Promotingandsharingknowledge,ideas

andstandardsforprepaidcommerce

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 ThePrepaidIndustry
Globalisation and improved propositions
Globalisationand
IncreasedGlobalisationofPrepaid:
• Paymentnetworkdevelopments,suchasSEPA,willboosttheabilityof
issuerstodevelopmultiͲnationalprogrammes
issuers to develop multi national programmes
• Bankswillincreasinglyuseprepaidasatooltosupportcorporatesintonew
countries
• Prepaidwillgrowincountries(suchasRussia,BrazilandIndia)wherethereisa
lackofanestablishedretailbankingand/orcreditinfrastructure
• Supportingthefullvaluechain–– globalclientswillneedglobalbanksand
processors

FurtherPropositionDevelopment:
• MultiͲproductcardscombiningprepaidwithsavingsandcredittoincreasethe
customerbase
• U i th
UsingthenetworkstofurtherdeveloptheopenͲclosedloopconcept
t k t f th d l th l dl t
• Furtheruseoftechnologyinservicingtohelpthebusinesscase

Source:JohnGoodale,TSYS

2
Nearly$680billionestimatedin
globalprepaidspendingby2015

(US$InBillions)

Europe2
UnitedStates& $120
Canada1
$385

SouthAsia,
MiddleEast&Africa1
$
$15 Asia/Pacific1
$45
Latin America &
Caribbean1,3
$115

Source: Boston Consulting Group, May 2008, Research Commissioned by MasterCard.

Source:BostonConsultingGroup,May2008,ResearchCommissionedbyMasterCard.
1.CountrieswithinthescopeofMCcommissionedstudy:U.S.,Canada,Brazil,Mexico,Australia,China,HongKong,India,Korea, Japan,South
Africa,France,Germaniccountries,Italy,CEE,Poland,Russia,Spain,U.K.andIreland,Benelux,Portugal,Scandinaviaand Turkey.2.Europedata
fromPSEstudy,August2008,ResearchcommissionbyMasterCard.3.LACisbasedonBrazilandMexicovolumesonly.

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 PIFObjectives
PrepaidInternationalForum(PIF) isanopen,globalforumfor
allparties participatingonacommercialbasisintheprepaid
economy It:
economy.It:

Developsguidingprinciplesandbestpracticesforprofitableand
ethicalparticipationintheprepaideconomy
h l h d

Createsinternationalstandardstopromotecross
Creates international standards to promote crossͲborder
border
expansionofprepaidcommerce

Providesavoicefortheindustrytospeaktonationaland
P id i f h i d k i l d
internationalregulatoryandgovernmentalbodies,andthe
media

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WhyisPIFnecessary?

Theprepaidindustryisinseriousdangerofreputationalrisk
Th i d t
Theindustryneedstocometogetherwithauniformapproach
d t t th ith if h
Uncertaintyoverprofitablebusinessmodels
Alleged moneyͲlaundering
Allegedmoney laundering
Deter““cowboy””operators
Riskofmisguided,contradictorylawsandregulations
g y g
Noindustrytracking
Noonespeaksfortheindustry
Stronglobbyingrole

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 PIFBoardofDirectors

ColinGreaves
OperationsDirector,NewcastleBuildingSociety

KelleyKnutson
Kelley Knutson
ExecutiveVicePresident,TSYS

MichaelLafferty
Chairman,LaffertyGroup

MichaelMueller
CEO &Founder,paysafecard.com
,p y

ChrisReddish
Chairman,PrepaidInternationalForum
YvonneWest
GiftCardManager,Sainsbury’’s
FionaWhitaker
HeadofGift&PrepaidProducts,Indue (Australia)

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 PIFExecutiveCommittee

RobertCourtneidge
GlobalHeadofCards&Payments,Salans

PeterSidenius*
Peter Sidenius*
Director,Edgar,Dunn&Company

MichaelLafferty
Chairman,LaffertyGroup

ChrisReddish
Chairman Prepaid International Forum
Chairman,PrepaidInternationalForum

*SpecialadvisortothePIF Board

PIF Founders:MichaelLafferty,ChrisReddish,KenHowes(Edgar,
p y)
Dunn&Company)andRobertCourtneidge g

7
PIFStructure

BoardofDirectors

LaffertyGroup
(contracted services)
(contractedservices)

PIF Central
Central
(est.2007)

PIF Brazil PIF Australia/NZ PIF India

(est.2009) (est.2008) (est.2009)

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MembershipProfile

Banks&FinancialInstitutions
CardSchemes
ProgrammeManagers&CardMarketers
Retailers
MoneyTransferOperators
T l
Telcos&MobileOperators
& M bil O
PaymentsProcessors
Legal&RegulatoryServicesProviders
Gift Card & Other Prepaid Card issuers
GiftCard&OtherPrepaidCardissuers
PrepaidSolutionProviders
TransportOperators
Loyalty & Incentive Providers
Loyalty&IncentiveProviders
AncillaryServiceProviders
Acquirers

