Strategies to Increase Debit Sales

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Strategies to Increase Debit Sales Revenues

• Greg BorchardtVisa Debit Product Office
• March 10, 2008

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NOTICE OF CONFIDENTIALITY

• This presentation is furnished to you solely
  in your capacity as a customer of Visa USA and
  participant in the Visa payments system. By
  accepting this presentation, you acknowledge that
  the information contained herein (the
  Information) is confidential and subject to the
  confidentiality restrictions contained in Visas
  operating regulations, which limit your use of
  the Information. You agree to keep the
  Information confidential and not to use the
  Information for any purpose other than in your
  capacity as a customer of Visa USA or as a
  participant in the Visa payments system. The
  Information may only be disseminated within your
  organization on a need-to-know basis to enable
  your participation in the Visa payments system.
  Please be advised that the Information may
  constitute material nonpublic information under
  U.S. federal securities laws and that purchasing
  or selling securities of Visa Inc. while being
  aware of material nonpublic information would
  constitute a violation of applicable U.S. federal
  securities laws.

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Agenda

• Demographic Profile
• Benchmark Your Portfolio
• Set Goals
• Develop Strategies
• Use Visa Tools

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Demographic Profile
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Debit Profiles
Non-User (25)
Heavy User (27)
MAKES LIFE EASIER
CASH IS KING!
GIMME THE MILES!

• Female (57)
• Married (67)
• With Children (48)
• Employed Full-Time (66)
• 39 Years Old

Source Visa Payment Panel Study, 1Q-4Q06
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Demographics byDebit User Segment

• Heavy debit-card users tended to be younger,
  married, employed full-timeand to have children
  present in the home
• Debit Non-Users tended to be older, male, have
  higher incomes and were more likely to be retired
  than the other user segment groups

Source Visa Payment Panel Study, 1Q-4Q06
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BenchmarkYour Portfolio
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Benchmark Your Portfolio

• Benchmark Against
• Visa System average
• Your Peer Group
• Benchmark Key Metrics
• PAU penetration, activation and usage
• Sales volume growth
• Account and card growth
• Key MCC growth rates
• Bill payment, MOTO, Internet, Fuel, QSRs
• Key Operations Metrics
• Authorization Approval rate
• Chargebacks

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Data Resources for Benchmarking

• Visa Online (www.us.visaonline.com)
• Consumer Debit Products Scorecard
• Visa Check Card Scorecard Issuer Guide
• Quarterly Visa System metrics
• Peer Group metrics ranked by sales volume tier
• Visa Account Executive
• Industry publications
• The Nilson Report
• ATM and Debit Card News
• EFT Data Book

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Consumer Debit Products Scorecard
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Set Goals
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Your Financial Institution vs. Visa System and
Peer Group Average

• Key Growth Metrics
• Penetration
• Activation
• Usage
• Average ticket
• Sales volume growth
• Power Scores
• Trx P x A x U
• SV P x A x U x Ave. Ticket

For illustrative purposes only
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Penetration
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Visa Check CardOpportunity to Increase
Penetration

• Point AWhere You Are Now

Point BWhere You Could Be
Visa SystemAverage
Signature-based/offline transactions only
Assumes full-year impact of penetration metric
changes all other factors remain constant.
Individual your results may vary, since a variety
of other factors can impact actual
results.Based on Visa Operating Certificates
for Consumer Debit, 3Q06
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Penetration Strategies

• Develop a Card Strategy
• All new DDA accounts receive Visa check card
• Best-in-class Issuers are penetrating 90 of new
  DDAs
• Ensure branch platform defaults to Visa check
  card
• Evaluate non-Visa check card customers
• Utilize Visa Solicitation Model for targeting
• Upgrade ATM and/or DDA-only accounts
• Use Performance Calculator to develop business
  case
• Develop activation program for upgraded accounts
• Incorporate telemarketing within first 14 days
  toencourage early activation

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Penetration Strategies (cont.)

