person to business payments on the web

PERSON TO BUSINESS PAYMENTS ON PERSON TO BUSINESS PAYMENTS ON THE WEBTHE WEB

PRESENTATION TOTREASURY MANAGEMENT ASSOCATION OF CANADAVANCOUVER, BRITISH COLUMBIA24 JUNE 2005

THE CANADIAN SOLUTIONTHE CANADIAN SOLUTION

22

MESSAGESMESSAGES

• This is the Canadian solution

• INTERAC Online is not debit

• eCommerce in Canada is real

• Consumers see value

• Merchants see value

• Roll out just started

33

PRESENTATION PRESENTATION CONTENTCONTENT

• Acxsys Corporation Background

• Industry Background

• The Solution

• Value Proposition

• Project Timelines

44

ACXSYS COPORATIONACXSYS COPORATION

• Formed in 1996 and owned by:

• The architects of INTERAC Association

CREDIT UNION CENTRAL OF CANADA

55

ACXSYS COPORATIONACXSYS COPORATION

ACXSYS INTERACASSOCIATION

FUTUREPARTNERSHIPS

ROYALTY-FREEFOR-PROFIT

SERVICEPROVIDER

BUSINESSDEVELOPER

CORPORATION

BRAND

IMN

LICENSOR OWNER

66

NEW BUSINESSESNEW BUSINESSES

• Cross Border Debit

• INTERAC Email Money Transfer Service

• INTERAC Online

77

417

1,100

2,000

2,400

3,000

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1999 2000 2001 2002 2003

Val

ue o

f Pu

rcha

ses

($00

0,00

0)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Num

ber

of H

ouse

hold

s ('00

0)

Value of Purchases Number of Households

GROWTH IN INTERNET GROWTH IN INTERNET SPENDINGSPENDING

Source: Statistics Canada

88

WHERE ARE THEY BUYINGWHERE ARE THEY BUYING

• Travel

• Consumer Electronics

• Home Products

• Apparel

• Computer Hardware / Software

% of Total1

14%

13%

13%

11%

9%

1. Source: Forrester Research, October 2003

99

CANADIANS USE DEBIT MOSTCANADIANS USE DEBIT MOST

Source: Bank of International Settlements

1010

THE COMPETITIONTHE COMPETITION

1111

DIFFERENCESDIFFERENCES

1. Real time

2. Automatic re-direct back to merchant

3. Ubiquitous INTERAC-branded service

1212

INTRODUCING INTRODUCING INTERACINTERAC ONLINEONLINE

• A new online payment service that allows consumers to pay for goods and services on the Internet directly from their bank accounts

• Alternative to existing payment options

1313

SERVICE TOURSERVICE TOUR

www.interaconline.com

1414

RELATIONSHIP MODELRELATIONSHIP MODEL

Consumer

Financial Institution

Acquirer

1515

INTERACINTERAC DIRECT PAYMENT DIRECT PAYMENT VERSUSVERSUS

INTERACINTERAC ONLINE ONLINEFACTOR

SERVICE PROVIDER

COST vs. PRICE

AUTHENTICATION

HARDWARE

LIABILITY FOR FRAUD

INTERAC Direct Payment

INTERAC Association

Non-profit / 3B txn

Card & PIN

Terminals / PIN Pads

Voluntary DCCP

INTERAC OnlineINTERAC Online

AcxsysAcxsys

For profit / ? txnFor profit / ? txn

Login ID & PasswordLogin ID & Password

NoneNone

Mandatory DCCPMandatory DCCP

1616

CONSUMER VALUECONSUMER VALUE

• Canadians spent $3B+ on Internet shopping in 20031

• 75% of these shoppers indicate concern about Internet transactions1

• 73% of online shoppers or online bankers are interested in the service2

• Provides options2

• No need for parent’s credit card2

• No need to worry about debt2

1. Source: Statistics Canada, September 20042. Strategic Counsel, October 2004

KEY DRIVERSKEY DRIVERS

Security Security

Freedom Freedom

1717

MERCHANT VALUEMERCHANT VALUE

• Enhance current eCommerce strategy

• No authentication requirement

• Leverages existing eCommerce investment

• Help SME compete

• New revenue stream

• GOOD FUNDS MODEL

1818

COST OF NO GOOD FUNDS COST OF NO GOOD FUNDS MODELMODEL

Source: Cybersource, September 2004

1919

VALUE OF GOOD FUNDS VALUE OF GOOD FUNDS MODELMODEL

Source: Cybersource, September 2004

2020

PROJECT STATUS

2121

ISSUER ROLL OUT SCHEDULEISSUER ROLL OUT SCHEDULE

Mar Apr May Jun July Sep Oct Nov Dec2005

RBC Royal Bank

Scotiabank

BMO

TD Canada Trust

Aug

2222

ACQUIRER STATUSACQUIRER STATUS

• Two Acquirers signed

• Three Acquirers receiving inquiries from merchants and third party providers

2323

COMMITTED MERCHANTSCOMMITTED MERCHANTS

… many more on the way!

2424

CONSUMER MARKETING CONSUMER MARKETING ACTIVITIESACTIVITIES

Phase 1: Back to School Campaign

Phase 2: Holiday Season

July Sep Oct Nov Dec2005 Aug

2525

MESSAGES RECEIVED ?MESSAGES RECEIVED ?

• Unique Canadian offering

• Not debit as we know it

• Canadians are buying online

• Value exists

• It’s not too late to participate

2626

QUESTIONS?QUESTIONS?

Barry CampbellDirector, Business Development

Acxsys Corporation(416) 869-5093

bcampbell@interac.org

www.interaconline.com