deluxe corp small business owner views on payment options

© 2014 Deluxe Enterprise Operations, Inc. All rights reserved. Proprietary and Confidential.

Customer Research: Small Business Owner Views on Payment Options.PRESENTED BY

Chris ClausenDirector - North American Payments & Transactional Solutions

May 2014


Table of Contents

Speaker Introduction Deluxe Corporation Overview ePayments Deluxe Payments Research Federal Reserve Study Different Results 10 Qualitative Key Learnings Summary of Findings Deluxe ePayment solution


Speaker Introduction

With over 18 years of experience in Financial Services, including working directly for financial institutions and 3rd party vendors/solutions, Chris brings expertise in the areas of payments, branch operations, credit, collections, analytics and call centers.

Chris Clausen Director of Payments and Transactional Solutions

Deluxe Corporation


Deluxe Corporation Overview

Deluxe Corporation is a changing, evolving and growing company. Through strategic acquisitions we have created a unique suite of services to help small businesses and financial institutions attract and retain customers, including marketing services and payment solutions. We help customers do more than compete against big business – we help them win.

At Deluxe, creativity, innovation and entrepreneurial spirit combine with all the resources and strength of a well-established company, creating the type of culture expected at a start-up rather than a Fortune 1000 company. Our customer base includes more than 4.5 million small businesses, 5,500 financial institutions,

and 6 million individual customers.

The new Deluxe® eChecks powered by VerifyValid™ offer cutting-edge technology that combines the best of check writing with the convenience of email delivery, giving businesses a fast and easy solution.


ePayments

It’s no big secret, payments are changing.


Deluxe Payments Research

The focus of today’s session is to review learnings from our Primary research efforts, including both qualitative and quantitative methods.

This research used existing Deluxe customers, lapsed Deluxe customers and non-customers.



Key Quantitative Findings from Deluxe’s Primary Research:

Lapsed customers identified their reasons for using fewer checks: In 2008, 42% said because business was slower than usual In 2010, 50% said because business was slower than usual In 2013, 17% said because business was slower than usual 76% said because they were changing to alternate payment methods

2008 2009 2010 2011 2012 2013

0

10

20

30

40

50

60

70

80

Business Slower

Alternate Payment Method



Key Quantitative Findings from Deluxe’s Primary Research:

ALL respondents identified the top 3 new methods of payments: 80% in US and 73% in Canada have changed to electronic bill payments 38% in US and 51% in Canada have changed to credit card payments 36% in US and 54% in Canada have changed to automatic pre-authorized payments


Federal Reserve Study

Key Findings from the 2013 Federal Reserve Payments Study:

B2C - checks declined 9.6% from 2006-12, or using a shorter time frame from 2009-12 the decline was more significant, 16.0%

B2B – checks declined 5.5% from 2006-12, or using a shorter time frame from 2009-12 the decline was more significant, 9.2%

http://www.frbservices.org/files/communications/pdf/research/2013_payments_study_summary.pdf

20062009

2012

0

1

2

3

4

5

6

7

8

9

B2CB2B

Bill

ions

Years

Checks written by Counterparty

http://www.frbservices.org/files/communications/pdf/research/2013_payments_study_summary.pdf


Different Results

WHY?

Federal Reserve Results: volume of checks written is not decreasing at an equivalent rate

Deluxe Results: alternate payment methods are tried in substantial numbers



We believe the answer lies in the qualitative results...


Key learning #1 - Qualitative

Small businesses have an established AP process which is critical to maintain because it’s tied to their accounting software. Accommodate both sophisticated and non-sophisticated AP processes Solution must be software agnostic Remittance data obtained from accounting software Accounting software change is not easy and often expensive Separation of controls

Solution must not require a fundamental change to AP processes and must integrate easily.

Payment Solution Criterion:



Small businesses do not want to worry about whether the payee will have trouble negotiating a payment. Time is a huge opportunity cost Adoption likelihood linked to confidence Acceptance issues can have a negative impact on a small business’ reputation Unexpected fees can equate to acceptance issues

Payment method must be broadly accepted.




Small businesses expect tangible evidence that payment has been made. Payment deadlines are frequent and sometimes unexpected Spend significant sums to ensure speedy payment Desire to hold funds and control release Immediate payment often required by suppliers to release

goods or provide services Payment delays result in tremendous frustration for

both SBs and payment recipients

Payment immediacy.




Small businesses want and expect to be able to provide remittance data with the payment. Without remittance capability, a solution is viewed as consumer design forced

onto businesses No extra money to reconcile payments Timely reconcilement avoids future work Remittance data avoids misunderstandings and difficulties

linking payments to invoices

Robust remittance data can be attached and sent with payment.


+ =



Small businesses do not want to ask for or force their payees to sign up for a payment solution. Not a payment educator No time to help payees sign up for a solution Payee acceptance limited when sign up required Sign up hampers payment immediacy

No payee signup/membership required.




Small businesses do not want to use a payment method that results in new or unexpected fees for the payee. Fees limit acceptance Fees are often charged back to them Fees limit usage Complicated fees are not good for business Should offer one payment method to consumers

or other businesses

No additional payee fees.




Small businesses do not want to force their payees to provide sensitive data in order to enable payment. Empathize with payee Often cannot force payee to provide sensitive data Security risk of obtaining sensitive payee data Security risk of storing sensitive payee data

Payee does not have to provide sensitive data.



Small businesses do not want to become payment experts – that is not why they went into business.

WANT THIS:o Intuitive processo Easy to understando Easy to learno Easy to implemento Simple for both them and their payees

NOT THIS:o Learning U.S. payment system infrastructure intricacieso Facilitator between payees and financial institutionso Spending time implementing payment method


Simple implementation.




Small businesses worry about security…a lot. They do not expect to have to become payment security experts to trust a payment method. Don’t want to worry about payee sensitive data, but do anyways Respond well to tangible evidence of payment security Payment facilitator is expected to manage security Security is table stakes

Secure – considered table stakes.




Small businesses do not want to have to sort through the vast and constantly changing world of ePayment solutions. Bewildered by payment methods, providers and potential business impacts Want trusted brands to bring forward best solution Concerned about fraud risk with unknown brands Worry about wasting time on payment fads

Endorsed by trusted name(s).



Summary of Findings

1. Easy integration with AP software with no fundamental change to AP Process

2. Broadly accepted payment method

3. Payment immediacy

4. Robust remittance data can be attached and sent with payment

5. No payee sign up required

6. No additional payee fees

7. Payee does NOT have to provide sensitive data

8. Simple implementation

9. Secure – considered table stakes

10. Endorsed by trusted name(s)


Summary of Findings

Small Businesses want all of these criteria to be present in an ePayment solution before switching all payments over, but they often have trouble articulating this!


Deluxe ePayment Solution

Why did Deluxe select eChecks as its Small Business ePayment solution?

ALL 10 criteria were met PLUS:

Significant cost savings for the customer

Additional separation of controls for customer – control is key

Keeps the Financial Institution at the center of the relationship

New protection available for the bank of first deposit


Deluxe ePayment Solution

To learn more about eChecks, please go to:

deluxe.com/echecks/

or call us at

800.631.8962

Thank you for attending today’s session!

http://www.deluxe.com/echecks/

http://www.deluxe.com/echecks/

deluxe corp small business owner views on payment options

Business

deluxe enterprise operations

deluxe results

deluxe payments researchwe

existing deluxe customers

new deluxe echecks

branch operations

new methods of payments

federal reserve payments