EFTA01382676.pdf

S-1/A Table of Contrail through our RapidConnect universal integration messaging solution; (2) improved risk and fraud management solutions; (3) access to a greater number of alternative payment services which have been developed for specific customer segments and geographic markets: and (4) more effective global 'Commerce gateways. In addition to these investments, we intend to continue to support our NP clients as they grow and expand into new countries and customer segments by enabling them to establish new relationships with our network of financial institution partners. and by leveraging the global capabilities of our OmniPay eCommerce processing platform. We are also focused on expanding our relationships with businesses whose presence is primarily online. We plan to widen our integration with shopping cans, web design firms, and other eCommerce infrastructure partners. We have also launched Payeezy. an all-in-one (-Commerce solution for SMBs that includes web and mobile storefront development, payment processing. security and fraud management. together with new integration tools and APIs that are convenient and easy to use. We also plan to increase the penetration of eCommerce sales to existing brick and mortar businessts, which will be achieved through solutions such as Payeezy, increased bundling of eCommerce with other First Data solutions, and selling eCommerce solutions to clients who currently lack an online presence. Expand Our Clover Operating System We acquired Clover. an open architecture, integrated POS operating system, in December 2012. At the time of acquisition, Clover had less than a dozen employees, none or only partially developed software, hardware options, and distribution strategy. Since then, we have grown Clover to 53 engineers, launched three versions —Clover Station, Clover Mobile and CloverMini — and built a robust open architecture platform that can service a broad array of business client& Within Clover, we also offer a cloud-based Clover App Market for business applications. Our goal with Clover is to create the largest open architecture platform of commerce-enabling solutions and applications for business owners. We believe we can achieve this goal by leveraging the breadth and scale of our distribution channels, and selling into our large existing client base. The recently launched CloverMini• for example. will compete in the high-volume traditional POS terminal space, and will, over time. likely become First Data's preferred terminal solution for acquiring clients. We are still in the early stages of this journey, so Clover has not yet had an opportunity to have a material impact on our financial performance to date. but we believe that Clover can play a significant role in our future growth. In addition to enhancing our ability to drive core acquiring sales, Clover allows us to earn incremental revenue from business clients. Currently. certain versions of Clover charge a recurring software-as-a-service fee, and we also generate revenue from the Clover App Market, where we typically have a revenue share arrangement on paid applications with the application developer. We also believe Clover can help enhance client retention because it will becomc corn to our clients' businwe.s, and position First Data as a value-added partner. For example, business owners may use applications in the Clover App Market to manage their employees' work schedules. operate customer loyalty programs, integrate transaction information directly into their accounting software, and gain analytical insight into their business. We believe it will be challenging for potential competitors to replicate Clover, particularly because of its open application marketplace. One of the primary drivers of success of an open application marketplace is the ability to attract third-party application developers, who arc often motivated to have their applications deployed on platforms with the broadest reach. We believe our Clover App Market is uniquely positioned to attract many of these third-party developers given First Data's distribution strength into business clients. 114 httplAnnv.see.gov/Archi vecledgaddatat883980/000119312515334479/d31022dsla.htmill0/14/2015 9:06:38 AM] CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0082133 CONFIDENTIAL SONY GM_00228317 EFTA01382676