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8/21/2018CREDIT CARD SURCHARGING AND OTHERPROHIBITIONS IN THE B2B WORLD FOLLOWING THE2017 AND 2018 SUPREME COURT DECISIONS: WHAT ISLEGAL, WHAT IS NOT LEGAL AND HOW TO SAVEMONEY IN PROCESSING CREDIT CARDSPresented by:Matt Fluegge – Vantiv, now WorldpayWanda Borges, Esq. – Borges & Associates, LLC18/21/2018BorgesDisclaimer: This communication, including any content herein and/or attachments hereto, isprovided as a convenience only, does not constitute legal advice, does not create an attorney clientrelationship, and does not alter your current merchant services agreement. Because of thegenerality of this communication, the information provided herein may not be applicable in allsituations and does not constitute a comprehensive list of issues that could impact your business.All merchants, including Vantiv clients, are subject to the terms of their bank card merchantagreement, the card networks’ operating regulations, and applicable federal and state laws.28/21/2018Borges1

8/21/2018What is a Surcharge?A surcharge is an additional feethat a merchant adds on to atransaction when a customeruses a credit card for payment.38/21/2018BorgesNUMEROUS LAWSUITS HAVEBROUGHT THE CREDIT CARDSURCHARGE and OTHER CREDITCARD ISSUES TO THEFOREFRONT OF CREDITGRANTORS’ DAILY BUSINESSPRACTICES48/21/2018Borges2

8/21/2018Antitrust Litigation and SettlementsFirst of many antitrust lawsuits commencing 2005 Defendants included: Visa Defendants [Visa U.S.A., Inc., Visa International ServiceAssociates, Visa Inc.] Mastercard Defendants [MasterCard International Incorporated andMaster Card Incorporated] Bank Defendants[Bank of America, Capital One, Chase, Citibank,HSBC and numerous others]58/21/2018BorgesAntitrust AllegationsCombination and Conspiracy Among Defendants Raised, fixed, stabilized and maintained at artificiallyhigh levels and non-competitive levels the interchangefees and merchant discount fees Merchants were deprived of the benefits of free and opencompetition in the market for credit card network services Price competition in the provision of credit card networkservices to merchants was restrained, suppressed andeliminated.68/21/2018Borges3

8/21/2018Settlement Agreement – December, 2013New changes to Visa / MasterCard network rulesallowing merchants to pass on credit cardAcceptance fees and costs to customers in the formof a surchargeDiscover changed its rules following Visa &MasterCard examples78/21/2018BorgesAmerican Express Issues –A Different Antitrust ClaimAmerican Express was sued by the United States andseveral states claiming antitrust violations/restraint oftrade that is antisteering provisions areanticompetitive because they result in highermerchant fees.88/21/2018Borges4

8/21/2018American Express Antisteering ProvisionsAmerican Express restricts merchants from engagingin activities that would harm American Express’business or brand. Merchants must not:indicate or imply that you prefer, directly or indirectly, any Other PaymentProducts over the Card,try to dissuade Cardmembers from using the Cardtry to persuade or prompt Cardmembers to use any Other PaymentProductspromote any Other Payment Products (except your own private label cardthat you issue for use solely at your Establishments) more actively than youpromote the Card98/21/2018BorgesSUPREME COURT OF THE UNITEDSTATES (SCOTUS) DECISION ONAMERICAN EXPRESS ANTISTEERINGPROVISIONSThis was an absolute “win” for American Express.SCOTUS ruled that “Amex’s antisteering provisionsdo not unreasonably restrain trade ” and specificallysaid: “Amex’s business model has spurred robustInterbrand competition and has increased the qualityand quantity of credit-card transactions. And it is‘[t]he promotion of Interbrand competition,’ after all,that ‘is ‘the primary purpose of the antitrust laws.’”108/21/2018Borges5

8/21/2018Surcharging Operating RulesCURRENTLY Merchants who surcharge credit card transactions are subject to thefollowing requirements:‒ Visa and MasterCard permit surcharging of credit card transactionsonly.‒ The settlement does NOT change current restrictions on thesurcharging of debit transactions (signature or PIN).118/21/2018BorgesSurcharging Operating RulesMerchants are only allowedto assess a surcharge thatdoes not exceed theireffective rate for theapplicable credit cardsurcharged.0.0%128/21/2018Merchants cansurcharge up to theircost, capped at 4%4.0%Borges6

