AIG SPONSORS OF MANCHESTER UNITED FOOTBALL CLUB
Mission statement: •
EasyKard PLC can apply their experience and knowledge of the card and financial industry sector together with the most recent advances in software technology, to produce a be spoke, multi currency, worldwide, pre-pay card program. This facility is not currently catered for by the majority of banking providers.
•
Linking Manchester United’s phenomenal fan base and established marketing facilities, together with EasyKard’s resources we can produce a package which generates a strengthened brand and a highly profitable product.
•
Using other systems developed by EasyKard, we are also in a position to tailor future services including e-money, in territories where AIG and Manchester United do not currently offer similar services to its members.
•
Such a major opportunity can establish further fan loyalty, ultimately presenting AIG with a stronger offering with Manchester United when contracts are reviewed post 2014/2016.
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 2 of 18
Global Reach EasyKard PLC is a global turnkey provider of prepaid and credit card solutions, offering a wealth of technology, software and innovative products. This global element is key to a successful roll out of an internationally recognised card. Banking regulations and network bylaws prohibit the issuing of cards from one territory into another without the correct licenses in place. For this reason, EasyKard have developed operations worldwide and continue to grow in new territories, thus creating further relationships and networks to expand the global strength of the company. This venture offers excellent synergies for us due to the global reach of the Manchester United fan base; EasyKard would look to have exclusivity over the Manchester United Pre-pay card worldwide. EasyKard are also able to offer further options such as mobile phone facilities, making the pre-pay card a basic banking facility to lower demographic fan base, particularly in poorer countries where banking institutions are not readily available to such customers. EasyKard PLC has formed links and relationships with various major global card brands such as Visa and MasterCard; this ultimately gives us the international brand recognition and retail support required to launch new card systems. In addition to these links.
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 3 of 18
Our Vision The pre-pay card system, lends itself to customers who have little or no credit rating, such demographics are higher in poorer countries, giving the worldwide pre-pay option increased availability to a wider customer base. Even in more affluent areas, much of the population is finding increased difficulty in acceptance for standard credit card and banking facilities, in part due to recession and higher unemployment. In each territory the system design, pricing and implementation, will offer a fair pricing policy, which is relevant to the country of use, economic climate and appropriate customer demographic. Territorial pricing variations will therefore increase the profile of the card in each country. Although open to discussion, based on our experience we propose the Manchester United branded card to be MasterCard throughout Europe and the UK. As MasterCard are also a major sponsor of the Champions League and therefore affiliated with the football institutions this gives them stronger brand recognition. We suggest the more recognised Visa branding possibly being used throughout the USA Canada and Asia. In some territories there may be possibilities of using both issuers to increase card profile, however where the need for single support is high, the resulting net profit will be beneficial
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 4 of 18
Initial Product launch Easykard PLC can structure the global roll out of the pre-pay card according to the needs of AIG; this may form one of two options: Option A, Initial priority roll out to Zone 1, and then later roll out to Zone 2. This would enable a card programme to be made available to key areas in Zone 1, in a shorter time scale. Estimated timescale: Zone 1 to be live by August 2009 then Zone 2 network to be live before the end of 2009. Option B, Roll out to Zone 1 and 2 together. This would enable a global corporate brand to be released zone 1 and 2 at the same time rather than individual territories. This would result in slightly longer set up times, but reduce marketing limitations in certain countries. Estimated timescale: Zone 1 & 2 to be live by the end of 2009. Zone 1 • UK • United States • Europe • Caribbean
Zone 2 • South America • Asia • Arab States • Australasia
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 5 of 18
Full Global Rollout Zone 1 and 2 will be followed by structured full global roll out to 180 countries worldwide, with priority to countries where existing client membership base is greatest, and these will include: • • • • • • • • •
India Philippines Japan Malaysia South Africa Indonesia Middle East China Korea
Some of these countries such as China may be subject to specific regional legislation may only be obtainable through offshore card variations. Roll out will also be structured to a format which is most workable for the demographic of the population, taking into account, technological advancement of the region and banking already available. Estimated Timescale: In the final territories roll out times may vary depending on the amount of infrastructure assistance required by service partners, however as EasyKard PLC has its own global office network, this can be streamlined by bringing many services in house in the short term. We would estimate this full roll out would take around 12 months after the initial launch.
