Premium Payback. Rewarding Consumers at the Point of Sale. Cassie Boutelle April 2017

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1 Premium Payback Rewarding Consumers at the Point of Sale Cassie Boutelle April 2017

2 Loyalty landscape what are we solving for? $60B in rewards liability across all loyalty programs in North America Number of loyalty programs the average U.S. consumer belongs to: 26% 1/3 of all rewards go unredeemed each year growth in rewards program participation since last census > 1/5 more than 1/5 of members have never made a redemption 13.4 Sources: The Financial Brand and the 2016 Colloquy Loyalty Census Number of loyalty programs the average U.S. consumer is active in: 2.3x non-redeemers are 2.3X more likely to defect than those who did in last 12 months

3 Premium Payback 3

4 A complex confluence of forces is accelerating Enhance the customer experience Drive growth and agility Combat escalating costs and margin pressure Protect assets and reputation Turn data into business insights Simplify growing technology complexity Creating new redemption opportunities at the point of sale is revolutionizing the way consumers are engaging with their payment card issuers and retailers. Turning rewards points into a new spendable currency creates a winwin for all players in the ecosystem. 4

5 Serving the unique needs of our clients in the U.S. and internationally Solution breadth Market reach Industry expertise Client relationships M +40 solutions $300M invested annually in nextgeneration advancements BPO, consulting and transformational services cards processed years FinTech experience +20,000 10B +3,000 9/10 top global banks ~75% U.S. credit unions 20/25 top U.S. retailers financial trade records processed per hour $9T moved globally every year consultants +55,000 employees worldwide 210 clients Federal government and 40 state governments operational facilities (81 in the U.S.) Dedicated market practices 5

6 FIS has quietly established a leadership position in customer loyalty 25 years operating card marketing and loyalty rewards programs 3,100+ loyalty specific clients Industry expertise 6,800+ individual programs Solution breadth Proven partnerships Scalable solutions Full service support Solid infrastructure Custom design and options Consulting services 6

7 Industry recognized solutions Fuel Redemption Best POS Innovation Premium Payback Best POS Innovation 7

8 Industry leading loyalty solutions FIS solution breadth, market reach, client relationships and industry expertise enables us to create solutions that transform the market. Point of sale Retailers Loyalty Services Convert Financial institutions Mobile wallets Aggregate Redeem Exchange Settle Traditional redemptions 8

9 Merchant benefits New lower currency option Drive incremental sales growth Leverage existing integrations Flexible financial & operational models Cross marketing opportunities 9

10 Financial institution benefits New lower cost rewards offering Point burner strategy Enterprise rewards opportunities Promotes top of wallet status High value, innovative real-time offering 10

11 Consumer benefits Increased buying power Higher brand affinity More access to deals and offers Ease of redemption High perceived value 11

12 Fuel Use Case In Market Example 12

13 Technology that demonstrates creativity, innovation and flexibility Our leading-edge solution now connects millions of payment cards with loyalty programs to a redemption option at the point of sale. The average American household spends $3,348 Leveraging our technology and integrations, consumers can redeem their rewards points for real-time discounts using a single swipe of their payment card. in their after-tax income on gas and diesel. A 10 cent rise in gas prices means that the average household spends $93.25 more per year. Every 10 cent rise in gas prices removes $11 billion fro co su er s wallets over the course of a year. Households in the lowest income quintile spend about 11 percent of their income on energy whereas households in the highest quintile spend 6.8 percent of their income on energy. 13

14 Fuel discount awards how it works Spend Swipe $ $ Save 14 14

15 Consumer satisfaction Likelihood of purchasing gas at BP if points WERE NOT available for redemption Not Likely 88% 88% 18% would redeem their points again for gas discounts Somewhat Likely 23% would redeem their points again for gas discounts Likely 34% 20% 30% redemption as a 5 (the best) or 4 felt gas discounts were a better value than other redemption options Very Likely 10% rated their experience for redemption as a rated their best) experience 5 (the or 4 for 56% 56% 25% 0% 90% 90% 40% felt gas discounts were a better value than other redemption options 15 15

16 Pilot success metrics Financial institution benefits Creating engaged consumers Blended average for Cost Per Point redeemed decreased from 109 bps to 104 bps Number one redeeming item, outpacing itunes and all Apple products combined in first month Increase of 10.11% in year over year number of transactions during the one year pilot Increase of 4.2% in year over year transaction volume during the one year pilot Increased transaction and volume More engaged cardholders Decreased redemption costs 16

17 Increase spend by 25% Before loyalty program $358 ScoreCard w/o redemptions ScoreCard traditional modules* $563 $694 ScoreCard new modules** $870 Average monthly spend * Travel and Merchandise ** BP and DAILY WINS 17

18 Increase spend by 25% New FIS loyalty program Avg. monthly spend* BEFORE redemption Avg. monthly spend* AFTER redemption BP Gas $ $ $ DAILY WINS $ $ $ Monthly increase (+25%) (+21%) * Avg monthly spend for FIS Loyalty member who redeems with Travel and Merchandise 18

19 Existing and in process integration points FIS solution breadth, market reach, client relationships and industry expertise enables us to create a redemption network that will transform the market. Other loyalty providers Big box retailers Loyalty Services Other future financial institutions Quick service restaurants Convert Other loyalty providers Aggregate Redeem Other future financial institutions Exchange Settle Other loyalty providers FIS MPS Mobile apps Mobile wallets 19

20 Consumer experience Advertisement 2. Payment 3. Redeem rewards Customer sees ad for Pay with Points Customer pays as usual If customer has enough points, customer is automatically prompted to pay with points 4. Confirmation After transaction, customer sees confirmation on screen and on the receipt 5. Settle Issuer settles with merchant through traditional means and customer receives statement credit 20

21 Questions? 21

22 Cassie Boutelle

23 2017 FIS and/or its subsidiaries. All Rights Reserved. FIS confidential and proprietary information.