SmartCard Networking Forum Working Together Wolverhampton 2 nd May 2007

1. SmartCard Networking ForumWorking TogetherWolverhampton 2nd May 2007

2. David Richards PayPoint’s background PayPoint’s clients and the PayPoint service PayPoint and Local Authorities, Housing Associations and Credit Unions Michelle Stanbrough PayPoint and SmartCards PayPoint and Transport

3. Nearly one in five adults have no current account >6m householders pay some or all bills in cash >£2bn cash payments per annum made at post offices, banks and in the convenience sector Limited consumer choice on when/where to pay using cash PayPoint established in 1996 to ‘fill the gap’ Background

4. PayPoint Overview PayPoint provides a service to: Clients - providing an established and cost effective retail network through which customers can make regular payments Customers - providing a nationwide network of convenient local outlets to pay their bills Retailers - generating commission and increased customer footfall

5. PayPoint facts • More than 17,250 PayPoint outlets • Over 7m regular customers • Clear visibility through distinctive branding • 322m txns/£3.8bn collected 05/06 • Collecting for 800+ clients from diverse range of sectors, including telecoms, utilities, mail order, local authorities, transport

6. Clients – Energy

7. Clients – Water

8. Clients – Telecoms & Media

9. Clients – Other

10. Retail Network • UK’s largest payment provider to retailers • PayPoint terminal attractive to retailers as simple and small • Dedicated call centre for agent queries – 7 days, 7am – 11pm • Built for convenience, service and location – c100 hours pw • All agents contracted directly with PayPoint • Only credit worthy retailers • Mix of independent retailers and major multiples - split 60:40 • >98% coverage of Acorn ‘DEF’ households

13. Customer Benefits • High service levels, welcoming environment • Clear receipt guaranteeing acceptance • Extended opening hours • Convenient to homes • “One stop” shopping and bill-payment • Clear, memorable branding

14. PayPoint Branding

15. Cost Reductions • Manually processing cheques/postal orders – expensive! • Handling cash – expensive and fraud/security risks • Doorstep Collections – expensive and open to fraud and security issues • Post Office and Bank charges deter customer payments • PayPoint has comprehensive agent network in place • Convenience means no excuses! • Regular, frequent settlement • Attract new customers/payers

16. 467 Local Authorities 2,000+ Housing Associations Estimated 200m txns pa Historically re-sold as a service by The Co-operative Bank and allpay.net Ltd Over 800 clients Day-to-day issues managed by Co-op and allpay.net Examples of payment types Council Tax Rent Social Services Issues for PayPoint Introduction of Smart Cards (providing access to different schemes and systems, e.g. Libraries and Leisure Centres) Dealing with large number of organisations indirectly or directly Clients wanting a range of services Increasing our range of services, e.g. Internet payments, texts etc Local Authorities, Housing Associations and Credit Unions

17. Smart Card Ticketing… through a retail payments network

18. What do you need? • Retail terminal network • Contact-less card reader • Security module (SAM) • Retail terminal network that can read all customer media types (ITSO & closed scheme) • Touch screen menu to assist with product selection • Retail terminal network provider with a proven solution

19. How does it work?

20. Smart Card ticketing Activating Smart Card ticketing using the contact-less card reader…

21. Product selection Selecting product using the touch-screen menu…

22. Customer receives bill, card or key and instructions to pay at e.g.PayPoint £ £ £ Customer visits PayPoint retailer to make payment / top up their phone. How does it work? Transaction data is sent to each utility or service provider to update customer accounts PayPoint central systems automatically collects transactions from each PayPoint terminal every night PayPoint direct debits the retailers bank account. Commission is paid direct to the retailers bank account Funds are paid to the utility / service providers.

23. Who are we working with?

24. Who are we working with?