• Educate Employees and Cardholders
• Provide training to branch employees
• Turn employees into Visa check card ambassadors
• Utilize Visa Check Card Retail Branch Training
  Guide
• Communicate product advantages to cardholders
• Safety, security
• Zero Liability policy
• Provisional credit
• Debt management and budgeting tool

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Penetration Strategies (cont.)

• Conduct Annual Account Acquisition Drive
• Portfolios need new accounts to offset attrition
• Strive for annual increase in new accounts of10
  or more
• Utilize Visas 2008 Retail Branch Promotion Free
  Gas or Groceries 365 Days a Year as one tactic
• Employ multifaceted approach
• Branch contests and incentives
• Issuer specific promotions
• Rewards
• Use Mystery Shopping to identify gaps

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Visa Check CardPenetration-Specific Materials

• Solicitation/ITA Direct Mail
• Uncarded
• Life Takes Visa Option
• Upgrade/Conversion Direct Mail
• ATM
• MC to Visa conversion
• Retail Branch Education Merchandising
• Customer Assistance Guide
• Educational Take-One
• Poster
• Tent Card
• Life Takes Visa Option
• 2008 Retail Branch Program Visa 365

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Activation
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Visa Check CardOpportunity to Improve Activation

• Point AWhere You Are Now

Point BWhere You Could Be
Visa SystemAverage
Assumes full-year impact of penetration
metric changes all other factors remain
constant. Individual your results may vary, since
a variety of other factors can impact actual
results.Based on Visa Operating Certificates
for Consumer Debit, 3Q06
Signature-based/offline transactions only
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Activation Strategies

• Provide Incentives

New and ExistingCardholders
Employees
Inactives
Develop ongoingactivation program Employ Visa
ActivationModel for targetmarketing Contact
monthly orquarterly basedon volume Use direct
mail, telemarketing, branchfollow-up calls
Reward for activation,not only for
accountopening Track new accountactivity with
VisaData Track
Use IVRs, VRO andother incentive offers based on
activation Contact new cardholders early (within
15 to 45 days of account opening)
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Visa Check CardActivation-Specific Materials

• Card Carriers
• Introductory/Reissue Card Carrier
• Conversion Card Carrier
• Upgrade Card Carrier
• Activation Education Direct Mail
• Activation Educational IncentiveDiscount Offers
  Letter Package
• Activation Educational StandardPackage Without
  Discount Offers
• Follow-Up Activation Letter Package
• 2-Panel Activation EducationalStatement Insert
• 4-Panel Activation EducationalStatement Insert
• Activation Take-One Brochure

• Merchant Premium Use-and-GetActivation Packages
  and Self-Mailers for
• Amazon.com
• Blockbuster
• Chevron
• Darden Restaurants
• Hallmark Insights
• JCPenney
• Starbucks
• The Home Depot
• Texaco

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Usage and Loyalty
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Visa Check CardOpportunity to Improve Usage

• Point AWhere You Are Now

Point BWhere You Could Be
Visa SystemAverage
Assumes full-year impact of penetration metric
changes all other factors remain constant.
Individual your results may vary, since a variety
of other factors can impact actual
results.Based on Visa Operating Certificates
for Consumer Debit, 3Q06
Signature-based/offline transactions only
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Usage Strategies

• Take Multipronged Approach
• Educate cardholders where and how to use
• Heavy users new places to use
• Light users benefits (security, budgeting)
• Ensure optimal daily spending limits
• Bill payments, other emerging merchant sectors
  have higher average tickets
• Develop a debit rewards program

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Usage Strategies (cont.)

