CHEX PROTECT

1. CHEX PROTECT About CHEX PROTECT About the ACH Processor & Bank Processor Customer Profile & Services Services & Products EFT/ACH Processing NSF Check Recovery (RCK) Consolidated Returns NSF Check Recovery vs. other Services Electronic Fund Verification Electronic ID Verification

2. About CHEX PROTECT CHEX PROTECT is a full service commerce company based out of Gulf Shores, AL, with a multitude of electronic based payment services for businesses. We sell check and credit card processing products and services to retail, restaurants, lodging businesses, and the like. CHEX PROTECT's bold entries into the emerging markets of check recovery, ACH Processing, Back Office Conversion plus developing associations & bank partnerships has further enhanced our core competency and puts us on the innovative edge in the future of electronic payments.

3. Client Profile

4. About ACH Processor ACH Direct is one of the largest privately held electronic funds processors in the United States with more than a million transactions per month totaling over $5.3 Billion in ACH transactions processed in 2005. ACH Direct has been providing payment-processing solutions to a wide mix of clientele since 1998 and continues to develop ways to help clients who face an increasingly complex and competitive business environment.

5. Client Profile

6. About Bank Processor Founded in 1990, The Bank of Kentucky has grown to become the largest community bank in Northern Kentucky with over 270 employees, $900 million in assets and 26 branch/41 ATM locations.

7. List of Services & Products • Back Office Conversion - BOC/ARC • Automated Clearing House Processing (ACH) • NSF Check Recovery • Consolidated Returns • Electronic ID Verification – ID Verify • Electronic Fund Verification – ATM Verify

8. EFT / ACH Processing

9. Back Office Conversion BOC

10. What is BOC? When customers pay for merchandise and/or services by check, whether at the merchant’s location or received by mail, the check is accepted in the usual manner and then later scanned with an imager and electronically deposited. There is no need for an additional signature or additional equipment at the POS. This is a back office function that saves time and money while accelerating cash flow.

11. How does BOC work? BOC enables merchants to accept checks as they currently do, without the need for any additional authorization. At a time that best works for the merchant, the checks are read by a high-speed scanner capturing all of the necessary information. The data file is built at the same time the checks are converted to an electronic Fund Transfer (EFT) transaction. The transaction is automated all the way through reconciliation. The process is integrated, enabling the data to be imported directly to other applications. The information is available through a variety of reporting options, including online access to every transaction, from the time the the check is entered until the time the funds are electronically settled to the account. The actual image of the check itself can be viewed from our secure website.

12. BOC Funding Process Consumer Merchant RDFI(Consumer’s Bank) ACH Operator (The Fed or EPN) ODFI(ACH Direct’s Bank) Transaction Initiation Flow of Debit to Consumer’s Account Flow of Credit or denial of payment to Merchant

13. BOC Benefits • No bank deposit fees • 24/7 Internet reporting with the ability to download data directly to the merchant’s existing and future applications • Notification of NSF and Closed Account checks within 24 - 48 hours, rather than 7 - 10 days • Real funds within 48 hours • Seamless acceptance and processing of business checks • No additional fees for processing business checks • Returned check fee of only $2.00 - banks often charge $3.00 - $25.00 per returned unpaid check • Reduced handling costs • Make deposits from your office, not the bank window • No more re-entry. Customer and transaction information is entered once.

14. BOC Benefits (cont.) • Improve cash management abilities • Enables the merchant to combine deposits from multiple locations, reducing fees and eliminating multiple banking platforms • Systems are integrated to enable the data to be shared seamlessly throughout the merchant’s operation • Detail information about how /where the check was accepted • Checks can be prescreened before acceptance • Check Writer ID can be verified before acceptance of the check • Returned items can be set to automatically go into a collection process that can even provide a new revenue stream for the merchant

15. Automated Clearing House ProcessingACH

16. What is ACH Processing? According to Computer World magazine, “The Automated Clearing House (ACH) is a secure, private electronic payment transfer system that connects all U.S. financial institutions. Direct paycheck deposits and debit card purchases are two examples of electronic fund transfers (EFT) that go through this network.”

17. How does ACH work? • ACH Processing allows a merchant to convert all its recurring payments into electronic transactions. It allows large and small businesses to collect their receivables each month on a consistent, dependable bases. Paper transactions can be moved electronically through the banking system the same way a credit card is transacted remotely with the advantage that the merchant does not pay a discount rate for EFT. Checks are electronically deposited into your account, without a trip to the bank. No drafts, no bank deposits, no more running to the bank. • Other typical ACH payments include salaries, recurring bill payments, and Social Security benefits. • According to the Federal Reserve Bank of New York, “In 2000, over 4.8 billion payments with a total value of more than $12 trillion were processed by ACHs through the Federal Reserve System.”. 

