1. Electronic Billing and Payment Market
2012. Property of Latente, LLC.

2. Part 1: The Bill Pay Ecosystem

3. Bank Pays
Biller Pays
Consolidated (Bank Bill Pay) Model
Consumer Mailed Bill
$.35 - .55/trans.
Biller
Payment
By Check
Billing and
Online Banking & Payment Processor
Bill Pay
Application Payment
$.05 - .15/trans.
Instructions
debit credit
Consumer’s Bank ACH Network Biller’s Bank
2012. Property of Latente, LLC.

4. Notes on Consolidated Model
 Thick and Thin E-Bills
 Typically summary (Thin) data is stored at EBP processor. For full detail (Thick) consumer
is redirected to biller. Some billers outsource both Thin and Thick to EBP processor.
 Top 400 Billers (by volume) typically reached with electronic payments and
remittance (80% of volume)
 On Us– payees that are the FI themselves (e.g., credit card) may be stripped off
 Smaller Billers – and payments by riskier / new consumers – typically are mailed a paper
check payment
 Depending upon processor some electronic volume may go through intermediaries such as
RPPS for remittance
 Variations on the Consolidated Model
 FI provides bill payment application that uses “web services” from the EBP processor
 FI provides bill payment application and payment warehouse – uses single EBP processor
for batch remittance
 Banks attempt least cost routing - try to maximize economies of On Us/We, and routing
remittance through RPPS and others rather than 100% of volume to single processor
2012. Property of Latente, LLC.

5. Online Biller Direct Model
Consumer
Biller
Payment
Remittance
Instructions
Biller Website
ACH
Consumer’s Bank Biller’ Bank
2012. Property of Latente, LLC.

6. Notes on Online Biller Direct Model
• Variations of the Biller Direct Model
• Biller’s may use various models to host their Online Biller Direct site
• Host it themselves – purchasing software from a vendor and using their bank for ACH debits
• Outsource hosting to vendor – typically driven by per transaction fees (less $.05 depending on volume)
• Emergency / On-Demand
• Most prevalently an IVR (phone) oriented model (also available through call center and online)
• Immediate posting of payments (depending on payment type and risk model, may be memo post)
• Usually credit or debit card along with a convenience fee to cover payment (interchange) costs plus a
“penalty” (fee may be all to Biller or split with a service provider; can be $3 to over $15)
• Walk-in / Agent Pay
• Offered in Authorized (Biller contracts with agents to accept payments) – can include Emergency
• Also offered in Non-authorized / Convenience – agents accept payments for any biller their payment
processor can reach (Convenience typically has consumer fee of $1 to $3; includes cost of processing)
• Authorized often free to consumer – Biller pays agent a fee ($.50; includes cost of processing)
• Authorized may offer Immediate posting of payments (depending on payment type and risk model, may be
memo post)
• Usually cash, some checks and increasingly cards are used for payments
• Pre-paid telecom and cards
• Through authorized agents or biller store fronts
• Usually immediate posting to account or card (Convenience fee to consumer of $3 or more)
• Heavily cash, some checks and increasingly pre-paid and debit cards for telecom
2012. Property of Latente, LLC.

7. Part 2: Bill Payment Market Statistics

8. Consumer Payment Transactions
By Product Type
(billions of transactions)
160.6 CAGR
180 2.2 Other 0.2%
1.8
141.9
160
5.3 Alternative Online Payments 22.5%
2.0
0.7 5.5 4.3
2.3 2.7 2.5
3.5 Bank Bill Pay 18.5%
3
140 3.2
8.2
2.1
Online Biller Direct 13.0%
12.5
120 30.1
Prepaid Card 10.4%
27.5
100 ACH Check Conversion -5.0%
ACH Debit 12.0%
80 34.8
49.3
Check -8.1%
60
Credit Card 1.8%
40 Debit Card 7.2%
51.1 47.9
20 Cash -1.3%
0
2009 2014
Sources: Industry data; Latente analysis
2012. Property of Latente, LLC.

