Citi Prepaid Services

1
Citi Prepaid Services

• An overview to delivering better, electronic
  payments

2
Agenda

• Introduction to the Prepaid Industry
• Prepaid Solutions for State and Local
  Governments
• Key Benefits of Prepaid Solutions
• Case Studies
• Questions and Answers

3
Introduction to the Prepaid Industry
4
Prepaid 101 Open and Closed Loop Programs

• Closed Loop Prepaid Programs
• Person-to-person gift cards
• Merchant-specific acceptance
• Non-bank issued
• Open Loop (Network Branded) Prepaid Programs
• Corporate/government and gift card uses
• Re-loadable and re-usable (configurable)
• Issued by banks
• Accepted on global payment networks (Visa ,
  MasterCard , Discover , American Express )

5
Prepaid Program Types
1 Visa preliminary estimate based on approximate
segment sizes of demographic and industry
spending and disbursements where prepaid
products may provide payment solutions. Some
segment dollar amounts may overlap. Version Q1
2003.
6
The Prepaid Market

• Network branded solutions had an overall increase
  of 82.8 in 2006
• Open Network Branded Prepaid, 2006 growth
• Payroll 79
• Employee Partner Incentives 91
• Consumer Incentives 484
• Public Sector 1,000
• Mercator, September 2007
• Mercator, March 2008
• MasterCard Europe and Boston Consulting Group,
  2007

7
Citi Prepaid Services

• We provide organizations with electronic payment
  solutions that
• Replace paper check, cash and other inefficient
  payment
• Extend communications to reinforce behaviors
• 10 year history in industry (early entrant)
• Prepaid clients include 45 of the Fortune100
• Have launched over 1,400 programs

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Prepaid Solutions for State and Local Governments
9
Prepaid Solutions for States
Replace existing check, voucher or cash payments
with a more efficient, effective, secure and
convenient prepaid program.

• Payroll
• Unemployment Insurance
• Pension Payments
• University Payments
• Financial Aid Payroll
• Law enforcement
• Juror, witness stipends

• Workers Comp
• Food Stamps WIC
• Child Support TANF
• Wellness Programs
• Catastrophe/ Disaster recovery claims

10
Key Prepaid Program Components

• Custom-designed Visa/MasterCard prepaid card
• Re-loadable and re-usable
• Good everywhere Visa/MC debit cards are accepted
• Plastic and virtual solutions
• ATM or debit only cards
• Payment Delivery Options
• ACH (Direct Deposit)
• Proprietary Bulk file
• Individual Payments (Web-based tools)
• Customer Support
• IVR
• Live Representatives
• Website
• Email

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Key Program Components

• Reporting
• Operational
• Business Reports
• Infrastructure and Security
• Redundancy
• Scalability

• Implementation Methodology
• Speed to Market
• Focus on Quality
• Training and Education

12
Key Benefits of Prepaid Solutions
13
Benefits of Prepaid to Clients

• Better Financials
• Lower cost delivery
• Improved Funds Management
• Fraud Protection
• Payment Reversals
• Streamlined Operations
• No lost stolen/stolen checks
• Eliminate administration associated with
  checks/cash
• Outsource payment fulfillment to full service
  provider
• Powerful reporting, better auditing capabilities
• Powerful Communications Tool
• Comprehensive communication/notification package
• Ongoing communication with recipients
• Spending visibility

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Significant Financial Benefit

• Example Client ROI for Paperless Payment Solution
• 105,000 total employees on monthly pay cycle
  receiving a check
• Assumptions
• 1.00 cost per check/per pay period (105,000 X
  1.00 x 52 5,460,000)
• 0.10 cost per payment / employee
• Potential of 90 cost reduction

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Benefits of Prepaid to Recipients

• Greater convenience
• No checks to deposit or cash
• Universal Visa/MasterCard acceptance
• Worldwide ATM access
• No lost or stolen checks
• Zero Liability protection for lost and stolen
  cards
• Better communication and service
• Detailed payment history online
• 24/7/365 support (web, IVR, live reps)
• Email/Text Message Alerts
• Special Transfers
• Improved financial management
• No need to carry cash
• Online account management

