The only quantitative assessment of the payments industry’s readiness to ignite or adapt toinnovation and change

Proprietary & Confidential. Not for Distribution

without express written permission

The Innovation Readiness Index | Scope & Purpose

There is currently no consistent,

reliable benchmark that measures

how companies are addressing

innovation in the payments space.

The rapid evolution of technology is

making it critically important to

understand how well certain

segments are performing as well

as how specific companies compare

within each segment.

Scope

US Retail Payments

Purpose

Assess Each Player’s

Readiness to Ignite or Adapt

to the Innovative Changes in

Payments (vs. each other

and vs. other segments)

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The Innovation Readiness Index | Vision

Our vision is to be THE brand index for

payments innovation – a credible, reliable

ranking of companies.

It will help individual companies identify their

strengths and weaknesses vs. the competition.

It will signal where they need to improve their

external perception or where they can leverage

brand strengths.

It will demonstrate where certain segments fall

short vs. other segments and potential areas

they can leverage to move the needle forward.

Proprietary & Confidential. Not for Distribution without express written permission

The Innovation Readiness Index | How it Works

Methodology

With development and guidance from leading academics and industry thought leaders,

the Innovation Readiness Index leverages proven methodologies for measuring

innovation strategies and execution. Its structure ensures that it is not biased towards one

industry segment, enables rich external evaluation, and is uniquely distinctive within the

payments industry.

Categories covering 100 companies

Top companies from across the payments value chain including:

What’s In It?

• Professional payment industry perceptions of company performance using survey

methodology from PYMNTS subscriber base

• Patent strength, using competitive impact

• Financial metrics and performance

• Company investments, partnerships, active initiatives

Objective performance metric derived from multiple data points including

• Networks

• Issuers

• Money Transmitters

• POS Enablers

• Commerce Platforms

• Security

• Stored Value

• Processors

• Rewards & Loyalty

Proprietary & Confidential. Not for Distribution without express written permission

The Innovation Readiness Index | Components

Components

“The Index” – multiple, objective data elements combined to determine the value

for each company based on a rigorous methodology.

Self-evaluation survey – an in-depth analysis of what drives innovation within each

company and the ability to create value within the ecosystem. Categories include:

Purpose of each componentThe Index is designed to give all companies a “starting point” and reflect where they stand

today with regards to driving innovation. In addition, it will also reflect how individual segments

compare to each other – For example are Rewards companies leading the way vs.

Processors?

The self-evaluation survey is a deep dive into the “what” of a particular company. It provides a

richness of the process, focus and value captured by innovation. Perhaps more importantly, it

will allow you to compare how your institution handles innovation vs. your peers or other

companies within the ecosystem by indexing across all other participating entities.

• Role of Innovation

• Value Proposition

• Sources of Value

• Monetization model

• Ignition strategy

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The Innovation Readiness Index | Program Architects

David Evans

Karen Webster

• Founder, Market Platform Dynamics

• Visiting professor at University College London & the University of Chicago

• Ph.D. in Economics, University of Chicago and Author of Paying with Plastic

• CEO, Market Platform Dynamics and President, PYMNTS.com

• One of the world’s leading experts on emerging payments and commerce

• Masters Degree in Marketing from John’s Hopkins University

• Recognized leader in the successful design and deployment of new products and

emerging payment strategies worldwide

• Over 20yrs experience of working with financial institutions and retail partners

• Managing Director, Market Platform Dynamics

• MBA in Finance from the University of Chicago Booth School of Business

Gloria Colgan

Josh Lerner• Jacob H. Schiff Professor of Investment Banking at Harvard Business School, and

head of the Entrepreneurial Management unit

• Ph.D. in Economics from Harvard

• Author, The Architecture of Innovation, The Venture Capital Cycle, The Money of

Invention, and Boulevard of Broken Dreams

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The Innovation Readiness Index | The Output

Proprietary Report & Analytic Platform

Participating companies receive access to a detailed annual report with

summary findings, company and industry rankings/benchmarking based on:

Robust Analytic Platform

PYMNTS will create and host a robust analytic platform which allows each company to cross-tab and

analyze responses for categories in which they participate. The data contained within the platform will

allow participating companies to benchmark themselves against the competition across a number of

dimensions including external perception scores, patent value and strength, innovation investment

history, org structure and culture, financial commitment, strategic focus, degree to which the company

has influence on the rest of the ecosystem, asset value and innovation rigor

• Quantitative index

• Perception of the company based on feedback from PYMNTS.com

subscribers

• Patent strength

• Financial metrics

• Four additional metrics that combined comprise “the index”

• Self evaluation score indexed vs. competitors and vs. other payment

segments

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The Innovation Readiness Index | Example

Example report – Patent Information

Qu

alit

y

Co

mp

etitive

Im

pact

Quantity

Portfolio Size

Client

Bubble Size:

Patent Asset Index™A

B

CD

HF

I

E

G

Proprietary & Confidential. Not for Distribution without express written permission

The Innovation Readiness Index | Example

Example report – Evolution of patent portfolios over time

Bubble Size:

Patent Asset Index™

Company A

Company B

Qu

alit

y

Co

mp

etitive

Im

pact

Quantity

Portfolio Size

Proprietary & Confidential. Not for Distribution without express written permission

The Innovation Readiness Index | Participation

Complete access:

Participation in robust self-evaluation.

Results from self-evaluation indexed to

other participants and included with annual

report and analytic platform, plus critical

patent insights. In addition, company

receives quarterly updates, including key

patent filings, investment activity and new

product introductions.

Baseline:

Self evaluation and final report

+ Quarterly reports available

+ Analytic Platform available

Proprietary & Confidential. Not for Distribution without express written permission