9. Bill Payment Market Size By Volume
24.9
Transactions (billions)
25 20.0 3.5
20 2.1 5.5 CAGR
3.0 ACH Debit 12.0%
1.9 13.0%
15 1.5 Online Biller Direct
2.3 Card 4.4%
5.3
Consolidated Bill Pay 18.5%
10
Check / Money Order
- -4.6%
_____
11.1 CAGR ALL TYPES 4.6%
5 8.8
0
2009 2014
Sources: Industry data; Latente analysis
2012. Property of Latente, LLC.

10. Comparing Bank Bill Pay and Biller Direct
Bank based usage is growing more rapidly and while both models will drive revenue
growth for vendors, Biller Direct is larger in terms of revenues.
Comparative Economics ($B)
Bank Bill Pay Biller Direct
5 yr. CAGR = 8%
5 yr. CAGR = 8% $2.6
$1.8
$1.3
$0.9
2009 2014 2009 2014
Transactions growing but on track to be over taken by Bank model.
Price compression will lower revenue per transaction but
Dynamic New entrants trying to find features to compete with Bank
increases in transactions will prop up revenue growth
consolidated bill pay advantages
Revenue Driver Transaction Growth Transaction Growth; Consumer Fees
Revenue Source Financial Institutions Primarily Receiving Payee; Consumers Secondary
Top 4 account for over 80% of the market with
Competitive Intensity Fragmented with Fiserv and Western Union as leaders
Fiserv/CheckFree dominant
Model is increasing in popularity and taking lead in terms of Often the starting place for first time bill payers. Billers continue to
Observations usage. Increased drive to integrate more tightly with e- prefer v. Consolidated model. As younger and latent adopters are
banking online and mobile to increase value and usage. less banked, Biller Direct or other biller friendly models may thrive
Downward pressure on pricing reduces margins; largest Biller direct is perceived to offer faster payment and more payment
Industry Trends banks seek control and pressure vendors on price and LCR; options (particularly cards); As E-Bill distribution grows Billers’
vendors responding with P2P and other value adds warm up to consolidated model if it saves them money.

11. Bill Direct Presentment and Payment Market (2011) is nearly $2.3B
Revenues By Product Type ($M)
$700
$600
$600
$500
$460 Distributed e-Bill
$410 Walk-in Convenience
$390
$400
Hosted Biller Direct
Walk-in Expedited
$300 Walk-in Prepaid Telecom
$225
Online Pre-paid telecom
On Demand
$200
$150
$100
$50
$-
Sources: Industry data; Latente analysis
2012. Property of Latente, LLC.

12. Penetration of Bank Bill Pay Varies Widely With
Significant Latent Upside
Estimated % of DDAs Subscribing to Online Bill Payment
By Bank Size
50
45
40
35
30
25
20
15
10
5
0
2012. Property of Latente, LLC.

13. Price Pressure Is On Bank Bill Pay Service
Providers But Varies by Bank Segment
Estimated. Annual
Change
Estimated Avg. Revenue / Transaction
Top 10 (8%)
Bank
Mid Tier (3%)
Bank
Community
Bank (3%)
Remittance
Only (10%)
0.00 0.20 0.40 0.60
Sources: Industry data; Latente analysis
2012. Property of Latente, LLC.

14. E-Bill Volume Is Growing, Potential Reach is Large
But Also Unrealized
Estimated Percentage of Bill Payment Transactions
100%
90%
80%
70%
60% e-Bills Not Distributed
e-Bills Scraped
50%
Unsubscribed e-Bills
40% e-Bills Paid
30%
20%
10%
0%
Sources: Industry data; Latente analysis
2012. Property of Latente, LLC.

15. Part 3: Bill Pay Competition Statistics

16. Consolidated Bill Pay Competitors - Market Share of Top Four
Share of Bill Pay Users Share of Outsourced Bill Pay FIs
Fiserv FIS ORCC iPay/Jack Fiserv FIS ORCC iPay/Jack
100% 2 100%
3
90% 90%
20 30
80% 80%
70% 70%
10
60% 60%
50% 50%
25
40% 40%
75
30% 30%
20% 20%
35
10% 10%
0% 0%
Sources: Aite; Fiserv Bill Pay Life Cycle Survey; Industry data; Latente analysis
2012. Property of Latente, LLC.

