Treasury and Trade Solutions | Citi Commercial Cards

A History of Achievement. A Future of Innovation. | October 2014

2014 Citi Annual Training Conference Welcome and Program Update

Before we get started, please be sure to… Before: – Kindly turn your cell phone to silent so as to not disrupt the session

After: – We value your feedback. We’ll distribute a survey after this session, please provide us with your comments by completing the survey. Your feedback will influence next year’s training session – Ask us questions! For any questions or comments, please feel free to reach out to us directly Trish Stoker 1.512.462.0487 [email protected]

A History of Achievement. A Future of Innovation. 1

David Cox 1.512.382.0265 [email protected]

Presentation Agenda • Conference Schedule • State of Texas/Citi Contract Updates • Single Sign-On Overview • Chip and Pin Card Migration • Paper Free Initiatives and CitiManager Alerts • One Time Passcode • Virtual Card Accounts (VCA) Overview • Program Optimization

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Agenda – Conference Day 1 8:00 – 8:30 a.m.

Onsite Registration

8:30 – 9:30 a.m.

Welcome and Program Update Speakers: Trish Stoker and David Cox (Citi)

9:45 – 10:45 a.m.

Fraud, Misuse and Abuse: Current Trends in Third-Party Fraud and How MasterCard and Citi are Addressing It Speakers: Trish Stoker and Maureen Bilbrey (Citi)

11:00 – 12:00

Best Practices for Program Management – State Guidelines and Recommended Practices Speaker: Melissa Hernandez (State Comptroller’s Office)

12:00 – 1:00 p.m.

Lunch (Provided on Conference Day)

1:00 – 2:15 p.m.

Roundtable Discussion: Best Practices for Program Management Break out sessions (Travel and Purchase)

2:30 – 3:45 p.m.

Roundtable Discussion: Best Practices for Training Program Administrators, Level Managers and Cardholders

3:45 – 4:00 p.m.

Wrap-up and Overview of Training Day

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Agenda – Training Day 2 8:00 – 10:00 a.m.

Introductory - CitiManager® for Program Administrators Advanced - Citi Custom Reporting System

10:10 – 11:40 a.m.

Introductory - Global Card Management System Advanced session continued - Citi Custom Reporting System

12:00 – 1:00 p.m.

Lunch Provided

1:10 – 2:30 p.m.

Introductory - Citi Standard Reporting Advanced - Global Card Management System

2:40 – 3:50 p.m.

Introductory - What Cardholders Can Do: CitiManager® /GCMS Advanced session continued - Global Card Management System

4:00 – 4:30 p.m.

State of Texas HUB Reporting

A History of Achievement. A Future of Innovation. 4

State of Texas Contract Information • State Comptroller’s Office executed contract renewal to September 2015 – The renewal is the second of three, one year renewal options available to the State Participating Programs – 156 State agency programs – 80 University programs – 434 Cooperative entities • Rebates – The next rebate will be paid in November/December 2014 • State: General Revenue • CO-OP’s: Direct Payment

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Single Sign-On Review

Single Sign-On Overview • Single Sign-On (SSO) provides access to all program management tools via CitiManager • Functionality set at company level so ALL users must login through CitiManager& use SSO when enabled • Reduces system logins and password maintenance – Using your SSO, you can access CitiManager, CitiDirect Global Card Management System (GCMS), Citi Custom Reporting System (CCRS) and Commercial Cards Learning and System Support (CLASS) with one, single password • Provides more efficient software navigation • Provides ease of cardholder password resets • Contact your Account Manager or a Help Desk representative to assist in activating SSO

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Chip and PIN Card Migration Introduction and Highlights

Chip and PIN Migration is Underway Chip and PIN cards are the next generation of payment card technology • Migration will occur over time and the target date for completion is March, 2015 – You will be contacted if you have a custom hot stamp • Citi launched the Chip and PIN card in 2011 for U.S. cardholders traveling abroad • Enhanced Security – Chip and PIN cards contain an encrypted microprocessor that is embedded within the card – When cardholders receive their new card, they will need to establish a 4-digit PIN during the card activation process, using Citi’s automated voice response system – This PIN will be used when making purchases at Chip-enabled merchants across the world • Existing cardholders will retain their same account number with their new Chip and PIN card, once received • Merchants in the U.S. are beginning to rapidly adopt Chip and PIN technology and are expected to continue to do so during the remainder of 2014 and into 2015 due to association regulations – Citi cards will continue to support magnetic card technology so cards can be used at merchants who are not Chip-enabled • Program Administrators can access additional information on the Citi and State websites to include in cardholder communications, as needed • In-depth discussion on Chip and PIN will continue during presentations and roundtable discussions today

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Paper-Free Initiative and CitiManager Alerts Enrollment Review

Paper-Free Enrollment Enrolling in Paper-Free statements is quick and easy.

