corporate prepaid - why a processor is not enough | prepaid summit europe 2013

Winning in Corporate PrepaidWhy a Processor is Not Enough

Prepaid & Emerging PaymentsEurope 2013

Confidential and Proprietary Information | © 2013 Ixaris System Ltd

Corporate prepaid is the most lucrative segment in prepaid and can provide new revenues to banks with corporate clients

Corporate Prepaid Transaction Volume

European Potential Transaction Volume by 2015Source: Visa Europe 2011

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Global Potential Transaction Volume by 2015Source: MasterCard 2012


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Concept

2003: Visa’s first virtual prepaid card program in 2003 (EntroPay)

Innovation

2010: Developed comprehensive platform for rapid creation of diverse prepaid applications

Technology

2013: Serving 20+ corporate clients with solutions across most Corporate prepaid segments

Solutions

Ixaris has 10 years experience delivering prepaid solutions


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1. We will look at 3 corporate prepaid solutions we have deployed in the past 6 months

2. Each solution is based on an underlying prepaid card program - is the card program on its own enough to deliver the solution?

3. How much of the functionality would you expect to be provided out of the box from a mainstream (your) processing platform?

4. What platform capabilities would be needed to deliver these programs without any IT development?

What does an FI need to deliver profitable fit-for-purpose solutions to demanding corporate clients?


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Case 1: Payroll Services company serving international clients placing ex-pats in far flung places

Payroll Services Provider

Employer 1 Employer 2 Employer …

Employee in Country X

Employee’s family in Country Y

Transfers funds to family quickly and cost-effectively

Pays bills in Country X as well as Country Y


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The Problem / Opportunity

– Market of around 1M+ workers earning up to $20,000 pa = $20bn

– International employers e.g US contractors sourcing labourers from Kosovo to work within US Army bases in Afghanistan

– Worker needs access to funds to make purchases and pay bills at home as well as in country where based

– Must give their family access to funds quickly and cost-effectively. Their family may well be unbanked

– Employers want a simple solution that works everywhere and is transparent

Case 1: Payroll Services company serving international clients

The Challenges

– Payroll provider required fixed price per account opened and per payment made

– Minimal use (withdrawal of salary in a single ATM transaction) must be free

– Internet access not guaranteed everywhere so fall-back SMS interface

required

– Cheap bank transfers / bill payments in worker home country required

– Reliable delivery of cards to inhospitable / hard to reach places

– Co-ordination of collection and verification of KYC documents


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Case 2: Internet booking engine serving large travel agents sourcing flights, hotel accommodation, car hire, etc

Travel Agent 1 Travel Agent 2 Travel Agent …

Travel Services

Search for travel services via diverse parameters

Collect and return info on matching services

Travel Services Booking Engine Complete order

and payment


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– Clients sources ~€1bn of travel services for its clients

– Actual order and payment was happening separately – an obvious gap in the service

– IBE saw an opportunity to provided a value-added service, and therefore a revenue opportunity

– Wanted to be able to optimize costs through a variety of card types

– Wanted to be able to add features such as multi-currency, credit, escrow, etc in future

Case 2: Internet booking engine serving large travel agents sourcing flights, hotel accommodation, car hire, etc

The Challenges

– Cards needed to be issued to the Internet Booking Engine so that they are

an intrinsic part of the service

– IBE did not want to handle client funds so funding had to be managed

separately

– IBE did not handle payments previously and did not want to have to become PCI

compliant

– Needed to be able to handle cancellations and refunds

– 3-way reconciliation a critical requirement


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Case 3: Marketing services provider wanted to create stand-out incentives programs for major brands

Incentives Platform

Third-party sales staff Inside sales people Front line support staff

Brand 1 Brand 2 Brand …


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– Global Prepaid Exchange estimates a European corporate incentives market of around €34bn

– Major brands are keen to incentivise front line staff, particularly those working at third-party distributors

– Money is the preferred incentive in Europe, but cash payments are seen as too impersonal and not sufficiently emotive – but branded prepaid cards can solve that

Case 3: Marketing consultancy wanted to deliver stand-out incentives programs for major brands

The Challenges

– User experience must live up to the expectations of the brand

– Must compete economically with non-cash rewards such as gift vouchers which cost less than

their face value

– ATM cash withdrawal capability to be suppressed due to tax

implications of cash payments

– Business intelligence essential to confirm how used


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Delivering and supporting corporate prepaid solutions requires much more than card processing

Delivery channels

Applications

Platform mgmt

Support systems

Card processing

Authorisation / Settlement

Chargeback processing Card lifecycle

Production, packaging,

delivery

AML (KYC, PEP&Sanctions

AML events)

Dispute Management Anti-fraud

Reporting and Business

Intelligence

Accounting and Billing

Support and eCRM

Deployment workflow

Corporate funds

management

Platform User Management

End-to-end Monitoring

Incentives Payroll Purchasing T&E / Expenses Disbursements

Web UI SMS API


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The nuances of each solution need to be implemented by tuning functional and look+feel aspects of several modules

UK Payroll Services Provider

Travel Services Booking Engine

Major Beverages Brand

?? ?How to set up these solutions on this architecture?


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Case 1: Deliver a universal bank account alternative, managing complex funds flows between several parties




Most modules needed, with appropriate configuration


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Case 2: Automate most program operations and make accessible via API for complete embedding in booking engine




API-driven solution with no human cardholders


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Case 3: Design every end-user interaction in line with the desires of the brand manager




Modules configured for desired user experience and branding


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Introducing: Ixaris Payments Server – we have put together a middleware package that sits over a basic processing switch

Payments Server

Proven with Ixaris’ own corporate clients

PCI-compliant, in-the-cloud for rapid deployment – no IT integration needed

Ready-to-market, highly configurable corporate prepaid applications

Full lifecycle : client configuration, on-boarding, monitoring and support

Just bring your own BINIn-built switch (Postilion)

Option 1: In-the-cloud

e.g. ACI BASE 24

Option 2: Your existing switch

e.g. FIS

Option 3: Third-party Switch


Summary

1. Corporate clients want solutions not prepaid programs

2. To deliver satisfactory corporate prepaid solutions quickly and profitably, more than a traditional card management platform is needed

3. Ixaris Payments Server is a full-featured flexible payments platform that provides rich applications and operational support systems

4. Ixaris Payments Server can be deployed over existing processing rails, turning legacy switches into a comprehensive platform

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Thank you

Appendix 1: Ixaris Payments Server Screenshots


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Console Home


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Configuration Tools


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Fund Forward Configurator – Look & Feel Section


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Platform Performance Dashboard

corporate prepaid - why a processor is not enough | prepaid summit europe 2013

Technology

ixaris system

proprietary information

corporate prepaid solutions

bn of travel services

branded prepaid cards

international clients

virtual prepaid card

payroll services company