Sample Business Plan International Mobile Payment

! ! I Additional Information I ! I I I I I I I I I International obilePayment,Inc. M Presented by Byron Head CFO byronhead@impay.eom 214.683.8118 IMPay is Represented by i I I Jenkens & Gilchrist J. Rowland Cook, Partner rcook@jenkens.com www.jenkens.com I I I Executive Summary - Additional Information | I International Mobile Payment, Inc. Introduction To describe our offerings we would start by describing some familiar scenarios. any of the actions that result from we don't or we can't. IMPay will eliminate the don'ts and cants and i "I'm sorry we don't or can't" i 1. Break bills that large 2. Take that currency 3. Take travelers cheeks 4. Take that credit card 5. credit cards 6. Take cash "Ok, well then I guess I will" 1. Go to the bank when it opens 2. Go to the ATM machine, if you can show me where one is 3. Get more and different credit cards my currency 4. Get travelers checks cashed into the local 5. Trade my country's currency for some of your country's currency that is not nearly as valuable or pretty as mine. 6. Not buy anything If you had access to all of your money or lines of credit and everyone you did business with or bought from could take your I i i i I i "money" from whatever source you made it available and it was available to you all of the time then you could just IMPay. Until now, convenient, secure, anywhere, anytime access to funds and the ability to combine access and payment has been impossible. i What Differentiates the IMPay transaction network from its competitors is I *:- The ability of businesses or individuals to aggregate access to all funds into one account or setup special accounts for special purposes such as promotions and incentives. .:. The ability of businesses or individuals to simultaneously conduct multiple electronic transfers of funds to and from multiple bank accounts, credit card or phone accounts. I i We have combined certain services for each of our target markets. They are: Service Package 1 - "IM Power Our Bank" I Developed to allow financial institutions branded wireless access to Merchant and Consumer Accounts. Benefits to financial services customers ate I _. IMPay is a hosted wireless transaction network. The immediate benefit is no hardware or software to buy or personnel to hire. The IMPay service may be tied to other transaction based service offerings such as stocks and insurance. i ".- I I ":* Business or Merchantloyalty andhigher accountbalances, which in turnraises lendinglimits. .:. Merchant customers may partner with the financial institution to promote their business through customer incentive programs. .:- them as a financial institutionin ato groups of merchantaccount members as partof an incentive programto differentiate Institutionsmay offer incentives competitive marketplace. •:. Reducedcosts throughincentive links between merchantand consumeraccounts. Forexample- no checksto process. i I -_. Throughthe offer of IMPay accounts, financial institutions can offer value added services such as Time & Expense Management,Purchasingand Payroll. OCA_Urs IMPay supply merchant, consumer .:. or smartcard accounts."Powered"institutionwith market informationthat will the between I and credit I "Never Possible Before" benefits include •_. Information on transactions between merchants and their customers and the financial institution has been impossible to informationcanby linking offer incentivesby groupsof merchantsto through consumers. collect except be usedto accounts and cards and lines of credit targeted IMPay. Merchant and consumer market Enabledwireless transactionsinclude i I • Bank-to-Bank - transfer to receive payment from another business or consumer bank account. Make payment to another business or consumer bank account. The IMPay transaction network initiates a bank-to-bank funds transfer. Bank-to-Credit Card - transfer of funds from a merchantbank account as a credit to a credit card account. If the merchant subscribesto the credit card company's services IMPay issues a "credit" from the merchantbank account to the business or buyers card account. If the merchant does not subscribeto the credit card company this is a funds transferto the IMPay transactiom networkand a credit issued to the credit card company by IMPay. Smart Card-to-Crcdit Card - Smart cards are tied to bank accounts or are stored-value cards. IMPay issues a debit to the smart card account or to the smartcard network and issues a credit to the credit card account. Credit Card-to-CreditCard - Credit card accounts are debited and credited by IMPay transactions simultaneously and reconciled immediately. Phone Account-to-Bank or Credit Card - stored-value or pre-paid phone accounts are debited and a credit is issued to a bank account. I • I • i • I • I Service Package 2 - "IM Power My Business" Merchants who adopt single or multiple IMPayaccounts benefit from I .:. No hardware,softwareor personnel cost to offer customers IMPaybenefits. I '¢- Ability to take any transaction regardlessof the source of funds. _¢. Lower