Understanding electronic payment offerings Jennifer R Glass CEO

“This is by far the most complex industry I have ever been associated with.

Mission Statement Provide an easy and secure way for businesses to accept credit and

Various Products Available Today �Merchant Accounts �ACH Programs �Check Conversion �Check Truncation �Check Verification

Merchant Accounts No two businesses are alike, so they can't be expected to have

Merchant Accounts (cont’d) Industry Jargon �Qualified transaction �Mid-Qualified transaction �Non-Qualified transaction �Rewards/Points-based card transaction

Merchant Accounts (cont’d) �Types of accounts: �Retail (swiped) � Countertop devices � POS systems

Merchant Accounts (cont’d) �Typical Costs for Retail (swiped) Accounts (tiered) � 1. 39% +

Merchant Accounts (cont’d) �Typical Costs for MO/TO & e-Commerce Accounts (tiered) � 1. 89%

Merchant Accounts (cont’d) �Cost Plus Pricing: �Visa, Master. Card & Discover have published rates

Merchant Accounts (cont’d) Terminals Available: �Stand-alone terminals (dial-up, IP based or dual-comm) � Several

Understanding your statements 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ.

ACH Programs �An ACH (Automated Clearing House) program is an electronic funds transfer (EFT)

Checks �There are three options for converting paper-based checks into electronic transactions: �Check Truncation

ATM �Store sales increase between 8 -12% by having an ATM inside �ATM cardholders

ATM (cont’d) �Over 90% of the ATM transactions are cash withdrawals, as opposed to

ATM (cont’d) �Options to get into the ATM market: �Purchase ($$$) �Lease ($$$) �Placement

Business/Merchant Cash Advance �A business/merchant cash advance allows you to receive money now in

Thank you for your time! Credit Cards, NJ Teaneck, NJ 07666 p. 201. 645.

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Understanding electronic payment offerings Jennifer R. Glass CEO Credit Cards, NJ (Teaneck, NJ)

“This is by far the most complex industry I have ever been associated with. I always tell new employees to give themselves six to nine months to become comfortable with the lingo and to understand how the payment processing system works. ” – David Schwartz, Director of Marketing, Authorize. net (April 2006) 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 2

Mission Statement Provide an easy and secure way for businesses to accept credit and debit cards along with checks and other electronic payment programs in their store, at home, or on the Internet. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 3

Various Products Available Today �Merchant Accounts �ACH Programs �Check Conversion �Check Truncation �Check Verification �Check Guarantee �ATM Machines �Gift & Loyalty Cards �Business/Merchant Cash Advance 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 4

Merchant Accounts No two businesses are alike, so they can't be expected to have the same bankcard processing needs. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 5

Merchant Accounts (cont’d) Industry Jargon �Qualified transaction �Mid-Qualified transaction �Non-Qualified transaction �Rewards/Points-based card transaction �Debit/Check Card transaction �Interchange (Visa, Master. Card & Discover) �PCI 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 6

Merchant Accounts (cont’d) �Types of accounts: �Retail (swiped) � Countertop devices � POS systems � Wireless devices �MO/TO (keyed) � Virtual terminals �e-Commerce (Internet sales) � Gateways 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 7

Merchant Accounts (cont’d) �Typical Costs for Retail (swiped) Accounts (tiered) � 1. 39% + for check-card transactions � 1. 65% + for credit & check-card transactions � 1. 89% + for credit card transactions � $0. 15 + per transaction (plus NABU fees) � $10. 00 + for monthly statements & account maintenance � Visa FANF fees ($2 -$40, 000/mo. ) CCNJ refers all merchant accounts to one or more of the following processors: Capitol Payment Systems/Wells Fargo Bank N. A, Walnut Creek, CA; North American Bancard/ HSBC Bank USA, Buffalo, NY Power. Pay/HSBC Bank USA, Buffalo, NY http: //www. creditcardsnj. com 1/24/2013 © 2003 -2013, Credit Cards, NJ. All Rights Reserved 8

Merchant Accounts (cont’d) �Typical Costs for MO/TO & e-Commerce Accounts (tiered) � 1. 89% + for check-card transactions � 2. 39% + for credit card transactions � $0. 20 + per transaction + $0. 10 AVS fee (plus NABU fees) � $10. 00 + for monthly statements & account maintenance � $20. 00 + for virtual terminal access (monthly) � Visa FANF Fees ($2 -$40, 000/mo. ) CCNJ refers all merchant accounts to one or more of the following processors: Capitol Payment Systems/Wells Fargo Bank N. A, Walnut Creek, CA; North American Bancard/ HSBC Bank USA, Buffalo, NY Power. Pay/HSBC Bank USA, Buffalo, NY http: //www. creditcardsnj. com 1/24/2013 © 2003 -2013, Credit Cards, NJ. All Rights Reserved 9