17. Bill Payment Market Competitors
Competitor Associated Market Ecosystem Offerings Competitive Position
Revenue Share
Fiserv Consolidated: 60% • Bank Bill Pay, Remittance • Fiserv is the number 1 or 2 player in all the primary segments in
$600M • e-Bill presentment and which it competes; Dominates bank bill pay and e-Bill distribution
distribution thru banks
Biller: $325M
15% • Biller Direct bill payment • Top tier banks deliver 70% of revenue (CheckFree); BofA 30%
(Online, IVR, CSR) • Patented “risk” model delivers 80% next-day payments via ACH
• Walk-In bill payment • Biller direct strength in utility and telecom segments; lagging in
financial services verticals; overall On Demand market share 30%
• Nationwide walk-in Convenience pay agent network (35% share);
slow to no growth market
• Integration with Corillian online banking, Mcom Mobiliti banking,
and CashEdge Pop Money – all market leading products
FIS / Consolidated: 10% • Bank Bill Pay, Remittance • Metavante boosted FIS to #2 in bank bill pay
Metavante $100M • e-Bill presentment • Focus is small to mid-sized FIs
• Biller Direct payment (IVR, • Smaller FI reach reduces value of e-Bill distribution – most of their
Biller: $20M
1% CSR, Online) e-Bill content is scraped rather than direct from the Biller
• Statement Formatting • Compete heavily on price and bundling with other payment services
(software) • Biller market is generally not a significant focus for FIS, but
strategically marketed to improve competitive position v. Fiserv
ORCC Consolidated: 5% • Bank Bill Pay, Remittance • At best number three player in most markets
$55M • e-Bill presentment • Well-regarded for integrated online banking and bill payment
• Biller Direct payment (IVR, product, ease of use, and budget management features
Biller: $55M
3% CSR, Online) • Risk model uses debit networks which is more expensive than ACH
• eLockbox • Strongest in the small and mid-market for banks and billers
• Uses eLockbox to gain greater share of wallet with small Billers

18. Bill Payment Market Competitors – cont’d.
Competitor Associated Market Ecosystem Offerings Competitive Position
Revenue Share
iPay/Jack Consoli- 5% • Bank Bill Pay, Remittance • Focus on reseller partnerships with online banking and other financial
Henry dated: • e-Bill presentment technology providers
• Regarded for tight integration with partners’ solutions
$50M
• Products easy to implement, low TCO
• e-Bill content available is all scraped
Western Biller: 25% • Biller Direct bill payment • Dominant provider in money transfer with nationwide agent network
Union $575M (IVR, CSR, Online) • Number 1 or 2 player in most Biller segments in which it competes
• Walk-In convenience bill • Western Union dominates the Walk-In Expedited Payments market
payment (60% share); heavily tilted to financial services (e.g., consumer credit).
• Walk-In expedited bill Has used with Speedpay (On Demand payments) to build share (45%)
payment particularly with financial services billers
• With wide spread adoption of bank bill pay and faster payment options
there, Expedited walk-in business is weakening
• Small but growing in fast growing pre-paid telecom market
Money Biller: 6% • Walk-In convenience bill • Competes against Western Union in the Walk-In Expedited segment
Gram $135M payment (heavily financial services) with about 30% market share; and a very
• Walk-In bill expedited bill minor player in Walk-In Convenience segment (less than 5%)
payment • MoneyGram has not made major efforts to compete outside of walk-in
• Recently signed a deal with Fiserv to enable Emergency Payments via
Fiserv’s bank billpay
IPP Biller: 2% • Walk-In convenience bill • Competes against Fiserv in walk-in convenience market (20% share)
$45M payment • Has a simpler off the shelf solution (browser-based) that is less
• Walk-In prepaid telecom expensive to implement for agents
• IPP competes heavily on price
• Focused on non-contracted segment and selectively going after
smaller authorized billers who get less attention from Fiserv
• Also distributes cell phones for its wireless telecom clients