American Express ESA to Opt Blue presented by

American Express ESA to Opt. Blue presented by: Danielle Rourke getnationwide. com

Opt. Blue Training Overview New Pricing Structure Merchant Impact Remaining Phases of Rollout ESA (External Sales Agent) vs Opt. Blue

ESA vs Opt. Blue (summary) Two statements One Statement Fees charged and merchant pricing set directly by American Express Fees charged and pricing set above wholesale rates by Nationwide Payments Typically a higher fee structure * Lower fee structure for most merchants * Deposit times not always the same as the other card brands Deposited as one batch with Visa/Master. Card/ Bankcard Discover

New Pricing Structure

ESA Rates

Opt. Blue Pricing Structure – Wholesale Rates Restaurant & Caterers/Drinking places have a tier 4 for tickets under $5 with a base rate of 1. 90% + $0. 04.

Opt. Blue Pricing Structure – Passthrough Fees ● 0. 10% Participation Fee 2 ● 0. 15% American Express Network Fee 2 ● 0. 30% Card Not Present Fee ● 0. 30% Digital Wallet Fee (for contactless payments) ● 0. 40% Inbound Fee (assessed on all American Express issues outside of the United States) ● 0. 50% ESA Conversion Fee ● $0. 03 additional cost for merchants participating in Opt. Blue and using the Global front end authorization network 3 2 - Billed as one line item. 3 - Nationwide is still working on how we will be billing the additional $0. 03 cost that is applicable to Global merchants participating in Opt. Blue. We will release more information as soon as we have it.

Default Pricing Enrollment – Cost Plus Merchants Tier BP Markup (%) Profit Margin * 1 0. 90% 0. 40% 2 0. 80% 0. 30% 3 0. 60% 0. 10% 4 0. 60% 0. 10% *after the 0. 50% conversion fee

Default Pricing Enrollment – QDR Merchants Industry Type Tier 1 * Tier 2 * Tier 3 * Retail 2. 50% + $0. 10 2. 75% + $0. 10 3. 00% + $0. 10 Service 2. 50% + $0. 10 2. 75% + $0. 10 3. 00% + $0. 10 Restaurant 2. 75% + $0. 10 3. 25% + $0. 10 3. 35% + $0. 10 Caterers/Drinking 2. 75% + $0. 10 3. 25% + $0. 10 3. 35% + $0. 10 MOTO Purchases 2. 60% + $0. 10 2. 85% + $0. 10 3. 10% + $0. 10 Healthcare SE 2. 45% + $0. 10 2. 65% + $0. 10 2. 90% + $0. 10 B 2 B SE 2. 45% + $0. 10 2. 60% + $0. 10 2. 85% + $0. 10 Lodging 3. 15% + $0. 10 3. 40% + $0. 10 3. 60% + $0. 10 Recreation/T&E 3. 15% + $0. 10 3. 40% + $0. 10 3. 60% + $0. 10 Other SE 2. 40% + $0. 10 2. 65% + $0. 10 2. 90% + $0. 10 Prepaid 2. 25% + $0. 10 2. 50% + $0. 10 2. 75% + $0. 10 *not including pass through fees (e. g. Network Participation Fee). Tier 4 enrolled at 2. 50% + $0. 04

Summary of Pricing Changes

ESA vs Opt. Blue (summary) Set rate based on MCC & the applicable industry type category Tiered rates based on both industry code and individual transaction amount * Restaurant merchants paid a 3. 50% + $0. 05 per item (Fast Food was 3. 50% + $0. 00) Restaurant merchants pay $0. 10 per item in addition to the wholesale rate that is applicable per tier The only industries that paid a CNP fee of 0. 30% were Retail/ Restaurant All merchants now pay a CNP fee on CNP transactions The cost for American Express did not vary per network There is an extra $0. 03 per authorization cost on the Global network Merchants processing over 1 million in volume couldn’t participate in ESA American Express has much stricter auditing policies to make sure merchants processing over this dollar amount get taken directly by Amex. * Certain merchants changed which industry type they are classified in.

