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  • Whos On First with Apple Pay Matt Pfaltzgraf Bob Steen

    SHAZAM Product Manager President & CEO, Bridge Community Bank

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Apple Pay What is it?

    Apple Pay announcement: September 9, 2014

    Apples version of a mobile wallet

    Uses near field communication (NFC) technology

    Wave your iPhone 6 model over a contactless reader with your finger on the TouchID

    No need to open an app

    Requires an initial enrollment process using the Passbook app

    Uses tokenization as added payment security

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Source

    Apple Pay Future Potential

    Apples brand loyalty and strong reputation will definitely add legitimacy to the mobile wallet

    As merchants upgrade equipment for EMV, they will likely include NFC compatibility, too

    Apple Pays fingerprint ID and tokenization to address security

    Apple Pay reinforces support for NFC and EMV contactless in the marketplace

    * PaymentsSource Sept. 2014

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Tokenization

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Tokenization

    Token fundamentals

    Process of replacing original payment credentials primary account number (PAN) with a unique alias or alternate identifier which may be subsequently used to initiate payment

    It provides a static replacement for the PAN

    SHAZAM will be supporting Apple Pay and tokenization for both Visa and MasterCard

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Visa Transaction

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • SHAZAM Transaction

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • What it Means to Your Financial Institution

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

    http://www.google.com/url?url=http://www.patentlyapple.com/patently-apple/2014/09/apple-files-for-the-apple-pay-trademark.html&rct=j&frm=1&q=&esrc=s&sa=U&ei=J9BHVJ6MJcX8yQT0wYGACg&ved=0CCYQ9QEwAQ&usg=AFQjCNHEqTi_a-cm-OMopgopR4icP603Kg

  • Agreement Highlights

    Reporting

    Interchange fee

    Tokenization fee

    Collection of fees

    Participation requirements

    Potential audit implications

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Reporting

    Submit twice annually accounting to Apple to verify the fees it owes the company

    Issuer is subject to an audit if Apple isnt satisfied with reporting

    Issuer must also submit frequent reports to Apple giving its cards Apple Pay transaction statistics

    Apple requires issuers to produce, through the card network, nearly three-dozen categories of quantifiable information

    Number and dollar volume

    Credit and debit activity

    Average ticket

    Top 100 merchants by charge volume

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Interchange Fee

    Visa and MasterCard will collect Apples share of interchange income and gather operational data

    Credit card transactions: participating issuers will pay 0.15% of the transaction amount

    Debit card transactions: participating issuers will pay $0.005 per transaction

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Tokenization Fee

    Issuers will also pay tokenization fees to Visa and MasterCard to tokenize their cards

    MasterCard: $0.50

    Visa: $0.07

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Collection of Fees

    Issuers will not pay Apple directly, but will pay their card network, which will pass the fees on to Apple

    Issuers will receive an invoice each month from the network and will have 15 business days to pay

    Issuers are barred from recovering any Apple Pay costs from cardholders in the program and must absorb their own development costs stemming from their participation

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Participation Requirements

    Apple requires that at least 95% of the cards in their portfolio are branded by a participation network, such as Visa or MasterCard

    The agreement specifies certain types of cards issuers may exclude from this calculation including, ATM-only, gift cards, Health Savings Account cards and commercial cards

    No Warranties. EXCEPT AS EXPRESSLY PROVIDED HEREIN, APPLE MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, REGARDING THE APPLE PAYMENT PLATFORM OR ANY RELATED PRODUCTS AND SERVICES CONTEMPLATED BY THESE TERMS AND CONDITIONS

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Potential Audit Implications

    Apple may request no more than twice a year a written certification that the amounts are accurate

    If Apple disputes the certificate, its allowed once each year to hire an external auditor to go verify the issuers Apple Pay records

    If underpayment exceeding 5% is found, the issuer will have to pay the auditors fees

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Adoption, Usage and Wallet Composition

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Apple Pay Demographics

    Copyright Phoenix Marketing International 2015

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Apple Pay Users

    Copyright Phoenix Marketing International 2015

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Apple Pay Wallet by Type of Card

    Copyright Phoenix Marketing International 2015

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Apple Pay In-Store and In-App Purchases

    Copyright Phoenix Marketing International 2015

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Samsung & Loop Pay

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • New Entries

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.

  • Thank you! QUESTIONS?

    2015 SHAZAM, Inc. Proprietary & Confidential. Information is of general applicability and current as of date of presentation.