virtual prepaid for perfect-fit payments · introduction to ixaris 2. payment imperfections offer...

Virtual Prepaid for Perfect-fit Payments

Prepaid Summit: Europe 2015Milan – Nov 2015

#PerfectFitPayments

Alex MifsudCEO

Prepaid Summit: Europe 2015Milan – Nov 2015

#PerfectFitPayments

Alex MifsudCEO

Contents

1. Introduction to Ixaris

2. Payment Imperfections offer Opportunities

3. Virtual Prepaid for Perfect Fit

© 2015 Ixaris System LtdOur Prepaid Opportunity 2

Pioneered virtual prepaidcards in 2003

Multiple re-usable applicationsthat can be configured anddeployed rapidly without ITeffort

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


Multi award-winning payments technology companywith 10+ years experience delivering prepaidsolutions

• Comprehensive range of off-the-shelfproducts / templates

• Customise, configure and deployper market or per customer withoutthe need for an IT project

• Or scale up sales by empowering clients tomanage and customize themselves

• Create exciting new products withoutextensive and expensive IT

What we doAn ‘App Store’ for prepaid programmes


• Comprehensive range of off-the-shelfproducts / templates

• Customise, configure and deployper market or per customer withoutthe need for an IT project

• Or scale up sales by empowering clients tomanage and customize themselves

• Create exciting new products withoutextensive and expensive IT

Turnkey corporate payment solutionsforpurchasing, disbursement, payroll, andincentives

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

Technology suite for banks to createand offer their own prepaid paymentapplications


Turnkey corporate payment solutionsforpurchasing, disbursement, payroll, andincentives

The Problem: payments inefficiencyThere are many large and unaddressed inefficiencies in payments

Cost inefficiency

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

slow transfers

Convenience inefficiency

Delays in transfer and settlement – resultsin costs of working capital and exposure

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

Control inefficiency

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


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, …

Convenience inefficiency

Delays in transfer and settlement – resultsin costs of working capital and exposure

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

Corporate card business is hooked on rebates

Chip & PIN cards are expensive to produce

Consumer interchange falling by up to 80%

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


Chip & PIN cards are expensive to produce

Now is the time to find New Models

Profits are under threat

Virtual account numbers are more than just payment cardsNo plastic! Virtual cards are a better mousetrap against payments inefficiency

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

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

Virtualization ofCard Payments canoffer a path to newapplications, newbusiness modelsand profitability


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

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

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

Virtualization ofCard Payments canoffer a path to newapplications, newbusiness modelsand profitability

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 globalCommercial Consumption Expenditure (CCE), butonly 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 withnational 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 sufficientexternal reference data


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 withnational 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 sufficientexternal reference data

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

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


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 ‘afterthe event’ creating difficulties for AXA that needs to keep suppliers in far flungplaces happy to serve it

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

The SolutionPurchasingPurchasingPurchasing



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

PurchasingPurchasingPurchasing



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

Ixaris enables to us todrastically improve thedisbursement of paymentsfrom all our 32 operatingcentres around the world

PurchasingPurchasingPurchasing



Ixaris enables to us todrastically improve thedisbursement of paymentsfrom all our 32 operatingcentres around the world

Nicolas Barsky,Group CFO

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 hotelrooms, flights and other holiday components across the world daily throughautomated purchasing processes. As an intermediary between travel servicesproviders, Logitravel’s margin are slim, and surcharges and forex exposure takes ahuge toll on profit.

TravelTravelTravel


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 ofincomplete reconciliation

Working with Ixaris hashelped boost ourmargins by 10-20% oneach transaction

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

TravelTravelTravel


Working with Ixaris hashelped boost ourmargins by 10-20% oneach transaction

Yago Casasnovas,Collection & Payment Manager

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

Source: Gx 2013


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 cardover 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

BackgroundIMS carries out market research/surveys with doctors in 100+countries, collating medical market data from over 100,000 medicalpractitioners. The incentivised doctors by giving them gift vouchers. Giftvouchers tend to be local and managing their procurement is a logisticoverhead. Client wanted to offer a more compelling incentive.

Case 3: IMS Health Radar – Incentivising Doctors WorldwideAchieving the desired brand experience through control over look & feel

IncentivesIncentivesIncentives


Challenges• User experience must live up to expectations of the brand• Must compete economically with non-cash rewards such as gift

vouchers which cost less than their face value• Payment must be compelling – maximum utility, no fees• Business intelligence essential to confirm engagement by doctors

Approach• A “Virtual First” approach was taken, with a free upgrade to a

Plastic chip & PIN card

• Fully IMS-branded user experience with seamless look & feelintegration with the survey response website and IMS-specificcustomer service tone-of-voice

Results for the Client• Running for its 5th year, live in 14 countries in 6 languages and 3

currencies

• Fewer than 1/3 chose to upgrade to Plastic, and those that doare more frequent users making the programme profitable

• Centralised payment operations significantly reducing internalfraud risks and lowering operational costs

Results for the Programme Manager• Value+fixed fee charging model, interchange is a small

contributor to revenues

Case 3: IMS Health Radar – Incentivising Doctors WorldwideAchieving the desired brand experience through control over look & feel

IncentivesIncentivesIncentives


Results for the Client• Running for its 5th year, live in 14 countries in 6 languages and 3

currencies

• Fewer than 1/3 chose to upgrade to Plastic, and those that doare more frequent users making the programme profitable

• Centralised payment operations significantly reducing internalfraud risks and lowering operational costs

Results for the Programme Manager• Value+fixed fee charging model, interchange is a small

contributor to revenues

Virtual cards coulddeliver over £500,000million cost savingover using plasticcards.

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

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

3. Ixaris Technologies can offer a range of solutions to enable banks tooffer 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


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

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

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

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

Alex MifsudFounder & CEOM: +44 774 865 7792E: [email protected]

@Ixaris #PerfectFitPayments

linkedin.com/company/Ixaris-systems-ltd

virtual prepaid for perfect-fit payments · introduction to ixaris 2. payment imperfections offer...

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