Rates now based on tiers as well as industry codes

Opt. Blue Cost Examples for ESA Converted Merchants (Global Network only) CNP applica ble on ESA? Opt. Blue Industry Opt. Blue Tier 1 Wholesale Rate 2 Opt. Blue Tier 2 Wholesale Rate 2 Opt. Blue Tier 3/4 Wholesale Rate Merchant Type and MCC Existing ESA Industry Existing ESA Rate 1 College/University (8220) Education 2. 50% No Other 2. 25%+$0. 13 <$100 2. 60% + $0. 13 $100. 01 - $3 k 3. 05% + $0. 13 >$3 k Direct Marketing - Catalog (5964) MOTO 3. 50% No MOTO 2. 75%+$0. 13 <$150 3. 10% + $0. 13 $150. 01 - $3 k 3. 55% + $0. 13 >$3 k Misc Publishing & Printing (2741) 3 Services 2. 89% + $0. 15 No Services 2. 35%+$0. 13 <$400 2. 70% + $0. 13 $400. 01 - $3 k 3. 15% + $0. 13 >$3 k Doctor/Physician (8011) 3 Office-based healthcare 2. 55% No Healthcare 2. 30%+$0. 13 <$150 2. 60% + $0. 13 $400. 01 - $2 k 3. 05% + $0. 13 >$2 k Restaurant (5812) Restaurant 3. 50% + $0. 05 Yes Restaurant 2. 30%+$0. 13 <$150 2. 60% + $0. 13 $25. 01 - $150 3. 50% + $0. 13 >$150 2. 65% + $0. 07 ≤$5 Fast food (5814) Fast Food 3. 50% No Restaurant 2. 30%+$0. 13 <$150 2. 60% + $0. 13 $25. 01 - $150 3. 50% + $0. 13 >$150 2. 65% + $0. 07 ≤$5 Caterer (5811) Restaurant 3. 50% + $0. 05 Yes Drinking Place/Caterer 2. 30%+$0. 13 <$150 2. 60% + $0. 13 $25. 01 - $150 3. 50% + $0. 13 >$150 2. 65% + $0. 07 ≤$5 2 1. Not including prepaid rates 2. Including all pass through rates but does not include any profit margin 3. No way of knowing which transactions are CNP

Q: Who does this negatively impact the most?

A: High volume high ticket merchants

Opt. Blue Cost Examples for Large Ticket ESA Converted Who Will Pay More with Opt. Blue (With No Profit Margin) Merchant Type MCC Code Average ticket /Tier based on average ticket Annual Amex volume Opt. Blue Rate Annual Opt. BLue Cost 2 Savings Lumber & Building Material 5211 $7, 000/Tier 3 $28, 191 3. 15% + $0. 10 $30, 726 -$2, 535 Auction House 8999 2. 89% + $0. 15 1 $27, 472 3. 00% + $0. 10 $29, 461 -$1, 989 Misc Printing Services $950, 000 2. 89% + $0. 15 1 $27, 466 3. 15% + $0. 10 $29, 932 -$2, 466 $4, 000/Tier 3 $900, 000 2. 89% + $0. 15 1 $26, 043 3. 15% + $0. 10 $28, 372 -$2, 328 8398 $3, 500/Tier 3 $800, 000 2. 89% + $0. 15 1 $23, 154 3. 05% + $0. 10 $24, 422 -$1, 268 4900 $3, 100/Tier 3 $675, 000 2. 89% + $0. 15 1 $19, 540 3. 15% + $0. 10 $21, 284 -$1, 744 5047 $8, 000 Tier 3 $975, 000 2. 89% + $0. 15 1 $28, 195 3. 00% + $0. 10 $29, 262 -$1, 066 ESA Rate Annual ESA Cost $975, 000 2. 89% + $0. 10 1 $8, 000/Tier 3 $950, 000 2741 $12, 000/Tier 3 Heating & Air 1711 Charitable Organizations Utility Medical Equipment/ Supplies 1. Currently no CNP 0. 30% charge with ESA. No way of knowing what percentage of transactions the 0. 30% CNP fee will apply to. 2. Including all pass through rates except the Global 3 cents and does not include any profit margin

Opt. Blue Cost Examples for Large Ticket ESA Converted Who Will Pay More with Opt. Blue (W/Default Profit Margin) Merchant Type Heating & Air Masonry & Stonework Misc Retail Lumber & Building Material MCC Code Average ticket /Tier based on average ticket Annual Amex volume 1711 $750 Tier 2 1740 $2, 100 Tier 2 5999 $85 Tier 2 5211 $900 Tier 2 Annual Op. Blue Cost with Profit Margin Savings Without profit margin Savings with profit margin $26, 455 $29, 380 $1, 917 -$1, 007 $17, 580 $19, 530 $1, 250 -$699 $12, 679 $14, 029 $855 -$495 $16, 266 $18, 066 $1, 140 -$660 ESA Rate Annual ESA Cost Opt. Blue Rate/ default profit margin Annual Opt. BLue Cost 2 $975, 000 2. 89% + $0. 15 1 $28, 372 2. 70% + $0. 10/ 3. 00% + $0. 10 $650, 000 2. 89% + $0. 15 1 $18, 831 $450, 000 2. 89% + $0. 10 1 $13, 534 $600, 000 2. 89% + $0. 10 1 $17, 406 2. 70% + $0. 10/ 3. 00% + $0. 10 1. Currently no CNP 0. 30% charge with ESA. No way of knowing what percentage of transactions the 0. 30% CNP fee will apply to. 2. Including all pass through rates except the Global 3 cents