Step 1 To select paper-free statements, click on the Statement tab

Step 2 Next, click the Go Paperless sub-tab

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Paper-Free Enrollment (continued) Step 1 Confirm the email address where your paper free statements will be sent Step 2 If the email is correct, click the Yes button If the email is incorrect, click the No button to be redirected to update your email address Step 3 You can also elect to set up online payments Click the Continue to Make Payment button to do so or click the Cancel button

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Cardholder Instructions on How to Register for Alerts To begin receiving Citi Alerts, cardholders must first enroll via the Alerts page on CitiManager®. PAs enrolling in Alerts for themselves follow the same process

– 2– 1

Go to My Profile Screen: My Profile Alerts Go to Alerts Screen: Click on “Alerts” button at bottom of “My Profile” page

1

2

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Cardholder Instructions on How to Register for Alerts Cardholders can easily select / deselect both the SMS and email alerts they want to receive (or stop receiving) by clicking the alert box(es) next to the respective alert(s) 1 Select desired Email and SMS Alerts using checkboxes (These can be updated at any time)

2 Add your mobile phone number

3 Update your email address(es)

4 Select timezone for alert receipt (must expand to view)

5 View Alert Subscription Log (must expand to view)

6 Agree to terms and conditions for SMS Alerts

7 Save changes Note: Screenshot shown for US companies. Alerts depicted may not yet be available for all other regions. In US, Sprint users will receive monthly SMS reminder of enrolment in Citi® Commercial Cards SMS Alerts per Sprint mandate. In Canada, all cardholders will receive monthly SMS reminder of enrolment in Citi® Commercial Cards SMS Alerts per Canadian telecommunications regulations. These users cannot turn off the alert unless they discontinue receipt of all Citi SMS alerts. This alert is not available to other regions or users A History of Achievement. A Future of Innovation. 14

NA Cardholder: Mobile Alert One-Time Confirmation Process There is an opt-in subscription process1 when a cardholder enters a new mobile phone number for Citi’s mobile alerts on the CitiManager® alerts subscription page

2. Receive activation code on mobile device

1. Register mobile phone number, choose alerts, and agree to terms and conditions on CitiManager®

4. Receive confirmation message

3. Enter activation code on CitiManager®

1In the US, Sprint users will receive a monthly SMS reminder that they are enrolled in Citi® Commercial Cards SMS Alerts per Sprint mandate. In Canada, all cardholders will receive a monthly SMS reminder that they are enrolled in Citi® Commercial Cards SMS Alerts per Canadian telecommunications regulations. The reminder alert cannot be turned off by the cardholder for these users – to stop receiving these reminders, the cardholder will need to discontinue receipt of all Citi SMS alerts

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Non Cardholder Alerts and One Time Passcode Increased Security with One Time Passcode

NA Non-Cardholder: Selects / Updates Alerts Program Administrators (PAs) are also able to select / deselect receipt of alerts for themselves by clicking on the appropriate alert radio box for that account 1– Go to My Profile Screen: My Profile Alerts

–

2

Go to Alerts Screen: Click on “Alerts” button at bottom of “My Profile” page 1

2

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Note: Screenshot shown for US companies. Alerts depicted may not yet be available for all other regions

One Time Passcode Additional Layer of Security Used during Login Process • Launched in September 2014 • Affects ONLY Non-Cardholders who have access to card accounts other than their own • Each login attempt is assessed for security – Only sessions deemed unusual or risky require a One Time Passcode (OTP) • An OTP entry screen will display receipt options (i.e. text message, email or phone) that you may choose – Only options set up in your CitiManager site profile will be available as possible options • Once you receive the OTP, enter the 8-digit passcode into the field on the screen to continue with your login –

The OTP passcode expires five minutes after it is sent to you

–

System allows six attempts to get into CitiManager, using OTP •

If you six failed attempts, click Cancel to return to the Receipt Option screen or go back to the CitiManger homepage to initiate the process from the beginning

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Citi® Virtual Card Accounts Commercial Card Solutions

