Profits, Right Before Your Eyes. Instant Image Verification.

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Profits, Right Before Your Eyes. Insta nt Image Verificati on

Transcript of Profits, Right Before Your Eyes. Instant Image Verification.

Page 1: Profits, Right Before Your Eyes. Instant Image Verification.

Profits,Profits,Right Before Your Eyes.Right Before Your Eyes.

InstantInstantImageImageVerificationVerification

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AgendaAgenda

The True ID® ServiceFace-to-FaceOnline

Next Steps

The Investment OpportunityBusiness model and strategyFinancial projections

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“Fastest growing financial crime”Dept. of Justice

The $25 Billion Problem: Identity FraudThe $25 Billion Problem: Identity Fraud

“96% of bank card fraud losses traceable to identity fraud”

Mastercard

“1.4 million fraudulent checks valued a $27.3 million written daily. $9.9 billion losses annually” Create a Check

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Types of Identity FraudTypes of Identity Fraud

Face-to-Face Online

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The Market:Face-to-Face Identity Verification Services

The Market:Face-to-Face Identity Verification Services

TravelRental carsAirlines/Travel agents

OtherBanks/Credit unionsCargo theft/Logistics

RetailHigh-value specialty storesGrocery/SupermarketsDepartment stores

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Effective Loss Prevention:Combating Face-to-Face Identity Fraud

Effective Loss Prevention:Combating Face-to-Face Identity Fraud

Need to HaveProactive deterrentEfficient through put at POSEasy system integrationComplete consumer acceptance

Effective user identity verification Nice to HaveEmployee audit capabilityEnable dispute resolutionOnline usability

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Existing Loss Prevention Solutions Fall ShortExisting Loss Prevention Solutions Fall Short

FalseRejects

FalseRejects

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Introducing the True ID® SolutionIntroducing the True ID® Solution

Proven face-to-face

effectiveness

Portability across channelsand markets

Unmatched consumer

acceptance

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Initial Consumer Contact

Consumer Enrolled, Photo

ID Scanned

Real-time Cross-market

Image Verification

Instant Image Verification Stops FraudInstant Image Verification Stops Fraud 9

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True ID Stops Face-to-Face ID FraudTrue ID Stops Face-to-Face ID Fraud

A Proven Solution… Successful pilots in travel, retail, banking & logistics Eliminated fraud cost-effectively Unmatched consumer acceptance

…in an Important Market 16 billion POS check transactions in 1999 $5.9 B annual losses from retail check fraud

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Instant Image VerificationProvides Secure Audit TrailInstant Image VerificationProvides Secure Audit Trail

Efficient dispute resolutionProactive employee fraud prevention

Effective loss prevention

investigations

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The Other Problem: Online Identity FraudThe Other Problem: Online Identity Fraud

By 2005, half of all fraud will be perpetrated online (Source?) Online fraud 12 times greater than face-to-face (Gartner Group)

Online losses are 10% of online retail spending (Meridien Research)

Average chargeback rate for online merchants is 15% compared to 1% for face-to-face transactions (Gartner Group)

52% of consumers who don’t shop online cite security concern (Forrester Research)

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The Market:Online Identity Verification Services

The Market:Online Identity Verification Services

TravelRental carsAirlines/Travel agents

OtherBanks/Credit unions

RetailHigh-value specialty storesBrick to Click retailers

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Online Identity Fraud Solutions:The Needs are SimilarOnline Identity Fraud Solutions:The Needs are Similar

Need to HaveEfficient through put at web siteEasy system integrationEffective user verificationComplete consumer acceptance

Nice to HaveProactive deterrentEfficient dispute resolutionHigh volume cost effectivenessSeamless cross-channel portability

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Online Identity Verification Solutions Fall Short

Online Identity Verification Solutions Fall Short

FalseRejects

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The True ID Online SolutionThe True ID Online Solution

At POS Consume

r Enrolled, Identity Verified

In-person

XYZ Dept. Stores 01/05/00 10:43:01AM

1 Item A 49.99 1 Item B 44.99 2 Item C @4.99 9.98 Total 104.96 Paid XYZ Card: 2345

Thank you for helping secure online transactions. Please, retrieve your security certificate within 48-hours

at: www.xyzstores.com

Your Passcode is xi78fhk66k

Please Print Email Address:

janedoeconsumer

@ abcdinternet.net

At POS Issue

One-time Passcode

on Receipt

for Digital

Certificate

Download

Consumer at Home Enters

Passcode on their

PC

Data Validated and True ID Digital Certificate Issued

Strong Authentication,

Real-time Security, Full Audit

Capabilities for In-person AND Online

Transactions

+ =

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The True ID Online SolutionThe True ID Online Solution

Leverages strong face-to-face authenticationBuilds on existing consumer acceptanceAligns costs with risksStrong compatibility with existing channels

Secure cross-channel audit capabilityReduces e-tail checkout hassles

For best “Brick to Click to Brick” shopping experience!

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Instant Image Verification:The Effective Solution to Identity Fraud

Instant Image Verification:The Effective Solution to Identity Fraud

FalseRejects

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The Image Data Investment OpportunityThe Image Data Investment Opportunity

Image Data Strategic AdvantagesFirst mover advantage--no direct competitorsProduction-stage productReal-world market acceptanceManagement with proven capital efficiencyStrong initial investors with industry knowledgeHigh gross margins

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Path to ProfitabilityPath to Profitability

Continue to prove marketsDevelop channels

Control burn while ramping revenue

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The Channels: Key to Mass DeploymentThe Channels: Key to Mass Deployment

Hardware Channels: POS Manufacturers Thin margins A few key leaders; highly competitive Existing products easily integrate True ID functionality Holy grail: A piece of transaction fees Service Channels Processors seek added services, eg check truncation Check & credit verification DBs need higher effectiveness to reduce costs Proprietary card services need higher-margin differentiators

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Burn ControlBurn Control

Lean Management Style4 years and production-stage product for $12M

Prove-the-markets-to-Channels StrategyKeeps sales/marketing expenses low and focused

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Minimal Manufacturing-related Capital NeedOn-demand outsourced manufacturingLeasing/financing option tap customer capitalStrategy ensures scaleability

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The Image Data Investment OpportunityThe Image Data Investment Opportunity

First mover advantage--no direct competitorsProduction-ready productReal-world market acceptanceManagement with proven capital efficiencyStrong initial investors with industry knowledgeHigh gross margins

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Growth: MarginsGrowth: Margins

Gross Margin2001•Increase transactions vs. hardware revenues

•Increase ratio of verification to enrollment

•Hardware Production/sales licensing begins•Hardware costs decline

2002•Increase in fully automated online verifications

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Growth: Face-to-Face MarketGrowth: Face-to-Face Market

Terminals Deployed

Terminal Revenue

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Growth: Online MarketGrowth: Online Market

Digital Certificates Issued

Digital Certificate Revenue

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Growth: Face-to-Face and Online TransactionsGrowth: Face-to-Face and Online Transactions

Total Transactions

Total Transaction Revenue

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P & LAug 2000 - Dec 2003P & LAug 2000 - Dec 2003