Case Study

It has been a year o unprecedented fnancial challenges or retailers and their customers. This paperwill describe fve proven strategies to improve merchants’ bottom line while strengthening theirrelationships with consumers. Based on our experience as a partner to merchants and retailersacross the globe, TSYS

is presenting strategies that can improve your results as early as 2010.This report, demonstrates how to:

Merchants can reduce complexity and operational risks while controlling costs with technology that allows them to manage vendors at the point-o-sale and across multiple payment channels.

2> Drie ne reenue streams ith innoatie products.

Deliver easy-to-use nancial services products

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remote capture deposit, reloadable debit cards andbill payment services

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that attract new customers and enhance relationships with existing customers.

3> Delier a better customer experience.

A growing number o customers are drawn to the power o sel-service to deliver both new andexisting programs, ranging rom enhanced loyalty and coupon programs to direct service programs or nancial services, such as real-time dispensing o git cards.

4> Discoer the benefits of loyal customers.

Whether you are new to rewards programs or a long-time veteran, Loyalty can give retailers ront-o-wallet relevance with new ways to link program oers to purchases that improve protability, including ways to elevate private label products or reward customers or buying higher margin products.

5> Take the surprise out of your processing costs.

The ability to reduce processing ees eludes most because businesses are not ocused on criticalactors

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like costly downgrades

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which erode monthly prots. Read about how TSYS delivered $5.4 million in annual savings or one national retailer using industry best practices.

Not every retailer can proft rom all o these strategies, but TSYS can help identiy the bestapproaches to improve proftability.

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Executie Summary: Fie Strategies to Impact Your Bottom Line

1> Simplify transaction management.

Technology has grown exponentially more powerul and customer-riendly while the point-o-sale hasgotten more costly and complex.

From the humble beginnings o the traditional cash box, thecheckout counter has grown more intricate and intelligentwith every generation o technological advances rom paper,to plastic, to virtual payments. Although the point-o-sale hasevolved into a critical part o the retail enterprise DNA, mostmerchants are rustrated by their ability to gain control o costsand capture the data that fows through the checkout. Todaythe retail industry spends billions o dollars maintaining anaging network o hardware, scanners, terminals, computers,and sotware. This patchwork o technology is used to manageeverything rom payroll, workfow, and inventory to git cardissuance and the processing o payments. Despite all thetechnological advances that have taken place, the promiseo simpliying the point-o-sale remains elusive.With TSYS that promise becomes a reality. TSYS has been apioneer in reducing the risk o innovation or over 25 years.Through our TransIT platorm and suite o PASS products

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CounterPASS

, MobilePASS

, KioskPASS

and WebPASS

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merchants and retailers can deliver cost-saving andrevenue-generating payments applications across anynetwork, using any payment device, at every type o point-o-sale. TSYS gives retailers more options while simpliyinghow they manage vendors and transaction fows.From single merchants to ranchise owners and specialtyshops, retailers are demanding more rom their investmentin the point-o-sale. Retailers realize they must have controlover critical unctions like managing payment transactions,minimizing raud risks, and staying a step ahead o data thieves.Retailers need the ability to manage customer data across allchannels

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in the store, online and in their call centers

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tocreate lasting customer loyalty. Retailers want to nd newee-generating services that deliver convenience, drawcustomers into stores, and infuence their behavior. Fromthe multi-national big box retailers to neighborhood mom-and-pop shops, the opportunity has never been greater.Consider the evolution o the corner gas station to a modernconvenience store. A generation ago, the payment transactionsat gas stations across the industry were largely cash-and-checkbased with the occasional carbon copy gas card receipt. Thepoint-o-sale was simple: a metal box or a bank depository bagor receipts. In the 1990s, the point-o-sale shited to the gaspump and customers were drawn into stores or convenientpick-up items. Today, the point-o-sale can improve loyalty,infuence customer behavior, and oer real-time inventoryupdates, management o a complex range o payment options,and delivery o wire transers, cash dispensers and otherbanking services to time-starved consumers. This transitionrequires an average investment o nearly $1 million per storeand management o scores o vendors with up to a dozenprocessing partners.TransIT, developed by Inonox

, a TSYS company, addressesretailers’ challenges in achieving cost eciency and enhancingthe customer experience. Until now, complicated and costlyad-hoc custom development and integration were the onlyoptions or retailers to transorm the point-o-sale. Apart romthe cost, the disruption to store’s operations was a deterrentand the results were let in the hands o vendors who wereoten protecting their own interests. With the TransIT platormTSYS has changed the rules and taken the power away romvendors and put it in the hands o business owners. The TransITplatorm is comprised o a number o unique oerings thatserve as the building blocks o any successul business andmatch a merchant’s strategy across any level o scalability.The value can be seen in ve key benets:

