Alternative payments refers to non-credit card payment methods used as alternatives to traditional credit card transactions. Virtual currency is used to purchase virtual goods within online communities like social networks, virtual worlds, and games. Commerce is changing rapidly as online transactions increase and the lines between offline, online, real and virtual purchases blur. Every player in the payments industry, including card brands, issuers, acquirers, merchants and consumers, must adapt to these changes. Applying big data and cloud computing can help payment providers better understand customer purchasing behaviors and preferences to develop customized pricing, rewards, and offers.

1. Alternative Payments
Turning Virtual Into Reality
Scott Swartz, Founder & CEO

2. Alternative Payments & Virtual Currencies
Alternative payments refers to payment
methods that are used as an alternative to
credit card payments.
Virtual currency is used to purchase virtual
goods within a variety of online communities;
which include social networking websites,
virtual worlds and online gaming sites.
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3. Commerce is Changing
Yesterday Today Tomorrow
Online
Online 6%
4%
Web- Online
Offline influenced +
Offline 57% Offline
37%
Offline
96%
2008 = $325B 2013 = $ 10T
Source: Forrester, Euromonitor
Source: Forrester Source: Economist Intelligence Unit
and Economist Intelligence Unit
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4. Real/Virtual Acquisitions and Partnerships
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5. McKinsey on Payments (Sept 2011)
“Brazil: Incumbents must reinvent themselves”
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6. McKinsey on Payments (Sept 2011)
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7. Every Player Must Change
Card Brands
Issuers Acquirers
Card Holders Merchants
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8. Changing Face of Business Models
• Freemium
• Social Gaming
• 30% -> 1.5% (ARPU BRL 20/month)
• LATAM(BRL 606) NA(BRL 521)
• Causium (cause marketing)
• Hybrid incentives
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9. Diablo III Real-Money Auctions (RMA)
eBay → monitored channel
Seamlessly integrated
“Gold” or 9 real currencies
DEAD AGAI N? Ma y be y o u n eed a
bet t er sw o r d – c l i c k he r e t o
c o me t o t he a u c t i o n ho u se No w $1 per item + 15%
Source: Blizzard Entertainment, CEB TowerGroup
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10. MetraTech Payments Case Study
Customer’s Platform 80+ payment methods
• Credit/Debit Cards
Payments • Phone and Mobile
• Prepaid, Cash & E-Wallets
• Bank Transfer
Subscriptions
160+ Currencies
Micro-transactions • Real and virtual
B2C
Proprietary
Product Catalog • Cross-merchant points
• Digital merchants B2C
• Online games Pricing / Bundles
• Virtual worlds B2B
• Social networks Online Statements
Least Cost Routing Legend
Customer systems
Anti-Money
Laundering B2B Agreements MetraTech systems
Customer Internal
MetraTech
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11. Need To Better Understand the Customer
How, When, Where, Why they buy
What they prefer
When they’re at risk
How to retain them
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12. McKinsey on Payments (Sept 2011)
“Recent work suggests that pricing actions
can improve bottom-line performance by
more than 20 percent within three years
without causing excessive attrition”
“Executives need the skills and tools to
make well-informed pricing decisions”
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13. What is the Customer Likely to Want?
Applying Big Data to Cloud Commerce

14. How Big Is Big Data?
2.5 quintillion bytes 98% of all data in the world today
of data per day created in last two years

15. Big Data Sources
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: Aberdeen Group, January 2012

16. Why is Billing & Compensation Critical?
People’s behavior
can be modified.
Remember the whole supply
and demand thing?

17. Reward Good Behavior
• Loyalty
• Affinity group: “think herd” pricing
• Partnerships
Rewards Discounts
Incentives Points Accelerators

18. Pricing
• Difference in pricing is no longer whether online or
offline or virtual or real
• Timeliness of offers
• Functional goods drive more users to pay
• Price points need to be experimented with
• Understand user demographics and customize when
appropriate
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19. Wrap Up
Offline, onl Build your Suppliers A3 data: Use
ine, real business and Acquire, A pricing, re
and virtual with distributers nalyze, Act wards and
are business are as offers to
blurring model important drive
agility in as customer
mind customers & partner
behavior

20. Questions
Scott Swartz, Founder and CEO
scott.swartz@metratech.com
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