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When Prepaid is More than Prepaid Future Payments: How Prepaid is emerging as more than just Prepaid
When Prepaid is More than Prepaid
Future Payments: How Prepaid is emerging as more than just Prepaid
Open Loop Prepaid in Europe
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• Prepaid Open loop cards first launched in the UK in 2002• MasterCard (BCG) forecast growth from 2012: £18.6bn to 2017: £99.3bn
• The decline in cash in the UK will accelerate over the next 10 years• By 2018 the amount of cash used will fall by 20% after adjusting for inflation
• Italy and UK account for approximately half of the opportunity by 2017• Consumer cards account for the majority:
• But how, what products . . . .
0 10 20 30 40 50 60
General Use
NFC mobile
Cons travel
Online
Gifts
Cons other
Payroll
Vouchers
Corp Incentives
Corp other
Government
Transit
Source: MasterCard Prepaid Sizing Study ‐ Boston Consulting Group January 2012
Consumer
Commercial
PublicSector
2017 GDV Value
The UK Consumer Prepaid Card Market Today
• Consumer Loaded UK Open Loop Prepaid Cards
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Travel Cards15%
General Cards35%
Retail / Gif t Cards46%
Money Remittance Cards
4%
Source: Polymath Consulting Analysis December 2012
Future Payments/Future of Prepaid
Prepaid can be just a FeatureA Platform for payment functionality
The Product is Something Else
Prepaid moves from being ‘The Product Itself’to being a feature of a Multi-Function Card
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How Multi-Function Works
• The card and the reader / terminal both have a list of the applications they support
• The application has a unique file identifier
• When the card is read by the terminal extracts the list of file identifiers from the card compares it to its own list of applications it supports,
• When it finds a match that is the application that is executed
• If more than one application is matched the terminal should present a menu of applications to the cardholder for selection
• This does not always happen and the terminal will then select the application with the highest priority (this is not the best way to operate)
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Application Matching – One match
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1) EMV Debit card 1) Payment2) EMV prepaid Card 3) Access Control 4) Mobile Top Up
• Standard POS reader recognises payment card
• Therefore payment application is executed.
Application Matching – One match
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1) EMV Debit card 1) Access Control 2) EMV prepaid Card 3) Access Control 4) Mobile Top Up
• Access Control is the only match between the card and the reader
• Therefore that is the application that is executed.
Application Matching – Two matches
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1) EMV Debit card 1) Access Control 2) EMV prepaid Card 2) Mobile Top Up3) Access Control 4) Mobile Top Up
• In this case the reader / terminal will operate in one of two ways
• Display a menu with the two choices and the cardholder selects the one they want to use
• The application with the highest priority (set by the card issuer) is the one that is executed.
• The first option is the best one for cardholder choice and is the way the readers and terminals are being set up to operate
Application Matching – No matches
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Student ID – No ID No Attendance
Sydney UniversityPolitecnico di Milano
Universita Milano BicoccaUniversity of Canberra
• These types of cards off prepaid as a facility, a feature on a broader product covering:
• University identification• Photocopying and printing• Building access• Library borrowing• Transport concession• Purchasing items on and off campus
• With Canberra University Printing & Photocopying funds are held separate to the Prepaid MasterCard Funds.
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ID and Access
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• VISA Prepaid• EMV Security
• Contact/Contactless and fast payment with VISA payWave
• Current Account Integration
• Transportation application
• Personalized or noname card
• International usage
• Open for new applications to load
• Campus application
• Acts as a standard debit card as well
Source: Banksoft Presentation Dubai Prepaid Conference 2010
And even at Schools
• School Cards, by Bank Zachodni, started in2010• Program implemented in 20High Schools• More than 20k Cards issued• 50 schools implemented by end of 2012
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Attendance Record
School Cards• School Cards, by Bank Zachodni, started in
2010• 50 schools implemented by end of 2012• Multiple functionality in addition to Access
Control Systems• Electronic diaries• Library loans• SMS information at• Providing a Pupil Electronic ID Card
• Two Versions of the card, standard for High School pupils
• Special prepaid product prepared for pupils younger than 13 parents acceptance
• Single transaction limited to 50PLN• 40% of active School Card users are 17years old
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Your Season Ticket
• Banca Popolare di Milano is the official ticketing partner for FC Internazionale• “Siamo Noi” has issued since June 2009
• 100,000+ active cards by end of 2010
• Gospodarczy Bank Wielkopolski has launched the FDI processed MasterCard PayPass “Fan Card” for KKS Lech Poznan, one of the best known football clubs in Poland.
• Launched in 2010 by Bank Zachodni WBK S.A., Poznań, Poland; 5 football clubs so far have adopted
• Speedway Circuit Card Launched in 2011 by Bank Zachodni WBK S.A., Poznań, Poland
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Manchester City
Results• Reported by the head of the project that there was a
30% increase in purchases by those using the card• On game days 86% of pilot participants attended the
stadium. All of them used the new card to access the stadium
• On match day, 40% of customers attending the stadium used the card for payment
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A Single Event Ticket
June 2011 Isle of Wight Music Festival• Festival goers in the VIP arena were given the
wristbands• These provided access control and payment
functionality• Pre-loaded with £30, the wristbands could be
used to purchase food and drink with a simple tap of the wrist
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• Festival-goers quizzed on the experience, said:
• 96% - they were quicker
• 98% - easier to use than credit or debit cards,
• 100% - want to use the PayPass prepaid wristbands again to pay at other festivals, concerts and sporting events
Visiting a City
• Purchase price €25• No POS usage fee• No loading fee• 48 hrs of free Public transport run by ATM
S.p.A. - Azienda Trasporti Milanesi (underground and ground transport
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• Text message on card usage if desired for spend over preset limit
• Online usage after password set up
• 18 Museums with FREE access• Discounts at other museums and exhibitions• Maximum one time load €150
I Live Here Card – Library, parking etc
• Electronic public transport tickets with a prepaid card
• 2 cities, over 150 000 cards issued
• Contactless payments, personalized city functions
• Key features: parking ticket, library card.
