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? Company’s Perspective

• Growing Market

• Well suited for low value – high frequency systems

• Smart checkouts

• Wider acceptance

Consumer’s Perspective

• Faster than credit cards

• No more messing with coins

• Can track their transactions online

• Eliminates need for ATM withdrawls

• Better personal budgeting

Merchant’s Perspective

• 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 don’t 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 EMI’s 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