• Take Multipronged Approach
• Develop a bill payment program
• Build annuity-like usage and improve retention
• Increase average ticket 74 bill payment
  average
• Develop operations infrastructure to supportbill
  payments and improve customer experience PPCS
  and Visa Account Updater
• Use Visa Bill Payment Propensity Model fortarget
  marketing
• Advocate security-based product advantages to
  displace cash and checks

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Develop a Rewards Program
Rewards Can Play a Critical Role in Expanding
Usage and Attracting New Card Users

• Rewards create an opportunity to
• Offer cardholders added value (incentive to
  change behavior)over checks and cash
• Differentiate debit card payments vs. ACH and
  otherpayment methods
• Increase usage among all segments
• Communicate overall value of debit with
  new,compelling message
• Visa Extras Rewards Program results have
  exceededexpectations
• Average 30 lift in usage
• Consider enhanced earn to encourage cardholder
  behavior

Based on Visa Extras program results individual
Issuer results may vary.
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Visa Check CardUsage-Specific Materials

• Low, Medium High Segment Targeted DM
• Low-User, Medium-User, and High-User Letter
  Package with Discount Offers
• Education Direct Mail
• 2- and 4-Panel Educational Statement Inserts
• Usage Educational Package (With and Without
  Discount Offers)
• Sample Channel Specific Copy
• Sample Usage ATM/StatementMessage Copy
• Sample Usage CardholderNewsletter Copy
• Email copy/templates
• HTML and Text Email (withand without Discount
  Offers)

• Merchant Premium Use-and-GetActivation Packages
  and Self-Mailers for
• Amazon.com, Blockbuster, Chevron, Darden
  Restaurants, Hallmark Insights, JCPenney,
  Starbucks, The Home Depot, and Texaco
• Visa Bill Pay materials
• Visa Extras materials
• National Promotions
• Security Program
• Tax Payment

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Use Visa Tools
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Use Visa Tools

• Marketing Resource Guide
• Visa Online
• Metrics, marketing, VBRs
• Pilot learnings
• PIN Terminal Training
• Instant Card Issuance
• Branch Best Practices
• Predictive modeling
• Solicitation
• Activation
• Usage
• Bill Payment Propensity
• Visa Extras Rewards Program
• Visa WebX Program

• Performance Calculators
• Best Practices
• VisaVue
• Visa Data Track
• Merchant Offer Program
• IVRs and VRO
• Hispanic marketing
• Operations enhancements
• PPCS and VAU
• Market research
• Market ready programs
• National promotions

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Visa Check CardMarketing Resource Guide

• Consultative, complete resource maps your
  business needs to Visa solutions
• Planning tools make it easy to build Visa Check
  Card marketing plans that optimize every stage of
  customer lifecycle
• Best practice programs make it easy to quickly
  deliver Visa Check Card campaigns to market
• Measurement tools help demonstrate positive
  impact of Visa Check Card programs on your bottom
  line

Hot OffThe Press!
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Visa Check CardPerformance Measurement Tools

• Easy to use, Excel-based tooldownloadable from
  Visa Online(VOL)
• PAU sensitivity model to analyzechanges across
  customer lifecycleand evaluate portfolio growth
• ROI calculators to estimatebreak-even and
  measureprogram impact
• In-branch penetration
• ATM upgrade
• Activation
• Usage

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Visa Check CardRetail Branch Training Tools

• Deepens product knowledge atthe individual
  employee level
• VCC Product Overview
• Customer Assistance Guide
• Talking/Listening Cues, FAQs,Welcome
  Call/Activation Scripting
• Provides quick, easy resourcesfor branch
  managers
• Branch Materials Overview
• Branch Promotion Overview
• Debit Branch Best Practices
• VOL Fact Sheet

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Visa Check CardBest Practices

• Provides latest Visa intelligence on
• Customer demographics
• Segment definitions
• Key messaging
• Tactics and marketing supportrecommendations
• Easy-to-use content is organizedby PAU lifecycle

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Order Your Materials Today

• Visit Visa Online atwww.us.visaonline.com/checkca
  rd1
• Visa Fulfillment
  1-800-235-3580
• Contact your Visa AccountExecutive
• debitmarketing_at_visa.com

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Summary
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Summary

• Benchmark your portfolio
• Set goals
• PAU
• Sales volume
• Account card growth
• Key MCC growth rates
• Develop strategies
• Use Visa tools to maximize results