WHERE TO GO WHERE TO GROW

WHERE TO GO WHERE TO GROW

RodRKatzfeySVP,Interna,onalAcquiring

www.GlobalOnePay.com

Agenda

Introduc1on

GrowthLandscape

PaymentFacilitators

ValueAddedPrograms

AcquiringvsDeveloping

QA

Introduc,on


GlobalPaymentMethods:

!  Visa,MasterCard,AmericanExpress,Discover,JCB,andUnionPay

!  Alterna,vepayments

!  Directdebit

!  ACH(eCheck)processing

AboutGlobalOnePay

PaymentsLeaderSince2003!  GlobalOnePayisasubsidiaryofPivotalHoldingsLtd.,opera,ngagroupof

companiesincludingPivotalPaymentsInc.

!  400employeesand70,000merchants

!  Mul,pleNorthAmericanofficesandglobalacquiringpartners

!  Technologyandpayments-enabledsolu,onsforglobaleCommerce,SMBacquiringandintegratedpayments(ISV)markets

GlobalConnec,vityinover130GlobalPaymentNetworks

GrowthOpportuni,es


WheretoGrow…

" Domes,cUS:Ci,esontheRise…−  SiliconValley(NorthernCalifornia)−  Atlanta(FintechSouth)−  NewAmazonheadquarters#2

" NorthAmerica−  Canada

!  Cross-BorderOpportuni,eswithourneighborstothenorth

" Overseas−  Europe−  Australia&NewZealand

e-retailsalesintheUSviaAmazonin

2017:$54.47Billion

RetaileCommercesalesintheUSby

2021:$485.27BillionRetaileCommerce

salesintheUSin2016:

$322.17Billion


UnitedStatesvs.GlobalMarkets

ProjectedeCommSalesforthe10LargestMarkets

OthersCountriesAmongTop10

UnitedStates

E-commercesalesvolumegrowingat~12%annually

ROWcombinedgrowingatover17%eachyear


GlobalMarkets:ExpectedeCommerceGrowthby2019

$535B(US)

$87.5B(Germany)

$143B(UK)

$56B(France)

$44.9B(Canada)

$25B(Australia)

PaymentFacilitators

PaymentFacilita,onFacts" Priorto2014onlyahandfulofcompanieswereofferingPaymentFacilitatorservices:

•  PayPal•  Square•  Stripe

•  PaymentFacilita,onindustryisexploding!•  2013grewfrom153intoanes,mated662in2016.•  2013paymentfacilitatorspaymentvolumewas$6.9billion•  2016ises,mated$39.7billion•  mid-2017$58.4billionwasreached

*DatafromDoubleDiamondPaymentsResearch,Centennial,Colo.


WhyisthePaymentFacilita,onmodelgrowing?

Tech Growth: ISVs, SaaS, Marketplaces & Platforms " Moresojwarecompaniesareembeddingpaymentsintotheirsojware:

−  Mindbody,Quickbooks,Freshbooks,Slack,Eventbrite&more

"  TheriseoftheGigEconomy−  Lyj,Uber,Fivver,Upwork,TaskRabbit,Postmates

!  9.2millionAmericansareexpectedtoworkinthegigeconomyby2021(IntuitandEmergentResearch)

"  FlexibilityandUserExperienceControl−  MostavailablePayfacmodelsarelessflexible,withlimitedop,onsandofferlimletonothingforaddingtothebomomline.

−  Sojware/techcompaniesexpecttheirembeddedpaymentstobe:!  Nearreal,meac,va,onofpaymentacceptance!  Reducedunderwri,ngoverhead! Moreflexibilityintheirpaymentdistribu,on!  Comprehensiverepor,ngandcompliancesupport

!  Robustrevenuestreamfrompaymentservices


WherecanPaymentFacilita,onGo?