Restaurant & Fast Food Merchants Are Also Impacted

Opt. Blue Pricing Examples for Restaurant/Fast Food ESA Converted Merchants (Global Network only) Opt. Blue Rate Opt. Blue Cost per transacti on Difference per transaction $0. 19 2. 65% + $0. 07 $0. 18 1. 4 cents / 35 BP 3. 50% + $0. 05 $0. 58 2. 60%+$0. 13 $0. 52 5. 5 cents / 37 BP $4 3. 50% $0. 14 2. 65% + $0. 07 $0. 18 -3. 6 cents / 90 BP $5 - $25 $15 3. 50% $0. 53 2. 60%+$0. 13 $0. 52 ½ cent / 3 BP 5812 <$25 $15 3. 50% + $0. 05 $0. 58 2. 60%+$0. 13 $0. 52 5. 5 cents / 37 BP Restaurant 5812 $25. 01 $150 $75 3. 50% + $0. 05 $2. 68 3. 20% + $0. 13 $2. 53 14. 5 cents / 19 BP Restaurant 5812 >$150 $155 3. 50% + $0. 05 $5. 48 3. 50% + $0. 13 $5. 56 -$0. 08 / 5 BP Restaurant 5812 >$150 $200 3. 50% + $0. 05 $7. 05 3. 50% + $0. 13 $7. 13 -$0. 08 / 4 BP Caterer 5811 <$25 $20 3. 50% + $0. 05 $0. 75 2. 60%+$0. 13 $0. 65 10 cents / 50 BP Caterer 5811 $25. 01 $150 $100 3. 50% + $0. 05 $3. 55 3. 20% + $0. 13 $3. 33 22 cents / 22 BP Caterer 5811 >$150 $3, 000 3. 50% + $0. 05 $175. 05 3. 50% + $0. 13 $175. 13 -$0. 08 / 1 ½ BP Merchant Type MCC Average Ticket $ Ticket for calculations ESA Rate ESA Cost per transaction Bar 5813 <$5 $4 3. 50% + $0. 05 Bar 5813 $5 - $25 $15 Fast Food 5814 <$5 Fast Food 5814 Restaurant 1. Including all pasts through rates but not including any profit margin

CNP previously didn’t apply to all industries

Opt. Blue Cost Examples for Large Ticket ESA Converted Who Will Pay More with Opt. Blue (With No Profit Margin) Merchant Type MCC Code Average ticket /Tier based on average ticket Annual Amex volume Opt. Blue Rate Annual Opt. BLue Cost 2 Savings Lumber & Building Material 5211 $7, 000/Tier 3 $28, 191 3. 15% + $0. 10 $30, 726 -$2, 535 Auction House 8999 2. 89% + $0. 15 1 $27, 472 3. 00% + $0. 10 $29, 461 -$1, 989 Misc Printing Services $950, 000 2. 89% + $0. 15 1 $27, 466 3. 15% + $0. 10 $29, 932 -$2, 466 $4, 000/Tier 3 $900, 000 2. 89% + $0. 15 1 $26, 043 3. 15% + $0. 10 $28, 372 -$2, 328 8398 $3, 500/Tier 3 $800, 000 2. 89% + $0. 15 1 $23, 154 3. 05% + $0. 10 $24, 422 -$1, 268 Utility 4900 $3, 100/Tier 3 $675, 000 2. 89% + $0. 15 1 $19, 540 3. 15% + $0. 10 $21, 284 -$1, 744 Medical Equipment/ Supplies 5047 $8, 000 Tier 3 $975, 000 2. 89% + $0. 15 1 $28, 195 3. 00% + $0. 10 $29, 262 -$1, 066 ESA Rate Annual ESA Cost $975, 000 2. 89% + $0. 10 1 $8, 000/Tier 3 $950, 000 2741 $12, 000/Tier 3 Heating & Air 1711 Charitable Organizations 1. Currently no CNP 0. 30% charge with ESA. No way of knowing what percentage of transactions the 0. 30% CNP fee will apply to. 2. Including all pass through rates except the Global 3 cents and does not include any profit margin

The cost previously didn’t vary per network

$1 Million ESA Cap

Q: What do I do now?