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 6 of 18
Marketing Much of the marketing to western countries can be internet based. Advertising in territories with lower demographics can be through third parties that support fund loading. In both cases, further marketing can be generated through the existing Manchester United & AIG client base, offering rewards (Including RED-rewards scheme) to members who further introduce new clients to the system. Pre-Pay card Marketing can also be licensed through AIG and Manchester United via existing websites and television networks to ensure information reaches the entire fan base. A specific package can also be tailored to the existing supporter rewards system. Multiple up-to-date card designs EasyKard has an in-house graphic design Studio; this means we can offer both AIG and Manchester United a number of designs from a generic package to individual or limited edition collector cards, all within the specific design policy of Manchester United. This in house service not only maintains control of the product, licence and artwork, but more importantly offers swift turnaround of new designs and can offer a fully personalised service for either the fans or the operating company.
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 7 of 18
Premium Products
Loyalty Scheme
Our graphic design team can also create premium supporter’s products; these will further strengthen the marketing opportunities for AIG, Manchester United and EasyKard. Such products may include collector’s special edition cards which can be produced at fairly low cost, or in more affluent areas, physical platinum & diamond encrusted products. Some of these premium products may also be presented in a gift box, with other added value products from the AIG & Manchester United branded products range. This facility may also ass a possible market for “collectors”. The choice of designs can be seasonal, thus allowing fresh stock of designs to continuously be introduced, additionally; any designs that are seen not to be popular can be removed.
EasyKard can see the huge benefits for links to the Red Rewards Scheme, such reward schemes can be very lucrative, creating major opportunities for increased popularity and sustainability of the card through brand awareness. Previous card programs developed by us include similar reward options which can easily be integrated into the system software, to allow card users to earn points for increased use and loading, these points can then be redeemed for “Money can’t buy” gifts, prize draws or collector cards. The result of such points systems creates increased loading and regular use of the card, ultimately resulting in higher profitability through residual income for both AIG and EasyKard
EasyKard PLC ©
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Future resources: e-money services We are in the process of developing a global E-Wallet “Pay-Pod” which is innovative and the first of its kind in the market. The E-wallet will allow customers from all over the world to transact securely using innovative mobile phone technology. According to the Boston Consulting Group*, currently 60% to 70% of the population in the Asia-Pacific-Middle East region do not have access to card based banking, although do have access to a mobile phone. Through our e-wallet facility all customers are eligible to obtain a prepaid card which allows them to save, control, manage, transfer and withdraw money through our electronic system in ‘realtime’. This does not rely on any other bank or finance house involvement; it is all transacted through us. Users can transact ‘on the go’ at any time globally and are all safe in the knowledge that each transaction is secure. The mobile phone capabilities twinned with the state of the art anti-fraud technology is a breakthrough in the e-money market. Research indicates that by 2012 the number of contact-free mobile phone bankers will reach 884 million. We recognise this growing phenomenon and have ensured our offering within the world of electronic money and pre-paid is one-step ahead which will make us the forefront of e-money technology. Easykard are also at the forefront of new technology, developing systems that incorporate new code card technology to ensure secure services for their users. *source of information Boston Consulting Group www.bcg.com Exchange Place 31st Floor Boston, Massachusetts 02109 USA http://www.bcg.com/impact_expertise/publications/files/Next_Billion_Banking_Consumers_June_2007.pdf
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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Database Take up Using statistics of the customer fan base supplied, we have prepared some information to show how card issue can influence residual income from card loading, AIG / Manchester United - supporter database figures % Take-up
No of supporters
Average Monthly Load
Total Monthly Load
1.25%
100%
3,000,000
£10
£30,000,000
£375,000
90%
2,700,000
£10
£27,000,000
£337,500
80%
2,400,000
£10
24,000,000
£300,000
70%
2,100,000
£10
£21,000,000
£262,500
60%
1,800,000
£10
£18,000,000
£225,000
50%
1,500,000
£10
£15,000,000
£187,500
40%
1,200,000
£10
£12,000,000
£150,000
30%
900,000
£10
£9,000,000
£112,500
20%
600,000
£10
£6,000,000
£75,000
10%
300,000
£10
£3,000,000
£37,500
5%
150,000
£10
£1,500,000
£18,750
1%
30,000
£10
£300,000
£3,750
The graph indicates values in GB£, the same format is relevant to any currency.
