TRENDS IN CAMPUS COMMERCE

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TRENDS IN CAMPUS COMMERCE
CACUBO 2009
Welcome!
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TouchNet Information Systems, Inc.

• In business since 1989
• Focused on Higher Education
• Privately held, profitable
• US-based, home-grown
• Focused on strategic partnerships

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The driving force behind trends

• Over the past 3-5 years, its been all about
  securityPCI
• Today, PA-DSS is a driving factor
• Security is continues and ever changing
• Today (W.I.N.)
• Its all about cutting cost and saving money
• Save money
• Make money
• Manage money

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Is Innovation on hold?

• Despite the economy and security concerns,
  technology (and expectations) continue moving
  forward
• iPhone
• Facebook
• Twitter
• Google
• Amazon

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Billing Expectations
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Not so simple
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Trend in Payment Consolidation

• Comprehensive set of tools for you merchants to
  use
• Aka, a Commerce Management System

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Business
with ePayments
Applications
with Payments
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Centralized CMS
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Business OperationsCommand Center
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Trends in Payments Alternative Payments
Javelin Research
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Debit Opportunity
ATM / PIN Debit

• Signature Debit

The Back
BIN File Management
The Front
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What is PINless Debit?

• The use of your PIN-based ATM Debit card over the
  internet
• Limited to specific billing merchants
• Utilities, Education
• Alternative method of authentication
• PIN number is never entered over the internet
• End-to-End Certification Required
• Growing number of schools live in the US, but
  still very limited

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Intelligent Routing w/Opt Out
State College
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PINless Report from a School
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Debit Example Average of 736.25Jan. 01 Nov.
05 (10 months)
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Electronic Checks

• NACHA Payment Types
• Traditional ACH
• Trend to watch
• Secure Vault Payment (SVP)

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ACH Transaction Flow
ODFI
RDFI
Operator
Originator
Receiver
International ACH Transaction (IAT) - ??? Secure
Vault Payments (SVP)
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Secure Vault Payment

• Cons for ACH
• No real-time Auth
• Batch system
• Not very portable
• Requires a shared secret
• Challenging for ecommerce situations

• Pro SVP
• Real-time Verification of Funds
• No sensitive information
• Portable
• shared secret already established
• Available for ecommerce situations

• Cons for SVP
• Its New and limited

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Trend in Payment Strategy - Convenience Fees -

• 25 of schools surveyed in 07
• The trend did not slow down in 08
• 99 are using a fee with out VISA
• Statistics support the model is working, online
  payment remain steady
• Drastic growth in Alt. Payments

• NACUBO 2007 Student Financial Services Survey

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Convenience Fee Matrix
Mastercard current program is making an
exception for this. Certain restrictions apply.
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Total Online Payments
Pre Conv. Fee
After Conv. Fee
Total Payments Online

• 50 of these are Debit Cards
• 89 have a checking account
• Avg. American has 6/7 cards

MC
ACH
Visa
ACH
lt 10
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Case Study 4 Year, Public, Southeast, 16,000 FTE

• Total web payments held steady
• Merchant Fees decreased to zero (from about 1
  million per/yr)

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Trends in Alternative Credit

• Convenience Fee Strategy limits access to a
  popular form of credit
• Offer an alternative form of credit, in the form
  of a payment plan
• Theres a better way to finance education
• Payment Plan Options
• Manual / In-house
• Out source
• Automate

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Installment Plans and Collections

• Software and technology have enabled schools to
  rethink payment plans
• Self Service Models have changed the
  administrative effort
• Revenue model is clear
• Installment plans can be used internally for
  collections
• RISK factorwho has your money?