A: Don’t panic

A: Don’t automatically opt all merchants out!

Opt. Blue Cost Ex. for Merchants Who Will See Savings (with no Profit Margin) Merchant Type MCC Code Average ticket /Tier based on average ticket Annual Amex volume ESA Rate Annual ESA Cost Opt. Blue Rate Annual Opt. BLue Cost 2 Savings Marina 5541 $450/Tier 2 $975, 000 3. 25% + $0. 00 $31, 687 2. 60% + $0. 10 1 $25, 566 $6, 120 Baseball Tickets (Professional Sports) 7941 $140/Tier 1 $900, 000 2. 89% + $0. 15 $26, 974 2. 30% + $0. 10 1 $21, 342 $5, 631 Veterinary 0742 $300/Tier 1 $800, 000 2. 89% + $0. 15 $23, 520 2. 35% + $0. 10 1 $19, 066 $4, 453 Industrial Supplies 5085 $740/Tier 2 $825, 000 2. 89% + $0. 15 $24, 009 2. 55% + $0. 10 1 $21, 148 $2, 860 2791 $550/Tier 2 $875, 000 2. 89% + $0. 15 $25, 526 2. 55% + $0. 10 1 $22, 471 $3, 054 Engraving Awards 1. Currently no CNP 0. 30% charge with ESA. No way of knowing what percentage of transactions the 0. 30% CNP fee will apply to. 2. Including all pass through rates except the Global $0. 03 and does not including any profit margin

A: Do utilize partner support to help you with analysis

Customer Service Script “American Express has introduced a new pricing model that is intended to lower costs associated with American Express acceptance as well as give you the convenience of one deposit and statement for all of the card brands. Because so many merchants are seeing a significant decrease in costs, we are reviewing each request for opt outs to ensure merchants understand the benefits they would be missing out on if they choose to opt out. Let me take your information and I will have the proper department contact you shortly. We do have a piece we can email you that addresses some of the most common concerns for you to review while you wait to hear back from someone. "

Customer Service Script

Customer Service Script

Partner Support is Providing a List of Merchants Sales Professionals should have received a list of ESA merchants scheduled to convert on Tuesday, November 1 st. There are several notes regarding these lists that are detailed in the Sales Alert that we encourage you to make sure you read through. (This is NOT all of the notes pertaining to the lists)

Merchants Who Were Opted Out Review the accounts to: 1. See if there is a reason that the merchant should have gone through the conversion 2. Do a full analysis on these merchants with more accurate data to see how much more they will be paying when they are converted to Opt. Blue so you can talk to them or adjust other pricing if necessary.

Merchants Scheduled to be Converted Review the accounts to: 1. Look for accounts that will pay more annually with the profit margin and consider if you want to lower pricing. Keep in mind that the totals that show losses are annual losses. 2. Look for any low ticket accounts on Global that may be impacted negatively and not identified on this spreadsheet. Merchants can be converted back to ESA if necessary. If you do, then Pricing modifications from the default pricing above can be requested by clicking here. Due to the complexity of this project, all pricing modifications for ESA converted merchants must be requested via this link. If you need any assistance completing a pricing request, please reach out to Partner Support.

Pricing Modification Requests for Converted Merchants

Q: How do I keep all these rates straight?

A: Cheat Sheet

American Express Opt. Blue Pricing Cheat Sheet Please note this is a screenshot and not the entire piece.

Remaining Phases of Roll Out TSYS Existing American Express Acceptors (and any ESA opt outs from this conversion) The Paymentech Network

In Summary

In Summary • If you haven’t read through the Sales Alert on this, please make sure you do. • Don’t panic but do review your accounts. • Work with Partner Support as needed to review the accounts. If they get overwhelmed they will ask Greg and I to assist. • Some merchants will be positively impacted, but we had to take action quickly on merchants that would be negatively impacted • The 50 BP conversion fee will be lowered at some point and ONLY applies to ESA converted accounts, not new Opt. Blue enrollments. • This is a great opportunity to approach prospective clients and tell them it’s very likely you will be able to save them money on their American Express processing volume. • We are here to help! We don’t want you to feel overwhelmed. Don’t ever hesitate to reach out to Greg or myself to discuss further.

Questions?