1. Private, Secure, Guaranteed ACH Credits – The Next Generation of Online Payments Samantha Carrier, Director, eCommerce, NACHA

2. 2 Agenda Market Demand The Payment Method Defined Demos Stakeholder Benefits The Pilot Defined The Role of eWise Pilot Timeline Q&A

3. 3 Market Drivers Rapid growth of Internet commerce has led to industry challenges. Security and privacy concerns  50% of US Internet users avoid making purchases online, afraid financial information may be stolen (CyberSecurity Alliance Research 5/06)  Nearly half of consumers avoid online Bill Pay due to security concerns (comScore Networks, cited in American Banker 4/20/06)  Alternative online payments will account for 26% of eCommerce volume by 2009 (Celent, 5/06) Continued fraud and chargebacks  6% of good sales lost due to fraud/risk screening (Cardline 2005)  Fraud is the top reason given for chargebacks on several networks (American Banker interviews with network executives, 1/17/06)

4. 4 Market Drivers Cont. Businesses want payment options − 72% of consumers surveyed say the have abandoned an online payment − 23% of households don’t have a credit card − 45% of households w/in 5% of credit limit State and Federal Agencies want payment options − High fees with existing payment options − Paper based payments prevalent

5. 5 The Private, Secure, Bank-Authenticated Payments Solution ‘Credit Push’ simply refers to using online banking to initiate Internet payments Consumers keep financial information private – never disclosed to the seller/business Seller/business receives real-time authorization of guaranteed payment (ACH Credit) Financial Institution authenticates the buyer, reducing risk, fraud, and charge backs Relieves seller/business burden to secure/protect consumer financial information

6. 6 Demos Consumer Purchases Bill Payments Funds Transfers

7. 7 Stakeholder Benefits – State Governments Real-time authorization of a guaranteed payment (ACH Credit) Increase use of electronic payments Reduce costs FI Authentication - reduces risk and fraud

8. 8 Stakeholder Benefits – Consumers Security and privacy – no financial information shared with the seller/business Familiar user interface with online banking More payment control and flexibility Consumers are most comfortable sharing private financial information and account access with their Financial Institution

9. 9 Stakeholder Benefit - FIs Use existing infrastructure - costs to support this channel have increased in the areas of authentication and security (FFIEC Guidance) Create new potential revenue stream - FIs generate little direct revenue from the online banking channel today Grow the eCommerce ‘pie’ and enable new online transactions Take a leadership role in privacy

10. 10 NACHA’s Online Payments Pilot Consumer transactions tested: online bill payments, purchases, account to account funds transfers Why run a pilot?  Evaluate potential markets for new online payment type w/privacy, security and guaranteed payment features  Evaluate level and structure of fees and impact on adoption  Determine costs, benefits and net economic benefit to all stakeholders

11. 11 NACHA’s Online Payments Pilot Pilot Participants:  Buyer’s FI (Guaranteeing ODFI)  Seller’s FI (Receiving FI)  Businesses (state and federal govt. agencies, online merchants, billers)  Third Party providers (enable FI and business customers)  eWise (pilot network provider)

12. 12 Participation Requirements Participation Requirements:  Buyer’s FI (Guaranteeing ODFI) must be FFIEC compliant for online banking  Businesses must be sponsored by a Receiving FI  Receiving FI warranties performance of sponsored businesses  Resources necessary for integration work with eWise Pilot Fees  There is no registration fee to join the pilot  Interchange and network fees will be collected  Fees will vary by transaction type

13. 13 About eWise eWise is an international provider of online payment systems and online banking applications – offices in US, UK and Australia Patented technology Customers include major international Fortune 500 banks Selected as technology provider for NACHA’s POC in January 2005 Successfully completed the POC technical test - meeting or exceeding all success criteria Will provide the eWise network as the Pilot Processor eWise network hosted & supported by Unisys Outsourcing

14. 14 Pilot Timeline Recruitment is currently underway Complete Pilot design by December 2006 Pilot launch in 2007 Pilot run time 12 months

15. 15 Next Steps INTERESTED IN LEARNING MORE ABOUT THIS PAYMENT TYPE AND THE PILOT? Check out the new Online Payments Pilot Website at paymentspilot.nacha.org Contact Samantha Carrier at NACHA: scarrier@nacha.org regarding pilot participation scarrier@nacha.org Contact eWise at pilot-info@ewisesystems.com for technical and implementation informationpilot-info@ewisesystems.com

16. 16 Q&A