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DEXIT – A MARKETING OPPORTUNITY

DEXIT – A MARKETING OPPORTUNITY. Easier than cash, faster than debit. Content. DEXIT the company Concept – Technology and Benefits Demand Competitors Company concerns and the final decisions Target market Product Revenue Promotion. Dexit the company. Formed as new company in 2001

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DEXIT – A MARKETING OPPORTUNITY

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  1. DEXIT – A MARKETING OPPORTUNITY Easier than cash, faster than debit

  2. Content • DEXIT the company • Concept – Technology and Benefits • Demand • Competitors • Company concerns and the final decisions • Target market • Product • Revenue • Promotion

  3. Dexit the company • Formed as new company in 2001 • Started as private, became public in 2004 • Bell Canada as partner in 2004 • Get a stake in Canada’s low-value cash transactions • Deciding how and who to target with their service • Before/After approach

  4. Concept and Technology To provide easy & fast payment through RFID technology Over the counter small cash payments. • Tags held by consumers • Readers on merchants counters • Wireless link between reader and tag • Withdraw money from consumers Dexit account

  5. Benefits • Benefits for merchants • Lower cash-handling costs (both theft and shrinkage) • Reduce line-ups • Turn walk-aways into customers • Reduced need to check for counterfeit money • Benefits for consumers • Faster than credit cards • No more messing with coins • Can track their transactions online

  6. Demand • Two prior attempts had shown an interest from both consumers and merchants • Mondex and Scotiabank • Canadians among the world’s heaviest users of electronic payment systems • 350,000 retailers in Canada accepted payment via IDP in 2001 • 17,6 million monthly IDP users were counted in Canada in 2001 IDP: Interac Direct Payment

  7. Demand Interac Direct Payment Transactions by Province (in millions) • Ontario (ON), Quebec (PQ) and British Columbia (BC) top three markets • Toronto (ON) Accounting for close to 30% of their province’s respective debit transaction market.

  8. Competitors • Retailers that issued their own proprietary payment cards or gift cards • Credit and Debit card issuers • More towards Dexit than Dexit is towards them • ExxonMobil Speedpass (1997) and Oyster (the new and developed) • Both using RFID

  9. Company concerns and the final decisions

  10. Product - Thoughts • Confident on using RFID • Consumers too accustomed to using cards? • Key chain fob or other kind of gadget?

  11. Product - Decision

  12. Target market - Thoughts • Target national or in a specific geographic area? • Target group of individuals who were comfortable with newer technologies (Like the Dexit tag)? • Who where the heavy users? • Better for low-value transactions • Target merchants based on the demographics and lifestyles of the consumers?

  13. Target market - Decision • Small target area within Toronto • Targeting areas with a high consumer-to-merchant ratio • Hospitals • College campus’ • Subway stations • office towers • Various take-away food and convenient shops • Target a younger consumer base (students) • “Pendlers” on their way to work (potential heavy users)? • Should they have target another area/group? • Public transportation • Taxi • Parking

  14. Revenue model - Before launch • Decision for finding revenue • Merchants • Transaction fee and how much? • Set subscription fee? • Consumers • Fee for each transaction? • Willing to pay if cost is transparent?

  15. Revenue model - Solution • Fees from merchants, based on a percentage of the transaction value. • Consumers pay 1.5$ each time they allocate new funds to the Dexit account. • Licensing fees from organizations (royalties). • Interest rates on prepaid accounts • Income from sales of Dexit point-of-sale terminals, RFID tags/readers

  16. Partners in crime • In mid 2004 Dexit partnered with Bell • Bell have exclusive rights to market and sell in Canada • Getting access to Bells relations to 500.000 merchants and 15 mill. customers. • Leads to lower marketing costs: • Sales and Marketing costs having gone from almost 1.5 million$ in Q2 2004 to less than 600.000$ in Q2 2005) • Licensing of system to other organizations

  17. Promotion - Before launch • Limited marketing budget • Push or pull? • Posters, TV, radio, newspaper, Webpage • Hire sales force?

  18. Promotion - Solution • Posters in the geographical area of service • Subway station, side of busses. • Special offers using Dexit’s webpage • Marketing surveys for existing customers • Ineffective webpage (show the bugger)

  19. SWOT - Not Forgot

  20. Wrap - Up • The status of Dexit, today, is still uncertain. • Only gained 20.000 consumers over the last 2 years • Only gained 460 new merchants since launch • Many investors • Their license agreements with Bell • First-mover advantage in Canada • Will they survive on the market? • Have they done it right? Thank you for your time

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