transactioncosts than bankor credit card merchantaccounts. .:- Multiple destinations for funds from a single transaction - capital account, payroll account, sales tax account or retirementaccount. I I .:. in frequentbuyergroups. and immediateto targeted customersin the form of gifts or productpromotionsor membership Loyalty incentives direct •:° Cross merchant promotions. "'A round of golf today at the Sheraton Hotel and you get a free drink at anyone of the I following restaurants or clubs." When you "Pay" with IMPay at that restaurant or club, IMPay already knows that you played golf at the Sheraton and creditsyourbill with that incentive. I I ._- Time and expense management through special IMPay accounts. I .:. that have Group at any one of the shops in the group or as a and paid shops or a Mall smart card. Merchant shopped Incentives to targeted customers. Such mall group of with any credit oroffering incentives to customers i "Never Possible Before" benefits include •:. For merchants to easily offer concurrent and linked incentives to targeted customers is not possible without considerable effort. Incentive IMPay accounts can work with single or multiple merchants. This type of loyalty I o:. IMPay accounts may be pre-configured to offer incentives to repeat customers automatically. incentive program is impossible to do now with any credit or smart card accounts. I Merchants are forced to use coupons and offer on the spot discounts which are inconsistent and difficult for traditional business accounting systems to track. Market reports are very difficult to compile using these types of incentives. I °:. Greatest benefit to merchants is that multiple IMPay accounts location for promotions offered through information that compares their business to similar businesses in the same area or allow merchants to receive marketing IMPay. i o:. foods department and your coffee purchase is free." that take effect immediately. Businesses may sponsor branded IMPay incentives "Shop with us today in our gourmet And if the customer leaves without their free coffee you can send an emall message to their mobile phone to remind them I to come back any day to take advantage of shopping that day. These incentives are impossible now through merchant accounts with either banks or credit card companies. I .:. Merchants may use IMPay stored-value accounts in place of multiple merchant accounts. accounts exist in a one-to-one relationship. Usually merchant and card I IMPay enables card accounts when the merchant desires. This is rather like Stored value having the ability to pay their bank or credit sales to IMPay buyers to be credited to stored value accounts. a merchant may be transferred to existing credit card bill over the phone once it has been configured to do so. I Product 3 - "IM Power Me, the Consumer" Consumer benefits include I .:. Ability to consolidate all phone, bank, credit or smart card accounts into one payment account. I .:. The ability to custom configure the way you will pay. You may configure your IMPay account to pay any transaction from $1 to $5 dollars by billing it to my cell phone account, any payment from $5 to $100 dollars deduct it from my bank checking account, and any payment over $100 is billed to my American Express account. I •:I " Set up multiple accounts with single or multiple ways to pay. Pay directly with any available account at any Merchant or Business that subscribes to IMPay directly or through their financial institution. I -:- Pre-configure thecharged to your smart card and any purchase over $25 is to $5 will be charged to your mobile phone bill, $5 to $25 is way to pay. For example, any purchase form 5 cents charged to your American Express Card. i .:. Get cash from ATM machines that subscribe to the IMPay transaction network. •:" Get separate IMPay stored value accounts for children, teens or as gifts for friends or family. You can use the stored value at any participating IMPay Merchant or Person to Person. ¢Get consolidated currently hold. spending information to develop your own profile regardless of the number of accounts you I ! ! •_- Pay by talking to your mobile device using Talk-N-Pay. I Talk-N-Pay has the ability to train the software to your language and more importantly your dialect of that language. This is a significant advantage in countries that are multi-cultural and multi-lingual. I I Marketing Strategy The need that our service satisfies is secure convenient access to any and all sources of money or credit for businesses or Your wireless consumers, phone or PDA becomes a remote control for your money. Financial institutions want to gain market share by offering more convenient and useful services and information to merchant and I consumer account holders. Merchants want to gain market share by making their products available to any and all businesses and consumers. Merchants want I to incent their best business and individual customers to continue to do business with them. Consumers want to pay in the most efficient and least expensive