ViVOtech Softwre Business

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Contactless Acceptance Made Easy for
Sherri Koper Sales Director
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Agenda

• The Opportunity
• Contactless Payment Processing
• Product Information
• Association Updates
• ViVOtech, Inc.
• Near Field Communication (NFC) and the Future of
  Contactless
• Questions

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Contactless Terminology
Universal Contactless Symbol
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MasterCard Consumer Trends

• Consumer Trends LESS CASH
• Cash Alternative is the way to go
• 86 of consumers want to use less cash
• Most carry less than 20
• Growing more comfortable with using a card for
  small purchases
• Consumer Trends SECURE PAYMENTS
• Security is Essential
• 91 of likely users would feel more secure if
  they were allowed to hold their payment card
  through their entire payment process
• Consumer Trends CONVENIENCE
• Speed and Flexibility are key
• Nationwide, almost 75 of respondents refuse to
  wait in line longer than five minutes for a
  purchase of less than 25.
• And, more than 25 of respondents refuse to wait
  longer than two minutes for these purchases

Survey was conducted in 2005 by Ipsos and
commissioned by MasterCard.
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Electronic Payment Evolution in The U.S.
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Major Contactless (RF) Payment Activities
MasterCard PayPass
Sheetz Petroleum 2 - Stadiums ExpressPay
announces acceptance at CVS
MasterCard
MasterCard
MasterCard
First Nationwide Retailer Announced PayPass
Acceptance
International
PayPass
PayPass
Commercial Roll Out
Pilot Expansion
Announces Orlando
Announced
Dallas Pilot with Nokia
Pilot
Sep Oct Nov Dec Jan
Feb Mar Apr May
Jun Nov Dec Jan Feb Mar
. Sep Oct
Nov Dec June Oct
2002
2003
2004
2005
Chase Issues Millions of Contactless Cards
American
Visa Contactless Launches Malaysia Pilot
Express
American Express Announces Nationwide Blue Card
Rollout
Announces
Phoenix Pilot
American Express ExpressPay
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Contactless Increases Spending Over Cash
Amex Phoenix Convenience Store
50
Amex NYC Convenience Store
External Jersey City Cafeteria
External Mercantile Cafeteria
32
33
27
25
25
Increase
0
Mercantile Cafeteria spend lift assessed by
CulinArt Representative Source Internal
American Express tracking and Pilot Merchant
Reporting
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MasterCard PayPass Report Card

• MasterCard PayPass Making Inroads vs. Cash
• Average PayPass transaction, credit or debit, is
  approximately 20.
• Consumers use their payment cards more frequently
  once those cards become PayPass-enabled,
  approximately 18 on average.
• Roughly 75 of all PayPass transactions were for
  purchases below 25 and approximately 45 of all
  PayPass transactions were for purchases below
  10.

Sources MasterCard PayPass Results, News Release
July 2006
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MasterCards PayPass Report Card

• PayPass issuers performance data, based on a
  study of the same three-month time frame in 2006
  vs. 2005, PayPass provided a
• 36 increase in usage per account
• 45 increase in total transactions per account
• 230 increase in usage at PayPass merchants
• 270 increase in the number of transactions at
  PayPass merchants

Sources MasterCard PayPass Results, News Release
July 2006
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National / Chain-wide Contactless Merchants
Nationwide roll outs
Regional stores enabled in target cities

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Stadiums Enabled for Contactless Acceptance
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Agenda

• The Opportunity
• Contactless Payment Processing
• Product Information
• Association Updates
• ViVOtech, Inc.
• Near Field Communication (NFC) and the Future of
  Contactless
• Questions

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How Are Contactless Payments Processed?

• Contactless payments travel the same payment
  authorization process as a mag stripe with
  increased security
• A small chip fits inside devices such as credit
  cards, key fobs, and cell phones, that transfers
  account information to the reader using a RF,
  radio frequency signal.
• ViVOtech readers read Amex, Discover, MC, Visa,
  and MiFare contactless payment devices.
• All are ISO 14443
• MiFare is a protocol for non-credit card payment
  or identification
• Contactless transactions MUST be flagged for
  tracking and security.
• MasterCard and Visa transactions require changes
  in 2 data elements
• American Express does not require the 2 data
  elements
• A unique identifying number is assigned to the
  transaction every time.

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ViVOpay 4000 Features

• 4 LEDS and Beeper
• A single cable providing
• RS-232 serial communication lines
• Input lines for external power (8 10Vdc, 300mA
  max)
• Top overlay
• Association entitlement recognition
• Bottom overlay
• Standard blue / black
• Custom

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What It Means For You

• Attract new business by offering your Merchants
• Increased speed and number of transactions
• Increased ticket size
• Reduced cash handling
• An innovative way to attract new business
• Stronger customer relationships
• New hardware sales
• Opens up new acceptance opportunities in
  traditionally cash-only environments.
• Be first to offer contactless payment acceptance.