8/21/2018Surcharging Operating Rules Calculating the effective rate/surcharge amount:‒ The average effective Interchange Reimbursement Fee rateplus the average of all fees imposed by Visa/MC on the Acquireror Merchant, expressed as a percentage of the Transactionamount, applicable to Credit Card Transactions at the Merchantfor the preceding twelve months or most recent month. Merchants that elect to surcharge must provide advance writtennotice to Visa, MasterCard, Discover, and the merchant acquirer30 days prior to surcharging.138/21/2018BorgesSurcharging Operating RulesMerchants will berequired to disclosetheir surchargepolicy at the pointof store entry and the point ofsale prior to thepurchasetransactionbeing completed.148/21/2018We impose a surcharge on credit cards thatis not greater than our cost of acceptanceWe impose a surcharge of % on thetransaction amount on Visa and MC payments.We do not surcharge Visa & MC debit cards.Borges7

8/21/2018Surcharging Operating RulesThe Transaction Receipt must show the Surcharge amountseparately on the front of the receipt in the same type fontand size as the other items, after the subtotal(allowing for any discounts) and before the finalTransaction amount.*The Surcharge amount must be included in both theNetwork Authorization Request and in Settlement.*158/21/2018BorgesSurcharging Operating Rules American Express – A merchantmust not impose “any restrictions,conditions, disadvantages, or feeswhen the Card is accepted thatare not imposed equally on allOther Payment Products, exceptfor electronic funds transfer, cash,or check.” [American Express MerchantOperating Guide – US – April, 2018] No registration required, noseparate surcharge field/amountrequired in authorization orsettlement. Discover – A merchant mayassess a surcharge on a card saleprovided that (a) the amount ofthe surcharge does not exceedthe merchant fee paid to Discoverfor the card sale and (b) themerchant also assessessurcharges on card salesconducted using other cardsaccepted by the merchant. Same authorization/settlementrequirements as Visa/MC.The foregoing is based on general information available. Each merchant should check itsown requirements with respect to the networks in which it participates.168/21/2018Borges8

8/21/2018Convenience Fees vs. SurchargesThe Convenience Fee Rules listed below are based on Visa’s rules, as they are the strictest.Other rules apply if accepting only MC and AMEXCONVENIENCE FEESSURCHARGES Allowed only on CNP transactions Allowed on CNP and CP transactions. Through an alternative channel frommerchant’s normal payment channel Fee is a percentage of the sale Fee is a flat or fixed amount Applicable to all forms of payment Disclosed prior to the completion of thetransaction and the cardholder is giventhe opportunity to cancel. Included aspart of the total sale. Allowed on credit and signature debit. Applies only to credit cards, not debit Competing brands should besurcharged, if contract allows. Disclosure surcharge policy Merchant must provide prior noticebefore implementation. Be mindful of state laws. Special programs for government andhigher education*Surcharges & convenience fees cannot be applied on the same payment.178/21/2018BorgesTechnology & Surcharging:The UTA-Vantiv Solution answers YES to the following questions If a merchant does not have the technology to help remain in compliance with theCard Networks’ Surcharging Rules, the merchant may be subject to monthly finesof up to 25,000. Does the solution pass the surcharge amount as a separate field within thetransaction? Is the surcharge amount added in automatically? Does the solution recognize the card type? Does the solution only surcharge credit cards and not debit cards? Does the receipt reflect the surcharge amount in the same font size and font styleas the rest of the receipt? Is the surcharge amount reflected after the subtotal (allowing for any discounts)and before the final transaction amount? Does the solution pass Level 3 data?188/21/2018Borges9

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8/21/2018AutomaticallyPass Level 3Surcharge* Bin File ValidationUTA/Vantiv Surcharge Receipt ExampleSurcharge Amount 228/21/201811

8/21/2018CREDIT CARD SURCHARGING NOWLEGAL FOR THE MOST PARTDespite the surcharge litigation settlements in 2013 and 2014, variousstate laws exist which prohibit surchargingCalifornia litigation on its anti-surcharge law went as far as the 9thCircuit Court of AppealsNew York, Florida and Texas litigation went all the way to the SupremeCourt of the United States (SCOTUS)Following the SCOTUS decision, there is ongoing litigationFederal Law prohibits surcharging of Debit Cards238/21/2018BorgesCREDIT CARD PROCESSING FEES STILLILLEGAL – in certain areasAs of the Antitrust Litigation Settlement Date, it was still illegal tosurcharge your customer with your credit card processing fees in 10states and Puerto Rico:California, Colorado, Connecticut, Florida, Kansas, Maine,Massachusetts, New York, Oklahoma and, Texas.248/21/2018Borges12

