B2P: Strategies to convert consumer

check disbursements to electronic

payments

Annette Tedesco

Bright Horizons Family Solutions

Seth Blacher

Wells Fargo Treasury Management

June 1, 2016

© 2016 Wells Fargo Bank, N.A. All rights reserved. For public use.

Who Is Bright Horizons?

A Family of Solutions at Work

© 2015 Bright Horizons Family Solutions LLC 1

Customized child care and early education centers at or near the work site

Family support services for dependents of all ages, meeting short-term and long-term needs

Educational advisory services for employees with newborns to high school students

Program management and advisory services for employees going back to school

Work/life consulting to increase effectiveness of people strategies

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Topics

What’s trending?

Perceived barriers to business to person electronic payments

New opportunities

EdAssist case study and best practices

What’s trending?

* Federal Reserve, “2013 Payments Study,” revised July 2014

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Consumer behavior is changing …

2005 2013

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….with the smartphone as the key catalyst

U.S. mobile payments (Billion $)

28% of smartphone

owners have made

a mobile payment

1.9 Billion

smart phones sold

in 2014

Half of all e-bills were delivered via a

biller website or mobile app

71% of US adults over 18

own a smart phone

(2014)

Sources: First Data, Carlisle & Gallagher Consulting Group, Square, Intuit, statista, tech crunch , federal reserve study

$36

$450

$1,080

2012 2015 2019E

63% CAGR

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… driving the move from checks to mobile P2P

payments

Source: Aite Group, Sizing Person to Person Payments in the US, November 2015, ClearXChange, 2016.

40%

32%

12% 8%

0%

10%

20%

30%

40%

50%

Mobile P2P payments by generation

Top banks helped consumers send an average of $21 Billion P2P payments in 2015

3% 6%

2013 2014

Mobile P2P payments have doubled in the

last year

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EdAssist’s views on trends

Deep Thoughts…

1.Checks can be costly and unreliable

2. Faster is better

3. Giving the customer choices is key

Checks sent to consumers from U.S. businesses each year

3 billion

* Federal Reserve, “2013 Payments Study,” revised July 2014

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Perceived barriers to B2P electronic payment

adoption

Gathering sensitive consumer information, like bank account number

It’s difficult to sign up to receive electronic payments

Concerns about the security of mobile or electronic payments

Opportunity

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6 billion people on earth

4.8 billion have a mobile phone

4.2 billion own a toothbrush

Sources: Mediabistro, Dream Systems Media, AdAge

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Uniting Banks to Provide a Better Payments Experience for Everyone

Overview of ClearXChange

Chase Capital One

Bank of America

First Bank

First Tech

BB&T

PNC

US Bank

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Moving B2P payments from paper to electronic

Instead of sending a check, send an electronic payment* using email address or mobile phone

Leverages the clearXchange network

No need to collect and store sensitive bank account information

Expedites payment to consumer payee

clearXchange facilitates payment routing using only consumers’ email addresses or mobile phone number

*USD payments to consumer payees with US bank accounts

B2P is future functionality and is subject to change or cancelation.

EdAssist:

Case study and best practices

EdAssist™ Summary of Services

© 2015 Bright Horizons Family Solutions, LLC

Educational Advising

Education Network

15

Streamlined Payment Processing

Add Electronic Payment Option for Participants

Solution without storing bank information

Competitive advantage, leading technology

Goals for new solution

How EdAssist made it easier for our

customers to do business with us

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How EdAssist sends electronic B2P payments in

4 easy steps

4 3 2 1

Payee provides consent to

receive electronic payments

Ed Assist sends payment

instructions to bank

Funds sent next business day with email or

text notification

Funds received in 2 business

days.

Unregistered payees have 14 days to sign up

with cXc or bank

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How EdAssist promotes switch to electronic

Require new customers to review payment options

Remind existing customers at each log-in

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Introducing Customer to clearXchange

Ed Assist payment preference selection

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Business sends:

– Email to Customer

Business receives:

– Sent

– Failed

– Returned

Customer’s Bank/clearXchange sends:

– Text

– Email

Notifications

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Risk is low when consumer information is accurate

Dispute process managed by business’ bank

Similar to ACH dispute

• If funds are available, then recovered

• If funds unavailable, typically not recovered

Risk considerations

Sending funds to incorrect email address or phone number

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EdAssist approach to implementation

Integrated single-stream solution with internal transaction system

One payment file with all payment types daily

Automated machine-readable notifications

Internal

Customer Facing

Market electronic payment in customer facing communications on web portal

Set preferences in personal profile

Email notification when payment is processed

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Results

1 client, 400 customers served

100 transactions (25 %)

Pilot

Forecast 2 clients, ~900 customers served

600+ transactions (66 %)*

Actual

Has our strategy been successful?

*16% of tokens unregistered, check cut as alternative

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Customer feedback

Higher sense of security

Efficient

Easy to sign-up

Lessons learned

clearXchange is not direct deposit

Some banks may require customers to take an extra step to receive funds

Communication from customer bank depends on customer preferences

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The road forward for EdAssist and you

Education

New Outreach from banking partner

Information with check payment

How can we increase participation?

How can you move consumers to electronic?

Combine payment processes where they diverge today

Convert check payments

“The smart phone is the Swiss army knife of

modern living.”

Source: Javelin Strategy and Research

Thank you