Types of Commercial Cards How a card is used assist in determining the card type

• Declining Balance Cards – Infrequent travelers, single use – Special events, projects • Travel Cards – Cards issued to individuals used primarily for travel expenses – Central bill – Individual bill (State agencies only)

• Purchase Cards – Cards used at point of sale for small dollar purchases – Issued to individuals that need to make ad hoc purchases – Centrally billed and centrally paid with Corporate liability

• Accounts Payable Cards – Cards used as a payment mechanism to pay invoices per the regular procurement process – Ghost cards tied to AP or a supplier

• Virtual Card Accounts – Fully automated and secure virtual card alternative to checks – E-payment/single use account A History of Achievement. A Future of Innovation. 20

Citi Virtual Card Accounts Overview Clients can gain financial benefits, process improvements, and greater security & control by leveraging Citi Virtual Card Accounts for supplier payments • Virtual Card Numbers (VCNs) – Unique, non-plastic account numbers used for secure purchasing – Local-currency issuance in 40+ countries and 25+ currencies

• Increased Transaction-Level Control Define authorization controls for each VCN: – Number of transactions (single- or multi-use) – Transaction amount limit (exact, maximum, or range) – Validity Period – Suppliers and Merchant Category Codes (MCCs)

• Enhanced Client-Supplied Data Capture up to 29 client-specified data elements with each VCN for enriched data analysis, reconciliation, and allocation

• Three Interface Options – Request website with customizable approval workflows – Batch File Interface – Real-time XML API

• Secure VCN delivery via encrypted email to suppliers

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Citi Virtual Card Accounts – Interfaces Virtual Card Numbers can be created by three interfaces: web, batch file and API Description

Web

Batch File

API

• Simple web-based user interface for generating VCNs • Supports approval workflow and user entitlements

• File-transfer method to generate a group of VCNs, typically from a centralized ERP or Accounts Payable system

• A real-time web service to integrate VCN’s in real time from clients’ eProcurement system, catalog, or other payment system • Flexible, supports custom client solutions

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limit

Manual/Automated

Speed

Manual

Real-time

Automated

Automated

Periodic (Intraday)

Real-time

Virtual Card Accounts Reporting VCA can enhance standard Commercial Cards transaction data, enriching and simplifying your analysis, allocation, and reconciliation processes

Reporting

Data Analysis

Allocation

Monthly Spend by Purchase Type

Record accounting codes up front

Reconciliation Match transactions to payment instructions by invoice or ref #

GL 1

For Each Transaction: • Rich Commercial Card Transaction Data • Virtual Card Number • Client Custom Data Fields

 Combine standard Commercial Card transaction data with virtual card number and custom data fields

Meeting Actuals vs. Budget

GL 2 GL 3

Capture add’l info to enrich data analysis

Use this data to automatically allocate to the proper GL

Easily track matched, expired, and active virtual cards

 View trends, monitor spending patterns, and track goals of your card program

 Allocate transactions to the correct accounting codes and cost centers

 Leverage invoice, payment reference, or order numbers to identify transactions

 Capture up to 29 custom data fields at time of card creation for later reporting

 Track requestor, reason for purchase, meeting ID, project ID, etc. to enrich data analysis

 With VCA, record accounting codes or requestor information at time of payment

 Match transactions automatically with purchase/invoice documents to track payment status

 Create custom reports tailored to your program

 Example Use: Track actual meeting spend vs. budget

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 Automate or simplify expense allocation  Sample custom data: GL code, cost center

 Sample custom data: invoice number, PO number

Virtual Card Accounts: Sample Reporting Data Use custom data fields, such as Invoice Number, Requestor Name or Meeting ID, to monitor and track spend on your program

Transaction MCC Description Amount Lodging - Hotels, Motels, 6756 Resorts - Not Elsewhere Classified

Merchant Transaction Transaction Country Code Currency Code Date FR EUR 8/10/2011

Transaction Reference Number 10603472

5943

Office, School Supply, and Stationery Stores

8.69

US

USD

3/22/2011

1-800FLOWERS.COM,INC.