8/21/2018Credit Card Anti-Surcharge StatutesSimilar language throughout the statutesNo retailer may impose a surcharge on a cardholder who elects touse a credit card in lieu of payment by cash, check, electronic or similarmeansCalifornia, Colorado, Connecticut, Florida, Kansas, Maine, Massachusetts,Oklahoma and Puerto RicoPermit the offering of a discount to induce payment by cash, checkor other means not involving credit card IF OFFERED TO ALLPROSPECTIVE BUYERS AND DISCLOSED CLEARLY ANDCONSPICUOUSLY IN ACCORDANCE WITH REGULATIONSTexas – slightly different – says the term “surcharge does not include adiscounted price charged for goods or services to a buyer who pays withcash.”258/21/2018Applicability of these Statutes toB2B Transactions 3 of the states with surcharge prohibition laws have adopted the UniformConsumer Credit Code: Colorado, Kansas, Maine California’s statute specifically uses the word “consumer” Massachusetts’ statute is included under “Consumer Credit CostDisclosure” Oklahoma’s statute is under the title “Consumer Credit Code” Texas’ “Business and Commerce Code” governing surcharges is titled“Rights and Duties of Consumers and Merchants” Puerto Rico’s statute specifically uses the word “consumer” Only Florida, New York and Connecticut were unclear as to Consumer orCommercial – BUT –Legal Experts agree statutes are not likely applicableto B2B transactions268/21/2018Borges13

8/21/2018NEW YORK LAWSUIT COMMENCED TOCHALLENGE THE CONSTITUTIONALITY OFANTI-SURCHARGE LAW Expressions Hair Design et al v. Schneiderman, Attorney General of NewYork, et al. Commenced in the U.S. District Court for the Southern District of New York in2013 for a determination that New York State’s General Business Law §518 isunconstitutional, vague and in violation of the First Amendment right to freedom ofspeech §518 says, in part “[n]o seller in any sales transaction may impose a surcharge ona holder who elects to use a credit card in lieu of payment by cash.” Federal Judge Rakoff found the NY statute unconstitutional “[I]n terms of their immediate economic consequences, surcharges and discountsare merely different labels for the same thing—a price difference between cash andcredit.” “[T]his virtually incomprehensible distinction between what a vendor can andcannot tell its customers offends the First Amendment and renders Section 518unconstitutional.”278/21/2018Borges2nd CIRCUIT COURT OF APPEALSDECISIONCircuit Court of Appeals decision on September 29, 2015New York’s law “does not prohibit all differentials between the priceultimately charged to cash customers and the price ultimately chargedto credit-card customers; it forbids charging credit-card customers anadditional amount above the regular price that is not also charged tocash customers but it permits offering cash customers a discountbelow the regular price that is not also offered to credit-cardcustomers”.New York’s law is neither unconstitutional nor does it violate amerchant’s freedom of speech.Petition to be heard by the Supreme Court of the United States (writ ofcertiorari) was granted on September 29, 2016Decision was rendered on March 29, 2017288/21/2018Borges14

