For years, digital businesses have offered flexible payments, such as recurring, installment and deferred billing, with successful results. Flexible payments are a “win-win”. You gain timely payment assurance while your customers enjoy payment options and uninterrupted service. This webinar shares the features of flexible payments and some effective tools for securing payments, as well as proven customer retention strategies. To hear the audio associated with this webinar, please visit our website: http://info.vindicia.com/Archived-Webinar-Flexible-Payments.html

1. Increasing Your Sales
With Flexible Payments
Nancy Gaumont
Business Product Manager
Chase Paymentech

2. © 2013 Chase Paymentech Solutions, LLC. All rights reserved.
June 4, 2013
Presented by: Nancy Gaumont, Business Product Manager
Increasing Your Sales with Flexible Payments

3. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 2
Today’s Agenda
Defining Flexible Payments and their Value
Effective Tools for Securing Payments
Customer Service and Retention Strategies
2

4. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 3
Flexible Payments Defined
Recurring
 Results from a relationship between a customer and a merchant
 Customer is billed for goods and services within an ongoing and agreed upon
billing or service cycle
 Billing or service cycle and terms are known and agreed upon in advance
Card on File
 Results from a relationship between a customer and a merchant
 Customer submits payment information for the first sale
 Customer agrees that merchant can store payment information for future
transactions
Installment/Deferred Payments
 Installment billing is the process of paying for a product or service in portions
due over a pre-determined schedule or time, usually for higher priced items
 Deferred payments or the “Buy Now – Pay Later” offers. Allowing consumers to
purchase something now and try it risk free for an offered period of time before
being billed

5. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 4
 Recurring payments programs
 Deliver higher lifetime customer value
 Decrease sales costs
 Card On-File
 Delivers convenience for your frequent customers with a faster checkout
experience
 Installment and deferred payments
 Increase average order value
 Capture more sales
 Attract new customers with appealing
financing terms
 Your customers gain
 Timely payment assurance
 Uninterrupted service
 Elimination of late payment fees
The Value of Flexible Payments
Businesses have used flexible payments for
years, with proven results

6. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 5
Consumer Usage of Recurring Payments
Bill pay with cards is more popular than ever
History
65 percent of credit card users are
committed to using a credit card for
bill payment,
67 percent of debit card users are
committed to debit for bill payment.
 Over 68 million U.S. households paid
bills online in 2012
For 24- to 30-year-olds, 63 percent of
monthly spending is on a card
Research confirms that the
percentage of bill payments made
through the mail will decline to 31%
by the end of 2013
Source: Visa Bill Pay Marketing Resource Guide for Billers
75 % Electronic
Payment
25 % Check
Payment

7. © 2012 Chase Paymentech Solutions, LLC. All rights reserved.6
Account Verification, Enhanced Authorization, Payment
Brand Tools, Account Updater and Authorization Recycling
Effective Tools for Securing Payments
6

8. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 7
 Account Verification messages are an effective means of
validating account numbers prior to authorizing for the full
amount
 Maximize sales by minimizing fraud exposure through the use of
CVV2 and AVS
 Cost effective: A verification message reduces potential chargebacks
and related dispute fees;
 A Visa Verification message fee is $0.025 versus the $0.048 assessed for
misuse of authorization when a $1 request is submitted without deposit
 MasterCard has no Verification Fee and assess a $0.055 misuse of
authorization fee when not deposited
 Greater success opportunity since the payment brands route
verification messages directly to the Issuers
 Reduces holds on your customers’ “open to buy”
 Reduces adverse impacts on any fraud detection tools used for
velocity checking and benchmarking
Account Verification Message

9. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 8
Enhanced Authorizations
 Use Enhanced Authorizations, a free service, to:
 Safely establish recurring relationships by proactively avoiding declines of
future scheduled payments
 Example: when a prepaid card is presented to establish a recurring relationship, you
can accept the card for the initial payment and request another payment method for
future payments or offer reduced service time frames that can be covered by the
existing balance on the card
 Automatically prompt for additional information that may lower payment costs
 Gain valuable insight into card-issuing country data that can help you manage
fraud
 Identify your affluent consumers so you can send them special messages and
exclusive offers
MOPs Card Details
Visa
MasterCard
Discover
JCB
Diners
International
Maestro
Prepaid
Payroll
Healthcare
Commercial
International
Affluent
Signature Debit
PINless Debit

10. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 9
 Address Verification
 Obtaining best possible interchange for certain rates requires AVS per
performed regardless of AVS response
 Card Verification Values
 Three-digit value on back of the card (4-digit on front of Amex card)
 Verifies card is valid and that buyer has card in his possession
 3D Secure (Verified by Visa/MasterCard SecureCode)
 Reduces chargebacks and shifts liability to Issuers
 Reduces interchange costs by 15 Basis Points on ALL
Credit Reward Cards with Visa and between 21-59
Basis Points on ALL credit cards for MasterCard
Payment Brand Tools
CVV example

11. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 10
Account Updater Locks in Clients!
 The electronic exchange of account
information from participating issuers to
card brands, acquirers and merchants
 Updates card information for recurring
payments and account-on-file
transactions among participating Visa
and MasterCard issuers
 Delivers new account numbers,
expiration dates, closed account and
cardholder advice in a timely, efficient
and cost-effective manner
Why Account
Updates Occur
Portfolio or account
upgrade or
downgrade
Account closure
Account renewal or
replacement
Acquisition/ merger
Bank portfolio
transfers between
payment brands

12. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 11
Benefits of Account Updater
Provides up-to-date
payment account
data quickly and
efficiently
Increases
authorization
approval rates
Retains customers
with uninterrupted
service
Improves average
customer lifetime
value
Reduces costs for
manual updates
and collections
Improves
customer
satisfaction

13. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 12
Transaction Recycling
Take a Second Chance
 If the transaction is declined, retries are allowed up to four
times within 16 calendar days for any reason other than lost,
stolen or pick-up
 Know the differences between soft and hard declines
 Hard declines include lost, stolen and pick-up
 What is your actual success rate for recycling?
 Monitor each code for success. For example, you may note that
a generic decline takes three retries, while an over limit might
require four retries
 What is your success rate if you recycle on specific
days of the week? Work with your Account Manager
to fully understand what will work best for you

14. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 13
Checklist for Ongoing Transactions
 Ensure transactions are flagged with the recurring
payment indicator (02) when processing recurring
payments
 Keep expiration dates on file and submit valid expiration
dates whenever possible
 Utilize Recycling, Account Updater, Verification and
Enhanced Authorization services for Recurring and
Account on File transactions

15. © 2012 Chase Paymentech Solutions, LLC. All rights reserved.14
Enrollment, Customer Retention and more
Customer Relationship Strategies
14

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Successful Programs Start at the Beginning
Early Enrollment
 Close the deal at the point of service
 Present electronic payment methods as the preferred way to pay
Incentives
 Offer discounts to customers who enroll in recurring payments
 Discounts are offset by the savings associated with electronic
payments over paper and reduced collection activities
Program Marketing
 Target most frequent payers/purchasers
 Highlight the financial savings (checks/postage)
 Highlight the convenience of automatic payments – enter data once
and never miss a payment
 Frequent messages have the highest impact on adoption

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Recurring Payment Program Retention
 Your efforts to convert consumers to recurring/card on file
payments does not end at the point of adoption
 Define and market against the drivers of consumer drop-out
from recurring bill payment programs in each of your customer
segments
 Example, income-constrained customers:
 Cash flow issues are the primary factor in late payments
 Automatic payments on debit cards can contribute to cash flow
issues if the consumer experiences bank overdraft fees
 Bank overdraft fees are $25-$35, significantly higher than a
typical late fee of $5. or 1.5% for recurring payments
 Consumers have a stronger incentive to avoid bank overdraft
fees than a late payment fee
 Offer counter-incentives, such as discounts tied to remaining in
recurring payment programs

18. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 17
Recurring Payment Program Withdrawals
Customer Service is Key
 Handle recurring payment discontinuations promptly
 Clearly explain how long it takes to cancel the recurrence (frequently one
to two billing cycles)
 If a customer cancels service overall, be sure to cancel their recurring
payments
Understand the Reason
 If it is a timing issue, can a new monthly billing date enable you to save the
automatic billing status?
 If it is a cost issue, can a different payment schedule – change from
monthly to quarterly or annually to monthly – help save the recurring
payment status?
 If the customer simply wants to control the payment timing and keep the
service, accept the cancellation and provide confirmation that the
automatic payments have been discontinued

19. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 18
Service Cancellation Considerations
Determine Reason
 Offer alternative to full cancellation for reasons such as job loss or not
seeing value in service (free or reduced service for x months)
 Cross sell different price and service plans that may better meet the
customer’s wants, needs and/or budget
When Cancellations Happen
 Provide cancellation documentation, including a cancellation
confirmation number to protect yourself from chargebacks
 Perform follow-up outreach at three, six and 12 months following the
cancellation, offering incentives to return

20. © 2013 Chase Paymentech Solutions, LLC. All rights reserved. 19
w w w. c h a s e p a y m e n t e c h . c o m
 Marilyn Mooney, VP National Accounts (Marilyn.Mooney@ChasePaymentech.com) 636-628-0278
With 19 years of experience in the payments industry, Marilyn has extensive knowledge of global payments, including card
acquiring and alternative payments strategies. Specializing in the card not present / ecommerce vertical .
 Meghan Bondy, VP National Accounts (Meghan.Bondy@ChasePaymentech.com) 703-323-0020
Payments professional with over 10 years experience. Specialize in working on National accounts in the Card Not Present
vertical with both US as well as International processing; Social networking companies, Gaming companies, Fortune
100/500 companies in B to B.

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