financial services overview – eta university ~ march 19 th, 2015

FINANCIAL SERVICESOverview – ETA University ~ March 19th, 2015

2 CONFIDENTIAL AND PROPRIETARY

ETA UNIVERSITY ~ AGENDA -- INCOMM

• About InComm• InComm Financial Services Overview• InComm -- Financial Services Products• InComm -- Financial Services Platform & Capabilities• Overview of Financial Services Prepaid Products/Programs• Glossary Of Terms – Financial Services

Confidential and Proprietary4

2013 WalmartSupplier of the Year

2013 TargetVendor of the Year

2012 CVS Supplier of the Year

Industry AchievementBROOKS SMITH

Best Network BrandedGift Card ProgramONEVANILLA

Best Prepaid Card or Packaging DesignVANILLA MASTERCARD GIFT 3-CARD MULTIPACK FOR SAM’S CLUB

Best in Category–Most Effective Closed-Loop or RAN Prepaid Card Program Gift CardDO IT YOURSELF HOME IMPROVEMENT GIFT CARD

Best Retail-Based Prepaid Card ProgramSPEEDWAY LOYALTY PROGRAM

Best Marketing CampaignGIFT CARD WEEK AT SHOPPERS DRUG MART

2014 Sam’s ClubSupplier of the Year

2014 Walmart Service Product of the YearRapid Reload & Vanilla Reload

RECOGNIZED LEADER

1992

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1999

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2010

2012

2013

2014

Founded in Atlanta, GA, offering long-distance service & technology

Develops first technology to allow POS activation at checkout

First to host POSA

Introduces first prepaid wireless cards Becomes a member of the Visa network, enabling card activations

Cable & wireless acquisition

Carrier value insertion begins

Launches first music download prepaid card with Napster

First financial services gift card AMEXFirst iTunes gift cardsDevelops lock/unlock technology

Full prepaid mall program launch Introduces Vanilla Gift Cards

Acquires PRE Holdings, Kwik Systems, Prepaid Enterprises and AirTIME Technologies

Enters Canada and UK

Enters Japan

Acquires Zeevex, GroupCard, Coinstar’s EPay and QPay

Develops first alternate toll & transit payment programsAcquires Medagate, Adility, OLS and GiftangoLaunches MyVanilla GPR card, Vanilla Reload network

Significant APAC expansion–footprint now over 30 countriesLaunches in-store digital sales, Cashtie, mobile commerce, incentives/loyalty programs, switching payment platform

Acquires Siras – Retailer Loss Prevention Services

LEADING THROUGH THE YEARS


FINANCIAL SERVICES


• Driving innovation and revolutionizing payments by delivering solutions that empower consumers and promote financial inclusion.

• Leveraging a global platform, go-to-market expertise and extensive relationships, InComm is directly at the epicenter of new commerce.

• Delivering turnkey end-to-end solutions founded upon decades of expertise and cutting-edge technologies.

FINANCIAL SERVICES ORGANIZATION

Sales & Business Development

AccountManagement Project

Management

Technology & IT

Operations

Marketing

Product Group

Mobile

Card Production

Customer Service

Fraud & Reconciliation

Network & Issuing Banks

ChannelManagement

Legal & Compliance

Finance


FINANCIAL SERVICES & INNOVATION

OLS Payment Switch

Swipe Reload

Enhanced PaymentPlatform

Mobile Solutions

Digitizing Cashinto Accounts

POS Integration


POS TechnicalIntegration

Product Design& innovation

Product/CategoryManagement

Card Production& Distribution

MarketingMerchandising &

Promotions

Website & App Design

& Development

Digital Delivery& Social Media

Merchant &Customer Care

Legal, Regulatory& Compliance

Processing &Reporting Platform

Program Management & Processing


END-TO-END SOLUTIONS


FINANCIAL SERVICES PRODUCTS


VANILLA® PRODUCT SUITE

Prepaid Gift Card Prepaid Self Use Prepaid Debit Card Cash-In Solution

The best selling prepaid brand worldwide – a suite of prepaid products offering non-reload and reload options that are safe and secure, giving consumers what they expect – convenience, reliability and flexibility.


