May 22nd, 2013
The production of a major brand’s gift card scheme can present numerous challenges for Retail Managers, says Dannie McDonald, Business Development Director, Contis Group. But it doesn’t have to be this way…
In my opinion, gift card managers for major UK brands don’t get the recognition that they deserve. Theirs is a tough role – not only do they need to synchronise the operations of numerous and varying suppliers in order to deliver schemes within budget, they also need to do so according to cast iron deadlines set by the promotional schedules their cards are designed to serve.
The expected returns on these campaigns are significant; fiscal ROI is just the start. Senior management expect, not unreasonably, that their gift card schemes should demonstrate a quantifiable and positive impact on brand visibility, customer loyalty and footfall, and of course increased spend. But because the different service components required to deliver and manage a gift card product are conventionally supplied by a range of different partners, the pursuit of these goals often requires the manager to marry internal and external resources, which can easily draw their focus away from other priorities, like planning the next line of gift card promotions.
The commercial gains from these initiatives, however, are well known and with more major brands offering gift card schemes than ever before, the market in the UK is both big and growing (currently estimated to be worth around £4 billion per year[1]).
More schemes mean that there are now more gift card managers than ever before. And from my recent conversations, they all seem to be asking the same question: ‘isn’t there a better way of doing things?’ Unquestionably, the answer is ‘yes’.
This issue of ‘service fragmentation’ in gift card programme management is hampering the gift card industry’s operational agility. When this issue is resolved (and it can be, quite easily) the world starts to look like a very different place indeed.
Currently, many gift card managers are committing a great deal of time and money to programme management, which could be invested elsewhere, in getting ahead of the pack; analysing customer behaviour; or focusing on new innovations in order to inform the next wave of cards. In extreme cases, service fragmentation creates an environment where the manager spends all of their time fire fighting; battling fluctuations in transaction charges, locking into partner negotiations in order to overcome service rigidity, or attempting to access, isolate and interpret meaningful customer data held externally.
This can result in a loss of strategic control and prevent brands from budgeting effectively for their gift card schemes. What’s worse is that this can cost a brand its competitive edge because its own processes prevent it from responding to market and customer requirements in a timely fashion.
The solution lies in the consolidation of providers. Engaging a provider that has total ownership over all the implementation and management processes required to launch and operate a gift card initiative will vastly reduce service fragmentation and enable managers to retain (or offload) as much of this work as they wish to, thus buying back the time they need to keep pace with ever customer dynamics and opportunities in the marketplace. There are less than a handful of providers operating to this model across Europe (Contis is one), so a strategic review of the category shouldn’t be too onerous.
Potential benefits include:
- Increased speed to market: programmes can be developed and brought to market in a fraction of the time typically experienced with a fragmented services model.
- Heightened agility in programme development and expansion: schemes are scalable and can be customised easily in line with customer and market needs. A single provider has an integrated view of all aspects of card delivery enabling a new level of management control.
- Cost efficiency and transparency: brands receive a clearly structured pricing model with low transaction costs. Unlike providers engaged in a fragmented model, end-to-end providers are not constrained by single sources of revenue (e.g. transaction charges) or multiple margins and are free to mould a solution specific to a client’s individual requirements.
- Simplicity of management: simply put, an end-to-end provider gives in house managers ‘one throat to choke’. Despite this, best-in-class providers are breathing comfortably, enabling their clients to reallocate internal resources to business and programme development.
It’s good to know that gift card managers have the grit and determination to make their programmes successful and grow the gift card industry. But at its core, this is an argument about business process efficiency and resource allocation, not about who can handle the most pressure. Senior management will be most responsive to evidence of enhanced performance, agility and innovation in their brand’s gift card schemes. A new end-to-end model for gift card delivery is, in my opinion, the fastest and most economical way to achieve this.
