Paper to Electronic - Card GFOA Conference August 2012│ Tucson, AZ

2 Color Scheme Accent Table Bank of America 16 Years with Bank of America 10 Years within Treasury / Card State, County, City, Higher Education, School Districts, and Commercial Clients Experience David A. Randolph, Vice President Card Account Manager Southwest Government

3 Color Scheme Accent Table City of Chandler 20+ years in the Public Sector 14 years in Banking Industry Experience Sharon Brause, CPPB, CPCP Procurement Officer

4 Color Scheme Accent Table Bank of America – National Card Portfolio Overview Over 52 years of experience in the Card industry, beginning with Bankamericard (Visa) Provide Card solutions to about 12,000 companies with an annual corporate card volume of about $24 billion Created the first dedicated vendor enrollment team to enroll your trading partners into ePayables $300MM 18-month Global Treasury investment, (e.g. Push Payments, Receipts Imaging, Global Card, Works) ePayables Card Shuffler Push Pay Purchasing Card Travel Card Pre-paid (incentive) Paymode - X Paymode – X + Paymode – X eInvoicing Check Wire ACH Achieved 15% in Card portfolio growth in 2009 Achieved 31% in Card portfolio growth in 2010* Achieved 13% in Card portfolio growth in 2011 *Above standard industry growth rates Card ProductsVolume – 2011 Purchasing Card $11,414,890,905 ePayables $10,030,186,000 Travel Card $2,964,841,373 Corporate One Card $3,515,768,362 Total $27,925,686,640

5 Color Scheme Accent Table Bank of America – Arizona Card Portfolio Provide Card solutions to approximately 28 organizations in AZ 2010 annual Card volume of about $53 million 2011 Jan – Oct Card volume of about $68 million Estimated 2012 total volume $78 million AZ Public Sector Group - City of Chandler Purchase Card Program – September 2000 ePayables Program – March 2009 Card ProductsVolume – 2011 Purchasing Card$57,650,624 ePayables$10,847,621 Total$68,498,245 Card Products Volume – Jan ‘12 – Jun ‘12 Purchasing Card$53,473,735 ePayables$6,342,083 Total$59,815,818

Payments Evolution How does Card compare?

7 Color Scheme Accent Table Payments Evolution

What is a “Purchase” Card?

9 Color Scheme Accent Table What is a “Purchase” Card? Payment Tool – Not simply a credit card Based on standard, Visa/MasterCard credit card Provides enhanced Internal controls & reporting Includes technology to streamline your purchasing process Purchasing Cards are given to employees to acquire goods and services for their organization Used to pay Accounts Payable invoices through ghost card application Central bill/central pay/corporate liability Most public and private organizations have Purchasing Card programs

10 Color Scheme Accent Table Transaction Flow Associations (Visa/MasterCard) Total Systems (TSYS) Works / Reporting Merchant Authorization

Why Purchase Card?

12 Color Scheme Accent Table Question: Why Purchase Card? Answer: Smart Spending Reduce costs associated with traditional fee-based payment types –Typically, 80% of transactions only represent 20% of total dollars spent –Streamline purchasing and payment procedures through less paperwork and processing time –Reduce the administrative burden

13 Color Scheme Accent Table Question: Why Purchase Card? Answer: Smart Spending $67.38 $89.21 Purchasing cards deliver savings of 76% over traditional purchase orders (POs). Savings Purchasing cards eliminate 6.3 days from the procure-to-pay process. 6.3 days Savings $

14 Color Scheme Accent Table Question: Why Purchase Card? Answer: Smart Spending Provides cash payout incentive when rebate terms met –Rebate payout based upon current annualized program spend –Calculation: Annual program spend x.0117 (117 BPS)  Program Volume: 2,000,000 x 117 BPS = $23,400 rebate Extends float and allows for more accurate cash balance tracking 1099 Relief – The combination of Regulations issued in August 2010 along with a Notice released in December 2010 means that card transactions are no longer subject to IRS reporting and withholding rules – Check transactions in 2011 and 2012 remain subject to the same rules as before – The planned expansion of reporting for check transactions has been repealed – IRS Resources: made-in-settlement-of-payment-card-and-third-party-network made-in-settlement-of-payment-card-and-third-party-network

15 Color Scheme Accent Table Question: Why Purchase Card? Answer: Smart Spending Authorization Controls –Merchant Category Code Blocking –Dollars per transaction, month, billing cycle or day –Number of transactions per day, month or billing cycle –Pre-purchase Approvals Accountability –Ensure cardholders account for all spending –Ensure managers are aware and accountable for their employee spending –Audit Reporting Visa/MasterCard Liability Protection….

16 Color Scheme Accent Table Visa Liability Waiver Program Visa’s misuse protection program is automatically provided with all Bank of America purchasing card programs and comes free of charge to AZ entities. –In the event that abuse occurs, members will be protected. –This coverage will be subject to the terms and exclusions of the misuse protection program The Visa Liability Waiver Program protects members against eligible losses that may be incurred through card misuse by a terminated employee –This coverage is included on all Bank of America Visa Corporate Card programs and based on the terms of the program will provide up to $100,000 reimbursement of eligible losses per cardholder. The Visa Liability Waiver Program applies to all transaction types –Internet –Mail Order –Telephone Order –Face to Face –Ghost Accounts –Department Cards

Card Evolution Why Automated AP Card?

18 Color Scheme Accent Table Question: Why Automated AP Card? Answer: Smart Spending Benefits to you: –Elimination of expenses associated with check i.e. printing, mailing, bank fees, fraud, etc –Extends float and allows for more accurate cash balance tracking –Provides cash payout incentive when rebate terms met  Program Volume: 10,000,000 x 117 BPS = $117,000 rebate –Incorporates into current AP process –Provider support for vendor enrollment Benefits to your vendors: –Converts the payment to electronic settlement thereby eliminating processing fees (internal and/or bank analysis charges) associated with accepting a check –Removes the mail float and funds availability factors from the collection process –Electronic delivery of the remittance information –Avoid giving out sensitive account number information

19 Color Scheme Accent Table Question: Why Automated AP Card? Answer: Smart Spending 19

How to Get Started…..

21 Color Scheme Accent Table How Do I Get Started? Consultation –Talk to a financial institution to understand:  Commitment for Card  Experience in AZ  Tools offered to manage a Card program  Additional services (Declining Balance Cards, Automated AP Card solutions, Receipt Imaging Services) –AP Analysis  Pick a project……. Agreements & Credit –Consortiums / Public Sector Groups Internal Support –Finance, AP, Purchasing, IT Implementation –Implementation Engineer  In depth understanding payment processes, GL chart of accounts, Organization structure, Reports, GL Export file  Training

Thank you! David A. Randolph