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Over50membersspanning
fourcontinents

•• AccorServicesBrasil&India •• FICO •• Salans

•• ALCOConsulting •• FIS Australasia •• SIAͲSSB
•• AmericanExpress
p •• GEMoney •• Sidley Austin
•• AndriolieGiacominiAdvogados •• GrassRootsGroup •• StandardCharteredBank
•• ATIVITelecomnet •• GͲTͲPGroup •• StateBankofIndia
•• AustraliaPost •• HDFC Bank •• Szprinc Consultores
•• Icelex Associados
•• AxisBank
•• ICICI Bank •• Th UK Gif C d & V h
TheUKGiftCard&Voucher
•• BancoCarrefour Association
•• BangkokBank •• IDT FinancialServices
•• Indue •• TransSend
•• BankofAmerica •• TransportforLondon(TFL)
•• BlackhawkNetwork •• Itau Unibanco
•• LaSer •• TSYS
•• Boanerges&Cia •• UNIK
•• BPAustralia •• MasterCardWorldwide
•• Metavante •• UnionBankofIndia
•• CartaSolutions VisadoBrasil
•• CBSS–– VisaVale •• NewcastleBuildingSociety ••
•• OsborneClarke •• Visa (India)
Visa(India)
•• Cuscal •• WesternUnion
•• Deacons •• Paysafecard.com
•• Raphaels Bank •• WhiteEagle
•• DeutscheBankIndia •• YesBank
•• Edgar,Dunn&Company
g , p y •• RetailDecisions
•• eͲpay •• SACS–– SouthAmericanCard
Services
•• Equens
•• Sainsbury’’s
•• EͲsafetransfer
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 PIFServices

Keyindustrymetricsandtrenddata*

Researchcapability

C d
Codesofconductandbestpractice
f d db i

Representation with regulators, media and

Representationwithregulators,mediaand
consumerbodies

*PIFDataAggregationService
* i i

11 5
 PIFBenefits
PIFbenefitsincludeaccessto:
Workinggroupsonkeyprepaidissues
Working groups on key prepaid issues –– suchasRegulation,Business
such as Regulation, Business
Models,ConsumerEducation,Fraud&RiskandTransport

AccesstoPIFͲgeneratedresearchincludingmarketresearchreportsand
WhitePapers

Annualsummitandgeneralmeeting

6memberbulletinsayear–– featuresincludeglobalmarketanalysis
andresearch

Aninteractivewebsite

A member helpdesk for networking support

Amemberhelpdeskfornetworkingsupport

12 6
 PIFAccreditation

Why?
Tocreateaninternationalstandardforgrowthinprepaid
commerce
Toaddressadversemediacoverageaboutprepaidsuchas
allegedmoneylaundering,aggressivemarketingandpoor
customerservice
t i
Toenhanceconfidenceamongstusersofprepaidproducts

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 PIFDataAggregation
Service

Objectives(June2008):

CreateaDataAggregationservicethatprovidesrealinsightandvaluetothoseissuing
prepaidcards
Providebenchmarkdata
Test/PilottheUKpriortorollouttootherPIF Chaptersonatemplateormanaged
basis

Wh F
WhoFrom/Where:
/Wh

Dataiscollectedfrom:
Prepaidcardprogrammemanagers,BankswhoalsomanageprogrammesandBIN
sponsoringbanks
No‘‘closedloop’’dataiscapturedasthisiscoveredalreadybytheUKGCVA
Data collected reflecting circa 60 70% of UK prepaid card sector
Datacollectedreflectingcirca60Ͳ70%ofUKprepaidcardsector

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 PIFDataAggregation
Service

CardCategorisation–– NottooBroad:NottooNarrow

Withmajordifferencesincardcharacteristicsbetweendifferenttypesof
cardsthedangeristhatbyamalgamatingdifferenttypesofbehavioursthe
data becomes meaningless as becomes an average rather than a benchmark
databecomesmeaninglessasbecomesanaverageratherthanabenchmark

TheLaunchCategories:
Government/CorporateLoaded
ConsumerpurchasednonͲreloadable /Gift
FX/Travel/CurrencyCards
y
Consumerloaded

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 PIFDataAggregation
Service
AFlavour:
ConsumerLoadedCards
Nearly a 10% drop last quarter v the YTD figuresintheaveragelaod
Nearlya10%droplastquartervtheYTD figures in the average laod value
value
pertransaction
FX/TravelCurrencyCards
Nearly a 20% increase in the number of loads per card
Nearlya20%increaseinthenumberofloadspercard
OnlyaslightincreaseinthenumberofATM/POStransactionspercard
Corporate/GovernmentLoadedCards
45% increase in the average spend value per transaction
45%increaseintheaveragespendvaluepertransaction

Where Next?