8/21/2018SCOTUS DECISION IN EXPRESSIONSHAIR DESIGN v. SCHNEIDERMAN Oral argument took place on January 10, 2017 Justice Sotomayor said she did not “see anything about speech in thestatute.” Opinion, delivered by Chief Justice John Roberts, stated “The question presented is whether §518 regulates merchants’ speechand—if so—whether the statute violates the First Amendment. We conclude that §518 does regulate speech Vacated the 2nd Circuit Decision Remanded the case for the Court of Appeals to analyze New York’s law as a speechregulation 29Case ongoing in the State of New York Court of AppealsTHUS, Judge Rakoff’s decision stands and New York’s anti-surcharge law isunconstitutional8/21/2018BorgesFLORIDA LAWSUIT COMMENCEDTO CHALLENGE THE CONSTITUTIONALITYOF ANTI-SURCHARGE LAW Dana’s Railroad Supply et al v. Pamela Jo Bondi, Attorney General of the State of Florida - U.S. District Court forthe Northern District of Florida was commenced in 2014 by the merchants for a determination that Florida Statute§ 501.0117 is unconstitutional and seeking an injunction preventing the State of Florida from enforcing the law.Florida’s no-surcharge law makes it a criminal offense—punishable by a fine of 500 and jail time—for any“seller or lessor in a sales or lease transaction [to] impose a surcharge on the buyer or lessee for electing to usea credit card in lieu of payment by cash, check, or similar means, if the seller or lessor accepts payment by creditcard.”Florida’s statute expressly permits “the offering of a discount for the purpose of inducing payment by cash,check, or other means not involving the use of a credit card, if the discount is offered to all prospectivecustomers.” Federal Judge Hinkle found the Florida statute to be constitutional “The merchant may give a discount for paying with cash, but the merchant may not exact a surcharge forpaying with a credit card. This is the law even though the difference between a cash discount and a creditcard surcharge makes no difference in the price a customer must pay when using either cash or a card; it isa matter of semantics, not economics.” “This statute is [not] a First Amendment violation. this statute is constitutional.308/21/2018Borges15

8/21/201811th CIRCUITCOURT OF APPEALS STRIKESDOWN FLORIDA ANTI-SURCHARGE STATUTE11TH Circuit Court of Appeals ruled on November 4, 2015“Tautologically speaking, surcharges and discounts are nothingmore than two sides of the same coin; a surcharge is simply a“negative” discount, and a discount is a “negative” surcharge. As aresult, a merchant who offers the same product at two prices—alower price for customers paying cash and a higher price for thoseusing credit cards—is allowed to offer a discount for cash while asimple slip of the tongue calling the same price difference asurcharge runs the risk of being fined and imprisoned”“By holding out discounts as more equal than surcharges, Florida’sno-surcharge law overreaches to police speech well beyond theState’s constitutionally prescribed bailiwick.”“We, therefore, must strike down § 501.0117 as an unconstitutionalabridgment of free speech”318/21/2018BorgesSCOTUS DECISION INDANA v. BONDIPetition to be heard by the Supreme Court of the United States(writ of certiorari) was filed on June 6, 2016.Petition was held in abeyance pending the SCOTUS decision inthe Expressions Hair casePetition was denied on April 3, 2017THUS: 11th Circuit Court ruling stands – Florida statuteunconstitutionalThere is no activity (neither litigation nor legislation) ongoing inFlorida following the SCOTUS decision328/21/2018Borges16

8/21/2018TEXAS LAWSUIT COMMENCED TOCHALLENGE THE CONSTITUTIONALITY OFANTI-SURCHARGE LAWLynn Rowell etal v. Leslie L. Pettijohn, in her official capacity as Commissioner of theOffice of Consumer Credit Commissioner of the State of Texas – U.S. District Court forthe Western District of TexasCommenced 2014 for a determination that declaration that TEX. FIN. CODE § 339.001,barring surcharges is unconstitutional and seeking an injunction preventing the Stateof Texas from enforcing the law - Virtually identical to the Expressions Hair caseTEX. FIN. CODE § 339.001 Texas’s no-surcharge law makes it unlawful for any merchant,“[i]n a sale of goods or services,” to “impose a surcharge on a buyer who uses a creditcard for an extension of credit instead of cash, a check, or a similar means of paymentTexas’ “no-surcharge” law permits merchants “to extend a discount to a buyer who payswith cash instead of a credit card.” Federal Judge Yeakel dismissed the Complaint finding “that the Texas Anti-Surchargelaw regulates only prices charged, an economic activity that is within the state'spolice power, and does not implicate First Amendment speech rights.” “the Anti-Surcharge law regulates economic conduct, not speech.”338/21/2018Borges5th CIRCUIT COURT OF APPEALSDECISION – March 2, 2016The Circuit Court affirmed the District Court and held that theTexas statute did not violate the First Amendment right tofreedom of speech.34 The Circuit Court examined thoroughly the 2nd Circuit(Expressions Hair) and the 11th Circuit (Rowell) cases which werein opposition to each other “Texas' law ensures only that merchants do not impose anadditional charge above the regular price for customers payingwith credit cards.” A plain reading of Texas’ law shows it forbids a merchant fromimposing an extra charge for a purchase with a credit card, and iscompletely silent as to any other form of pricing.8/21/2018Borges17

