Enabling Electronic Payments

1. Enabling Electronic Payments Presented by Atiba Phillips Principal Consultant INFOCOMM Technologies Ltd.

2. Agenda • A little about INFOCOMM • Introduction to Electronic Payments • Why e-Payments? • Key Success Factors • A Case Study from T&T

3. What are electronic payments? Types of electronic transactions Electronic Payments are payment transfers for goods and services made electronically. Introduction B2B B2C C2C G2C / G2B M2M (Mobile)

4. The ability to pay electronically is at the heart of e-business Payments are already leaving the economy electronically… … and very little is coming in. Why Electronic Payments? Electronic Payments stimulates Trade and Entrepreneurship …and is critical to the internet-based and knowledge-based economy Why Electronic Payments?

5. Overview • Payment types / Technologies: • Credit and Debit cards • Stored-value cards • E-Wallets, Digital Cash, etc. • The Automated Clearing House (ACH) / RTGS • Payment Channels • Point-of-Sale • Telephone • Internet • Kiosks / ATM • Mobile Payments: Cell Phones, Wireless, RFID etc.

6. Critical Success Factors To ensure that robust credit and debit based e-payments are facilitated there are threekey lines of action: Ensuring the legislative framework is appropriate Ensuring the infrastructure requirements are met Encouraging trust in e-payments by the SME and consumer community.

7. Legislative Framework Cornerstone Legislative Items Include: • Electronic Transactions Bill • Data Protection Bill • Office of the Data Commissioner • Electronic Funds Transfer (Crime) Act • Omnibus Cyber Crime legislation For Government, additionally: Exchequer and Audit Act – subsidiary regulations and Order papers

8. Pre-requisite Infrastructure Minimum Infrastructure Required include: • Domestic Internet interconnectivity/ routing • Domestic businesses with on-line business interfaces • Internet accessible Payment Gateway into a domestic inter-bank network • Competitively priced Internet Merchant Accounts • (third party) payment service providers (PSPs) • (third party) authentication service providers

9. TRUST • People trust people not computers; and: • People have absolutely no sense of humor when it comes to money.

10. Instilling Trust in e-Payments Instilling trust is a complex issue. Some approaches include: • Promotion initiatives including through Government as a model/ leadership user • Public-Private-People initiatives (e.g. e-Business Roundtable) • “National Trust Councils” to promote Local (and possibly) Regional “Trust Marks” for local / regional e-commerce websites • Better Business Bureau and on-line consumer protection initiatives

11. Benefits • Myth: “there is only a small ICT savvy section of the market – there’s no demand” • Fact: A broad cross-section of the society is interested in convenience and value • Proof Points: • 20% year-on-year LINX POS debit demand • Sharp uptake in cellular market • Myth: “ICTs only increase costs, besides front-line labour wouldn’t be able to adapt” • Fact: Even certain ‘labour intensive’ sectors have pervasive uptake of ICT • Proof Points: • For eg. touch screen installations in restaurants are now pervasive • Businesses realise the benefit for speed and inventory management • CSRs have learnt to use the technology effectively • The advent of e-payments is critical to the creating and sustaining competitive businesses and economies

12. Consumers want to pay online!! Government Utilities Business Consumer Shopping .com

13. A Case Study • The Trinidad and Tobago Inter-bank Payment System

14. LINX: Brief History • Seventeen (17) years ago, all commercial banks throughout T & T began exploring the concept of collaboration and shared (particularly ATM) infrastructure. • Fourteen (14) years ago the Bankers Association of Trinidad and Tobago (BATT) formed a company called LINX and formed the Board. • In October 2004, BATT and the Central Bank of Trinidad & Tobago, approved the formation of Trinidad & Tobago Interbank Payments System Ltd (TTIPS), and the company’s name was registered. • TTIPS primary purpose is to provide a Cheque Alternative Infrastructure, rather than a cheque clearing facility. • Since its launch, over 445,000 transactions have flowed through the system (2006) – 225,000 transactions last month.

15. LINX • machines and 300+ ATMs on the Network • there are 8000+ POS machines at merchant sites • LINX™ clears through the RTGS (ie, not the ACH) • The existing owners of the LINX™ network are the following banks: • Republic Bank • RBTT • Scotia bank • First Citizen’s Bank • The first Licensee to the LINX™ network is the Eastern Credit Union co-operative Society

16. TTIPS • The Automated Clearing House • in the case of payroll, a company can send one file of employee payments to any one bank and have all employees’ accounts credited regardless of the employee’s bank - automatically • Companies can also receive or make payments to suppliers and clients. • Cheaper, faster and more convenient for the consumer, the bank and for you!

17. Thank You!!!! Atiba Phillips Managing Director INFOCOMM Technologies Ltd. mobile:1(868) 683-6300 e-mail: atibaphillips@ict.co.tt web:    www.ict.co.tt