way. Consumers want to take advantage of merchant discounts and incentives. Secure Convenient access to money and credit increases the volume of all buy/sell transactions. II I transactions is provided by an easy to not on the wireless network provides security. Convenience securely on the Intemet and use interface to mobile wireless devices that connects to the Internet and conducting buy/sell The potential access to these services is a market of over 1.2 billion mobile phones and 600 million wireless Intemet connected by devices 2004. The wireless Internet is as personal as the cell phone and more useful. It has spread faster and is available to a larger number of I I businesses and individuals than the wired Internet. There are 700,000 banking institutions with 1.6 trillion merchant and 15.7 trillion consumer accounts worldwide today. I I How will we market our service? Our market differentiators are aggregating multiple bank, credit and phone accounts and convenient secure wireless access. "Remote control for your money". theira existing sales and marketing channels.partner directly with banks, card companies, and wireless carriers and manufacturers to use As financial services company, we will i institutionsalso market though financial merchant accounts to assure a such as Cap Gemini, EDS or of IMPay. Our additional client We will we will solicit business and service technology providers "Powered By" market view PWC. Through these financial branded financial and business services include purchase, promotional, girl, stored-value, cash, payroll, travel, expense & incentive accounts. IMPay branding will be a multi-lingual & cultural blend of bank and credit card companies. The first target market will be in Europe where the digital wireless networks exist. We have strong Chinese contacts in our Management, Directors and Advisory Boards and will begin in China after reaching our market goals in Europe. We will begin in the US as soon as the digital wireless networks become available. In addition to the usual TV and print advertising in Europe, we will market through the production of a multi-lingual into-channel I I I the international Mobeyforum.org, whose mission is similar to Ziff-Davis TV (ZDTV) in the US. We calltoitencourage the usebroadcast channel will in financial wireless device market and Mobey "IV. The of mobile technology follow the services. I Milestones Revenue and Cost at Milestone Milestones Start-up Beta Testing Open Region 1 - EuropeanOffice Go Live Version 1.2 Open Region 2 - Asia Office Go Live Version 2.1 Open Region 3 - South American Office Go Live Version 3.1 Open Region 4 - US Office Go Live Version 4.1 + 1months + 6 months +7 months +8 months +12 months +16 months +31 months +31 months +34 months +36 months After Start-up Total Cost to Reach Milestone $2.5 M $5.9 M $6.7 M $7.4 M $11.1 M $15.8 M $34.9 M $34.9 M $40.9 M $45.8 M Total Revenue at Milestone I -_ $159 K $840 K $20.1 M $20.1 M $35.4 M $49.7 M I I I I I I I I I I I I I ! Features Matrix for IMPay & Competitors I Company 724 Aetherystems S Billpoint C2it EcashTechnolosies EmoneyMail First Data-cone MoneyZap PayPal. PayTrust Yodlee IMPay Mobile Payment Y Y N N N N N N Y N N Y Internet Payment Y Y Y Y Y Y Y Y Y Y N Y Talk to N Pay N N N N N N N N N N Y Cash from N ATM N N Y Y N Y N N N N Y Multiple Accounts Y Y Y Y N N Y N N Y Y Y Account Aggregation N N N N N N N N N N Y Y Multiple Payment N Options N Y N N N N N Y N N Y Incentive Accounts N N N N Y N N N N N N Y Combined Account N Information N N N N N N N N N Y Y i I I I I Features Definition Mobile device orthe Payment is conductedfrom a mobile device to a mobile device or the Internet.Paymentrequest is made from a mobile Payment - Internet. I payment. Payment - Payment is conducted over the Interact.New or existing credit card information is entered into the site for internet Talk to Pay - Voice recognition softwareis used to initiate the paymentrequest and complete the paymenttransaction. I Cash from ATM - A payment request may be sent from the mobile device to the ATM network and cash is delivered at the designatedATM machine. Multiple Accounts - The IMPayaccountis configuredwith multiple phone, bank andcredit card accounts from which to pay or to receive payment. For a merchantthis would mean accepting payment from a single transactionand distributingit to an operating account, sales tax account, retirementaccount or investment account. Account Aggregation - phone, bankand credit accounts can be includedand accessed fromone or moreIMPay accounts. other IMPayaccount holders. Those IMPayaccountsmay be heldby other Merchantsor consumers. Incentive Accounts - Merchantsmay offer custom discounts or reimbursementssolely or in combinationwith other Merchants to Combined Account Information - Merchantsand consumers are provided with a comprehensive paymentrequest and transaction I I i I history thatpayment,the discountsmultiple perspectives. This Merchants this is a view of customers, businesses or consumers, and method of can be viewed from offered or received. For also allows consumers to mack payments from multiple accounts the monitordiscounts andrebatesreceived frombusinessesand merchants. ! I I 1. 