8/21/2018SCOTUS DECISION INROWELL V. PETTIJOHNPetition to be heard by the Supreme Court of theUnited States was also held in abeyance pending thedecision in the Expressions Hair case.On April 3, 2017, the Petition was Granted, the 5thCircuit Court of Appeals Judgment was Vacated andthe case was Remanded for further consideration inlight of Expressions HairTHUS: Texas’ anti-surcharge statute standsconstitutional and enforceable as of now358/21/2018BorgesTEXAS ACTIVITY SUBSEQUENTTO THE SCOTUS DECISIONThe 5th Circuit Court, upon directive by SCOTUS, sent this case back to the U.S. District Courtsaying:In Rowell v. Pettijohn, 816 F.3d 73 (5th Cir. 2016), our court affirmed the dismissal of appellants'challenge to Texas' Anti-Surcharge Law, which prohibits merchants from imposing surchargesfor credit-card purchases. We held the law did not implicate the First Amendment's free-speechprotections and was not unconstitutionally vague. Id. at 82, 84. On 29 March 2017, the SupremeCourt, in a similar matter, Expressions Hair Design v. Schneiderman, U.S. , 137 S.Ct.1144, 197 L.Ed.2d 442 (2017), held speech was regulated and remanded to the second circuit.As a result, the Court remanded this matter to our court "for further consideration in light ofExpressions Hair Design". Rowell v. Pettijohn, No. 15-1455, U.S , 137 S.Ct. 1431, 197L.Ed.2d 644 (2017).Accordingly, this matter is REMANDED to district court for further proceedings consistent withExpressions Hair Design.368/21/2018Borges18

8/21/2018TEXAS ONGOING LITIGATIONAFTER THE SCOTUS DECISIONLitigation is ongoing in the District CourtEach side has filed a Motion for Summary JudgmentThe Plaintiff/Merchants are asking the court to declare that Tex. Bus. &Comm. Code §604A.0021 violates the plaintiffs’ free speech under the FirstAmendment and should permanently enjoin the State of Texas from enforcingthe statute against themThe Defendant/Texas’ Attorney General has asked the court to dismissPlaintiffs’ claims on the bases that:1. Texas’ longstanding statutory surcharge ban protects consumersfrom deceptive and misleading pricing schemes2. The surcharge ban is valid because it directly advances Texas’ssubstantial interests in protecting consumer welfare and promoting commerce378/21/2018BorgesTEXAS LEGISLATION FOLLOWING THESCOTUS DECISIONTexas Business and Commerce Code: Title 12. Rightsand Duties of Consumers and Merchants: Chapter 604AProhibition of Certain Surcharges was amended so thatthe enforcement of credit card surcharge prohibition hasbeen transferred to the Office of the Attorney General388/21/2018Borges19

8/21/2018TEXAS ATTORNEY GENERAL“CONSUMER PROTECTION DIVISION”Charging Extra For Credit Card UseIn Texas, a business can not penalize you for paying with a credit card.Businesses that add a surcharge to those who pay by credit card might beviolating provisions of the Texas Finance Code. However, businesses candiscount the regular retail price of an item for consumers who pay cash. Ifyou believe a business is charging extra for credit card purchases, pleasea file a consumer complaint with our office.This information is followed by a link to instructions on filing a consumercomplaint.398/21/2018BorgesWhile there are laws (for now)restricting surcharging in 8states, it is important tounderstand that Legal Expertsagree the statutes are not likelyapplicable to B2B transactions!408/21/2018Borges20

8/21/2018THE IMPACT OF THE UNITED STATESSUPREME COURT DECISIONON THE ANTI-SURCHARGE STATUTES.California - unconstitutional SORT OF - The 9th Circuit Court of Appeals [01/03/18]upheld the U.S. District Court’s ruling for declaratory and injunctive relief BUT modified it“to apply only to plaintiffs, and only with respect to the specific pricing practice thatplaintiffs, by express declaration, seek to employ.” 41ColoradoConnecticutFlorida – unconstitutionalKansasMaineMassachusettsNew York - unconstitutionalOklahomaTexas – constitutional and litigation ongoingPuerto Rico8/21/2018BorgesContracting Around the Anti-SurchargeStatutesContractual Agreement as to Place of TransactionIt is agreed that all credit card transactions between [Merchant/Trade CreditGrantor] and [Customer] shall be deemed to take place in the State of [ ]and shall be governed by the statutes of the State of [ ].The above Forum Selection verbiage is provided by Borges & Associates, LLC for thepurpose of this educational program, is not intended to be legal advice and trade creditgrantors are advised to consult with their own legal counsel428/21/2018Borges21

