April 14, How Prepaid Cards Can Compliment Existing Payment Solutions

Transcription

1 April 14, 2010 How Prepaid Cards Can Compliment Existing Payment Solutions 1

2 Reminders and Announcements Please turn off all cell phones and mobile devices Thank You to today s sponsors! Opening General Session sponsored by IBM Thought Leadership Spotlight Session sponsored by Fundtech Monday Night Gala Sponsored by Fiserv All conference attendees will have free access to PAYMENTS 2010 Conference session recordings. Attendees that registered onsite will receive details to access the session recordings within 10 days Most of the education sessions at the confrence can be counted towards your continuing AAP accreditation. If you are interested in becoming an Accredited ACH Professional (AAP) please stop by the NACHA & RPA booth. Please take a moment to complete session evaluations! Each evening attendees will receive an link to an online evaluation of the sessions offered that day. Anyone completing an evaluation is entred into a drawing for a chance to win a special prize! April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 2

3 Agenda Commercial prepaid opportunity Applications for commercial prepaid Case studies Travelex Comdata Q&A April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 3

4 Forward Looking Statements This material may contain, in addition to historical information, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of These forward-looking statements are based on our current assumptions, expectations and projections about future events which reflect the best judgment of management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by our comments today. You should review and consider the information contained in our filings with the SEC regarding these risks and uncertainties. MasterCard disclaims any obligation to publicly update or revise any forward-looking statements or information provided during today s presentations. April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 4

5 The Prepaid Opportunity is Global Nearly $680 billion in global prepaid spending by U.S./Canada: $385B Europe: $120B SAMEA: $15B Asia/Pacific: $45B LAC: $115B 1 Countries within scope of report: U.S., Canada, Brazil, Mexico, Australia, China, Hong Kong, India, Korea, Japan, South Africa, France, Germanic countries, Italy, CEE, Poland, Russia, Spain, UK and Ireland, Benelux, Portugal, Scandinavia and Turkey Source: PSE; Boston Consulting Group, May Research commissioned by MasterCard April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 5

6 The Prepaid Opportunity is Local Corporate Programs Commercial prepaid spend in the U.S. alone is projected to total $310 billion in 2015 Public Sector Program Areas 2015 U.S. spend = $135B Business travel & entertainment Meal vouchers Corporate purchasing Payroll Corporate Incentives & Promotions Program Areas Consumer Retail 2015 U.S. spend = $30B Gift Travel Healthcare & Insurance Program Areas 2015 U.S. spend = $15B Flexible Spending Accounts (FSA) Health Reimbursement Accounts (HRA) Insurance claims Program Areas 2015 U.S. spend = $160B Public Benefit & Welfare programs Emergency assistance & disaster relief Travel & cash management Payroll & incentives Pension & Social Security Program Areas Financial Inclusion 2015 U.S. spend = $40B Consumer reloadable Youth Campus Source: BCG Study, May 2008, Report Commissioned by MasterCard April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 6

7 Current Economic Environment Presents Many Challenges For Companies April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 7

8 Applications/Card Uses The Three Categories of Business Expense Business Administration Customer Administration Employee/Recipient Administration Travel & Cash Management (Commercial BIN) Travel Infrequent travel Per Diem Invitation travel Other travel Purchasing Fleet Petty Cash Projects Meetings Supply Incentive Promotions & Incentives (Consumer BIN) Promotions Incentives Rebates Airline Distressed Passenger Defined Benefits (Consumer BIN) Flexible Spending Health Savings Health Reimbursement Commuter/ Transit Meal Voucher Retained Assets Recurring Benefits (Consumer BIN) Payroll Workers Compensation Royalties Commissions/ bonuses Pensions/ Social Security Government entitlement payments (social benefits) Child Support Housing benefits Unemployment Job training programs Insurance annuity One-time Benefits (Consumer BIN) Disaster relief & emergency assistance Employee Incentive Employee Relocation Insurance Claims April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 8