Phenomenal Growth YOY

Vanilla® Gift Cards come in many denominations and a variety of themes.• Vanilla Gift is the #1 selling Visa gift card

in the United States.

• Available in $25, $50, $100, and $200 denominations and $20-$500 variable load (purchase fee applies).

• Multipacks available providing three or five great gift cards with one low purchase fee.

• Licensed art available for exclusive gift card programs including: Man of Steele, Duck Dynasty, Skylander and more.


InComm's virtual open loop products can be redeemed to conduct purchases online, over the phone and on-the-go.

• InComm's digital delivery platform enables several options for a consumer to choose from including email, SMS and direct connect to a mobile application.


For simple and practical everyday spending…

OneVanilla is convenient to use everydayfor online shopping, bill pay, travel and more.There are no fees after purchase, no registrationis required and funds never expire.

Vanilla products are safe, reliable and easy to use.


MyVanilla is a reloadable debit card with features consumers want – text and email alerts, direct deposit and more.No credit check or bank account required.

• MyVanilla’s competitive advantage is we offer a high value product with a low cost of ownership

• Customers have a clear understanding of fee schedules by offering a simplified fee plan

• Great for budgeting, pay per use vs. monthly payment requirements

• Money management tools that put customers in control of their spending


Industry’s most comprehensive cash-in network for loading money at thousands of US-based retail locations

• Available in all major channels including pharmacy, convenience, and discount stores

• Conversion To ‘Swipe Reload’ POS 4/15


INCOMM -- FINANCIAL SERVICES PLATFORM & CAPABILITIES

COMPLETELY INTEGRATED PROCESSING PLATFORM

BENEFITS: • Secure, nimble, scalable• Customizable product features• Customizable activation process• Houses cardholder and

account level information• PCI compliant• Risk and compliance controls

and real-time notification system


• Customized user experience, Web API, IVR API, marketing communications and social media

• VMS Customer Care Desktop access for your service representatives

• Settlement, reconciliation reporting

FEATURE-RICH, FLEXIBLE PROCESSING PLATFORM

FEATURES: • Multiple, Account Origination Options- Online Registration- GPR Go / Instant Issuance –

turn-key web enabled- Secure package activation- Mobile App registration- Real-time card replacement

• Real-time, Email and SMS Alerts, Bill Pay, Direct Deposit, Remote Deposit Capture

• Vanilla Reload access to 15 million customers

• Cardholder Web Site & Mobile App• 24x7x365 Support Services • Multi-lingual Support – English, Spanish,

Canadian French• Analytics Reporting Catalog


CUSTOMIZED REPORTING & ANALYTICS

Program reporting focused on tracking results

• Card Summary Report

• Transaction Summary by Merchant and Location

• Remittance Summary Report

• Transaction Detail Report

• Spend Analysis Report

• Customized reporting to support back-office systems

• Daily detailed extracts that provide transactional and cardholder information for reconciliation and compliance required by auditors



FEATURES: • Delivers Discount Offers

• Points Accumulators• Multiple Purses• Integration to Pharmacy • Real-Time Access to Value• Ability to create custom offer triggers• Extensive Reporting & Analytics

OFFER TYPES:

• $ Discount• % Discount• BOGO• Point Redemption• Accumulated Discounts

(Ex. Buy 3 X get 1 Y at 50% off)

Using defined spend to strengthen customer relationships and drive revenue

ENHANCED PAYMENT PLATFORM


REBATE CARDthat drives spend back to your locations

LOYALTY & REWARDSprograms that drive retail sales in-store

GIFTING EXPERIENCEwithout POS upgrade for small chain or franchisees

PARTNERSHIP OPPORTUNITIESthat deliver additionalcustomer value

RAN – RESTRICTED SPENDING SOLUTION

CUSTOMER SERVICEFOR YOUR PROGRAM

InComm’s Customer Care Representatives are highly trained employees who excel and have high call standards


• The Jacksonville center annually handlesover 2.6 million calls for Financial Service Products

• Our service levels make InComm one of the finest consumer support organizations in our industry.

