O C T O B E R 1 2 , 2 0 0 5

J. P. MORGAN ELECTRONIC FINANCIAL SERVICES, INC.

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BENEFIT PAYMENT AUTOMATION

Presented by Brian Claire, Hector Clark, Jan Konigsberg

Agenda and Introductions

EBT and Debit Card Conversion: From Paper to Plastic

International EBT – the way forward

Benefit Delivery Today

$$$$ $$$$

Government defines eligibility and program rules

Determinationof benefit amount

Recipients access benefits

CurrencyChecks

Warrants

CouponsPhysical delivery of

benefits

Benefit Delivery

Government defines eligibility and program rules

Determinationof benefit amount

Via EBT

$ $ $ $ $ $ $ $

Recipient accesses benefit

Electronic deposit

Benefit ready to use

$ $ $ $

$ $ $ $

Benefit Delivery Via EBT —Government Role

Benefit Delivery Via EBT—Contractor Role

Card issuance/training

Transaction processing

Customer Service

ATM/retailer access & settlement

Phases of EBT Expansion

U.S. RolloutU.S. RolloutConversion Contracts

U.S. RolloutOngoing OperationsRenewal Contracts

EBT Pilots In U.S.Initial Contracts

U.S. RolloutU.S. RolloutConversion Contracts

U.S. RolloutOngoing OperationsRenewal Contracts

EBT Pilots In U.S.Initial Contracts

First Phase of EBT Expansion

EBT Pilots In U.S.Initial Contracts

1984198719891991

Gain experience “electrifying” benefits

Learn about EBT-specific problems

Creation of core EBT business model

U.S. RolloutU.S. RolloutConversion Contracts

U.S. RolloutOngoing OperationsRenewal Contracts

EBT Pilots In U.S.Initial Contracts

Second Phase of EBT Expansion

U.S. RolloutConversion Contracts

Establish national policies

Refine service definition

Stakeholder behavior change

1991 - 2002

Third Phase of EBT Expansion

U.S. Rollout

Ongoing OperationsRenewal Contracts

Renewal contracts yield significant efficiencies to all stakeholders

Governments reap rewards of EBT

Addition of new benefit programs / rulesU.S. RolloutU.S. Rollout

Conversion ContractsU.S. RolloutOngoing Operations

Renewal ContractsEBT Pilots In U.S.

Initial Contracts

Phases of International EBT Expansion

U.S. RolloutOngoing Operations Renewal Contracts

U.S. RolloutInternational Pilots Initial Contracts

U.S. RolloutInternational Rollouts Conversion Contracts

U.S. RolloutOngoing Operations Renewal Contracts

U.S. RolloutInternational Pilots Initial Contracts

U.S. RolloutInternational Rollouts Conversion Contracts

First Phase of International EBT Expansion

Significant international “pilot” programs

International PilotsInitial Contracts

US. benefits in USD distributed overseas via DBC program

First Phase of International EBT Expansion

U.S. RolloutOngoing Operations Renewal Contracts

U.S. RolloutInternational Pilots Initial Contracts

U.S. RolloutInternational Rollouts Conversion Contracts

Second Phase of International EBT Expansion

World Bank: Plan Colombia

UK benefits in BP distributed in UK via POCA program

International RolloutConversion Contracts

U.S. RolloutOngoing Operations Renewal Contracts

U.S. RolloutInternational Pilots Initial Contracts

U.S. RolloutInternational Rollouts Conversion Contracts

Third Phase of International EBT Expansion

Future expansion

Ongoing International OperationsRenewal Contracts

Lessons LearnedRecipients prefer the safety and convenience of EBT

Survey Results

What is the main reason you signed up for the Direct Benefit Card?

Survey Results

Please tell us how satisfied you are with the following benefits of the Direct Benefit Card

Survey Results

I no longer have to rely on the mail

Money will be in a safe place

accessible only by me

I am very satisfied with

the cardI don’t have

to carry cashEasy to use any

time

Recipients prefer the safety and convenience of EBT

Lessons Learned

Public and private sector have defined a commercial model that works for the conversion and ongoing operation

RiskManagement

Service Definition

Policy Definition

Commercial Contract

Model

Costs of EBT

0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

Co

st p

er F

amily

Year

Price for EBT Services

Actual Cost of EBT Services

Current Administrative Cost

Recipients prefer the safety and convenience of EBTPublic and private sector have defined commercial model that works for the conversion and ongoing operationProven approach for international pilot, expansion and countrywide

rollout

Lessons Learned

Overview of existing benefit processing

Plan Colombia

Pick Upor Delivery

$$

$$

$ $ $ $

Current Process

Local BankCountry Bank

World Bank

$ $ $ $

Overview of existing benefit processing

Plan Colombia

EBT: Pilot, evaluation, expansion

$$

$$

$$$$

Process With EBT

Country Banks

World Bank

$ $ $ $

Recipient accesses benefit

$ $ $ $

$ $ $ $

Risk management& service definition

Commercial model

Pilot / program specifics and

research

Stakeholder acceptance

Decisions To Be Made Jointly

Overview of existing benefit processing

Plan Columbia

EBT: Pilot, evaluation, expansion

Timetable for progress

?Questions?Questions?

Vragen?

Perguntas?

Domande?Fragen?

Preguntas?

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