9 Customer Administration Business Administration Employee/Recipient Administration Three Categories of Business Expense Exist Across All Market Segments Small Business Mid-Size Companies Corporations Government/ Public Sector Payroll Employee Incentives Commissions/Bonuses Payroll Workers Comp Commissions/Bonuses Employee Incentives Relocation Payroll Workers Comp Royalties Commissions/Bonuses Insurance Annuity Employee Incentives Relocation FSA/HRA Health Savings Vouchers Retained Assets Payroll Disaster relief Employee Relocation Insurance Claims Employee Incentive Pensions/ Social Security Government entitlement payments (social benefits) FSA/HRA Health Savings Vouchers Travel Purchasing Petty Cash Travel Relocation Purchasing Petty Cash Projects & Meetings Travel Relocation Purchasing Petty Cash Projects & Meetings Travel Relocation Purchasing Petty Cash Projects & Meetings Promotion Incentives Promotion Incentives Rebates Promotions Incentives Rebates Airline Distressed Passenger Incentives Rebates April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 9

10 Why Prepaid Cards Make Sense For Companies` Prepaid cards: Are more efficient and secure than checks and cash Reduce administration and distribution costs Offer spending control features Provide simplified tracking and reporting Offer convenient, instant access to funds worldwide via ATMs and merchants Do not impact corporate or individual credit ratings And they play a unique and complementary role in the business payment mix: Do not require additional extension of credit Can be issued to all workers regardless of credit status Can be given to temporary or remote workers not authorized to use the company s card products Can be used for one-off or infrequent needs Can be given to suppliers without risk of reuse April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 10

11 Flexible Solutions For Every Kind Of Business Expense Makes paying employees easier and cost effective vs. paper paychecks A more efficient way for employees to receive their insurance payments An innovative and memorable way to reward employees and thank clients Replaces traditional paper-based solutions with a more efficient electronic one Makes payment of business related expenses more cost effective vs. cash and checks A convenient way for employees to access their health benefits A convenient way cost effective way for companies to provide rebates to their customers April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 11

12 Customer Administration Business Administration Employee/Recipient Administration Three Categories of Business Expense Exist Across All Market Segments Small Business Mid-Size Companies Corporations Government/ Public Sector Payroll Employee Incentives Commissions/Bonuses Payroll Workers Comp Commissions/Bonuses Employee Incentives Relocation Payroll Workers Comp Royalties Commissions/Bonuses Insurance Annuity Employee Incentives Relocation FSA/HRA Health Savings Vouchers Retained Assets Payroll Disaster relief Employee Relocation Insurance Claims Employee Incentive Pensions/ Social Security Government entitlement payments (social benefits) FSA/HRA Health Savings Vouchers Travel Purchasing Petty Cash Travel Relocation Purchasing Petty Cash Projects & Meetings Travel Relocation Purchasing Petty Cash Projects & Meetings Travel Relocation Purchasing Petty Cash Projects & Meetings Promotion Incentives Promotion Incentives Rebates Promotions Incentives Rebates Airline Distressed Passenger Incentives Rebates April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 12

13 Commercial Credit/Debit and Prepaid - Address Payment Needs for Commercial Customers Employee/ Recipient Administration Prepaid Solutions Business Administration Credit Debit and/or Prepaid Solutions Customer Administration Prepaid Solutions April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 13

14 Prepaid Cards Can Offer Significant Advantages To You Increase Operational Efficiency Strengthen Existing Relationships Establish preference for your brand Influence and motivate behaviors Cross-sell other banking and financial products and services Access New Segments Diversify portfolios by serving nontraditional customer segments Develop new commercial relationships Speed up processes Eliminate paper-based processes Improve Financial Control Reduce risk and fraud Reduce administrative costs Enter prepaid market for a low investment Capture Incremental Revenues Create new revenue stream by turning cash transactions into card transactions Offer additional banking and financial products and services April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 14