[1] UK Gift Card and Voucher Association – http://www.ukgcva.co.uk/
Posted in Blogs
March 7th, 2013
The latter period 2012 saw a further 8000+ new credit union members become credEcardplus users. Further more there are now more cardholders than ever receiving cash rebates of up to 15% when they use their credEcardplus to pay for their weekly shopping.
But the significant increase in card take-up is more than just a result of the cash rewards available to cardholders. The card is provided to credit union members along with an e-account that provides money management functionality similar to that provided by a high street bank account. Users can have wages, loans and benefits paid directly into their credEcardplus e-account (the account comes with a UK sort code and account number) and are able to withdraw cash at ATMs and supermarkets, set up standing orders or recurring payments, pay bills and view up to the minute transaction information and statements.
Fees for using the account are minimal, and ethically priced, ensuring cardholders receive maximum benefit for minimal outlay. The UK based customer services team provide all members with support including how to activate their card, set up standing orders and how avoid incurring fees and get the best value when using the card and e-account.
For further product information visit the website at www.credecard.com or email Geoff.leech@contisgroup.com
Posted in Blogs
March 7th, 2013
The benefit reforms to be introduced in 2013 will see a large percentage of credit union members, unaccustomed to managing their money on a monthly basis, struggle to maintain regular payments for essentials including rent, council tax, utility bills etc…. not to mention repayment of credit union loans.
However, the credEcardplus prepaid Visa card and e-account programme will shortly include our new ENVELOPE facility designed to help those members who will have to adapt to having benefits and wages paid directly into their e-account once a month. The facility allows the member to automatically ‘ring-fence’ a percentage of their monthly income they need to pay essentials, whilst leaving the remainder free to spend or withdraw as cash.
Estimates show that many organisations could see an estimated 9%-14% increase in arrears following the introduction of the universal credits system. Including housing associations, care facilities and others will see an estimated 9%-14% increase in arrears following the introduction of the universal credits system. The creEcard ENVELOPE facility will help your members to avoid falling behind with essential payments, providing a useful money management tool to take away the stress and complications of adapting to the new benefits format.
For further information on the New ENVELOPE facility and how it can benefit your credit union and members, contact Geoff Leech, Head of Partner Development on 01756 693257 or email Geoff.leech@contisgroup.com.
Posted in Blogs
February 26th, 2013
Thought leadership blog post from Mike Fromant, Managing Director, Contis Group
The introduction of Universal Credit in 2013 is going to be disruptive, to say the least.
The government’s single payment initiative for state benefit recipients will require claimants to manage all financial commitments from one monthly imbursement paid in arrears directly into their bank account.
Today, most benefits recipients budget on a weekly or fortnightly basis, according to how often their benefits are paid. Among them are many who struggle to manage their finances effectively from one week to the next. How then will they cope when forced to revise their financial behaviour in order to manage all their outgoings from one monthly payment?
Many of today’s recipients don’t have a bank account either, nor any means of obtaining one. This raises two more problems. Firstly, without a bank account, how can they receive the Universal Credit payment to which they are entitled? Secondly, if they don’t have an account, neither do they have a bank manager to turn to for advice. Who then will support these individuals with their financial planning as they grapple with transitioning to a monthly payment model? Suppose they have a disability which inhibits their capacity to manage their account? What then?
What is patently clear is that in order to continue to receive state benefits the unbanked must obtain an account facility of some kind. Fortunately, e-money institutions like Contis can offer anyone a prepaid e-account complete with an account number and sort code – account holders need only provide proof of identity and address. When obtained via a Credit Union, individuals can also access the financial guidance and support they will need during their transition to the Universal Credit system and beyond. Additional cards can also be made available, meaning a relative or carer can play an open and active role in managing a claimants financial affairs, should they be unable to do so themselves.
Prepaid facilities like credEcardplus not only offer individuals a means of receiving and making payments, but also provide a platform to facilitate better money management. By offering ‘jam jar’ accounting facilities – where cardholders are able to separate incoming funds into different ‘jars’ for different purposes – prepaid solutions can facilitate effective monthly budgeting for those unfamiliar with the practice. As cardholders can only ‘spend what they load’, prepaid solutions can also help to mitigate against debt.
