Prepaid for Perfect Fit Payments

Virtual Prepaid for Perfect-fit Payments

Prepaid Summit: Europe 2015Milan – Nov 2015

#PerfectFitPayments

Alex MifsudCEO

© 2015 Ixaris System LtdOur Prepaid Opportunity 2

Contents

1. Introduction to Ixaris

2. Payment Imperfections offer Opportunities

3. Virtual Prepaid for Perfect Fit


Multi award-winning payments technology company with 10+ years experience delivering prepaid solutions

Pioneered virtual prepaid cards in 2003

Multiple re-usable applications that can be configured and deployed rapidly without IT effort

Who we areFast facts: 13 years old, 160 staff, 80+ engineers


• Comprehensive range of off-the-shelf products / templates

• Customise, configure and deploy per market or per customer without the need for an IT project

• Or scale up sales by empowering clients to manage and customize themselves

• Create exciting new products without extensive and expensive IT

What we doAn ‘App Store’ for prepaid programmes


Turnkey corporate payment solutions for purchasing, disbursement, payroll, and incentives

From Technology to Turnkey SolutionsWe provide the tools for prepaid but also build & operate solutions

Technology suite for banks to create and offer their own prepaid payment applications

https://www.virtualincentives.com/


The Problem: payments inefficiency There are many large and unaddressed inefficiencies in payments

The inefficiencies vary by - Payments use case: purchasing, gifting, payroll, …- Industry: travel, insurance, construction, …- Geography: Western Europe, Eastern Europe, US, Africa, Middle East, …- Customer size and type: consumer, SME, enterprise, …

Cost inefficiency High fees for cross-border transfers Forex spread Working capital requirements due to

slow transfers

Convenience inefficiency Delays in transfer and settlement –

results in costs of working capital and exposure

Accessibility in the preferred form of use: e.g. APIs for businesses, on mobile for consumers, …

Control inefficiency Errors and failures Fraud – external and internal Exposure due to repudiation Loss of control over funds in transfer


Corporate card business is hooked on rebates

Chip & PIN cards are expensive to produce

Consumer interchange falling by up to 80%

Now is the time to find New Models

Profits are under threat

The Opportunity: why prepaid issuers should address the problem Established models in the cards business are under threat – do nothing and die!


Virtual account numbers are more than just payment cards No plastic! Virtual cards are a better mousetrap against payments inefficiency

Multiple use modes: single-load multi-spend, single-load single-spend, multi-load single-spend, multi-load multi-spend. Works on prepaid (debit) or credit card products

Real time issuance: Issued, funded and delivered electronically in real time, at almost zero cost

Fine-grain control: at the time of issuing can set the value-as-needed, MCC-restriction, time-validity window

Perfect reconciliation each card issued against external reference provides to the penny reconciliation against external data such as purchase order, client claim, etc

Virtualization of Card Payments can offer a path to new applications, new business models and profitability

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Opportunities for Perfect-Fit Payments (1): Purchasing CardsP-Cards have not been as successful in Europe as in the US

Europe accounts for 31% (€27.9 trillion) of global Commercial Consumption Expenditure (CCE), but only 8% of this is done via cards

Visa Commercial Consumption Expenditure Index 2010

Key reasons why• P-cards are perceived to lack the controls available on other payment methods

• P-cards are perceived as expensive for both buyer as well as supplier compared with national payment systems – SEPA threatens to extend this to pan-EU payments

• Limited penetration of card acceptance amongst suppliers

• Poor facilities for reconciliation – transaction records from issuers do not provide sufficient external reference data


Purchasing BackgroundAXA makes thousands of international payments daily supporting travellers who need immediate assistance. It handles 8.5 million case files annually in over 200 countries, employing 6,900 people in 32 different countries to do so. AXA often has to pay suppliers in far-away places and under circumstances where time for procuring a service (such as rescue or medical attention) can be critical.

Challenges• Getting pre-payments to service providers in some countries requires local agents

to handle a lot of cash, involving risk

• Payment on invoice can result in the amounts involved being under dispute ‘after the event’ creating difficulties for AXA that needs to keep suppliers in far flung places happy to serve it

• Reconciliation across such a complex organization (with 32 subsidiaries) and its suppliers globally is a constant challenge

Case 1: Real-Time Payments for Global AssistanceStreamlining global payment processes with lower costs and improved controls


PurchasingThe Solution



Approach We created a solution based on our standard Corporate Purchasing application configured to deliver a single-use virtual card via secure web terminals so that deployment would not require integration. Each card number created was tagged by additional data such as the claim number, customer id, supplier reference, cost centre. This enables perfect reconciliation once settlement records are received.

Results for the Client• Reduced costs v bank transfer or cheques – particularly cross border, smaller and

fragmented payment

• Improved controls due to better reconciliation and reporting

• Faster payment process – payments issued and received globally in real time 24/7

Results for the Programme Manager

• Multiple revenue streams: fees, interchange share, forex

Purchasing



Ixaris enables to us to drastically improve the disbursement of payments from all our 32 operating centres around the world

Nicolas Barsky,Group CFO

Purchasing



Case 2: Payment Optimization for European Travel GroupDirect contribution to the bottom line and improved controls

BackgroundInternational online travel agent (OTA) Logitravel purchases thousands of hotel rooms, flights and other holiday components across the world daily through automated purchasing processes. As an intermediary between travel services providers, Logitravel’s margin are slim, and surcharges and forex exposure takes a huge toll on profit.

Challenges• Losing 10-20% of margin as a result of payment costs for common types of

bookings such as Low Cost Carriers

• “Surcharges and forex fees a significant threat.”

• “Facing a reconciliation nightmare.”

• Unclaimed hotel booking commission fees running at about 20% as a result of incomplete reconciliation

Travel


Working with Ixaris has helped boost our margins by 10-20% on each transaction

Yago Casasnovas, Collection & Payment Manager

Travel

Case 2: Payment Optimization for European Travel GroupDirect contribution to the bottom line and improved controls


Opportunities for Perfect-Fit Payments (2): Incentive Payments This market is growing but many programmes can be unprofitable

Key reasons behind opportunities for virtual in Incentive programmes• 53% of those who have received an incentive in the UK preferred Cash or Open-loop card

over product, experience or store card

• Reloadable open-loop cards in Europe have to be Chip&PIN – expensive outlay

• Small amounts and irregular pay-outs make such programmes unprofitable

Source: Gx 2013


1. Virtual prepaid can address many of the inefficiencies in payments, and are flexible enough to provide perfect-fit

2. Several market segments are ripe for virtualisation are purchasing, supplier payments and incentives

3. Ixaris Technologies can offer a range of solutions to enable banks to offer virtual card programmes today:

– Cloud-based standalone virtual cards platform– Integration into legacy systems (optional)– Fully outsourced programme management (optional)

Conclusion: Virtual Prepaid for Perfect-Fit PaymentsVirtual delivers the flexibility, economics and reach to solve large inefficiencies

Drop us a line:[email protected]

Find out more:www.Ixaris.com

@Ixaris #PerfectFitPayments

linkedin.com/company/Ixaris-systems-ltd

mailto:[email protected]

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Prepaid for Perfect Fit Payments

Economy & Finance