DEXIT

A Marketing Opportunity
Group - 1

Dexit - Overview

Formed in 2001 CEO Renah Persofsky Provide an alternative to cash for low value transactions Introduced dexit tags to be used in conjunction with the reader using RFID Usage Low cost transactions Issue - how and who to target with their service?

History of e-Cash

1993 - Natwest and Midland bank found a company for capturing e-cash market

About Mondex:

Stored money as stand-alone e-info on a chip Payments could be made in person, via telephone or internet No signature or PIN required Could carry e-cash upto five currencies Flexibility to debit bank account or transfer e-cash stored on card

Reasons for Failure

Costly payment process Difficulty in linking it to royalty programs

Scotiabank VisaCash card

Favourable response from public High cost of hardware, hence nationwide rollout cancelled

Electronic Payment Industry

In 2002 market dominated by credit and debit card systems Cash remained the preferred choice for transactions Estimated market : Exhibit 3 Avg value of transactions lower than other countries and decreasing over the years : Exhibit 4 Market growing both by no of users and transactions : Exhibit 5 Ontario, Quebec and British Columbia are 3 greatest markets : Exhibit 6,7,8

Why Dexit?
Companys Perspective

Consumers Perspective

Merchants Perspective

Growing Market Well suited for low value high frequency systems Smart checkouts Wider acceptance

Faster than credit cards No more messing with coins Can track their transactions online Eliminates need for ATM withdrawls Better personal budgeting

Lower cash-handling costs (both theft and shrinkage)

Reduce line-ups Turn walk-aways into customers Reduced need to check for counterfeit money Faster Payments

SWOT
STRENGTH Reliable system Propriety system B2B and B2C target market Fast transactions WEAKNESS 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

THREAT New entries Not yet reached critical mass (lack of awareness) Other technologies (mobile phones)

Target Segment

Approximately 17.6 million debit card users

Ontario, Quebec, British Columbia are the top three markets for debit transaction
Toronto, Montreal, Vancouver contributes to 30% of the respective provinces debit transactions

Proposed Plan
Pilot study Toronto If success Test in Montreal and Vancouver (As usage rates are high) If failure Try to understand the reason for failure and implement the changes

Target customers

Students (College Campus) Manual Labor who work for daily wages Industry workers (Blue and white collar) Hospitals Fast food restaurants and convenient stores Public Transportation (for getting tickets coin free/hassle free) Taxi Users Parking system

Product Features

In addition to keychain following forms could be introduced:

Strip to be attached to items mostly carried ex. Mobiles, wallets Plastic cards I-cards

Pricing Strategies

Cost plus pricing Reasons:

Low cost transactions High cost for infra and other costs ( 60%) Price based Differentiation from other potential competitors

Promotion

Posters in areas where low cost transaction takes place (near cash counters) Create a Buzz using the webpage by offering new attractive content everyday OOH Advertising, PR activities and focus on Viral/Guerilla Marketing rather than traditional advertising customer loyalty program - After every 20 transaction, get a coffee free at your favorite restaurant Trade promotion by offering equipment's free of cost to merchants to create a buzz within the merchant community

Revenue Model - Options

Merchants:

Fees from merchants, based on a percentage of the transaction value.

Organizations/Shops/Retailers:

Licensing fees from organizations (royalties). Income from sales of Dexit point-of-sale terminals, RFID tags/readers

Free offering in the initial stages and charging EMIs based on the number of transactiosn

Customers:

If Amount prepaid < $ 100 charge $ 2 as transaction fee Else Interest rates on prepaid accounts

Future Plans

Rollout nation wide marketing campaigns Partner with existing companies with have a large user base Create Mobile App (Emergence of smartphones)

Thank You