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 10 of 18
Worldwide Take up Clearly the indicated database of fans does not present the whole story, we believe the prepay card service will be a major attraction to fans worldwide, reaching fans that do not currently subscribe to AIG or Manchester United products. This opportunity is clearly a major opportunity for all parties concerned, as a result a similar indication of loading income is applied to the worldwide fan base figures below: AIG / Manchester United - supporter database figures % Take-up
No of supporters
Average Monthly Load
Total Monthly Load
1.25%
100%
140,000,000
£10
£1,400,000,000
£17,500,000
90%
126,000,000
£10
£1,260,000,000
£15,750,000
80%
112,000,000
£10
£1,120,000,000
£14,000,000
70%
98,000,000
£10
£980,000,000
£12,250,000
60%
84,000,000
£10
£840,000,000
£10,500,000
50%
70,000,000
£10
£700,000,000
£8,750,000
40%
56,000,000
£10
£560,000,000
£7,000,000
30%
42,000,000
£10
£420,000,000
£5,250,000
20%
28,000,000
£10
£280,000,000
£3,500,000
10%
14,000,000
£10
£140,000,000
£1,750,000
5%
7,000,000
£10
£70,000,000
£875,000
1%
1,400,000
£10
£14,000,000
£175,000
Again, the graph indicates values in GB£, the same format is relevant to any currency. EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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Financial Model The figures in the previous graphs give an indication of card income at an average of just £10 per card; however historical data indicates many pre-pay card users maintain an average much higher than this: lower customer demographics are actually attracted to higher loading, as they use tend to rely more on the card, in the absence of a full bank account, in some cases applying their full weekly wage or benefit to pre-pay cards. Of course these conservative estimates can generate massive income potential from loading fee’s alone; however there are clearly further income streams from such card systems. These may include: • Sale of the Cards • Card Fees (where charged) • Interest on investment of funds held on cards • Interchange on purchases made in some territories • Breakage (unclaimed funds left on expired cards) • Any incidental income Some of these rates can be negotiated by AIG and EasyKard, where as some are subject to global banking variations; however as an indication such income streams are likely to generate a further 20% above the loading fees.
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 12 of 18
Additional income Average days 30/2 = 15x12 Interest rate 0.24%
0.10%
Sale of card $15.00 Cost of card $4.50 Gross profit $10.50
0.05%
0.01%
0.02%
Based On 3m Manchester United database Potential Interest on loading
Card fees
Gross profit on initial sale of cards
Interchange
Breakage
Incidental
$432,000
$30,000
$31,500,000
$15,000
$3,000
$6,000
$388,800
$27,000
$28,350,000
$13,500
$2,700
$5,400
$345,600
$24,000
$25,200,000
$12,000
$2,400
$4,800
$302,400
$21,000
$22,050,000
$10,500
$2,100
$4,200
$259,200
$18,000
$18,900,000
$9,000
$1,800
$3,600
$216,000
$15,000
$15,750,000
$7,500
$1,500
$3,000
$172,800
$12,000
$12,600,000
$6,000
$1,200
$2,400
$129,600
$9,000
$9,450,000
$4,500
$900
$1,800
$86,400
$6,000
$6,300,000
$3,000
$600
$1,200
$43,200
$3,000
$3,150,000
$1,500
$300
$600
$21,600
$1,500
$1,575,000
$750
$150
$300
$4,320
$300
$315,000
$150
$30
$60
Applied to the same take up ratio as the previous graphs EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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Cost and fee allocation To simplify the model, EasyKard are looking to create a simple 50/50 profit split on all income earned from the cards globally. There will be no cost to AIG in respect of set up, banking, processor and vendor set-up. AIG and Manchester United will cover their own internal costs such as legal and contractual fees and internal IT integration costs and marketing through existing fan base, including MUTV and membership publications & websites. EasyKard PLC will cover implementation fees for the card network, systems and vending including global management costs, from inception to expiry of final card. There is a set-up cost per programme per territory, EasyKard will cover these costs and the ongoing operating costs of the programmes worldwide. There is a cost to produce each card; these cards will be met by the Sale Price of the card.