724 Solutions Toronto & Review of Competing Companies Austin, Nasdaq SVNX Develops and markets a Mobile Commerce Services Platform (MSP) is a highly scalable solution for the delivery of secure I technologies. The MSP is an end-to-end technology solution power and benefits of digitalization, the Intemet and mobile mobile commerce (m-commerce) _ansactions, leveraging the for businesses and commerce intermediaries that facilitates secure, personalized, context-sensitive consumer and merchant interaction and payment completion. The MSP solution includes: • Mobile Shopping Applications • Personalization • • Secure Payment Applications Flexible Commerce Gateways I I I Partners include - Nokia, Bell South, Brodia, CheckFree and Mastercard. Our evaluation of this competitor is that they have the development platform that is in use by financial institutions and will by partner Brodia Group who has an e-wallet. 724 bought Tantau in Austin, a subsidiary of Compaq. develop a vertical market to manage more than one method of mobile paymenL Internal mobile payment is being developed 2. Aether Systems - Austin - Private Aether offers its Anywhere Commerce Platform to integrate and deliver new and complimentary services. Using this platform, a client can extend and enhance their wireless portal or service offering, making it even more compelling and relevant to the customer. In addition to undertaking specialized projects, Aether offers the following wireless commerce solutions: • Anywhere Account Access: Instant access to banking, billing and loyalty accounts. Anywhere eWallet: Quick, easy, time sensitive purchases Event Notification Service: happens Personal information - as it Anywhere Commerce Platform: i I I I • • • • • • I I • Deliver integrated personal commerce services If you are a Financial Institution, Mobile Phone Operator or Portal we also offer the following partner services for private labeling through the Anywhere Commerce Platform: • Elec_onic Bill Presentation and Payment • Manage bills while on the move Person • to Person Payments • Send or request money instantly • Mobile Point of Sale: • Bring the point COUSUnler i I I of sale to the We consider Aether the most immediate and viable competitor. They are wireless and do both bill presentment and personI doing development Aether does not to-person payment. using their systems.list a major fmancial institution as a customer or partner though they may have one ! 3. I Billpoint - Ebay - Private Billpoint simplifies and facilitates person-to-person and person-to-small business payments over the Internet. The company's mission is to expand payment choices for buyers while reducing payment-processing costs for sellers. Ideally suited to any of the start-up expenses typically associated with traditional payment processing. The company plans to augment its individual sellers and small businesses, Billpoint's suite of products does not require merchant accounts, new software, or credit card and electronic check payment offerings with additional products in the future. i I customer database. Strategic partner - Wells Fargo, Visa. As yet they have no wireless presence, but they have access to Ebay's 30-million i 4. C2it- Citibank, NYSE- "C" Send Cash to virtually anyone in the U.S with an e-mail address! credit card account. C2it Service will send the money right from your bank or I Request Cash from anyone in the U.S. with an e-mail address. Get Cash that has been sent to you via c2it Service! Simply tell us which account to apply the money and let us do the rest. May 15th send money to 30 different countries. a simple payment system operates bank-to-bank, This is that credit card-to-bank and credit card-to-credit card. It is sponsored by the largest world bank and could expand to wireless. Most hank-to-bank or credit card-to-bank transfers take 4-5 days to confirm and cost 2% to $50 international. I I 5. Eeash Technologies - Digieash - Private The Monneta product suite includes a variety of payment methods that benefit financial institutions, service providers, I consumers, and merchants. The Monneta product suite provides a multibank, multicurrency solution for person-to-person, consumer-to-merchant, and business-to-business payments. With our product suite, financial institutions can offer their customers the ability to send and receive eCash ability to make purchases at merchant account information. Our Monneta product and securely.consumers and merchants the currency via e-mail without sharing and business sites around the world simply suite offers Our platformindependent software seamlessly integrates into existing banking applications using simple application programming interfaces Solutions in the Mormeta product suite include: Debit, Prepaid, Gift, Loyalty, and Mobile. I I I 6. I the last recently Digicash30 days. opened this offering and it has several attributes of the IMPay service. The