18. ACH Funding Process Main Participants • Originator • ODFI – Originating Depository Financial Institution • ACH Operator • RDFI - Receiving Depository Financial Institution • Receiver ACH Network • ACH Payment: An electronic method for transferring credits and debits between financial institutions • ACH Network: A batch processing, store-and-forward system • No real time settlement • Functions through a series of agreements

19. ACH Benefits • No bank deposit fees • 24/7 Internet reporting with the ability to download data directly to the merchant’s existing and future applications • Notification of NSF and Closed Account checks within 24 - 48 hours, rather than 7 - 10 days • Real funds within 48 hours • Seamless acceptance and processing of business checks • No additional fees for processing business checks • Returned check fee of only $2.00 - banks often charge $3.00 - $25.00 per returned unpaid check • Reduced handling costs • Make deposits from your office, not the bank window • No more re-entry. Customer and transaction information is entered once.

20. ACH Benefits (Cont.) • Improved cash management abilities • Enables the merchant to combine deposits from multiple locations, reducing fees and eliminating multiple banking platforms • Systems are integrated to enable the data to be shared seamlessly throughout the merchant’s operation • Detail information about how /where the check was accepted • Checks can be prescreened before acceptance • Check Writer ID can be verified before acceptance of the check • Returned items can be set to automatically go into a collection process that can even provide a new revenue stream for the merchant

21. How much does BOC & ACH cost? • A single electronic transaction starts at around 30 cents and decreases with volume. • For electronic payments that “bounce,” known as “rejected items,” the cost starts at $2.00 and decreases with volume, which is substantially less than returned check fees. This is one of the important reasons that electronic transactions has become such a popular payment method. • Banks normally charge $25.00 on average for a returned check. • Each electronic transaction represents a minimum $23.00 savings per returned check. Electronic transactions also cost considerably less than wire payments. • How do I set up an ACH/BOC system? You don’t need to go any farther. CHEX PROTECT can provide merchants with the tools they need to debit or credit their customers’ accounts for fees owed or refunds due.

22. CHEX PROTECTEFT Products • Virtual Terminal ……………………….. (ACH Processing) • Direct Billing ……………………………. (ACH/BOC Processing) EFT: Electronic Fund Transfer

23. Virtual Terminal

24. What is Virtual Terminal Virtual Terminal (VT) is a web-based application that enables merchants to debit or credit their members checking, savings, or credit cards account on a recurring or non-recurring basis. Because VT is a web-based application, there is no need for expensive equipment. Moreover, it can be accessed from any computer anywhere in the world.

25. Transactions supported by VT • ACH (Electronic Check) Transactions. • Credit Cards Transactions • Debit Cards Transactions • Check Verification • ID Verification

26. VT Features • Process single (current and future date) and recurring debits or credits out of checking, savings, or credit card accounts. • Secondary payment back-up • Custom messaging board: Schedule email notifications to groups of customers! • Multi-company support under one MID – no extra cost! • Multi-user – no extra cost! • Powerful Search options: • By date • By Transaction number & type • By user • By customer • Combination of all above

27. VT Features (cont.) • Comprehensive suite of reports • Future Schedule Items Summary & Detail • Future Credit Card Expiration • Credit Card & E-Check Verification Report • E-Check Verification • NSF Detail Report • Deposit Summary & Detail Report • ACH Origination Summary & Detail • ACH Received Summary, Detail & Expanded Detail • Multi-User, Multi-Location & Multi-Division Reporting • On-line reporting 24/7/365 • Reports can be exported into PDF, CVS, Excel, NACHA, and a number of other file formats

28. VT Features (cont.) • Security options: • Comprehensive control over users access rights and transactions limits • Maximum transaction amount per transaction type • Limitations in the type of transactions users are allowed to performed • Users access can be limited by the day of week and time of day • User access can be limited by locations through the use of IP limiting • All data is transmitted and stored in encrypted format

29. VT Features (cont.) • Data entry includes time saving features & automatic validation features to increase accuracy and productivity: • Credit Card Account number validation • ABA number validation • Extensive default settings to help minimize keystroke • Support a wide variety of Point of Sale Hardware • Check & Credit Card Readers • Check Imagers • Receipt Printers

30. VT Features (cont.) • Supports all major credit cards • Capable of achieving swipe rates • Supports P-card level II • Log on anywhere you have an Internet connection • Integrated Check and ID Electronic Verification • Supports re-presentment of dishonored payments through CHEX PROTECT

31. VT supported electronic checks types • PPD (Business to Consumer) • CCD (Business to Business) • WEB (Web Initiated) • TEL (Telephone Initiated) • POP (Point of Presentment – POS) • ARC (Account Receivable – Lockbox) No extra cost incurred for any of these transactions type!