With an anticipated eight million Universal Credit payments expected over the first four years alone[i], financial solutions designed for low income individuals and those with developing financial skills will grow dramatically in 2013. e-Money institutions like Contis have been working hard to create solutions for this sector that deliver far greater benefit to account holders than a traditional bank could offer, linking their account to rewards and incentive programmes that enable individuals to generate cashback on the money they spend.
Once they have weathered the transition to monthly payments, many Universal Credit claimants that have opted for a prepaid e-money solution are likely to find themselves in a more stable, accessible and beneficial environment through which they can manage their financial affairs.
[i] Department of Work & Pensions
Posted in Blogs
February 18th, 2013
Concern for unbanked members on benefits triggers raft of new partnerships
In a bid to help members adjust to the introduction of Universal Credit in April 2013, eight major Credit Unions across England and Wales including, Castle and Minster and LASER, have chosen to provide prepaid financial services via Contis Group’s ground-breaking credEcardplus e-money solution.
The eight new Credit Unions, which have a combined membership of 40,000, bring the total number of UK issuers offering credEcardplus to 42; a figure that has risen by 50% since the government announced plans to introduce Universal Credit in 2010.
By partnering with Contis, a leading European provider of end-to-end prepaid financial solutions, Credit Unions are able to offer members many of the money management facilities usually associated with traditional banking, like an e-account facility that is capable of supporting standing orders, money transfers and ATM withdrawals via the Visa network. This is of particular importance now, because Universal Credit will require unbanked benefit recipients to equip themselves with a basic account facility in order to accept the new initiative’s single, consolidated, electronic benefits payment.
“Credit Unions are growing increasingly uneasy about how their unbanked members are going to cope with the transition to Universal Credit,” comments Mike Fromant, Managing Director, Contis Group. “They understand that most benefits recipients budget on a weekly or fortnightly basis, according to how often their instalments are paid. Among their members are many who struggle to manage their finances effectively from one week to the next, so Credit Unions are rightly starting to ask questions about how members will cope with a system that will only provide monthly payments into a registered account.
“We are delighted to be working with so many Credit Unions around the UK in order to answer this need,” continues Mike. “credEcardplus provides a credible and low cost alternative to mainstream banking, together with a host of benefits for both cardholders and issuers. We anticipate demand for our e-money solution will continue to increase as Universal Credit gets ever closer.”
Since all credEcardplus transactions are managed online, Credit Unions adopting the solution are able to redirect considerable in-branch resources away from arduous cash handling processes, toward activities that deliver greater value to their members, such as providing guidance and support on financial planning. By working with members on the credEcardplus e-account facility, Credit Union staff can help them to prepare for the transition from weekly to monthly payments, by setting up standing orders for rent and utility bills, for example.
Credit Union members are also provided with a prepaid payments card linked to a rewards scheme that enables them to generate cash rebates on everyday purchases from a variety of participating retail outlets, such as Asda, BHS and New Look.
“Once they have weathered the transition to monthly payments, many Universal Credit claimants that have opted for a prepaid e-money solution are likely to find themselves in a more stable, accessible and beneficial environment through which they can manage their financial affairs,” adds Mike. “The more Credit Unions can do to assist their members now, the easier it will be for them when the initiative starts to roll out in April.”
Posted in Latest News
February 15th, 2013
Mike Fromant, Managing Director, Contis Group
UScommentator Brett King is right in his claim that ‘the underbanked don’t need banks anymore’ (FinExtra blog, Dec’12) but, frankly speaking, his is only half the story.