15 Who is Travelex? 1976 Travelex Founded 2001 Acquired Thomas Cook Financial Services 440m 2005 Travelex valued at 1bn 2006 Acquisition of AMEX Outsourcing in the UK 2007 Acquisition of Reusch $440m Total assets 2.5bn World s leading foreign coin processor World s leading travel money outsourcing business World s largest retail FX business World s largest airport retail FX network World s largest global distributor of prepaid travel cards. Live in 24 countries across 6 continents April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 15

16 Prepaid Cards For Corporations Current Travel Payment Solutions Corporate Credit Cards Petty Cash Vouchers Cash Advances US OUTBOUND INTERNATIONAL TRAVEL ESTIMATED AT $14 BILLION April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 16

17 Case Studies Major University: Office Expenses vs. Petty Cash Coaches who take travelling sports teams Global Corporation: FLEXIBLE FUNDING SAFE & SECURE EASY to ADMINISTER EASY TO USE Funding of staff business expenses vs. Wires April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 17

18 Case Studies: Major University Requirements A global supplier with industry experience to manager the process for passenger compensation Easily rolled out to all markets across the world Instant issue and easy to administer Management information and robust audit trail Appropriate level of support Flexible solution Multi-level security hierarchy Cost-effective solution April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 18

19 Case Studies: Major University CURRENT PROCESS Request funds prior to travel Spend funds Keep receipts Submit receipts & expense form Expenses form approved by manager Submitted to finance Payment to staff account Exchange leftover funds on return Manual receipts record REVISED PROCESS Corporate stocked with card Cards loaded pre trip Spend during trip Electronic expense form submitted Current New Existing April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 19

20 Case Studies: Major University BEFORE Major research department has 10 offices in remote locations across the globe and used combination of petty cash and wire transfers to fund their operation Needed more flexibility to provide funds on the fly and access to allow staff to purchase research equipment and access local currency through ATM for business expenses AFTER Corporate Cash Passport successfully implemented for staff in Africa, Asia, Caribbean and U.S. Travelex solved an employee emergency when her purse was stolen en route from US to Mozambique. Replacement funds were a lifesaver; we really appreciate the excellent customer service. Dept. Business Leader April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 20

21 Case Studies: Corporation BEFORE International security company needed ability to fund the activities of its employees in remote regions of the world Relied heavily on wire transfer of funds which was costly solution with limited visibility of funds and utilization of funds after distribution AFTER Travelex Corporate Cash Passport delivered initially to 34 employees. Business expenses are loaded monthly by central administration Staff have immediate access to funds Program administrator has instant visibility of funds applied to each card and also can view usage Anticipated expanded roll-out to over 2,000 staff in Q 2 10 I really like the ability to view and print reports once payments are processed. It helps when resolving questions from the field. Program Administrator April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 21

22 Is Prepaid Right for My Business? QUESTIONS TO ASK WHEN EVALUATING PROVIDERS: FX Expertise Global Network/Local Presence Security and Compliance Customer Service for Employee Support Emergency Support Controls and Streamlined Processes April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 22

23 Controlling Costs through Innovative Prepaid Solutions Current economy provides ideal timing to explore new options Prepaid cards can be configured to meet various needs Cost savings, ease of fulfillment and online tracking Ability to easily access funds globally Security for international traveling employees, staff or contracted staff in other countries April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 23

24 Thank you for your time. For more information: Rebecca Phipps Vice President, North America Sales April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 24

25 Who is Comdata? Leading provider of innovative, value-added commercial payment and information solutions Subsidiary of Ceridian Corporation Founded in 1969, HQ in Brentwood TN Productivity improvement, cost reduction and expense management Provide strategy, implementation and support services Ceridian Corporation. All rights reserved. 25