5992

Florists

99.97

US

USD

636561

WM SUPERCENTER

5411

Grocery Stores and Supermarkets

11.42

US

004513

RIUSA II S A

5964

Direct Marketing Catalog Merchants

758.16

001532

COMFORT INN

5812

636561

CROWNE PZA VILLAHERMOS

636561 636561

Account Number (Short) 004513

Merchant Name 121 PARIS HOTEL

MCC 7011

636561

STAPLES

636561

Virtual Card Virtual Card Number Label 1 51248967539 Purchase Type 25841

Virtual Card - Data Virtual Card 1 Label 2 Hotels Requestor Name

Virtual Card Virtual Card - Data 2 Label 3 John Dover Meeting ID

Virtual Card Data 3 6670

10603472

51248967539 Purchase Type 25841

Meeting & Event Planning

Requestor Name

Roger Ferguson

Meeting ID

4852

3/26/2011

54256315

51248967539 Purchase Type 25841

Meeting & Event Planning

Requestor Name

Patricia Kimber

Meeting ID

4852

USD

7/14/2011

10603472

51248967539 Purchase Type 25841

Meeting & Event Planning

Requestor Name

George Smith

Meeting ID

6670

ES

EUR

8/16/2011

85418361

58569423196 Purchase Type 78231

Meeting & Event Planning

Requestor Name

Jane Jones

Meeting ID

7104

Lodging - Hotels, Motels, 550 Resorts - Not Elsewhere Classified

GB

GBP

8/10/2011

25536062

59632147855 Purchase Type 36946

Hotels

Requestor Name

Roger Ferguson

Meeting ID

6670

7011

Lodging - Hotels, Motels, 172.69 Resorts - Not Elsewhere Classified

MX

USD

8/6/2011

10603472

51329876543 Purchase Type 57694

Hotels

Requestor Name

Alexander Lee

Meeting ID

4852

WHOLESALE SUPPLIES PLU

5970

Artists Supply and Craft Shops

33

US

USD

8/3/2011

55425631

51329876543 Purchase Type 57694

Meeting & Event Planning

Requestor Name

Jane Jones

Meeting ID

7104

TARGET

5310

Discount Stores

370

US

USD

3/18/2011

55425631

51329876543 Purchase Type 57694

Meeting & Event Planning

Requestor Name

Patricia Kimber

Meeting ID

7104

00108381

00006452

Standard Commercial Card Transaction Reporting Data Elements A History of Achievement. A Future of Innovation. 24

Additional VCA Reporting Elements: Virtual Card Number & Custom Data (e.g. Purchase Type, Requestor Name, Meeting ID)

Using Virtual Card Accounts: Request VCNs and Transact Transact Client 1. Requests virtual card number (VCN) linked to a real card account number (RCN) – Set controls – Set custom data fields

Merchant 3. Processes 16-digit VCN for payment via existing Point of Sale mechanism

2. Receives VCN and uses in a transaction

MasterCard 4. Identifies processed card number as a VCN

OR

5. Checks VCN controls *

Has VCN sent to supplier automatically via secure email system

(e.g., amount, validity period, supplier, MCCs)

6. Returns authorization – approval or decline – back to merchant 7. Sends authorization, clearing message and VCA custom data fields to Citi

Citi 8. Posts transaction to RCN account 9. Loads VCN transactions and associated custom data to CitiManager and other online tools

Client Reporting

Custom Data Fields

Transaction Details

* In addition to the check on the VCA controls, Citi conducts additional checks – including credit limit and fraud analysis - on the real card number (RCN). This step is omitted merely to streamline the depiction of the above VCA process

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Authorization Details

Posting Details

Web Interface for Requesting a Virtual Card Number

Optionally, if the request is over the value for the group, it is sent for approval

1. Input payment details and set controls

2. Add required/optional custom data fields that are linked to the purchase type

3. Receive Virtual Card Number immediately (or after optional approval) A History of Achievement. A Future of Innovation. 26

Secure Email Delivery Virtual Card Numbers and remittance data are automatically sent to suppliers by secure email • Secure, encrypted email sent to supplier email address at the time of card creation • Email address can be specified as part of a virtual card number request or maintained with Citi • Clients can customize their email template: – Choose which fields to display – Custom subject line – Custom email footer – Contact address for non-delivery notifications • Preparedness Best Practices: – Validate suppliers’ emails – ideally, dedicated addresses for Accounts Receivable Depts. – Let suppliers know when to expect their first payment through the new method & confirm initial receipt

Secure Email Delivery (Sample) From: [email protected] Subject: Virtual Card Payment from Any Corp Dear Widget Group, Inc., This is a notification of payment details from Any Corp, Inc: Account Number: Exp date: CVC2: Valid To: Amount:

5400-4444-5555-2345 08/11 333 07/15/11 $3065.25

Custom Data Fields Payment #: Customer #: Invoice 1: Invoice 2: Note:

0615-WIDG-AA ANYCORP2 INV001 INV002 Applied early pay discount

This virtual card number has been provided by Any Corp, Inc for a single payment the invoices listed above. Please call 800-555-1234 for additional information about the Any Corp virtual card program or to update your contact information. Do not reply to this email.

