John
Yeomans, general manager of prepaid and debit at payment
processor Fidelity Information Services, describes how pioneering
online payments company Moneybookers has integrated prepaid card
functionality with its e-wallet to attract a mainstream
audience.
Go deeper with GlobalData
Once considered the new kids on the
financial service providers’ block, e-wallet companies – epitomised
by Moneybookers – are certainly making their mark in the highly
competitive online payments sector.
The first e-money issuer in the UK to be
authorised by the Financial Services Authority (FSA), Moneybookers
offers a range of online payment options and an email
person-to-person (P2P) money transfer service, and recently has
been named by global business consultancy Deloitte to be the UK’s
fastest-growing private equity-backed company. Currently, around
60,000 merchants use Moneybookers’ payments service, including
global partners such as eBay.com, Skype and Thomas Cook.
The company provides business access through
its network to more than 80 payment options in over 200 countries
and last year achieved a transaction volume of €4.5 billion ($6.1
billion). Thanks to a combination of a fast-expanding customer base
in current and additional geographic markets and deployment of new
services, Moneybookers has built a solid base of well over 11
million account holders. The company is growing by 13,000 new
accounts daily and is aiming for another record year during
2010.
Leveraging technology
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By GlobalDataA key element in Moneybookers’ success is its
astute use of technology to ensure round-the-clock availability,
security and ease of use for its web-based service – as well as to
enable the expeditious launch of innovative new products. Last
October, for example, Fidelity Information Services (FIS) helped
the company to launch a prepaid card that provides Moneybookers’
online accountholders with instant access to their cash through the
global MasterCard ATM network.
The prepaid cards are issued by Moneybookers’
bank partner, Newcastle Building Society, and processed by FIS.
Customers can retrieve money from ATMs displaying the MasterCard
acceptance mark anywhere in the world as soon as they have received
funds in their Moneybookers’ account, or use the card to buy goods
and services, both at point of sale and online. This means that for
the first time, customers do not have to put up with a delay while
waiting for the money to be transferred through a national clearing
system into a separate account.
Unlike other prepaid cards, customers using
the Moneybookers prepaid MasterCard do not have to split funds and
separately preload the card. Instead, the card synchronises
automatically in real time with the funds in the customer’s
Moneybookers e-wallet.
The Moneybookers MasterCard can be issued to
customers across the EU and they can choose from four different
card currencies: euros, sterling, dollars and zlotych. The card
application is available in 12 languages, which allows Moneybookers
to mirror the geographic reach and localisation of its services –
and target emerging markets that have low banking, credit and card
penetration.
FIS and Moneybookers team
up
When Santander
acquired Alliance & Leicester and announced it would be
withdrawing support to Moneybookers, the company needed to replace
its card issuer and transaction processing partners as quickly as
possible to maintain its business development momentum. So
flexibility, fast system build, and rapid deployment of a solution
with straight-through processing, real-time authorisation and a
raft of supporting services were also major factors.
The FIS solution was up and running from a
standing start within six months. Moneybookers took a conservative
view of how many cards would be issued in the first year of
operation – with a target of around 50,000 – but take-up over the
months since launch has been considerably higher than anticipated.
Yet regardless of whether customer numbers go up or down, as
operating costs are aligned to transaction volumes, Moneybookers
pays only for what it uses. The system is infinitely scalable, with
no limit on how many cards and transactions that can be handled –
and importantly, without any degradation or interruption of
service.
From an operational perspective, e-wallet
customers benefit from greater security as they do not have to
expose their credit card details on every website from which they
purchase. It is more convenient as payments can be made simply by
entering their email address and password. Superior cost control is
achieved as customers can only spend the money in their e-wallet,
therefore defining the exposed risk themselves, while robust fraud
protection is built into the system.
Martin Ott, co-CEO of Moneybookers, said that
with FIS providing the company with processing for the prepaid
card, customers gain access to a low-cost, real-time money
transmission service.
Given the current buoyancy of the prepaid
market, this is a great application for prepaid cards. Research has
suggested that we would see the number of prepaid cards issued in
the UK reach 10.8 million as we enter 2010, with a total card spend
value of over a billion dollars1.
As the use of online payments grows, consumers
are expecting more sophisticated services such as instant access to
their money. The Moneybookers money transfer service is at the
leading edge of online payments and its prepaid card is a smart
innovation, allowing customers to get instant access to their funds
through an online transaction.
(1) Prepaid Card Growth Beneficial To Migrant Workers,
Onlyfinance.com. 9 October 2008
