1. Actionable intelligence that
drives Revenue & Profit in the eChannel…
Replacing Cash & Checks
with P2P Money Movement
Paul McAdam
April 26, 2010
Presented at
NACHA PAYMENTS 2010
© 2010. All rights reserved www.ecomadvisors.com

2. Research Objectives
NACHA and eCom Advisors partnered with FIS and PayPal to:
 Understand consumers’ awareness of P2P payments, and their
likelihood to use P2P payment services offered by a financial
institution
 Determine consumers’ understanding of the use cases of P2P
payments, the likelihood to use them
 Determine consumer receptivity toward a centralized money
movement solution offered by their financial institution (ePayment
Portal)
© 2010. All rights reserved Page 2

3. Research Methodology
 29 question, online survey
 1,180 completed surveys
 February 23 – 24, 2010
 Sample obtained from Survey Sampling International
 Estimated error rates: + 2.5% to + 3.1%
© 2010. All rights reserved Page 3

4. The research was designed to survey
“active” online banking customers
100%
88% “Active” defined as use within
the past 30 days
40%
14%
8%
Active Active Active Active Have Ever
Online Banking Online Bill Pay Mobile Phone Mobile Phone Sent a
to Access to Access P2P Payment
Online Banking Online Bill Pay
© 2010. All rights reserved Page 4

5. Survey respondent demographics
Income 65 or over Age
100K+ 15% 18 - 24
Under 25K 13%
14%
21% 25 - 34
55 - 64
13% 14%
75K – 100K
12%
50K – 75K 25K – 50K 35 - 44
30% 45 - 54
23% 23%
22%
Gender
Male
40%
Female
60%
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6. There is already strong awareness and
utilization of P2P payments
 66% aware it is possible to send P2P payment to an individual
using a computer
 26% aware it is possible to send P2P payment to an individual
using a mobile phone
 40% have sent an online P2P payment to another individual
 41% have used either online bill payment or a P2P payment
service to send an electronic payment directly to another individual
within the past year
– 24% reported doing this on at least a monthly basis
© 2010. All rights reserved Page 6

7. PayPal is the only widely recognized
P2P payment brand
Consumer awareness of P2P payment services
PayPal 93%
MasterCard Mobile MoneySend 10%
Obopay 4%
POPMoney 4%
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8. Most consumers are not aware of simpler
methods of sending P2P payments
Consumer awareness of ability to send P2P using:
Bank account and routing numbers 67%
Email address 37%
Mobile phone number 14%
© 2010. All rights reserved Page 8

9. Discussion topics
P2P Payment Concept Test
ePayment Portal Concept Test
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10. P2P Payment concept test
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11. P2P payment use case scenarios
Does not apply Definitely/probably would not Might or might not Definitely/probably would use
Sending money to a son or daughter in college 36% 16% 16% 33%
Sending money out of the country to a family member,
25% 26% 19% 31%
friend, associate, etc.
Splitting the cost of a gift (e.g. birthday gift, wedding gift,
12% 38% 26% 25%
etc.) with co-workers, friends or family members
Paying a friend back for your portion of a dinner bill
13% 42% 24% 22%
(splitting check at a restaurant)
Splitting the mortgage or rent with your roommate,
31% 33% 17% 19%
partner or spouse
Paying your babysitter, house sitter, dog walker,
23% 41% 19% 18%
gardener, house painter, etc.
Purchasing items from a garage sale or flea market and
13% 52% 19% 16%
paying the seller
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12. 48% are likely to use at least 1 of the 7
P2P use case scenarios…
… 21% are likely to use the majority (at least 4 of 7)
of the scenarios
10%
1 of 7
10%
2 of 7
52% 48% 7%
Not Likely to 3 of 7
likely to use P2P
use P2P 7%
4 of 7
6%
5 of 7
3%
5% 6 of 7 21%
7 of 7
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13. Likelihood to use P2P payments with
“does not apply to me” removed
Sending money to a son or 51%
daughter in college 33%
Sending money out of the 41%
country 31%
28%
Splitting the cost of a gift 25%
25% Definitely/probably
Splitting a dinner bill 22%
would use with "does
not apply to me"
28% removed
Splitting the mortgage or rent 19%
Definitely/probably
Paying your babysitter, house 23% would use
sitter, etc. 18%
Purchasing items from a garage 19%
sale or flea market 16%
© 2010. All rights reserved Page 13

