The Trend is your friend in Campus The Trend is your friend in Campus Payments:

Introductions and Agendag

Topics

Card Regulation Update Card Regulation Update– Wall Street Reform 2010– Card Act 2009

– How Debit cards can affect your businessHow Debit cards can affect your business… Mobile

– Stats, predictions, corporate examples, applying to campus

W ll St t R f d Wall Street Reform and Consumer Protection Act[ Dodd-Frank Act - 2010 ]

• 533 new regulations• 60 studies• 94 reports

Dodd-Frank Summary

Fi i l i d t h l Financial industry overhaul “Too big to fail” Regulation of financial instruments Consumer protection agency AND…

The “Durbin Amendment”

Senator Richard Durbin (D-IL)

“Where the money goes”…(i.e. Interchange)

…where have you heard this before?

Where the Money Goes

Sources: GAO (analysis); Art Explosion (images).

The Hidden Credit Card Fees

44%

35%35%

Fee Summary (US)

PIN Debit– Average $0.35 to $1.50 per transaction

D ti i t PIN d bit ith Dramatic increases to PIN debit with some networks removing their caps

Signature Debitg– 1.4% of the transaction value

Credit Card (Visa and MasterCard)( )– 1.6 to 2.4% of the transaction value

http://www.federalreserve.gov/pubs/feds/2009/200923/200923pap.pdf

A M tt f Vi P i tA Matter of View Point

IDebitDebit = PIN Debit= PIN Debit CreditCredit = Signature Debit= Signature Debit

Issuers“Banks”

I t li kI t li k

• Rewards!

• No PIN Required• Lower Fees

$$$$$$InterlinkInterlink

& Maestro& Maestro

No PIN Required

• No Added Txn Fee

• Zero Liability*

• Less Risk w/PIN

• Fewer Chargebacks

$$

Merchants“Schools”

Consumers

“Students

1.4%1.4%$.50$.50

“Students”Merchant are forced to raise the cost of all goods

National Retailers Association estimates it cost the average American Family $427 per/year in higher retail prices

Example of PIN Debit PricingLARGEST POS DEBIT NETWORKS Rate % Per Item Fee Cap

Switch Fee

Market ShareNETWORKS Rate % Per Item Fee Cap Fee Share

Interlink (Visa) 0.75% $0.1500 No CapNo Cap $0.0350 40.5%

Star 0.75% $0.1500 $0.65 $0.0425 28.7%

Pulse 0.65% $0.1000 No Cap $0.0700 11.6%NYCE 0.65% $0.1000 $0.65 $0.0375 9.8%

The four largest POS debit networks (Interlink, Star, Pulse, and NYCE) process 91% of alland NYCE) process 91% of all ATM POS transactions.

Durbin Amendment TimelineSection 1075 of Dodd-Frank Act

Key Components of Durbin for Merchants

1 Federal Reserve to control debit interchange1. Federal Reserve to control debit interchange2. Requires 2 unaffiliated Networks on Cards3 M h t h i ht t t t ti t3. Merchant has right to route transactions to

the network of least cost4 Min / Max for credit card acceptance4. Min / Max for credit card acceptance 5. Discount for “cash-like” payments

1. Fed to Set Debit Interchange Proposed cap (from Dec 2010) Proposed cap (from Dec. 2010)

– $.07 - $.13– Risk/SecurityRisk/Security– Final Ruling April 21

Banks fighting hardg g

There is an exception for Issuers with assets under $10 billion, as well as Government Issued Cards,

and General Purpose Re-loadable Cards.

2. Two Unaffiliated Networks

Requires 2 unaffiliated Networks on Cards Addresses VISA’s monopolistic moves with

I t li kInterlink

3. Merchant Routing

Merchant have the right to route transactions to the network of least costT ki th ti i t f th h d f Taking the routing issue out of the hands of consumers, who are influenced by carrots, and putting it in merchants controland putting it in merchants control

4. Minimum / Maximum Amount for CC

Merchants can refuse cards for transactions under $10

Food courts with low average tickets might not accept credit cards as the cost average per/transaction may be too highbe too high

Allows merchants to set a maximum dollar amount for which a card will be acceptedamount for which a card will be accepted

Schools might accept credit cards up to $100, then redirect the rest to a convenience fee service

5. Discount for Cash

Allows merchants to discount Allows merchants to discount for cash-like payments (even in the same channel)the same channel)– Cash-like payments may include:

Signature and PIN Debit ACH Checks Cash Student ID Cards

Discount Price: $1,000*

“Discount for Cash” Price for Tuition Regular Price $1,020

Cash-like payments options:– ACH/Debit– Checks/Cash

g $ , Discount-4-Cash Not Applied Continue here to Pay by

Credit Card…– Student ID Cards– (Or) Click here for Regular

Price/Credit Card

– Visa– Mastercard– Discover– American Express

* Price reflects a “Discount” for using a Cash-like Payment Methods.