• Calls are normally answered in less than one minute with abandonment rates typically in the 5% range.

• We typically exceed our objective of 80% of calls answered in 30 seconds

PROVEN PROTECTION FOR THE YOUR PROGRAM

Fraud protection backed by our proactive risk and compliance team


Fully Compliant and Licensed

• Licensed to operate in 50 states,

District of Columbia, Puerto Rico and USVI

• All licenses are current and in good standing

• Program deemed fully compliant

by all examining states programs for agents

and employees

• Training programs and toolkit cover basic

AML requirements, specifics related to prepaid

cards, how to file SARs and CTRs, best

practices, etc. In addition, we also provide in-

store training posters with employee sign-off

acknowledgement of understanding.

Partner Merchant Monitoring

• Monitor over 400k unique partner locations with multiple portals per location

• Configurable system to support any location(s)

Card Monitoring• Monitor millions of cards

• 24/7/365 coverage

FRAUD PROTECTIONAND RISK MANAGEMENT

• InComm’s industry leading Fraud Prevention and Risk Management team is comprised of 60 employees located in Columbus and Atlanta Georgia.

• The team is responsible for monitoring and managing fraud and risk for InComm employees worldwide which includes

- 450,000 total retail locations

- Of which 100,000 retail locations sell financial services products

- Fraud Team monitors fraud for both the activation and redemption transactions

• To offer the best coverage we use both proprietary and commercially available software packages to monitor high risk activity across multiple time zones

• Our team uses a sophisticated Fraud Lab to replicate fraud schemes to facilitate solutions


EXPERIENCEDCARD PRODUCTION

InComm has the ability to meet specific partner needs for GPR card production and volume expectations.


• InComm managed nearly 700 million cards last year over 30 quality milestones per print run

• Experienced in production of open loop EMV and Smart Cards for both US and International markets

• InComm manages both secure open loop card packages and personalized card carriers.

- Able to customize the carriers specifically for increasing temp to perm conversion

CONFIDENTIAL AND PROPRIETARY27

• INCREASE SALESone store at a time

• ENSURE RETAILERSare viewed as prepaid destination by their consumers

• OPTIMIZE SALES by finding lost sales opportunities

• IMPROVE ROIof all business decisions

Did You Know?

MERCHANDISING


What Is Prepaid? ~ An Industry Overview

Prepaid products are among the fastest growing types of payment instruments in the U.S.

According to the 2013 FRB study, the number of prepaid card transactions

reached 9.2 billion in 2012, up from 5.9 billion in 2009.*

* Fed. Reserve Sys., The 2013 Federal Reserve Payments Study, Recent and Long-Term Payment Trends in the United States: 2003-2012, Detailed Report and Updated Data Release (2014), available at https://.frbservices.org/files/communications/pdf/general/2013_fed_res_paymt_study_detailed_rpt.pdf

are reloadable – others are not.

Some prepaid cards

Some prepaid cards

are closed-loop – others are not.

32

PREPAID CARDS ARE ISSUED BY HIGHLY REGULATED FINANCIAL INSTITUTIONS

• Regulated by OCC, FDIC or FRB; or by state banking regulators in case of MSBs

• Most reloadable prepaid card programs are fully Reg. E compliant USA PATRIOT Act compliant

• OFAC Compliant• Compliant with Provider and Seller of Prepaid Access

Rules• Required to report with SARs and CTRs

Not the same as closed loop cards

33

CONSUMER

Financial Institution member of a card network

System of record & transaction processing. May provide or direct customer care, risk mgmt, & report disputes.