32. VT supported Credit Cards • Visa • MasterCard • American Express • Discover • Diner’s Club • JCB

33. VT Integrated Services • Real-Time Check Verification – ATM Verify:is an added integrated service to Virtual Terminal that allows merchant to determine – virtually in real time – whether the account is currently overdrawn, frozen, closed, or whether or not the account has ever bounced a check, thus ascertaining whether a check is likely to be returned. • Real-time Electronic ID Verification – ID Verify:is an integrated service to Virtual Terminal that assists merchants at the point of sale, in determining the likelihood that the person that they are talking to or selling goods to is indeed the person who he claims to be.

34. Direct Billing

35. Direct Billing Direct Billing is by far the most comprehensive electronic payment-processing window-based software application available today. Direct Billing Software enables merchants to debit or credit their customer’s checking, savings, or credit cards account on a recurring or non-recurring basis. Direct Billing supports a wide variety of Point of Sale hardware, including check readers, check imagers, credit card readers, and receipt printers making it easy to convert high or low volume of checks into Electronic Fund Transfers (EFT). The software is multi-user and net workable. All transactional data is stored on the merchant’s system. Moreover it utilizes the latest security technology.

36. DB Supported Transactions • ACH (Electronic Check) Transactions. • Credit Cards Transactions • Debit Cards Transactions • Check Verification

37. Direct Billing Features • Support for all major credit cards • Check verification and conversion • Powerful recurring transaction features • Network ready out of the box • Multiple merchant processing account support • Comprehensive security and reporting features • Reports can be exported into PDF, Word, Excel, CSV, and others • Real-time and batch-mode transaction processing • On-line reporting available

38. Direct Billing Features (cont.) • Lightning fast authorizations • VISA E-Commerce Indicator (ECI) support • CVV/CVV2/CIB support • Receipt masking/truncating requirements support • Local stored data is encrypted • Encrypted and Stored at ACHD’s Data Center available • Address Verification Service (AVS) support • Procurement Card (P-Card Level III) support

39. DB supported electronic checks types • PPD (Business to Consumer) • CCD (Business to Business) • WEB (Web Initiated) • TEL (Telephone Initiated) • POP (Point of Presentment – POS) • ARC (Account Receivable – Lockbox)

40. Direct Billing supported Hardware • Low and High Volume Check Readers • Low and High Volume Check Imagers • Credit Card Readers • Receipt Printers

41. DB Integrated Services • Real-Time Check Verification- ATM Verify:is an added integrated service to Direct Billing that allows merchant to determine – virtually in real time – whether the account is currently overdrawn, frozen, closed, or whether or not the account has ever bounced a check, thus ascertaining whether a check is likely to be returned.

42. NSF Check Recovery (RCK)

43. What is RCK? When a check writer bounces a paper check or an electronic check, the bank automatically forwards the NSF check to CHEX PROTECT ‘s processing center. The check is then re-presented electronically into the banking system allowing CHEX PROTECT to capture the lost funds for the merchant. Best of all, our NSF check recovery service is FREE!. CHEX PROTECT NSF Check Recovery also includes a generous rebate for each item collected offering an extra revenue source for your business.

44. RCK Program • Merchant R E C E I V E S 1 0 0 %face value of all collected checks • Merchant R E C E I V E S 20%R E B A T Eof the State allowed fees for each collected check • O N L Y $ 3 . 0 0 NSF FEEwith CHEXPROTECT consolidated returns option • IT’S ABSOLUTLY F R E E! All fees for recovering the check are paid by the check writer

45. RCK cost vs. other Services Save hundreds even thousands per month # of transaction: 1000 % of Bad Checks/month: 3%

46. RCK cost vs. other Services Save hundreds even thousands per month Avg. Ticket: $25.00 % of Bad Checks/month: 3%

47. RCK Features • Receive 100% face value of collected check • Fully automated electronic process • Account Monitoring assures the highest collection rates • Integrated Traditional Collections ( letters, calls, etc) • Powerful and Cost Saving Consolidated Options • 20% rebate of all collected fees • It’s absolutely FREE! • On-line Access – data updated daily Make RCK an extra source of income for your Merchants

48. RCK Benefits • Traditional Check Collections are used (collectors call/mail letters). • Customers handled professionally and courteously. • Merchant doesn’t have to make any collection calls. • Keeps you out of an uncomfortable/embarrassing customer service problem. • Automatic mailing of funds to the merchant twice each month.

49. Consolidated Returns

50. What is Consolidated Returns? It is the process by which all the merchant's NSF checks are rerouted and consolidated into one single account, while maintaining multiple banks of deposits. Consolidated Returns expedites the processing of NSF checks from 15 to 4 days and reduces the ten to twenty five dollar fee that banks typically asses depositors for each returned deposited item The consolidated returns service requires the use of a special deposit endorsement that provides routing information for all returned items. The endorsement can be done via a stamp or through your POS system