Visa/US - Debit Overtakes Credit- 2010 Stats -

Debit (Signature and PIN)– Total purchase volume up 7.9%– Accounts open up 22.3%

Credit– Total purchase volume down 7.3% – Accounts open down 11.6%

Debit Cards the Big Winner (’09)

For the first time since the Fed started tracking payment trends, debit cards surpassed checks as the most used non-cash payment option in America Debit card usage increased by 14 8% per year over the course ofused non-cash payment option in America. Debit card usage increased by 14.8% per year over the course of the study and accounts for nearly 35% of all non-cash payments. That represents an annual increase of 12.8 billion transactions from the last study, which was released in 2007.

What the Future Holds for Debit? Regulatory Changes:Regulatory Changes:

– Limitation on Overdraft Fees (Regulation E)– Fed controlled Interchange Capg p

Unintended Consequences (Banks will…)– Push “Opt-in” to overdraft “protection”

So they can continue to collect over draft fees

– Free checking will be harder to findD bt d ill di i i h– Debt rewards will diminish

– Possible per transaction fee to cardholders on all debitdebit

Expand Debit Acceptance

Suggested Debit Strategy Expand Debit Acceptance

– Revisit agreements with commerce (software) providers

Unbundle Signature Debit from Credit – In your processing contracts

More important now to be on a “Cost Plus” pricing model More important now to be on a Cost Plus pricing model NO MORE BUNDELD PRICING.

– In your payment applications – In your reconciliation and reporting

Revisit Convenience Fees ArgumentT f t tili i C F ’ N Vi– Top reason for not utilizing C-Fee’s…No Visa

Apply the “Durbin Factor” to C-Fees Visa (Debit) becomes a viable payment Visa (Debit) becomes a viable payment

option again– In the past 70% of card payers (i e Visa) had to– In the past, 70% of card payers (i.e. Visa) had to

make alternative arrangements– Now 55-60% of those (i.e. Debit) will have a free

option All Signature Debit cards will be re-directed

f C i F iaway from Convenience Fee service– VISA Debit will be accepted on your site, using your

Merchant AccountsMerchant Accounts

C dit C d A t bilit R ibilit Credit Card Accountability, Responsibility, and Disclosure Act of 2009

“Credit CARD Act”– Transparency

A t bilit– Accountability– Mutual

ResponsibilityResponsibility

Signed by President Barack Obama on May 22 2009Signed by President Barack Obama on May 22, 2009

Summary -- Credit CARD ACT of 2009 Phase 1: Aug. 20, 2009

– 45-day advanced notice of any rate increase– Right to cancel card prior to any rate increase– If you cancel, original interest rate used to payoff balance– Statements must be mailed 21 days prior to due date

Phase 2: Feb. 22, 2010– Rates can not be increased on existing balance for one yearg y

Retroactive rate increases are now prohibited– Improved disclosures

Statements must include a box that shows how much you’ve paid in interest and fees

Must clearly explain the consequences of making only minimum payment Must show what your monthly payment must be to pay off in three years Clearly show the due date (due date must be the same each month) Clearly show the due date (due date must be the same each month)

Key Provisions Which May Apply to Campus

– Are you a card issuer?y Do you partner with an issuer?

– Card issuers should not impose excessive fees on cardholdersexcessive fees on cardholders Overdraft/NSF Fees (Reg. E - Debit) Over credit limit fee (CARD Act)

Limits credit cards to teens w/out– Limits credit cards to teens w/out parental consent

– Strict limitations on marketing to t d tstudents

– Must disclose everything and submit contracts to the Federal Reserve Bank

CARD Act Spotlight on Higher Ed Marketing relationships in Question

– NY AG reviewing more then 300 contracts– Parallels drawn to Student Loan Probe

http://www.insidehighered.com/news/2010/10/13/debit#Comments

• CBS Money Watch

Media attention has been growing…

• Time

• Reuters

• USA Today

• Washington Post • Denver Post• Denver Post

• Seattle Post

• Oregoniang

• Fox News

• Dave Ramseyhttp://www.washingtonpost.com/wp-dyn/content/article/2010/10/03/AR2010100304352.html?hpid=topnews

Next Topic(time check?)

Mobile Mobile…

New Technology called the “cell phone.”

R i i i

A Look Back at Mobile Phones

Reminiscing...

Bag Phone To Car Phone To “hand held” To Mobile Phone To Smart Phone

Smart Phone Predictions Smart Phone Predictions (3 Year Range)

Virtually all phones sold Virtually all phones sold will be smartphones

Smartphones will out-sell plaptops, netbooks and PC

M ill t More users will connect to the Internet via mobile

Game changing real-time g gcommerce platforms and cloud-based services will emergeemerge

http://chronicle.com/article/Colleges-Search-for-Their/126016/

Percentage of Students Who Use Percentage of Students Who Use Mobile Device Daily to Access the Web

SOURCE: Educause Center for Applied Research

How Do You Use Your Smartphone Today?