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Citi Virtual Card Accounts: Conclusion VCA can help unlock opportunities to optimize your existing Commercial Card program and to deploy card payments in new areas throughout your organization

Security

Control

 Unparalleled security, control and paymentprocess automation  Opportunities to grow card programs through both simple web-based as well as efficient, automated system-to-system solutions  Flexibility to start with the simple web use and evolve to future integration and automation

Automation

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Program Optimization Review

Optimization Requirements and Feedback • Optimization assists in determining where potential spend can be identified and incorporated into your commercial card program. The optimization is performed by analyzing the vendors paid by check and determining if they would be a good fit for commercial card usage. • In order to run the optimization, a one year history of check payments is recommended – Include vendor name, address, and tax ID, the more data the better the results – File format is in Excel • Feedback – Top 30 merchant card acceptors by spend – Top 30 merchant non-card acceptors by spend – Highest spend by Merchant Category Code • Turnaround time for analysis is approximately a week to 10 days after receipt of check file

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Top 30 MasterCard Acceptors by Spend Vendor

Payment Method

JET SET SPORTS

6,149,252

CHECK

VERTIS COMMUNICATIONS

5,636,802

CHECK

US POSTAL SERVICE

4,688,224

Wire

UNITED AIRLINES

2,834,960

Check

ALTA RESOURCES INC.

2,508,599

EFT

AMMATAC CORP

2,426,617

EFT

NIKE USA INC

1,937,758

Check

MOORE WALLACE NORTH AMERCIA, INC.

1,574,330

Check

AT&T

1,320,654

Check

TRANS WORLD INTERNATIONAL, INC.

1,205,771

CHECK

COLORADO SPRINGS UTILITIES

1,179,071

Check

TEAM EPIC LLC

1,131,011

CHECK

MERKLE, INC.

966,415

EFT

MARSH USA INC

916,791

Check

LAUTERBACH GROUP INC

877,421

Check

ASPEN VALLEY SKI/SNOWBOARD CLUB

875,796

CHECK

PARADYSZ MATERA CO INC

768,127

EFT

VML, INC.

761,516

CHECK

ADECCO USA, INC.

694,654

Check

CARNATION BUILDING SERVICE INC

687,765

Check

BLUE STATE DIGITAL

629,600

CHECK

SYSCO FOOD SERVICES OF DENVER

623,140

CHECK

AT&T MOBILITY

588,908

Check

STAPLES PROMOTIONAL PRODUCTS ECHO ENTERTAINMENT INC.

585,060 582,475

CHECK

ROYAL COLLEGE OF ART U.S.FOODSERVICE

545,501 537,132

A History of Achievement. A Future of Innovation. 30

Spend

CHECK WIRE CHECK

Impact and Benefits of Optimizing your Program Typical Transactional Cost Savings in Private Sector • Average cost per transaction with traditional PO $95 (1) • Average cost per transaction with P-Card

$21 (1)

• Equals potential savings of $74(1) per transaction

• $74 savings x 1,000 transactions currently being paid via check = $74,000 (2)

A History of Achievement. A Future of Innovation. (1) Source: 2012 Purchasing Card Benchmark Survey Results/Richard Palmer and Mahendra Gupta, RPMG Research Corporation (2) Assumes only invoices currently being paid via check, that identified as card-accepting merchants. 31

Impact and Benefits of Optimizing your Program Cycle Time Reductions in the Private Sector • Average cycle time per transaction with traditional PO: 12.8 days (1) • Average cycle time per transaction with P-Card 4.9 days (1) • Reduction of cycle time = 8.5 days or 70%(1) • Cycle time defined as time from determination of purchase need to the receipt of ordered goods

A History of Achievement. A Future of Innovation. (1) Source: 2012 Purchasing Card Benchmark Survey Results/Richard Palmer and Mahendra Gupta, RPMG Research Corporation 32

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A History of Achievement. A Future of Innovation. © 2014 Citibank, N.A. All rights reserved. Citi and Citi and Arc Design are trademarks and service marks of Citigroup Inc. or its affiliates and are used and registered throughout the world.