mobile offering is new within EmoneyMall - Bank One - Private EMoneyMail, powered by Bank One, is the safe, easy way to Send Money over the Intemet. You can now send money eleOxonically to anyone in the United States by simply sending him or her an e-mail message. I EMoneyMail is convenient.get cash from an ATM toto find your checkbook, envelopes, and stamps you have to get to others. No longer do you have to No longer do you have pay your half of the dinner bill. No longer do to send money a money order or cashier's check for items you buy at online auctions. EMoneyMail is easy. You can now send money at the click of a button over the lntemet any time you're online. With EmoneyMail, you can use an existing checking account or Visa card from any U.S. t_nancial institution to send money to any e-mail user in the U.S. No need to set up a new checking account! All you need to get started is the recipient's e-mail address. Partners are Bank One and the Intemet bank Wingspan. This offering is tied to Bank One's Visa card and bank accounts I I I and uses email as a primary delivery vehicle and has not yet added a mobile component. ! 7. I First Data - Atlanta, NYSE "FDC" Leader in electronic commerce and payment services, First Data serves more than two million merchant locations, 1,400 card issuers and millions of consumers. Provides branded card services to financial institutions and businesses. PaySys by partner I Owns Western Union, and Wireless initiative cOne. First Data Corp. and three partner firms have created EOne Global LP, an independent company that helps banks facilitate I also usesbusiness-to-business, person-to-person, business-to-government, and consumer-to-merchant payments. The start-up Intemet First Dam's SurePay technology, which facilitates business-to-business and consumer-to-merchant payments, and First Dam's money I 8. I EOne also plans to launch a platform to help consumers send MoneyZapWestern Union via wireless devices in the fourth quarter. A simple service that allows you to send money from a designated credit card or bank account. credit card-to-bank. Works bank-to-bank and I 9. No wireless initiative yet. PayTrnst- New Jersey - Private more keeping writing you carl pay your No lost time track of bills and checks. Now receive and all bills online, from anywhere - home, work or while on the road. As a PayTrust member, you get a highly compelling and unique solution for bill management that was designed to dramatically improve the way you pay bills today. With PayTrust all of your bills can I I I arrive online. PayTrust now brings bill delivery and payment to the world of wireless devices. If you have a Palm VII handheld and Palm.Net TM service, you can now receive summary information about each bill that arrives in your PayTrust Bill Center and pay it anytime from anywhere. Imagine being able to pay your bills from the palm of your hand in a matter of seconds. With Pay trust's new service for the I to do VIIget started youdownload the top ofWCA to your Palm VII even whencomputer. Instantly,your computer. All view have Palm to handheld is can stay on free your bill management handheld you're away from you'll be able to you your PayTrust inbox, pay any bill you choose and see payments you've scheduled - fight from the palm of your hand. Customers are charged a monthly fee and/or a transaction fee. Parmers include AT&T Ventures, Citigroup, Yodlee and SoRBank 10. PayPal - X.eom Internet Bank- Omaha - Private I I Most frequently used payment method on Ebay with 2 million recorded auctions. from bank-to-bank or bank-to-credit card. You may send money through email or I After signing up for your PayPal account online, you can send money by going to www.paypal.com on your Web-enabled mobile phone, send money, check your balance and view your transactions from the convenience of your phone. Customers are charged a fee of over 2%. PayPal is reportedly for sale. Our attorney has contacted their CEO Peter Theft anonymously to find out if this is true. 11. Yodlee - Redwood, CA - Private I I Yodlee is the leading provider of account aggregation services. Account aggregation is defined as a single point of access to all bank and credit card accounts regardless of account holders or issuers. I Investors wireless initiative other than Sequoia Capital. Partners include PayTrust, Check,Free and National Interbank. They have no include Accel Farmers and through PayTrust. ! I Transaction Engine Specifications per Server I Hardware requirements: I Software requirements: Capacity." I Performance: SUN Enterprise 250 SUN Solads 2.7 50,000 users Average of 100 transactions/minute peak of 5 rain 300 transactions/minute (for 50,000 users) Up to 2,000,000 users Wireless Application Protocol 1.1 SIaMApplication Toolkit, GSM Phase 22+(GSM03.40) Short Message Services, GSM Phase (GSM 11.14) GSM -2nd generation standard for mobile communication TCPflP-lntemet protocol used for browsing and network HTI'P -Intemet protocol used for transport I Scalability: Supported standards: I I I I I I I I I I I I I !