Keep p ith the ne s Keep up with the news Listen to our favorite podcast

T ti kid Texting your kids GPS or Google Maps Alerts and notifications Keep tabs on the social networks Calendars

what about tomorrow? …what about tomorrow?

In Store Price ComparisonIn-Store Price Comparison

ShopSavvy | ScanLife | RedLaser | Barcode ScannerShopSavvy | ScanLife | RedLaser | Barcode Scanner

A St t Ph t B kApp Store-to-Phone-to-Bank

Mobile Banking Usage Increasing

19% f U S h d t d b ki 19% of U.S. consumers have conducted banking transactions on a mobile device

– Compared to only 9 percent just 18 months ago.*p y p j g

13.2 million people accessed bank accounts from mobile sites during the month of April, 2010, a 70% increase over a year ago **increase over a year ago.**

* KPMG's fourth annual Global Consumers and Convergence surveyg y** A recent study by comScore

Mobilizing the Bursar’s OfficeBank of America Student

Students/Parents

Bank of America Mobile Model

Student Accounts

Students/Parents View Bills Check Balances Make Payments Make Payments View Payment

History Receive AlertsReceive Alerts

Information Alerts and Warnings

87% of schools use text messaging emergency alerts.On average 48.9 percent of students sign up.

-- Campus Safety magazine 2010 poll

2 W “A ti bl ” T t2-Way “Actionable” Text

Bank of AmericaBank of America

CitiCiti

ChaseChase

And more…

Live Example: text the short code "22551“:• "bal" (as in balance)

Try it Try it now!now!

•“trans” (as in transfer).now!now!

If They Text Your School If They Text Your School, Will It Text Them Back?

Student Account Bal One Card Bal Due Date Reg. Dateg Refund Date Refund DueRefund Due Game Time

B th A & B > $1 Billi Both Amazon & eBay > $1 Billion (in Mobile Commerce)

Amazon announced that it has sold more than $1 billion worth of products through

bil hmobile phones eBay is aiming for $1.5 billion in mobile sales

after rackingafter racking up $600 millionmillionin 2009

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=132597

Mobilize Campus CommerceAmazon/eBay Campus eCommerceAmazon/eBay Mobile Model

Campus eCommerce

Near Field Communications (NFC) Near Field Communications (NFC) and Mobile Device

• Visa and MC

• Discover w/AT&T, Verizon, T-Mobile,

• Sprint

NFC Transition: Card | Sticker | Phone

Over 150,000 retailers from 20 top brandsfrom 20 top brands accept Visa payWave payments, and the list is rapidly growing.

Nokia C7Nokia C7

Quick Response (QR) Codes MoviesMovies Advertising Tickets Tickets Boarding Pass Ordering Ordering RSVP Car Rental Car Rental Downloads

Campus Portals Release Mobile Versions Open SourceOpen Source

– MIT http://mitmobileweb.sourceforge.net/

– University of Oxford http://sourceforge.net/projects/mollyproject/

C i l Commercial– Blackboard

SunGard/Datatel/Oracle– SunGard/Datatel/Oracle

Example of a Mobile Portals•Campus maps •Campus calendar•Campus calendar •Campus news •Campus directory •Indiana University web site search •Status of key university IT services •Access to some LMS content•Access to some LMS content•Campus classified ads •Emergency contacts •Bus schedules •Campus alerts, including emergency alerts

The ERP’s Release Mobile

Starter applications

Mobile Connection

pp “m-Apps” Course

calendarscalendars News Feeds Grades

More ERP’s Release Mobile

Access to courses, contacts, events, notifications, news,

dand maps.

eLearning Leveraging Mobile

Apps in the Classroom

Live Session Evaluation

Send a textto “22333”

http://www.polleverywhere.com/multiple_choice_polls/MTM5NDM4NjIyMQ

POD Casting / Anywhere On-Demand Learning

http://www.acu.edu/technology/mobilelearning/conferences/summit/2009/podcasts.htmlhttp://www.acu.edu/technology/mobilelearning/conferences/summit/2009/podcasts.html

Gi i / D tiGiving / Donations

Alumni Relations Text to join…Text to join… Text to give…

QLess at UT Dallas

Eliminates lines P id t ti Provides set time Saves time and increases student

satisfactionsatisfaction

Final Session EvaluationSend a Text to 22333

Questions?Questions?QQ

Thanks!Thanks!

Jeff Rapp TouchNet913.599.6699

Come Again!g

Tha ksThanks