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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Logistics Logistics of how the card will work in each territory/demographic will need to be taken into account. In most western countries, the use of the internet and e-wallet systems both for account management and advertising can be utilised, however some operating countries with limited IT infrastructure will require larger further support from the licensed card loading affiliates to ensure the availability of manual loading. In each country (Particularly in poorer territories) EasyKard will need to conduct research to ensure the current banking systems and networks are able to support the required technology. Where appropriate, EasyKard PLC can offer assistance to third party card support networks, to ensure an accessible, successful launch of the pre-pay card network. Where current contracts are in place with banking institutions offering services to AIG, the option of card vending will be offered where possible to existing links, however in the case of territories where no such agreement exists, or where the offer of card vending services is declined, then EasyKard will distribute cards either through their through their own network or through existing or new third party networks, EasyKard will manage this function on behalf of AIG/ Manchester United and ensure the processes run smoothly.
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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Processing services EasyKard will arrange initial data processing through their Manchester head office, located near the Old Trafford football ground, which will also add to brand recognition and loyalty. Further card issue and processing will be through the EasyKard global network, working closely with banking partners in some territories. Card issuing is to start in line with the proposals on pages 5 & 6, and to run to June 30th 2014 with further 2 year run off to June 30th 2016 unless renewal of contract follows and is assigned to EasyKard PLC. AIG will be required to manage any conflicts with Manchester United existing or future sponsors. This will ensure the exclusivity of both the EasyKard proposal and allow AIG to maintain market position as an existing sponsor.
View from the EasyKard Head Office Building Manchester
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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Conclusions •
The combination of programmes globally can create a whole new income stream for AIG that is both highly profitable and fan-friendly.
•
EasyKard working with AIG would look to make the product globally available so that every Manchester United fan has access to the product no matter where they are. If there is a Manchester United fan base in a territory where EasyKard do not operate, and where it is viable, EasyKard will look to expand into this territory.
•
The income and brand awareness from a global financial product such as this has huge potential and would set the bench mark for all other entertainment and fan based companies for years to come.
•
Linking Manchester United’s phenomenal fan base and established marketing facilities, together with EasyKard resources can produce a package which generates a strengthened brand and a highly profitable product.
•
Such a major opportunity can establish further fan loyalty, ultimately presenting AIG in conjunction with EasyKard PLC a stronger offering with Manchester United when contracts are reviewed post 2014/2016.
EasyKard PLC © February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
Page 17 of 18
Data Protection Licences undertaken by EasyKard will ensure operational rigidity and smooth entry of the card into the marketplace. Management of the scheme is to be carried out by EasyKard global network and offices, with no sub licences being issued to third parties. The single licence approach will ensure the protection of data supplied by both AIG and MU. EasyKard PLC will be required to work closely with banking partners in some territories, for card issue and loading, however every effort will be made to ensure no information regarding the database of fans is passed on to any other institution, group or competitor. Issuing banks in each territory will only be custodians of funds in each case and will not have direct customer contact or access to the client database. EasyKard PLC would expect a similar level of data protection from AIG and Manchester United, regarding systems, processes and information & software technology. EasyKard PLC will endeavour to resolve and manage all regional card variations on behalf of AIG and Manchester United; however we can not be held responsible for shortfalls in other financial institutions and mismanagement thereof.
All terms detailed within are strictly subject to contract. This document is confidential and intended solely for the person or organisation to which it is addressed. It may contain privileged and confidential information and should not be copied or distributed to any third party without the permission of EasyKard PLC. If you have received this information in error, please notify us immediately. This document does not constitute a binding offer, acceptance, amendment, waiver or other agreement, unless such intention is clearly stated in the accompanying contracts on which it relies.
EasyKard PLC Š February 2009: Proposal for AIG: Manchester United Card Brand This document is strictly classified and contains information appropriate for AIG and EasyKard PLC only
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