• A host-based processing system that stores sensitive data

at the host and not at the merchant location

• Control over vendors and the costs to route payments• Flexibility to work across existing point-of-sale systems

and networks to manage the cost o operations andreduce the risk o deployment

• Leverage to securely use transactional data to improve

nancial management or deliver customized loyalty solutions

• ROI mapped to the unique objectives of your strategy

In challenging times, retailers need to adopt an innovativephilosophy to simultaneously manage costs and deliver acompetitive advantage. Decisions made now can deliversustainable gains across the enterprise or specic areas o operations in the uture.TransIT provides options or a diverse range o strategies.Perhaps some o these scenarios sound amiliar:

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Executive Summary

| Five Strategies to Impact Your Bottom Line

Executive Summary

| Five Strategies to Impact Your Bottom Line3

cont. > Simplify transaction management.

• You are a growing retailer that is ready to graduate from

terminal-based solutions.

As your business grows and youopen more locations, you demand more than a counter-topterminal can oer. Yet the cost o moving to a specializedsolution that is priced or your bigger competitors andsupports a more complex system means less money oryou to shit rom operations to marketing in order to continuegrowing your business. CounterPASS may be your answer.This Web-enabled solution allows you to expand checkoutcapacity, speed up payments processing, and minimize theneed or new vendor-controlled hardware. CounterPASSenables secure, high-speed Internet-based transactionprocessing through the TSYS payments gateway. A hostedsolution is easy to use and intuitive to set up, allowing theretailer to automate batch processing and unctional orcompliance updates. Moreover, the platorm includes areal-time dashboard o transactional activity that gives retailerstrue control over their cash fow with transparency across allo their payment providers. CounterPASS rees merchantsrom hardware- and vendor-specic solutions that requireongoing investment and disruptive upgrades as security andother standards evolve. The payback comes through rapiddeployment, greater control over transaction processing costs,daily access to your cash fow, and no cost or upgradingunctionality and maintenance o the hosted system.

• You want to turn foot trafc into revenue by giving consumers

the ability to do more of their business hile in the store.

Yourconsumers want more convenience and control in managingtheir retail experience. KioskPASS is easy to use and deliversthe convenience and sel-service that consumers demand.Whether you are an up-and-coming clothing retailer wantingto link your catalog and online business to the store, a quick-service restaurant wanting to speed up ordering and checkout,a specialty retailer looking to oer a git registry or a thousand-SKU retailer wanting to better target special oers, coupons orbuying clubs, a sel-service strategy can be simple to execute.TransIT makes it possible to link existing hardware acrossconficting back-end systems, without changing paymentspartners, giving you the ability to customize unctionalitiesor individual shoppers. Whether at a ree-standing kiosk ora simple Web interace through WebPASS, TransIT is provento increase revenue and the average basket-size because itgenerally keeps the customer engaged longer. The sel-servicenature o KioskPASS makes store stang more manageable.The kiosk and the Web allow loyalty or buying club membersto check in or unique oers designed to improve valueor their next purchase. TransIT makes sel-service scalable,whether through the Web interace or the kiosk.

• You want to turn real estate in your store into a revenue

machine.

Convenience is one o the greatest assets a retailercan use to grow their business. Time-starved customersincreasingly choose to shop at locations where they canaccomplish more within a single trip. This trend started inthe 1980s when the rst bank branches were integratedinto grocery stores and has grown in popularity as retailerscapitalize on the opportunity to bring convenience toconsumers and access to the unbanked. Until now, thisstrategic option has been largely available only to the biggestmass-market retailers. TransIT makes it possible or moremerchants and retailers o all sizes to earn revenue romtheir retail space by giving customers access to a range o name brand, white glove services including: money transercapabilities, git card purchases, check cashing, bill payment,and cash advances. These services are only possible todayby dealing with each vendor separately and then managingtheir unique integration demands. Like a true gateway, TransITenables retailers to choose the products and partners that bestt their way o doing business. By taking the technology andoperational risk out o the equation or the retailer, TSYS letsits customers ocus on maximizing new revenue streams anddelivering the convenience that consumers demand.The scenarios are nearly limitless, but what matters most isutilizing the latest strategy to capitalize on the fexibility andcontrol delivered by TransIT. Developing an action plan startswith clearly dening business needs and ranking priorities.Then, by using the consultative process that has made TSYS aleading global provider o payments solutions in the UnitedStates, TSYS helps identiy a road map to execute a successulstrategy. Next, TSYS works with a business to develop abudget that demonstrates how TransIT leverages the existinginrastructure. Finally, TSYS maps the hard and sot benets

that demonstrate the ROI every executive demands. Whether

it is operational eciency, gains through tighter control o cash, enhanced customer loyalty, or improved reportingand analysis, TSYS demonstrates the anticipated results.Regardless o the strategy, TSYS can help develop and deliver aroadmap toward competitive advantage. There has never beena better time to take control and improve in-store operations.