• The service has been tested and tweaked/debugged

• Ready to roll out to other international PIF chapters

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PIFCentralWorkingGroups

BusinessModels(BMWG)2007Ͳ 2008

ConsumerEducation(CEWG)

Legal & Regulatory (LRWG)

Legal&Regulatory(LRWG)

Transport(TWG)
p ( )

Fraud&RiskSubWorkingGroup(FRSWG)
g p( )

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 BMWG(2007Ͳ2008)
BusinessModelsWorkingGroup(BMWG)
Ͳ ChairedbyJohnGoodale,TSYSEurope

ComposedofPIFMembersinterestedinadvancingthebusinessmodels
C d f PIF M b i di d i h b i d l
specificallyforschemeenabledprepaidcards

Aimedtocapture,analyseanddeveloptheformativeverticallyaligned
Aimed to capture, analyse and develop the formative vertically aligned
businessmodelsthatareemerginggloballyinprepaid

OperatedwithintheremitofPIF,representedthegeographicalmembership
b
baseandcoversthebusinessmodelchallengesaffectingtheinternational
d th b i d l h ll ff ti th i t ti l
prepaidindustryasawhole

ProvidedalinkintoPIFtoallowittocommunicatewithandinfluence
Provided a link into PIF to allow it to communicate with and influence
externalbodiesthatcouldhaveanimpactondevelopingthebusinessmodel
withintheprepaidindustry

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 CEWG
ConsumerEducationWorkingGroup(CEWG)
Ͳ ChairedbyPeterSidenius,Edgar,Dunn&Company

ThetwomainaimsoftheCEWGaretorecommendcodesofconduct forprepaidbusinessesand
develop policies and plans for the education of consumers andotherprepaidusers
developpoliciesandplansfortheeducationofconsumers and other prepaid users

ThetwoaimsareconsideredtoberelatedbutwillresultindifferentdeliverablesforPIF.The
intentionisnottoreinventthewheelintheseareasbuttakewhatisbestpracticefromaround
theworld,considertheapplicabilitytotheEuropeanenvironmentaswellaswork/collaborate
, pp y p /
withallinterestedbodiestoensureunderstandingandcommitment

CodeofConduct –– theobjectivewastodiscussandagreetoastandardisedwideͲrangingcode
ofconductforprepaidbusinessesthatcanberecommendedforadoptionbythewiderindustry
–– andglobally.TheresultisthePIFIssuerCodeofConduct
and globally The result is the PIF Issuer Code of Conduct

ConsumerEducation –– theobjectiveistodiscussandagreetostrategies,plansandactivitiesfor
theeducationofconsumers,otherprepaidusersandthemediaacrossEuropetodemonstrate
therealbenefitsofprepaidsolutionsandprovideguidanceonhowprepaidoperates.
p p p g p p p

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 FRSWG

Fraud&RiskSubWorkingGroup(FRSWG):
Objectives:
ToexplorewhatPIFcouldandshouldbedoinginrelationtofraudandriskinthe
prepaidmarketandtorecommendactionstothePIFWorkingGroups

T
Tounderstandthetypesoffraudinexistenceandestablishwaystomitigaterisk
d t d th t ff di it d t bli h t iti t i k
Workinprogress&complete:
InteractiveTypologyRegister:documents(international)incidentsoffraud,typesof
fraud,geography,itssignificanceandbasicmitigationstrategies.
Discussionareasinclude:
Ͳ Negativebalances
Ͳ Secondaryissuance

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 LRWG
Legal&RegulatoryWorkingGroup(LRWG)
Ͳ ChairedbyRobertCourtneidge,Salans

Obj i
Objectives:
Toprovideamediumthroughwhichtoliaisewithlocalregulatorstodealwith
inconsistenciesacrossdifferentjurisdictionsandtrytoeducateandmoveregulators
towards a more level playing field
towardsamorelevelplayingfield

Tobuildaknowledgebankacrossdifferentkeyjurisdictionstoenablemembersto
understandthelocallawissuesofrunningcardprogrammesforprepaidcardsin
thosecountries
h

Toprovidealinkforsomeofthekeylocaltradeorganisationssuchas
trade/retail/payments groups to achieve an international reach and understanding of
trade/retail/paymentsgroupstoachieveaninternationalreachandunderstandingof
howlocallawsandregulationswillapply

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 TWG
T W ki G (TWG)
TransportWorkingGroup(TWG)
Ͳ ChairedbyAlanLeibert,AlcoConsulting

Objectives:

ToaddressissuescreatedthroughthenonͲcashfarepaymentsrequirementin
electronicticketing
electronic ticketing

Ͳ Governanceandregulatoryissues
Ͳ Technical,standardsandperformanceissues

ToincreaseawarenessofPIFinthetransportandalliedmarketplaces

Ͳ Stimulatestakeholderparticipation(e.g.transportoperators)
Stimulate stakeholder participation (e g transport operators)
Ͳ provideaforumformeetinganddiscussionacrossPIFWorking
Groupsandallmembertypes

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 Withspecialthanksto:

Patron of PIF Brazil & India

PatronofPIFBrazil&India

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