CustomerDirect
ePower's CustomerDirect offers a full service electronic bill presentment and payment solution for businesses with a recurring billing cycle. CustomerDirect will utilize data from a biller's existing system and create an enhanced online version of a customer's bill. In addition to electronic billing, CustomerDirect strengthens direct marketing and customer care. The electronic bill is presented to a consumer as a bill from the biller, not from ePower. This customized bill will contain promotions and information chosen by the biller that are accessible through successive mouse clicks.

The operations flow of this service is designed to integrate smoothly with the biller's existing workflow. The process involves the following steps:

1. The utility sends billing information for the current cycle to ePower in the utilities existing system format.
2. ePower software translates this billing information into its database. For each new bill, ePower generates a customized electronic bill. The electronic bill is emailed to the customer.
3. The customer receives the email, reviews, and approves payment by responding to the email.
4. ePower processes the responses, For each approved payment, an automated clearing house (ACE) transaction is submitted to ePower's bank.
5. The transaction is processed within the ACE system.
6. An execution report is returned to ePower
7. ePower compiles the executed and fully funded transactions, and sends back a reconciliation report which integrates directly into the utility companies system.

Value of CustomerDirect to a Biller
The CustomerDirect solution is a unique service that addresses the needs of our customers, the billers, and the consumer, the individual paying the bill.

CustomerDirect provides the following benefits to a biller:

• Direct connection with customers
• Reduction in operating costs associated with billing
• Reduction in working capital requirements
• Superior data management
• Control over branding issues
• Security

Connecting with Customers
Customer retention and loyalty will be enhanced through the CustomerDirect interactive connection between utility and consumer. The system will allow billers access to and analysis of their data to offer improved customer service by understanding the customers purchase behavior patterns, offering easy access to billing details to both the end user and the CSR, and facilitating easy payments. This improved knowledge of customer buying behavior will enhance customer service and customer retention. Examples of these services include:

Interactive marketing - A customer's bill is a valuable channel that can present customized promotions to an individual customer based on their usage patterns of the service provided. CustomerDirect. will analyze customer usage and present promotions and plans that are applicable to individual user groups. This one-to-one marketing approach will provide higher responses than traditional statement stuffer promotions.

Enhanced customer support - Customer service representatives (CSR) will be able to view over the internet bill formats that are identical to the customer's copy. CSRs will be aware of all information that has been sent to customers and are better educated to serve customers and their needs. Additionally, reducing requests for copies of bills enables CSR's to spend more time on actual customer service.

Web links- The customer is able to review past billing periods and print copies of each bill from the Payabill.com web-site. Links will also be established with other support services such as FAQ (frequently asked questions) pages, the biller's site and direct e-mail between the customer and the biller,

Cost Savings from using CustomerDirect
Eliminate operating costs - Costs eliminated include postage, paper, printing, and remittance expenses. ePower's billing solution will generate savings of $0.75 to $1.25 per bill per month. This figure does not include the potential savings from avoided customer service calls, which can cost a biller anywhere from $1 to $5.⁴ Estimates place 40-50% of all customer calls as related to questions about their bill.

Reduction in Working Capital
Availability of funds - EBPP reduces the accounts receivable cycle from about 45 days (see sample company data below) to an estimated average of 15 days. This reduction in days accounts receivable represents substantial savings in financing costs for a biller. For a hypothetical customer paying $50 per month, this would translate to savings of 40 cents per month per customer. Through strategic alliances with ePower's financial partner, CustomerDirect will initiate payment upon customer authorization through the ACH network.

Sample Utility Accounts Receivable Turnover (amounts in millions)

Data Management
Control - The biller maintains control of all billing data and customer relationships. At no time does ePower intend to dis- intermediate a biller and their consumers. CustomerDirect allows billers to design their own electronic bill format and promotions. All of ePower's client databases will remain confidential.

Data storage and access - CustomerDirect provides a graphical browser interface that is user friendly for the end user regardless of operating system. The system's database will permit storage of billing data online.

Data Analysis - The system will enable the biller to analyze billing and usage patterns of customers, and utilize this information for interactive marketing programs and developing accurate customer profiles.

Security
The customer's bank account number/credit card number is NOT transmitted over the Internet. When the customer authorizes payment by responding to the EBPP email, a transaction is generated, but no financial information is transmitted. The bank account information resides only in the secure database, and the transaction is an ACH transmission over a dedicated private line. Additionally, the deployed system will have a firewall between the web access and the core database. To insure state of the art security, ePower will devote significant resources to having security experts on staff and utilize the services of web security consultants.

In addition, CustomerDirect will constantly log all activity. To prevent fraudulent transfers, daily reconciliation of all accounts will be conducted prior to the close of business each day.

Value of CustomerDirect to the End User
The main benefits of using CustomerDirect for the end user (the consumer) are convenience based. The consumer saves time by not having to handle the paper bill, not having to write a check, and not having to mail the bill. For each bill paid through ePower, the consumer saves the cost of a stamp, and the cost of a check. Additionally, a receipt is automatically generated for record keeping. After the initial development, features will be added which will allow the transaction record to be imported into Quicken and other personal finance management software.

4 KPMG - Electronic Billing Models