Under direct supervision of/ contract with Card Issuer/BIN Sponsor, designs & runs the card program, may provide functions on behalf of card issuer

Switches transactions, provides risk management and strict operating rules and regulations

Endpoints where prepaid cards are sold to consumers:

Online, Retailers or Malls, Financial Institution Branches

Provides transaction processing and customer support for merchants; typically provides POS terminals used in retail setting

A merchant accepting value loads OR a MSB operating a network to provide reload services to cardholders through reload sites

NETWORK BRANDED PREPAID VALUE CHAININCLUDES THOSE OUTSIDE OF TRADITIONAL CREDIT/DEBIT PARTNER NETWORK

Load/ Reload S Sites &

Networks

Seller/ Distributor

Acquiring

Processor Network Program

Manager Issuer

ProcessorCard Issuer/

BIN Sponsor

The General Purpose Reloadable (GPR) Card

is an open-loop prepaid card

According to the Mercator Advisory Group, the amount

loaded onto GPR Cards grew from less than $1 billion in

2003 to nearly $65 billion in 2102,

and was estimated to exceed $98 billion in 2014.



Who Makes GPR Cards Available?

The issuing bank is not alone.

Retail Outlets

Distributors

Program Managers

Processors

Issuer Bank

Payment Network



Who Uses GPR Cards and Where Do They Get Them?

Why GPR Cards?

• Are considered safer than carrying cash and equipped with fraud protection.

• Are used by a wide range of consumers to make purchases, pay bills, get ‘ready’ cash, set and stick with a budget, and avoid debt.

A recent FRB of Philadelphia study found that the use of prepaid cards has moved beyond the unbanked or lower-income consumer to encompass fully banked individuals of average to above-average incomes.**

**Susan Herbst Murphy, Federal Reserve Bank of Philadelphia, Millennial with Money: A New Look at Who Uses GPR Prepaid Cards (September 2014)

Where can GPR Cards be obtained?GPR Cards can be obtained at retail locations, by phone, direct mail, or online – for a purchase fee, or not, depending on the structure of the program.



How Are GPR Cards Used?

A Fully Functional GPR Card Program

Allows the Cardholder to:• reload the Card• get cash• make purchases• pay bills• benefit from protections of Regulation E• have the availability of FDIC pass-through

insurance coverage

GPR Card Features

Some GPR Card programs offer features such as:

• Customer loyalty programs• Purchase cushion protection• Optional overdraft protection• Discount programs• Optional savings account



Oversight and Regulation

Oversight

The issuing bank oversees its third-party relationships – including those with program managers.

Regulation

• Electronic Funds Transfer Act• Treasury’s Financial Management Service rule• Regulation II• FinCEN prepaid access rule• State consumer protection laws and regulations

specific to prepaid products including State Money Transmitter laws and regulations


Prepaid ~ Glossary of TermsFinCEN: Financial Crimes Enforcement Network & U.S. Treasury

Bank Secrecy Act – ‘BSA’ --- FinCEN• http://www.fincen.gov/statutes_regs/bsa/

Money Services Businesses --- ‘MSBs’ – FinCEN• http://www.fincen.gov/financial_institutions/msb/

Office of Foreign Assets Control – ‘OFAC’ – U.S. Treasury• http://www.treasury.gov/resource-center/sanctions/Pages/default.aspx

Currency Transaction Report – ‘CTRs’ – FinCEN• http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-G002.html

Suspicious Activity Report – ‘S.A.R.s’ -- FINCEN• http://www.fincen.gov/whatsnew/html/sar_faqs.html

http://www.fincen.gov/statutes_regs/bsa/

http://www.fincen.gov/statutes_regs/bsa/

http://www.fincen.gov/financial_institutions/msb/

http://www.treasury.gov/resource-center/sanctions/Pages/default.aspx

http://www.treasury.gov/resource-center/sanctions/Pages/default.aspx

http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-G002.html

http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-G002.html

http://www.fincen.gov/whatsnew/html/sar_faqs.html



financial services overview – eta university ~ march 19 th, 2015

Documents

prepaid card program

card multipack

proprietary slide

financial inclusion

myvanilla gpr card

vanilla gift cards

prepaid enterprises

prepaid wireless cards