14. Younger consumers are clearly much
more receptive …
Sending Purchasing
Paying
money to a Sending Splitting the items from a
Splitting the Splitting a babysitter,
son or money out of mortgage or garage sales
cost of gift dinner bill house sitter,
daughter in the country rent or flea
etc.
college market
% Likely to Use 51% 41% 28% 25% 28% 23% 19%
18 - 24 153 166 185 185 171 164 173
25 - 34 108 122 128 129 123 134 125
35 - 44 91 98 93 99 101 114 109
45 - 54 92 87 77 85 72 78 89
55 - 64 89 67 84 56 73 51 57
65 & over 62 52 44 48 37 48 40
Under $50,000 93 95 97 96 102 99 89
$50,000 - $99,999 101 96 101 103 91 93 109
$100,000 and over 122 125 109 106 118 121 116
… Receptivity increases slightly with income
© 2010. All rights reserved Page 14

15. P2P Payments: Benefits & features most
important to consumers
Craft your marketing communications around these points:
 Trusted brand behind the P2P service
 Online access to complete and secure payment history
 Able to easily send a payment in only 2 – 3 clicks
 Recipient receives funds electronically within a few moments
 Flexibility regarding funding account (DDA or credit card)
 Ability to send/receive payments with email address or mobile phone #
 Reduces need to write & mail checks and carry cash
27% rated the ability to send P2P payments using their mobile phone
as an important feature
© 2010. All rights reserved Page 15

16. Mobile banking consumers will be the
early adopters
Computer Mobile Phone
Online Bill Online Bill
Banking Payment Banking Payment
Sending money to a son or daughter in
33% 34% 55% 63%
college
Sending money out of the country 31% 33% 55% 70%
Splitting the cost of a gift 25% 27% 51% 63%
Splitting a dinner bill 22% 21% 46% 61%
Splitting the mortgage or rent 19% 19% 41% 51%
Paying your babysitter, house sitter, etc. 18% 23% 48% 61%
Purchasing items from a garage sale or flea
16% 17% 32% 44%
market
© 2010. All rights reserved Page 16

17. Smartphone owners are the most
receptive
Type of Mobile Device Owned
Total Survey Slider, Smart
Flip Phone
Population Candy Bar phone
Sending money to a son or daughter in
33% 28% 32% 46%
college
Sending money out of the country 31% 25% 34% 44%
Splitting the cost of a gift 25% 21% 25% 40%
Splitting a dinner bill 22% 14% 20% 32%
Splitting the mortgage or rent 19% 14% 17% 30%
Paying your babysitter, house sitter, etc. 18% 19% 20% 35%
Purchasing items from a garage sale or
16% 13% 17% 25%
flea market
© 2010. All rights reserved Page 17

18. Discussion topics
P2P Payment Concept Test
ePayment Portal Concept Test
© 2010. All rights reserved Page 18

19. ePayment Portal concept test
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20. Almost half of consumers would likely
use the ePayment Portal
Percentage of consumers likely to use ePayment Portal if
offered with current online banking and bill pay service
Definitely
Definitely would would not use
use 10%
20% Probably would
not use
10%
Probably would Might or might not
use use
29% 31%
© 2010. All rights reserved Page 20

21. 70% would likely use P2P payment
services within the Portal
Payment types likely to use in the ePayment Portal, among those who
expressed interest in the Portal
Make a bill payment 88%
Make emergency bill payment to avoid a late fee 75%
Send a P2P payment 70%
Receive electronic bills instead of paper statements 66%
Transfer money to an account I have at a different FI 62%
Have debit card charged for a P2P or bill payment to
49%
earn debit card rewards
Purchase and/or load value onto a gift card 45%
Have credit card charged for a P2P or bill payment
38%
instead of checking account
© 2010. All rights reserved Page 21