Merchant Accounts (cont’d) �Cost Plus Pricing: �Visa, Master. Card & Discover have published rates that are updated twice per year (April & October) that dictate how much all of the players in the industry pay per transaction. There are hundreds of categories of rates involved, dependent on industry type, method of processing and so much more. � Visa: http: //bit. ly/Visa. Interchange. Oct 12 � Master. Card: http: //bit. ly/Master. Card. Interchange � Discover: http: //bit. ly/Discover. Interchange 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 10

Merchant Accounts (cont’d) Terminals Available: �Stand-alone terminals (dial-up, IP based or dual-comm) � Several models available to fit your needs �Point-of-Sale terminals (computerized systems) � Several options available to fit your needs �Wireless terminals � Several models & plans available based on your usage and needs �Online/Virtual terminals � Authorize. net and others ? ? ? FREE vs. PURCHASED vs. LEASED vs. RENTED ? ? ? 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 11

ACH Programs �An ACH (Automated Clearing House) program is an electronic funds transfer (EFT) service that enables you to automatically debit your customers from their checking or savings account. �Debited funds are deposited into your business account the next business day after collection. �Automatic debits are scheduled on the days you choose. Preparing and the mailing of invoices and accepting payment by paper checks and the risks of late payments are all virtually eliminated. Cash flow becomes predictable. Accuracy guaranteed. Plus, your customers will be able to avoid the hassle of writing and mailing checks. And you enjoy money in the bank on time, every time. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 13

Checks �There are three options for converting paper-based checks into electronic transactions: �Check Truncation �Check Verification �Check Guarantee 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 14

ATM �Store sales increase between 8 -12% by having an ATM inside �ATM cardholders spend an average of 20 -30% more then none ATM customers. �People use their ATM cards in convenience store more than any other point-of-sale cash back device by nearly 28 to 1. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 15

ATM (cont’d) �Over 90% of the ATM transactions are cash withdrawals, as opposed to balance inquires. �Adults use an ATM in a convenience store more than any other service in the store except pay phones. �The most popular day for ATM's is Friday. �The average withdrawal from an ATM is $43. �Studies show that cash retention among large retailers is 30 -33%. Smaller retailers can be as high as 40%! �Up to 80% of the dispensed cash in nightclubs, remains there. �Each year ATM's handle nearly 18 million transactions. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 16

Gift & Loyalty Cards �Myth: Only the large retailers and chain stores offer gift cards to their customers �Fact: Not true! The expenses to make these programs cost-effective for small retail and even start-up merchants have been greatly reduced. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 18

Gift & Loyalty Cards (cont’d) �Gift and Loyalty cards generate money for merchants. �Gift and Loyalty cards are great advertising pieces. �Gift and Loyalty cards encourage repeat business. �Gift Cards are the fastest growing form of non-cash payment in the country. �Gift Cards are great to hand-out for promotional events. �Gift Cards can be used for store credit in place of cash or refunds on returned merchandise. �Gift Cards are compatible with almost all existing terminals. �Gift Cards can replace paper gift certificates for easier accounting. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 19

Gift & Loyalty Cards (cont’d) What types of merchants would benefit from: �Gift Cards: Small & large retailers, restaurants and franchises benefit from a gift card program. Gift cards work well to replace traditional paper gift certificates and/or store credit slips. �Loyalty cards: Car washes, delis, restaurants, retailers, dry cleaners, and other merchants that depend on and reward repeat business. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 20

Business/Merchant Cash Advance �A business/merchant cash advance allows you to receive money now in exchange for the purchase of a small portion of your future Visa®and Master. Card® sales. �Cash advances are deposited into your business checking account giving you immediate access to needed funds. �If traditional bank loans are not an option, or you simply want to borrow against your future sales, then a Business/Merchant Cash Advance may be the perfect alternative for you. 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 21

Thank you for your time! Credit Cards, NJ Teaneck, NJ 07666 p. 201. 645. 0132 w. creditcardsnj. com e. jennifer@creditcardsnj. com Payments 4 Business creditcardsnj 1/24/2013 http: //www. creditcardsnj. com © 2003 -2013, Credit Cards, NJ. All Rights Reserved 22