DEXIT A MARKETING

OPPORTUNITY
Easier than cash, faster than debit

Content
DEXIT the company
Concept Technology and Benefits
Demand
Competitors
Company concerns and the final decisions
Target market
Product
Revenue
Promotion

Dexit the company

Formed as new company in 2001
Started as private, became public in 2004
Bell Canada as partner in 2004
Get a stake in Canadas low-value cash transactions
Deciding how and who to target with their service
Before/After approach

Concept and Technology

To provide easy & fast payment through RFID technology
Over the counter small cash payments.
Tags held by consumers
Readers on merchants counters
Wireless link between reader and tag
Withdraw money from consumers Dexit account

Benefits
Benefits for merchants
Lower cash-handling costs (both theft and shrinkage)
Reduce line-ups
Turn walk-aways into customers
Reduced need to check for counterfeit money
Benefits for consumers
Faster than credit cards
No more messing with coins
Can track their transactions online

Demand
Two prior attempts had shown an interest from both consumers and
merchants
Mondex and Scotiabank

Canadians among the worlds heaviest users of electronic payment systems

350,000 retailers in Canada accepted payment via IDP in 2001
17,6 million monthly IDP users were counted in Canada in 2001

IDP: Interac Direct Payment

Demand
Interac Direct Payment Transactions by Province
(in millions)

Ontario (ON), Quebec (PQ) and British Columbia (BC) top three markets
Toronto (ON) Accounting for close to 30% of their provinces respective debit transaction market.

Competitors
Retailers that issued their own proprietary payment cards or gift cards
Credit and Debit card issuers
More towards Dexit than Dexit is towards them

ExxonMobil Speedpass (1997) and Oyster (the new and developed)

Both using RFID

Company concerns and the final decisions

Product - Thoughts
Confident on using RFID
Consumers too accustomed to using cards?
Key chain fob or other kind of gadget?

Product - Decision

Target market - Thoughts

Target national or in a specific geographic area?
Target group of individuals who were comfortable with newer technologies
(Like the Dexit tag)?
Who where the heavy users?
Better for low-value transactions
Target merchants based on the demographics and lifestyles of the
consumers?

Target market - Decision

Small target area within Toronto
Targeting areas with a high consumer-to-merchant ratio
Hospitals
College campus
Subway stations
office towers
Various take-away food and convenient shops

Target a younger consumer base (students)

Pendlers on their way to work (potential heavy users)?
Should they have target another area/group?
Public transportation
Taxi
Parking

Revenue model - Before launch

Decision for finding revenue
Merchants
Transaction fee and how much?
Set subscription fee?
Consumers
Fee for each transaction?
Willing to pay if cost is transparent?

Revenue model - Solution

Fees from merchants, based on a percentage of the transaction value.
Consumers pay 1.5$ each time they allocate new funds to the Dexit
account.
Licensing fees from organizations (royalties).
Interest rates on prepaid accounts
Income from sales of Dexit point-of-sale terminals, RFID tags/readers

Partners in crime
In mid 2004 Dexit partnered with Bell
Bell have exclusive rights to market and sell in Canada
Getting access to Bells relations to 500.000 merchants
and 15 mill. customers.
Leads to lower marketing costs:
Sales and Marketing costs having gone from almost 1.5 million$
in Q2 2004 to less than 600.000$ in Q2 2005)
Licensing of system to other organizations

Promotion - Before launch

Limited marketing budget
Push or pull?
Posters, TV, radio, newspaper, Webpage
Hire sales force?

Promotion - Solution

Posters in the geographical area of service

Subway station, side of busses.
Special offers using Dexits webpage
Marketing surveys for existing customers

Ineffective webpage (show the bugger)

SWOT - Not Forgot

STRENGTH
Reliable system
Propriety system
B2B and B2C target market
Bell (strong partner)
Fast transactions
High entry cost

WEAKNESS
Webpage not consumer-centric
High consumer acquisition cost
Expensive hardware for
merchants
High entry cost

OPPORTUNITY
Licensing of system (Royalties)
Possibility to port the system to
online sales
Profit by substitute the cash
market with e-cash so big
competitors dont see it as a
threat Investors

THREAT
Adoption conservatism (Like
Euro in DK)
New entries
Not yet reached critical mass
(lack of awareness)
Other technologies (mobile
phones)

Wrap - Up
The status of Dexit, today, is still uncertain.
Only gained 20.000 consumers over the last 2 years
Only gained 460 new merchants since launch

Many investors
Their license agreements with Bell
First-mover advantage in Canada
Will they survive on the market?
Have they done it right?

Thank you for your time