Growing Pains " BeingaPayfacistough

−  Lotsofrestric,ons&regula,onstoovercome!  Repor,ngandaudits!  Complianceandoversightismorecomplex!  Possiblemoneytransmimerlicensing

" MarketConfusion−  Imposterscrea,ngmarketconfusionforISVsandPlaoormstochooseasolu,onthatisrightforthem

" Developmentchallenges−  Everythingbuiltfromthegroundup−  Complexityofautomatedunderwri,ngtolinkfromonlineapps−  Whitelabelingorhierarchycreateachallengefordeveloperstobuild

" Cer,fica,onsmainlyintheUS−  VeryfewcompaniesofferPayfacservicesInterna,onally

Evolution of ISOs " Developingintomerchantconsultantstoofferassistanceinnumerousareasoutsidethepaymentecosystem

" AcquirersandISOswillofferPaymentFacilita,onsolu,ons

ValueAddedPrograms


MerchantCashAdvanceProgram

" Whatisit?:−  Alterna,vetoabankloan

!  Lessredtapeandrestric,onsfromatradi,onalbanklending.!  Easiertoqualifyandfastertofundwithlesspaperwork

"  TheWhys:−  Es,matedthat$80to$120billiondollarsofunmetfundingtosmallbusinesses

!  Es,matedonly$15billioninloansdistributedin2017

−  16%ofwouldbeborrowersneverapplyforfearofrejec,on" Benefits&StrategiesforISOs&Acquirers:

−  Reducedamri,onduetomerchantbeinglockedinacontract−  Bea"hero"byhelpingmerchantssucceed−  Addi,onalRevenuesharingwhenreferringamerchantforcashadvances


CashDiscoun,ng/CashSurchargingProgram

" Whatisit?:−  Discounttocustomersforpayingwithcash

!  Customerswhochoosetopaywithcreditcardwillbechargedanominalfee!  Requiresaterminalthatcanprocessthesurchargefees

! Merchantscanchargeupto4%intransac,onfees

" Pros&Cons:−  ISOscanexpectuptoa90-basispointoverinterchangemargin−  Notlegalin11states&USterritories:

!  California,Colorado,Connec,cut,Florida,Kansas,Maine,Massachusems,NewYork,Oklahoma,TexasandPuertoRico.

−  Aidswithmerchantreten,onbyprovidingauniqueserviceofferingoutsideoftradi,onalmerchantserviceprograms

AcquiringvsDeveloping


Pros&Cons Acquiring"  Gotomarketfast

−  Products,Resourcesandcorecompetencies−  Talent&experienceacquisi,on

"  Reducedbarrierstoenter−  Built-incustomerbase&product/technologyawareness

"  Financialgain−  Meetstakeholderexpecta,ons;increasemarketshare

"  HejyCosts−  Returnsmaycausefinancialfallout

Building

"  Buildaproducttofityourbusinessbasedoncustomerfeedback−  Integratesandfitsbemerwithbusinessmodelandculture

"  Highercostsindevelopment,resourcesandresearch

"  Sloweradop,on"  Needtobuildawarenessandcustomerbase

Industry-wide,morecompaniesare

acquiringbusinesses,notbuilding


Past&CurrentIndustryM&As

"  May2018:PayPalacquiresiZemle−  $2.2Billion−  Smallsbusinessmerchanttoolsin12interna,onalmarkets

"  May2018:AdobeacquiresMagento−  $1.7Billion−  IntegrateseCommerceintoAdobe’sSuiteofCloudPlaoormtools

"  December2017:FirstDatacompletesacquisi,onofBluePay−  $760Million−  77,000newmerchants&450sojwareplaoorms

"  December2017:TSYSacquisi,onofCayan−  $1.05Billion−  Geniusplaoorm;70,000merchantsand100+integratedpartnersintheU.S.

"  December2017:Van,vacquiresWorldPay−  $10Billion−  Interna,onaleCommercereach;300differentpaymentmethodsacross146countriesand126currencies

"  May2014:Van,vacquiresMercuryPaymentSystems−  $1.65Billion−  3,000POSsojwaredevelopers&dealers

Phone#:(XXX)123-4567EmailAddress:

THANK YOU!


RodRKatzfey

SVP,Interna,onalAcquiring

Email:[email protected]

WHERE TO GO WHERE TO GROW

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