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My FFP Card and Domestic Check In
• Launched Dec 2011 by Bank of New Zealand & Air New Zealand
• 700k Frequent flyers were sent a new AirPoints card that was also a multi-currency prepaid card
• Customers ‘opt in’ to activate the card• Reported that ANZ were hoping for a 15% activation rate
• Card holds funds in any 4 currencies from a choice of 8
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• Frequent flyer points on spend and double on cross-border spend• Frequent flyer points participating merchants (barcode on front of the card)• Fast boarding on domestic ANZ flight by tapping the OneSmart card at check-
in kiosks and boarding gates• Contactless payments and P2P payments by SMS• Free international ATMs access• Inactivity fee or low balance fee of $1.95 month• $1 load fee
My Cash Back Card
NHS Prepaid Card• Cash back from 40 retailers
• 3% on Sainsburys• 5% on Asda, Argos, Boots, Comet Goldsmiths, Halfords, HMV,
Homebase, Marks & Spencer, Miss Selfridge, Topshop, Topman, Mothercare, New Look, Waterstones, B&Q, Dominos Pizza, Ernest Jones, H Samuel, Wallis, Marriott Hotels, Burton, Dorothy Perkins, Thorntons, Toys R Us, Debenhams, House of Fraser, Evans, JJB Sports, American Golf, Leslie Davis, Outfit, River Island, TGI Friday, BHS, Jessops, John Lewis, Zizzi, Wilkinson and Pizza Express
• http://www.mumbook.co.uk/blog/251/nhs-cashback-black-cards-are-now-free
• 16k cards issuedUtility Warehouse• Multi level marketing programme, card designed to drive loyalty • GDV spend annual $250m, Cash back for reduction in Utility Bill• 160k cards issued• P&MM £200m of sales through ‘partner retailers’• Active cards 130k, typical activity rates are 30 – 50% of base• 40 – 50% of transactions by value are through the supermarkets• Currently retailer contracts are for closed user groups
i.e. Employees and open to negotiation for other groups
• Willing to work as PM or just retail partner manager
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My Health Records
• U.S. Bank, in 2011 launched durable wristband that combines contactless payment technology with emergency contact and medical information.
• It also links to a customizable Emergency Response Profile (ERP) that provides medical professionals with fast access to critical medical information in the event of an emergency
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• Customers can load and reload funds onto the chip as needed via an online user account. Signatures are not required for purchases under $50
• Each band also carries a VITAnumber, a unique, eight digit numeric identifier that links the wearer to a customizable Emergency Response Profile, which houses the individual´s identity and critical medical data .
• With the VITAband, customers can conveniently check their account balances, reload associated prepaid accounts and customize theirEmergency Response Profiles.
• .
Why is Multi-function so important
Prepaid is all about Distribution
Creating propositions consumers want, need and will use
Prepaid as a feature not a product no longer needs to be valued just for the prepaid functionality, but on the overall product proposition.
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Polymath Credentials
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Who We Are/Our Approach
• Founded in 2005, involved in prepaid since 2002• To date work across the UK, Europe and the Middle East. • David Parker CEO/Founder spent 4 years in the Far East & nearly 5 years in the Middle East
• We don’t believe in the ‘bench’ system where consultants are allocated based on ‘who is free’.
• Bespoke teams built around client needs, sometimes white labeled through partners• Delivered by ‘Practitioners’ people who have spent time in industry solving and delivering on
real projects• Practitioners who understand corporate issues and work in the real world, not ‘in theory’
• Deliver a highly cost effective solution of senior experience, when and where it is required
• Strategic input with real relevance to today’s business environment
Our Network
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Sri Lanka
Pakistan
IndiaMalaysia
Bangladesh
Nigeria
UAE
Australia
Hong Kong
Singapore
USA
United Kingdom
Kenya
• Through our Partner Practitioners we offer a global of prepaid expertise and on the ground resources
Oman
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A Customer Centric Approach
• Recommendations verified based on customer impact and implementation complexity
• Customer impact reviewed and balanced versus financial metrics
• Based on belief that a customer has to use and understand the product – in theory does not always work in practice
Customer
Distribution/ Sales Channel
Marketing & Collateral
Proposition & Pricing
Product Design/ Functionality
Technology
Regulation & Governance
The customer delivers the profits!
Polymath Consulting: Across Prepaid and Emerging Payments Business
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Added Value
Collections and
Receivables
Activation and Usage
CRM strategy and implementation
CRM best practice review
Call centre training and optimisation
Activation offers and upsell programmes
Data analysis, propensity modelling
Risk assessment & management
Scorecard build and integration
Collections software selection/ implementation & deployment
Process analysis and policy manual creation
Methodologies – roll rate, vintage analysis, bad debt provisioning
Loyalty programme development , review/ & enhancement
Strategy development, earn/burn analysis
Partner selection
Added value offering development including RFP Management
Cross sell strategy and support
Project Development
Partner identification For Prepaid : BIN Sponsorship/ Programme Management/ ProcessorsFor Credit : Credit Card Issuer
RFP development/ management
Proposition Development
Product Specification
Business Case development incl. Financial modelling
BIN sponsorship Business Case
BIN sponsorship set up and project plan / support
EML Application
KYC/AML systems development
Processor Certification
Identification of partner banks for certification
Mobile strategy & enablement
Systems Support/
Development
Opportunity Assessment
Detailed Market analysis
‘Blue Sky’ gap analysis
Potential solution partner identification
Market Analysis
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Some Clients
