Leveraging Data to Increase Efficiency and Create Alternative Revenue Streams

ETA Transact’14April 8, 2014

Las Vegas

Presenter Biographies

Ramit Arora (Moderator), Co-Founder and President, Biz2Credit

Ramit Arora heads the company’s operations and handles larger bank and client relationships. He also oversees all strategic web initiatives for the company. Ramit

previously worked with a Fortune 500 consulting company as a Finance Solutions Architect. He has over 10 years of experience in the financial services space, including commercial finance and financial services risk management developed during his stint

at Citibank.

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Guru Charan (Moderator), VP of Business Development and Strategy, Biz2Credit

Guru Charan is responsible for developing the pipeline of potential borrowers and lenders, and setting the strategic direction of Biz2Credit. He started his career as an

engineer at Intel Corp and then worked in investment banking at Lehman Brothers/Barclays and BofA/Merrill Lynch. He later moved to the corp. dev. and

strategy group at Discover Financials where he successfully worked on the acquisitions of LendingTree, HLC and Student Loans Corp He then headed the corporate M&A and

BD groups at H&R Block. Guru has a BA from Bangalore University, an MS in Computer Science from Western Michigan University and an MBA from The Darden School,

University of Virginia.

Presenter Biographies

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Jeremy Brown, CEO, Rapid Financial Services (dba RapidAdvance)

Jeremy Brown calls on his 20+ years of first-hand management experience running small and mid-sized businesses across service industries including retail, construction

and technology, to deliver funding solutions to small businesses throughout North America. Prior to joining RapidAdvance, Jeremy served as the COO of a national

audiovisual service company. He also served as CEO of a commercial construction contractor and worked as the President of a retail computer company. Jeremy is a

CPA and holds a degree in Economics from Duke University.

Presenter Biographies

3

Randy Clark, SVP of Marketing, Mercury Payments

Randy Clark joined Mercury in February 2013 to lead overall dealer, developer and merchant marketing. He has more than 20 years of marketing leadership experience

with top-tier venture-capital backed, private-equity owned and $1B+ public companies. Prior to Mercury, Randy was CMO of UC4 Software and Platform Computing which he helped transform into high-growth $100M businesses respectively. Randy has a BA from the University of Pennsylvania and received his MBA from Harvard Business

School.

Presenter Biographies

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Brendan Ross, President, Direct Lending Investments

Brendan Ross is President of Direct Lending Investments, the General Partner of a short-term, high-yield, small business loan fund. Prior to his work in direct lending and as a

financial advisor, Brendan was a turnaround CEO. He ran a number of companies, including Reserve America, the world’s largest outdoor recreation reservation company,

and Fanfare Media Works, a $50 million provider of in-supermarket advertising on register tape and shopping carts. Brendan graduated from Brown University. He

received Magna and Phi Beta Kappa and was awarded Honors in Sociology.

Presenter Biographies 5

Introduction: Opportunities and Challenges Facing Merchant Processors

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Key Trends

Transaction volumes will continue growth trajectory• Small and medium size merchants represent largest net revenues

opportunity• Adoption will put pressure on transaction fees

New entrants have increased competitive dynamics• Disruptive ISOs (square, Groupon)• Specialized VARs (restaurants, doctors)• Entrances of new POS competition

Transaction Processing Industry Trends 7

Source: Nilson Report, 2003-2008; McKinsey Payments

Practice.1 Includes C2B and B2B

point-of-sale and bill pay spend using card

instruments

Transaction Processing Industry Trends

Merchant payment services Dynamics

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Merchant Acquirers: Status Quo Economics 9Challenges:

• Merchant Attrition due to increase in substitutes and competitive pricing• Downward pressure on pricing for renewals

Growth Opportunities:

• Same store sales growth (increasing card volume)• Re-Pricing actions allow merchants to create new sales• Cross selling additional products like are key to increasing revenue

growth• New Sales – Attracting new customers required to offset existing

customer churn

Merchant Acquirers: Status Quo Economics

Source: McKinsey Payments Practice.

Driving Merchant Services and digital

commerce: Findings from McKinsey’s 2012

small business acquiring Panel, March

2013..