22. Mobile banking consumers will be the
early adopters of the ePayment Portal
Computer Mobile Phone
Online Bill Online Bill
Banking Payment Banking Payment
Likelihood of using the ePayment Portal 49% 53% 76% 83%
Likelihood of accessing the ePayment
16% 25% 59% 74%
Portal with your mobile phone
© 2010. All rights reserved Page 22

23. ePayment Portal: Benefits & features
most important to consumers
Craft your marketing communications around these points:
 Convenient -- can make all payments and transfers from one
central location
 Online access to complete history of all payment types
 Safe and secure because it’s offered through my FI
 A time saver
 Reduces need to write & mail checks
 Reporting tools to help me budget and spend within my means
© 2010. All rights reserved Page 23

24. Customer incentives/rewards may drive
increased ePayment Portal adoption
More or less likely to use the ePayment Portal
Likelihood to use Likelihood to use with rewards
45%
31%  49% likely to use
29%
the Portal
24%
20%  69% likely to use
the Portal if offered
15% an incentive
10% 10%
8% 8%
Definitely Probably Might Probably Definitely
would not would not or might would use would use
use use not use
© 2010. All rights reserved Page 24

25. Cash back awards are the most
desired incentive
Rewards and Incentives consumers identified as most valuable to
encourage ePayment Portal use
Cash back awards 75%
Loyalty points that can be redeemed for
7%
merchandise
Travel awards 6%
Preferred interest rates on on deposits and/or loans
5%
at the bank
Coupons/discounts from retail stores in your
3%
community
Reduced fees on deposits and/or loans at the bank 3%
Coupons/discounts from online retailers 1%
© 2010. All rights reserved Page 25

26. Some consumers may switch FI’s to
obtain the ePayment Portal
Among consumers interested in the ePayment Portal, 34% would
be willing to switch to a FI that offers the Portal
Definitely would
Definitely would
switch
not switch
10%
10%
Probably would Probably would
not switch switch
22% 24%
Might or might not
switch
34%
© 2010. All rights reserved Page 26

27. Leveraging the research insights:
Conclusions and action items
 Integrate P2P payments within your online banking and bill-
payment applications
– Emphasize simplicity, payment velocity and recordkeeping
 Many of the consumers receptive to the P2P and the ePayment
Portal concepts are Gen X and Y
– Leverage social media to raise awareness and encourage utilization
– Utilize the viral aspects of P2P payments to encourage customers to
build payee lists
 Rewards or incentives are not necessary to attract the early
adopters to P2P and the Portal
– But use of rewards/incentives (specifically cash-back rewards) should
be considered to encourage later adopters
© 2010. All rights reserved Page 27

28. Leveraging the research insights:
Conclusions and action items
 Integrate P2P payments and ePayment Portal services with your
mobile banking services
– Incorporate them into your new mobile banking rollouts
 Focus on driving adoption among today’s active mobile banking
and bill pay consumers
– Twice as likely to adopt as traditional online banking and bill payment
consumers
– More forgiving of early rollout glitches than later adopters
 Target and market to consumers who own the latest mobile device
technology, in particular Smartphones and iPhones
– Develop apps that enable transactions within 2 or 3 clicks and easy
access to payee lists and transaction history.
© 2010. All rights reserved Page 28

29. Contact information
eCom Advisors provides executive consulting and research services to banks, billers, vendors and
investors in financial services technology and online banking, billing and payments. Our
consultants possess 175+ years of direct operating experience, and are considered leading experts
in the industry. We help executives make their most crucial ecommerce management decisions.
Boston office
Chicago office
95 Washington St.
Canton, MA 02021
781.784.1663
Paul McAdam
eCom Advisors
One Westbrook Corporate Center, Suite 300 1 Westbrook Corp. Cntr.
Westchester, IL 60154 Westchester, IL 60154
630.865.3135
Atlanta office
paul@ecomadvisors.com
708.449.7743(office) Columbus office
630.865.3135 (cell)
3340 Peachtree Rd. NE
5650 Blazer Parkway Atlanta, GA 30326
Dublin, Ohio 43017 404.848.7709
614.734.8372
© 2010. All rights reserved Page 29