8/21/2018Contracting Around the Anti-SurchargeStatutesJurisdiction and Venue ProvisionAll credit card commerce between [Merchant/Trade Credit Grantor] and [Customer] shallbe governed by and interpreted in accordance with the laws of the State of [ ] withoutregard to conflict of law provisions thereof, and all actions, disputes, and proceedingsarising from, relating to or in connection with credit card commerce between[Merchant/Trade Credit Grantor] and [Customer] shall be commenced, at the solediscretion of Trade Credit Grantor, in any federal, state or local court within the state of [] or in any federal, state or local court within any state where Trade Credit Grantormaintains a place of business.The above language is provided by Borges & Associates, LLC for the purpose of this educational program, isnot intended to be legal advice and trade credit grantors are advised to consult with their own legal counsel.438/21/2018BorgesWhether you chooseto impose a surchargeor not, merchants arelooking to reduce the costof card acceptance. Howcan this be done?448/21/2018Borges22

8/21/2018Payments SystemRoles & ResponsibilitiesThree key entities manage the payment system:12Issuers:3Networks:Acquirers Issue cards Provide systems/operations Sign up merchants Assume buyer’scredit risk Develop products Underwrite merchant risk Provide risk management Provide processing Generate reports Offer advertisingand promotions Handle authorization Provide customer service Set standards and rules Manage Capture/Settlement Generate reports Provider customer service458/21/2018BorgesMark Tapia([email protected])Fee breakdownInterchange IssuerNetwork Assessments& Other Access Fees NetworksProcessing Fee468/21/2018 Acquirer/ProcessorBorges23

8/21/2018Fee Breakdown 500 Visa B2B Transaction 0.0195 0.6500 0.001 0.05Interchange (2.10% 0.10)Visa Base II Fee 1.25Tran Fee 0.0019Comm/Gateway FeeVisa Acq. Proc. FeeVisa Assessment 10.60Total Cost 12.57Visa Risk FeeInterchange represents 84% of the cost of this transaction.*Based on Average Ticket currently qualifying for the Visa Commercial B2B Business Card rate478/21/2018BorgesInterchange ManagementFees are influenced by 3 key considerationsProcessingTechnologyMarket Segment 48B2BTravel & EntertainmentFuelGroceryOther RetailRecurring PaymentseCommerceRestaurantsEmerging Market8/21/2018 Card TerminalPOS Software SystemsVirtual TerminalAutomated Fuel Dispenser(AFD ) Key Entry Emerging TechnologyProducts Consumer Cards‒ Credit‒ Debit‒ Rewards‒ World‒ Signature Commercial Cards‒ Purchasing‒ Business‒ Corporate‒ FleetBorges24

8/21/2018Visa Business Card-Not-Present TransactionWith AVS (Address Verification)2.10% 0.10Without AVS and Level II data2.95% 0.100.85% Downgrade498/21/2018BorgesInterchange ManagementIncentive Program Commercial Cards – Level II/III Commercial Cards – Large TicketSavings Opportunity Decreased expense Increased profit508/21/2018Borges25

8/21/2018Commercial Card – Data LevelsLevel 1 Card number,expiration date,location information,Tax ID, AVSLevel 2Level 3 Sales Tax Amount Customer Code Sales Tax Indicator Tax exempttransactionscannot qualify forLevel 2, but theycan qualify forLevel 3518/21/2018 Line Item Detail –invoice data such asquantity, description,dollar amount.This is not a comprehensive list of level3 data requirements.The greater amount ofdata provided, the lowerthe interchange rate.Borges352 &(66,1* /(9(/ 4 8 /,),& 7,2 1 & 57*RRG%HWWHU%HVW 26