26 Innovative Payment Solutions Corporate C Credit Card AP Travel Purchasing Fleet and Maintenance Virtual Card for Prepaid Card Programs Payroll Per Diem Petty Cash Incentive HSA/FSA April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 26

27 Case Study Corporate Offices: Houston, TX 3,800 employees 120+ locations nationwide 2008 revenues of $675MM Outstanding safety record Three Major Divisions Environmental Industrial cleaning Container cleaning services People, Safety and Commitment April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 27

28 Program Overview Goals Leverage a card to eliminate cash distributions for per diems Consolidate purchasing and travel cards onto a single platform for greater control and streamlined integration Assign a corporate administrator for enhanced oversight and transparency Introduce advanced audit and exception management Key Benefits of the Program In-period costing Risk mitigation through greater controls and transaction visibility Centralized reporting on all activity and simplified reconciliation Cost reductions through variable payment terms April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 28

29 PSC: A One-Card Solution Purchasing - for small operational purchases and one-time emergency items Travel - individual travel, meals, air, etc. Fleet - Used for procuring fuel and selective maintenance Per Diem (Prepaid) - employee allowances (eliminated need for cash) A One-Card Payment Solution configured to deliver, when and where we need it. April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 29

30 PSC: A One-Card Solution A One-Card Solution: Combining Credit and Prepaid Purchasing and Travel: 2,300 cards* Fleet: 2,100 cards* Note: 50% of the cards have prepaid funds loaded weekly for per diems Per Diem Only: 950 cards Monthly Volume Purchasing, Travel and Fleet: $5.5M Per Diem loads: $600,000 Debit funds accessed with PIN at ATM and POS locations April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 30

31 PSC: A One-Card Solution A one-card platform with dual functionality delivers greater control and cost savings Universal acceptance provided greater employee satisfaction Achieved superior control and transparency to all discretionary business expenses via online portal Simplified program administration through real-time card management, on demand per diem loads and reporting Incremental margin improvement continues through lower cost and greater organizational compliance April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 31

32 Case Study Corporate Office: Ft. Lauderdale, FL Premier providers of outsourced customer contact management services 9,000 employees,17 locations worldwide 25 year history of service excellence Industry Expertise Consumer Products & Retail Financial Services Healthcare Internet, Media & Entertainment Telecommunications & Wireless April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 32

33 Program Overview Goals Recognize and reward associates for performance excellence Leverage a card to eliminate cash distributions Provide associates a universally accepted card with ATM access Streamline administration, centralize control and ensure compliance Key Benefits of the Program Co-branded PRC Prepaid MasterCard for employee convenience HR managers have access to real-time card administration Centralized program control with transparency to all disbursements Lower cost, increase control and provide greater overall employee satisfaction when receiving recognition rewards April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 33

34 An Incentive Solution As employees, we want Instant recognition and rewards! Simplicity: It should be easy to use. Convenience: A card that works where and when we want to use it. Flexibility: Store purchases or cash withdraw, we want the choice! April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 34

35 The Process Cards are issued to the employee with a $0.00 balance at the time of employment The associate is told the card may be loaded with a $ value based upon successfully completing periodic sales and incentive programs The HR manager loads a $ value to the designated associates card Associates have instant access to the funds using it at MasterCard and/or ATM locations nationwide Amounts loaded can vary between $2.00 and $2,500. The company averages $40.00 per individual load PRC processes 100,000 transactions annually exceeding $4.0M April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 35

36 A Prepaid card platform delivers greater control and cost savings Universal acceptance provides greater employee satisfaction when receiving incentive and recognition rewards Centralized program administration and realtime card management ensured compliance goals were achieved Flexible card controls made loading a single card or multiple cards easy and convenient Program reporting ensured accurate accounting for reconciliation and tax calculations April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 36

37 For more information: Comdata Corporation Darin Horrocks Director, Corporate Payment Solutions April 14, 2010 MasterCard Worldwide - Proprietary & Confidential 37

38 Thank you. April 14, 2010 April 14,