Catalysing Europe s Prepaid Opportunity

Transcription

1 Catalysing Europe s Prepaid Opportunity Guido Mangiagalli Head of Prepaid and Mobile Store Value Account Warsaw 30 th October This information is not intended, and should not be construed, as an offer to sell, or as a solicitation of an offer to purchase, any securities.

2 Topics for today The European Growth Agenda A View of Europe in 2020 Lessons Learned Case Studies

3 Poland: Current Situation and Future Constant POS increase year after year. POS Evolution x year Highest Contactless penetration in Europe. Mobile banking penetration is high with more than 2,000,000 customers. Employee Incentive 7% Poland: Prepaid Segments Oct Sept 2013 Money Employee Benefit Transfer Expenses Payments 1% 1% Corporate Incentive 2% Bonus 1% Other Payments 3% Payroll 4% Club Membership 2% 1% Gift 4% Prepaid Segments Youth 24% Loyalty 9% Source: Visa Europe Prepaid PIF & Cognos Promotion 19% General Purpose 22% Oct 2012-Oct 2013

4 Prepaid is set to outpace other card products across Europe Europe growth % 3% 12% Debit Credit Prepaid CEE growth % 6% 5% Debit Credit Prepaid Charts show forecast CAGR in debit, credit and prepaid between Source: PSE Consulting

5 In 2013 Prepaid Remains the Most Dynamic Card Product in Europe Mobile prepaid programmes being re-launched Belgian and Dutch consumers taking up prepaid as savings tool. e-money directive implemented 2013 Legislation extends tax benefits for meal vouchers to noncash payments Act on Payment Services 2013 clarifies issuance of e-money Vodafone and Visa develop mobile contactless Smartpass solution IBAN prepaid cards provide a free basic current account

6 Number of transactions, 2012 In GPR Dominance now being Challenged by Online and Travel Outside Italy Market still dominated by GPR - due to success in Italy and UK Corporate and government products Un/ underbanked (incl GPR) Turnover, transaction volume and card base growing in the FX/travel and online - concentrated in the UK Online Other consumer products FX/travel Other segments remain nascent, with some localised success in government and corporate benefits as well as Virtual prepaid Source: PSE Consulting 2013 Prepaid Report Number of cards, 2012 Presentation Title Other consumer products includes gifting, remittances and youth Corporate and government includes corporate reloadable, corporate disposable, payroll and government benefits 6

7 Corporate Products Likely to Drive the Increase in Spend by 2020 Remittances 8% Government Benefit 3% Gifting 5% FX/travel 7% Corporate disposable 10% Spend by sector 2020 Card Spend in 2020 Corporate reloadable 12% Youth Payroll 2% 2% Un/ underbanked (incl GPR) 34% Online 17% In 2020, just above 100bn in spend expected. GPR products remain dominant product in terms of consumer spend Online expected to experience significant growth across the region Corporate products collectively set to account for almost a quarter of the market Consumer Gifting and Payroll set to underperform compared to experience in the US Source: PSE Consulting 2013 Prepaid Report Presentation Title 7

8 Prepaid trends Growth Sectors Mobile 2 Corporate benefits 3 Loyalty

9 1 Mobile Prepaid Focus to m-commerce not m-payment Decide to Buy Compare Options Purchase Manage Post- Transaction 70% Easy and quick 25% Purchase Journey Simple Oriented proposition across all steps in the consumer purchase journey Purchase process quick and frictionless Rewarding By being linked to appropriate loyalty and offers progammes

10 1 Visa Prepaid Contactless Tag micro-tag Mobile App VPP Interner (V.me) UK Case Study: Sticker customers make three times as many eligible transactions and show a three times higher repeat usage rate (compared with contactless cardholders) Activation rate among 18 to 25 year-old customers: 10%, ~4 times higher than 46 to 60 year-olds The strategic focus on social media and PR had a huge impact on media and consumer engagement The issuer has created interest through viral videos on twitter and created interest in using social media to create a positive feeling for almost 10% of the target

11 2 Targeting the Prepaid Corporate Offer New Prepaid applications in Europe Corporate Prepaid Programmes make up 50% total Prepaid applications Growing segment and very active in UK market in particular Ensure an obvious business case (not just marginal) Minimise costs of issuance eg virtual cards Number of PIF applications Contactless Corporate General Purpose Gift Government Incentive Mobile Money Transfer Private Label Travel Virtual Youth

12 2 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 Solution Used Virtual prepaid Partner platform to issue real-time, single-use virtual cards for purchases from travel service providers By using prepaid virtual cards client was able to increase their gross margin by 45% on flights, as well as benefiting from a comprehensive set of reconciliation tools. 12

13 2 Corporate Benefits: CaxtonFX Presentation Title 13

14 3 Extending Prepaid into Loyalty Attractions Issues Available to whole customer base (vs credit) Track customer usage outside the merchant (vs closed loop) Vehicle for other products eg insurance Keeping down cost of topup while providing choice Driving activation levels Providing attractive incentives to use card Presentation Title 14

15 3 GPR with Loyalty Euro card: 1 Point for each Euro 1.50 that spent in Euro. Receive 2 Point for each Euro 1.50 you spend in other currencies 15

16 Thank you. This information is not intended, and should not be construed, as an offer to sell, or as a solicitation of an offer to purchase, any securities.