Virtual Prepaid - How to Make (Real) Profit | PayExpo June 2013 | Ixaris Systems Ltd

Virtual Prepaid: How to Make (Real) Profit

Alex MifsudFounder & CEO

June 2013

Confidential and Proprietary Information | © 2013 Ixaris System Ltd

1. What is Virtual Prepaid2. Who Needs Virtual Prepaid3. Delivering Profitable Solutions4. Lessons learnt – Dos and Don’ts

2

Outline


Virtual prepaid cards are just payment cards without plastic

Multiple use modes: single-load multi-spend, single-load single-spend, multi-load single-spend, multi-load multi-spend

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

3

http://www.desktopwallpaperhd.net/view/bike-speed-legacy-175396.html


Corporate prepaid is the most lucrative segment in prepaid

Corporate Prepaid Transaction Volume

European Potential Transaction Volume by 2015Source: Visa Europe 2011

4

and Virtual Prepaid delivers incredible advantages in most application areas

Global Potential Transaction Volume by 2015Source: Visa Europe 2011


Ixaris has 10 years experience delivering Virtual Prepaid

Concept

2003: Visa’s first virtual prepaid card program in 2003. ~$0.5 billion p.a. now

Innovation

2010: Developed application platform for Virtual Prepaid

Technology

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

Solutions

5


Case Study 1: Corporate Purchasing

Background• Top 10 European online travel agency

Business Challenge• Purchasing of low cost carrier flights involved surcharges that was negatively

impacting their bottom line• Velocity checks by merchants limiting effectiveness of corporate cards• Problems with allocating funds from refunds and cancellations back to customers• Poor internal controls due to high limit s on corporate cards

2. Saves on low cost airline surcharges

2. Books hotel rooms and rental cars

1. Order virtual cards via API or via console

3. Download reports for reconciliation

6


Case Study 1: Corporate Purchasing

Card activity• Average transaction value €150• Monthly volume €20M

Revenue• Total monthly revenue from fees and

interchange = €92,000

Cost• Total monthly processing and card scheme

cost = €45,333

P&L - annualised• Revenue €1,104K• Gross Profit €560K

Return forFinancial

Institution

7


Right card type for the job• Virtual cards are an extremely powerful tool for corporate purchasing• Prepaid BINs are not always the best option – interchange can be an excellent

source of revenue (Prepaid BIN vs Corporate BIN)

Deliver a complete business solution• Solution needs to cater for comprehensive management by the client,

minimizing operating overheads for the provider• Rich-data reconciliation reports• Tools to facilitate allocation of cancellations and refunds to customers

Flexible pricing to incentivise volume• Many procurement clients multi-source, therefore price to incentives volume

Case Study 1: Corporate Purchasing – Lessons Learnt

8


Background• Our Client is a global top 5 market research firm, carries out market

research/surveys with professionals in 90 countries

Business Challenge • The use of a variety of country-specific gift vouchers was costly and

causing major operational issues

Case Study 2: Incentives

9

We delivered a complete branded solution to send payments worldwide in multiple languages with a seamless customer experience

Our client now issues rapid payments at a lower cost


Get the economics right for incentive programs• Using virtual cards as default, and plastic as an upgrade is a very cost-

effective combination for incentives

Highly configurable re-usable applications, not bespoke• Corporates want customisation, especially when it comes to the user

experience and their brand, but avoid bespoke development

Able to tap into multiple revenue streams to win business• Many sources of revenues, including interchange, client-fees, end-user

fees, dormancy/breakage• Not all may be acceptable to the client, so must be able to trade off and

offer right mix

Optimize support for effectiveness and cost• Provide tools / FAQ for the client to provide first line support

Case Study 2: Incentives – Lessons Learnt

10


11

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 BIN

We achieved profitable Corporate Prepaid programmes by creating a highly configurable re-usable application suite

Payments Server

Launched today at

PayExpo 2013


Summary

1. Virtual cards can address many aspects of Corporate Prepaid applications in a novel way

2. The economics of virtual cards can deliver superior profitability in many Corporate prepaid applications

3. Must have a flexible fit-for-purpose platform, like Ixaris Payments Server, to optimize applications for client needs and delivering profitability

12

Thank you

Alex MifsudFounder and CEO

[email protected]

Virtual Prepaid - How to Make (Real) Profit | PayExpo June 2013 | Ixaris Systems Ltd

Technology

Transcript of Virtual Prepaid - How to Make (Real) Profit | PayExpo June 2013 | Ixaris Systems Ltd