mercator Advisory Group agree that the payments industry and, indeed, the purchase experience itself will undergo more change in the next five years than it has during the last twenty. Universal Commerce is an expanding concept and evolving set of capabilities—the impact of which is only just beginning to be felt by merchants, consumers, and financial institutions. Now is the time to prepare.

© 2012 First Data Corporation. All rights reserved.2965

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