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What It Means for Consumers

• Cash alternative
• Tap N Go feature provides a quick, easy method
  of payment
• No need to search for cash or wait for change
• Since the payment device never leaves the
  customers hand, there is a greater sense of
  security
• Ability to track transactions, offering greater
  financial control

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Agenda

• The Opportunity
• Contactless Payment Processing
• Product Information
• Association Updates
• ViVOtech, Inc.
• Near Field Communication (NFC) and the Future of
  Contactless
• Questions

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ViVOtech Hardware Offering
Countertop
Mounted
OEM/Integrated
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ViVOpay 4000 with a Countertop Stand
Parts for Countertop Stand
Longer Cabling needed for countertop stands
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ViVOpay 4000 Mounted to a Terminal
Saddle, Bracket and Cable needed to Mount
ViVOpay 4000 to a terminal Mounts to Hypercom
T4100, Omni 3750 and Nurit 8320
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ViVOpay 4000 Mounted with Adhesive

• Bottom adhesive overlay is needed to secure
  bracket for glass or window mount

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ViVOpay Drive-Thru Reader

• All in one ViVOpay DTm provides contactless and
  Mag-Stripe at the window.
• High Durability Designed for indoor and outdoor
  use in extreme weather conditions.
• Flexibility Side, top, and bottom mounting
  configurations to fit most drive-thru
  installations and surface types such as metal and
  brick.

ViVOpay DTm
ViVOpay DT
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Agenda

• The Opportunity
• Contactless Payment Processing
• Product Information
• Association Updates
• ViVOtech, Inc.
• Near Field Communication (NFC) and the Future of
  Contactless
• Questions

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Millions of Contactless Cards / Fobs
Projection of 45 million contactless cards /
devices in U.S. market by the end of 2006. (ABI
Research, April 5, 2006.)
Chase has issued 10 million Chase Blink
credit, debit / check cards. Wells Fargo
announced they will re-issue debit / check
cards. All of American Express new replacement,
and renewal Blue Cards being issued now have
ExpressPay contactless payment technology.
Launch of additional American Express Cards /
products with the ExpressPay feature is being
evaluated. MBNA is issuing affinity credit
cards for sports stadiums in multiple cities
based on MasterCard PayPass contactless
technology. This will accelerate in 2006. Citi
is issuing 2.5 million debit cards using
MasterCard PayPass contactless technology in key
fob and card form factors. Keybank will issue
all of its debit card profile based on
contactless cards based on MasterCard PayPass
technology. HSBC is launching contactless
payment cards based on PayPass contactless
technology. It will be issuing contactless debit
cards in New York area through HSBC Bank USA.
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MasterCard Visas Markets for 2006

• Cities
• Atlanta
• Baltimore
• Boston
• Chicago
• Cleveland, Toledo, Ohio
• Columbus
• Dallas-Fort Worth
• Denver
• Detroit
• Los Angeles
• New York
• Pittsburgh
• Philadelphia
• Phoenix
• Seattle-Tacoma
• Washington, DC

• States
• Connecticut
• Maine
• Massachusetts
• New Hampshire
• New Jersey
• New York
• Pennsylvania
• Rhode Island
• Vermont

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Target Retail Industries

• Book Stores
• Cafeterias (Schools / Corporate)
• Drug/Pharmacy
• Dry Cleaners
• Events
• Grocery/Supermarkets
• Movie Theaters
• Music Stores
• Newsstands
• Parking Garages
• Petroleum Convenience Stores
• QSR
• Stadiums Arenas
• Theme Parks
• Video Stores

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PayPass U.S. Merchant Deployment - 2006
Category by ZIP Code
As of February 28, 2006
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Association Benefits

• American Express, MasterCard (January 2006), and
  Visa (effective October 2006)
• No signature required for transactions 25 and
  under for ALL MCCs.
• Optional receipt waiver for transactions 25 and
  under for ALL MCCs.
• Chargeback's fall to issuer.
• Fraud
• No signature
• Under 25

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Agenda

• The Opportunity
• Contactless Payment Processing
• Product Information
• Association Updates
• ViVOtech, Inc.
• Near Field Communication (NFC) and the Future of
  Contactless
• Questions

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ViVOtech Evolution 2002 - 2006

• From first venture funding in 02to market
  leader in 06
• Shipped more than 180,000 contactless readers
• McDonald nationwide installed with ViVOtech
  contactless technology.
• Has 80 market share for installed contactless
  readers
• Became a recognized supplier of contactless card
  and fob products
• Aggressive NFC phone payment strategy. Recently
  announced ViVOnfc
• Nokia makes significant strategic investment in
  ViVOtech

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Agenda

• The Opportunity
• Contactless Payment Processing
• Product Information
• Association Updates
• ViVOtech, Inc.
• Near Field Communication (NFC) and the Future of
  Contactless
• Questions

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Mobile Phone NFC Payments
Contactless Payment is Paving the Road for Mobile
Phone Payments

• All POS locations accepting contactless payments
  will be able to accept Mobile Phone NFC Payments

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NFC Phone

• Near Field Communication (NFC) enabled phones
• NFC is currently in trial programs and should be
  released at the end of 2006.
• By 2009, more than half of cell phones will be
  NFC enabled, ABI Research
• By 2009, annual sales of cell phones will be in
  excess of 1 billion units, Gartner Group
• Did you know that a study showed that you
  discover your lost your phone in 26 minutes and
  your wallet in 24 hours?

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Website links

• To learn more, visit any of the following sites
• www.mastercard.com/paypass
• www.paypass.com
• www.mastercardmerchant.com/paypass
• www.americanexpress.com/expresspay
• To Apply for a MasterCard PayPass Card / Device

• http//www.mastercard.com/us/personal/en/aboutourc
  ards/paypass/issuers

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Sherri Koper, Sales Director skoper_at_vivotech.coms
(813) 368 - 2855