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Underserved Population in the US
Approximately 80M Underserved (Population in
Millions)

• 80 million consumers in the US without a
  traditional deposit account or with limited
  access to credit.
• These consumers received almost 1 trillion in
  payments from employers, states, government
  entities, insurance companies and others
• Over 1.5 billion in fees are paid to cash
  checks

Underserved Consumers
Unbanked (no banking relationship) Underbanked
(low/ no credit score) Recent Immigrants
..with almost 1T in Income ( Billions)
Source Study commissioned by Visa and performed
by Bearing Point in 2004/2005
17
Case Studies
18
Case Study State of Maryland

• State of Marylands Need
• Maryland currently delivers paper checks to
  recipients of unemployment benefits
• Issuing paper checks involves significant
  costs, administrative overhead and risk
• An electronic delivery method is ideal for the
  State

• Citis Solution
• Citi is providing a fully electronic solution
  to deliver and communicate unemployment
  
  benefits via our Prepaid Services platform.
• Citis customizable solution eliminates the
  need to issue paper checks while providing
  beneficiaries with flexible access to funds and
  comprehensive customer support

19
National Guard Case Study

• Client Objectives
• The National Guards goal was to drive a large
  scale recruitment campaign
• The National Guard and its partner Docupak
  desired an effective incentive to motivate
  existing troops to refer and recommend new troops
  
• Citis Solution
• Citi Prepaid Services provided our
  industry-leading Referral Program, featuring
  a
  fully customized prepaid debit card
• Results
• The program was so successful it was expanded to
  the Air National Guard

20
Case Study Stein Mart

• Situation
• High fashion, off-price retailer with about 300
  stores, coast-to-coast in 30 states, 18,000
  active associates
• Expensive and inefficient process of in-house
  printing and distribution of pay checks and paper
  pay stubs bi weekly
• Ongoing delivery issues associated with
  uncontrollable forces over the past several years
  (9/11, hurricanes, strikes, etc.)
• Less than 50 direct deposit adoption
• Results
• Savings of approx. 100K annually
• Eliminated checks within 2 weeks of rollout
• 100 electronic paperless pay
• Redeployed payroll resources to other areas
• Significantly reduced payday disruptions

21
Chicago Parks Case Study

• Client Needs
• The Chicago Park District (CPD) is responsible
  for enhancing the quality of life throughout
  Chicago.
• CPD wanted to decrease the payroll expense
  related to delivering checks and reduce the
  expense for employees to access their pay
• Citi Prepaid Solution
• A customized Citi Prepaid Program helped the
  CPD significantly reduce employer costs
  associated with payroll expenses, as well as
  reduce banking expenses for the employee.
• Results
• From the start, we had confidence in Citis
  ability to implement the solution. Citi assured
  us that implementation and adoption of their
  payroll card program would be transparent not
  only was Citi able to seamlessly work with our
  existing Oracle payroll system, the pay card
  implementation did not create additional or
  extensive work for the payroll manager or our
  employees.

22
Citi Prepaid Solutions Healthcare

• Replace premium discounts, checks, gift cards and
  direct deposit with a branded, powerful incentive
  
• Perfect for
• Wellness Incentives
• Disease Management
• Weight Loss Programs
• Smoking Cessation

23
Case Study Citi for You

• Situation
• Citi was looking to engage their workforce in
  Health Risk Assessments online surveys
  developed to establish a health profile of each
  employee so programs can executed to help reduce
  healthcare premiums.
• They needed a compelling and universal reward
  that was easy to manage.
• Solution
• Citi combined an online assessment with a fully
  branded prepaid program. The prepaid card was
  chosen because of its universal popularity and
  simple execution.
• Results
• Citi distributed the health survey to all
  domestic employees. With the prepaid incentive
• Citi received nearly 125,000 completed surveys
  with participation 60 above forecast, and
  payments and communications delivery cost
  reduction of 10.
• .

24
Questions

• Thanks for your time

Jason Tiede Citi Director, Global Prepaid
Services Jason.Tiede_at_citi.com