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Case Study UNC-C

• 254,000 enrollment fee revenue
• 11,000,000 in payments collected
• Over 5,000,000 in scheduled pmts
• These were all hands off transactions.
• Student did touch
• Administration did not touch

Figures based on 2008 (one full year)
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Expectations Keeping up with the Trend Setters

• iPhone generation
• Twitters and Tweeters
• Everything mobile
• Anytime, anywhere access to everything

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Online vs. Mobile Banking Users
Juniper Research
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Mobile commerce examplesfor you campus

• Billing and Payment
• Notifications, Inquiries, Authorizations,
  Presentment and Payments
• Mobile Shopping and Purchases
• Downloadable items (or) items mailed to your
  physical location
• Security
• Two Factor Authentication / Alerts and Warnings

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Stages of Mobile Growth

• Email to SMS (one way)
• Training Wheels
• SMS Gateway
• Two way
• Mobile Web (WML)
• Applications
• Contactless

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One-way Text Messaging

• The most commonly used data application on mobile
  phones is SMS text messaging
• 74 of all mobile phone users are active
  texters
• The average users sends 2.6 SMS text per/day

source Informa 2007
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More text then calls!
Nielson Mobile, a service of The Nielson Company
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Most Common Text uses Today

• Chat/Text Messaging
• News Updates
• Voting
• Instant Alerts
• Weather, sports, airlines, financial, emergency
• Mobile coupons and discount offers

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Two-way (SMS) Messaging

• NOT only sending and receiving text messagesbut
  reacting
• Actionable Messages responding to a text
  message request
• Uses an SMS Gateway vs. Email
• SMS Rules and Regulations
• Opt in
• Very tightly controlled / serious fines
• Per transactions fees apply

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Two-Way Messaging Examples

• What is my balance
• When is my next due date
• Score

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Real-life Corporate Examples

• ATT Text-2-Pay
• Amount Due text is received
• Response of Total is sent to pay
• PayPal Text2Buy
• You see Text to Buy in an ad
• Text the item code to the number shown
• Chase Credit card alerts, inquiries, and more
• Text chase with the phrase bal
• Receive back your current card balance

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Mobile Web Access

• Mobile Access to existing web applications
• Keys
• Mini web pages that load very fast
• Limited or no graphics
• Limited text
• Optimized for small screens
• Works on all web enabled devices
• Able to run under HTTPS

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Mobile Access Examples

• Bank of America
• Over 1 million mobile banking users (in less then
  a year)
• Today, over 2 million!
• Balance Lookup
• Transactions History
• Pay Bills
• Many other Banks and Brokerages have followed

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ImageNet Mobile Check Deposits
Again, Bank of America has adopted this
technology too
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Mobile Applications

• Programs designed for a specific device or
  operating systems
• Blackberry
• Windows mobile
• Symbian
• Palm, etc.
• Java (JME)
• Challenge to keep up with all of the various
  platforms and new phone

Etrade Ad Black Berry Only
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Other Apps in the Real World

• Scan Life - Bar Codes
• Examples
• Paperless Boarding Passes are emailed to
  passenger's cell phones and appear as a Bar Code
• Delta
• Continental
• Ralph Lauren

Juniper forecasts that over 400 million mobile
subscribers worldwide will use their mobile
phones for ticketing by 2013.
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Contactless

• RFID/NFC technology embedded in to payment
  devices, used to Tap-n-Pay
• Merchant infrastructure is being built now
• Examples
• McDonalds, Arbys, Jack-in-the-Box, etc.
• CVS

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Contactless migration to the Handset

• Two formats NFC/RFID
• Processors
• First Data/RFID
• Carriers and Handset Makers/NFC
• Sprint SD Card
• ATT - SIM Chip
• Others NFC Built into the handset (Nokia)

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Some examples on campus

• Many are doing one-way SMS notifications
• Security/Athletics/Schedules/Mobile Coupons
• A few are doing contactless
• Slippery Rock
• 25 in various stages
• Mobile Access and Payments
• A few are doing mobile access for ERP
• Drexel

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Account Status
State College
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Additional Business Office Mobile Functions

• Current Activity
• Make a Payment
• Payment History
• Access Payment Plans
• Refunds

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Bar codes can quickly link users to products in
Mobile Stores
Register for this Event NOW!
www.stateu.edu/m
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Marketing Mobile Bills
View and Pay your Student Bill NOW with you
Phone! www.stateu.edu/m
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Trend Summary

• Consolidated Payments
• Commerce Management System
• Payment Methods Payment Alternatives
• PINless Debit
• ACH/SVP
• Alternative Credit
• Automate Payment Plans
• Payment Strategy
• Convenience Fees
• Expectations
• Mobile Anytime, Anywhere

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Questions?Thanks!

• John McElroy, Business Development
• TouchNet
• jmcelroy_at_touchnet.com
• [phone]