100

(5-15)

(5-15) +5-10

85-95+5-15

+1-5

+1-10

95-120EXAMPLE MERCHANT ACQUIRER ANNUAL RUN-RATE ECONOMICS

In Percent

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Cross Selling Opportunities

FinancialPoint of Sale

(POS)

Social – Local-Mobile

(SoLoMo)

Additional Services

• New POS Technology (Mobile, Payment, ACH)

• Consumer lending products

• Drive new promotions and partnerships

• Drive new revenue channels (mobile, local, referrals)

• Loyalty programs and dashboard management

• Payroll Services• Bookkeeping

• Lending Products• Banking• Insurance

Products• Fraud / Default

services

Merchant Acquirers: Status Quo Economics 11

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Data Can Improve Merchant Services & Performance

DATA COLLECTION

PR

ED

ICTIV

E A

NA

LYTIC

S

Customer Trends• Transaction

Behavior: Repeat usage and lifetime spend

• Predict future needs and merchant pairing

Demographics:• Timing / Age /

LocationTransaction Data• Processing volume• average ticket size• Repeat customer

data• Card /Mobile/Online• Seasonality

Merchant Services• Loyalty and

improved multichannel marketing and channel management

• Merchant pairs and cross-promotions

• Forecast bad debts and chargebacks on limited data

• Predict fraudulent transactions

• Improve Cash Flow forecasting

NEW PRODUCTS

Customer• Custom promotions and

service bundling

Merchant• POS Fraud prevention• Seasonal Working Capital

financial products• Staffing suggestions• Recommendations for

downtime utilization• Inventory Management

How Biz2Credit uses data to enhance revenue streams

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• In order to meet customer needs, merchant service providers need to anticipate clients business needs

• Introducing merchants to new revenue streams adds value to both customer and merchant servicer

• Data collection and analytics of merchant ecosystem provides an opportunity to create value added services to merchants

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Key Takeaways

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Biz2Credit in a few words…

Biz2Credit is an online marketplace that equips small and medium size businesses with tools needed to analyze their financial

health and equips banks with the tools to more efficiently manage their small business lending process. Proprietary technology

streamlines the loan application process and connects borrowers to lenders using a patented credit algorithm.

• Funded over $1 Billion to date

• Over 1,200 lenders on our platform, including 50+ micro-lenders

• Has direct reach to over 1.6 million small and medium sized business owners

2012 - Entrepreneur.com Top Small Business Finance Resource2011 - Crain’s Top Entrepreneur

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Biz2Credit in a few words…

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Biz2Credit is the solution for small business

Streamlines Application Process

• A single digital application for all lenders• Financial/business data can be pulled from the 5 big touchpoints• Store and share documents with lenders via DocVault• Begin and complete loan process without ever leaving the platform

Ensures Appropriate and Competitive Financing

• Marketplace environment ensures competitive rates• Biz2Credit algorithm calculates best financing options for each business

One-Stop Shop For Any Small Business

• Full array of financing solutions for entire life-cycle of a business• BizAnalyzerTM provides free financial analysis, scorecard, and recommendations

on an on-going basis

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Biz2Credit is the solution for small business

Current Market:

------------------------------------------With Biz2Credit:

Lender A

Lender A

Lender C

Lender B

Lender D

Lender B

Lender C

?

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Biz2Credit and Data Analysis

The Biz2Credit Loan application captures card processing key data

• Name of processing company, merchant ID• Monthly card sales, transaction volume• Fee rates paid by merchants to processors

To determine credit eligibility, Biz2Credit analyzes different data sources including card processing statements. This enables Biz2Credit to:

• Lower loan defaults: Loans provided through Biz2Credit have a 75% lower risk of default compared to traditional lending

• Lower borrowing expenses by over 50% compared to traditional lenders• Analyze industry trends and structure new loan products to meet varying

demands

This has enabled Biz2Credit to provide low interest rate products while ensuring that the lenders on our platform meet their lending IRRs

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Partner with Biz2Credit to provide credit to your customers

1. Offer your customers a single, online financing resource that can find the best loans for any type of small business

• Biz2Credit has over 1,200 lenders on the platform and offers the full gamut of financing options (eg - Start-up loans, micro-loans, working capital loans, SBA loans, Asset-backed loans, cash advances, etc)

• Other financing partners may only offer 1 or 2 different products, forcing customers to take expensive products such as a Cash Advance

2. Generate a new revenue stream

• Biz2Credit will share of all recurring revenue generated from referred customers

3. Integrating with Biz2Credit will increase customer retention and stickiness for your product

• Integration will allow customers to apply for credit in a more seamless fashion, and receive pre-qualified offers instantly

• Biz2Credit tools provides real-time scorecard to all small business owners

Thank you