8/21/2018AutomaticallyPass Level 3Surcharge* Bin File ValidationInterchange Rate ExamplePurchasingCard:BusinessCard:Purchasing Standard . 2.95% 0.10Business Standard .2.95% 0.10Purchasing Card-Not-Present(tax exempt) . .2.70% 0.10Business Data Rate I(tax exempt w/ no L3) .2.65% 0.10Purchasing Card-Present(tax exempt) .2.50% 0.10Business Data Rate II(taxable) . .2.00% 0.10Purchasing Level II Rate(taxable) 2.50% 0.10Business Data Rate III . 1.75% 0.10Purchasing Level III Rate . .1.90% 0.10Business LargeTicket Rate:.1.20% 40.00Purchasing LargeTicket Rate: .1.45% 35.00548/21/2018Borges27

8/21/2018Sample Transaction Costs:Interchange ExpensePurchasing Card:Business Card: 500 transaction 500 transactionPurchasing Standard(minimal data) . 14.85Business Data Rate I(Level I) . 13.35Purchasing CNP (tax exempt,w/out Level 3) . 13.60Business Data Rate II(Level II, taxable) . 10.10Purchasing Level II Rate(taxable) . 12.60Business Data Rate III(Level III) . 8.85Purchasing Level III Rate . 9.6030% - 35% cost reduction by processingLevel III data vs. minimal data558/21/201834% reduction in cost by processingLevel III data versus Level IBorgesSample Transaction Costs:Interchange ExpensePurchasing Card:Business Card: 50,000 transaction 50,000 transactionPurchasing Standard(minimal data) . . 1,475.10Business Data Rate I(Level I) . 1,325.10Purchasing CNP (tax exempt,w/out Level 3) . 1,350.10Business Data Rate II(Level II) . . 1,000.10Purchasing Level II Rate . . . 1,050.10Business Large Ticket . . 640.00Purchasing LargeTicket Rate . . 760.0044% - 48% cost reduction by processingLevel III data vs. minimal data568/21/201852% reduction in cost by processingLevel III versus Level I dataBorges28

8/21/2018Visa Purchasing Card Transactions10 Transactions for 200,142.05 in FebruaryCurrent CostsCosts with NACMProgram & VantivSavings 578/21/20182.70% 0.10 5,404.841.45% 35.00 3,252.06 2,152.78BorgesMC Fleet Card Transactions4 Transactions for 125,109.01 in FebruaryCurrent CostsCosts with NACMProgram & VantivSavings 588/21/20182.70% 0.10 3,378.341.25% 40.00 1,723.86 1,654.48Borges29

8/21/2018B2B Company – Processing Fee SummaryCURRENTNACM PROGRAMSAVINGSAccount 1 - Sept.Account 1 - Oct.Account 2 - Sept.Account 2 - Oct.Account 3 - Sept.Account 3 - Oct. 87,508.20 63,681.35 3,642.60 2,866.23 3,389.50 6,761.06 61,768.62 45,615.82 2,856.15 2,266.81 1,367.25 2,305.80 25,739.58 18,065.53 786.44 599.41 2,022.24 4,455.27TOTALS 167,848.94 116,180.46 51,668.483.14%2.17%* EFFECTIVE RATEEffective rate fees divided byVisa/MC/Discover Sales59 5,347,307.72Visa/MC/Disc SalesAVG. MONTHLY SAVINGS 25,834.2430.78%TOTAL ANNUAL SAVINGS 310,010.91SAVE8/21/2018BorgesThe UTA-Vantiv VirtualTerminal & Online Bill PayPortals AUTOMATICALLYpass the required Level 3data to help ensure thelowest interchange rates.608/21/2018Borges30

8/21/2018Level 3 ImpactWithout Level 3 Data on tax exempt payments,merchants are paying on average 0.20% to0.90% more than they could be on every Level 3capable commercial card transaction618/21/2018BorgesSavings AnalysisInterested in a FREEinterchange qualificationanalysis for attending today’spresentation?Email a copy of your company’srecent monthly merchantservices statement(s) to:[email protected]/21/2018Borges31

8/21/2018QuestionsBORGES & ASSOCIATES, LLCA

Visa Defendants [Visa U.S.A., Inc., Visa International Service Associates, Visa Inc.] Mastercard Defendants [MasterCar d International Incorporated and Master Card Incorporated] Bank Defendants[Bank of America, Capital One, Chase, Citibank, HSBC and numerous others