King offers an overview of some alternative financial services that provide the utility of banking. First he cites low-value convenience purchase accounts from retailers like Starbucks and Apple as one example of how consumers are banking elsewhere. This facility, however, will only account for a tiny fraction of an unbanked individual’s day to day spending. Then he turns to P2P lending, which may well be expanding rapidly but, in my view, can’t (and shouldn’t) be cited as a service that supports the idea of not having a traditional current account.
For me, the key to King’s claim is that the underbanked do, in fact, need basic banking facilities; they just no longer need to get them from a bank.
Take a closer look at the breadth and sophistication of services that are available from European e-money providers and King’s claim strengthens considerably. Here, a traditional bank account is actually a rather poor choice for the underbanked consumer.
e-Money insititutions like Contis Financial Services are tailoring financial solutions specifically to suit the underbanked market and are gaining real traction as bona fide alternatives to traditional bank accounts. credEcardplus, for example, is delivered with an online account facility complete with an account number and sort code. This enables users to check their balance and set up standing orders to manage benefit payments and other regular transfers, without requiring a visit to a bank branch or enduring a raft of unwelcome (and often pointless) credit checks. No bank in sight.
The reloadable prepaid card model (which traditional European banks have always struggled to deliver effectively) is exploding. In the UK, the model’s growth is, in large part, being driven by the government’s flagship Universal Credit state benefits initiative which, when it kicks off in April, will require all claimants, including those currently unbanked, to open an account in order to receive payments. Faced with this prospect, low income and underbanked individuals are fast realising they now have attractive alternative options. They need not live in fear of tipping over their limit and incurring extortionate bank charges because with a prepaid account, they can only ‘spend what they load’. Moreover, when obtained via a Credit Union, the best of these e-money solutions offer incentive reward and loyalty schemes linked to high street merchants, which help cardholders generate automatic rebates on everyday purchases.
2013 will be a year of change for the underbanked segment and it’s great to see King banging the drum for banking alternatives. Finally, through prepaid e-money solutions like credEcardplus, this customer segment will get the services support it both needs and deserves.
Posted in Blogs
February 13th, 2013
New hires in sales, marketing and customer services extend domestic and international capabilities
In response to market demand for its end-to-end prepaid and debit solutions, Contis Group, one of Europe’s leading e-money solutions providers, has enhanced its domestic and international capabilities with the addition of five strategic hires.
These appointments follow the company’s service expansion in 2012 which gave Contis total end-to-end ownership of all implementation and programme management processes required to effectively launch and operate a prepaid or debit card initiative. Since then, Contis Group’s customer footprint has grown to encompass new sectors and territories, as large organisations around the world realise the benefits of working with a single partner that can service all of their prepaid and debit card requirements under one roof.
“2013 is a big year for us,” comments Mike Fromant, Managing Director, Contis Group. “Our acquisitions and strategic repositioning work has moved the business up the value chain and is increasing the size and value of our client base. Contis is engaged in deals with credit unions to serve the unbanked community, private sector organisations across Europe to streamline corporate expenses systems and large retail holding companies to service gift card, loyalty and rewards programmes.
“The market is moving quickly,” adds Fromant. “It will be those providers capable of innovating that will prosper the most. With this in mind, Contis is also looking at new ways to collaborate with customers in order to help them fulfil their commercial objectives. All this means that we need more people if we are to continue our development both in the UK and internationally. We will be disclosing more on these deals in the coming weeks, but for now, we would like to welcome our new colleagues at this exciting time in our growth.”
The company has bolstered its sales, customer services and marketing teams in this latest recruitment drive.
Chris Cresswell joins Contis as Sales and Business Development Director. Formerly with LaSer UK, Chris brings to Contis significant experience in the cards and loyalty sector and will be responsible for generating new revenues in this area. Chris is joined in the sales department by new Sales Executive, Oliver Smith who will work to increase product awareness amongst existing and prospective credEcardplus clients.
Customer Services Advisor, Renata Burdon, has joined from Eurobank EFG and is currently studying for a degree in Business Management Studies. Renata brings a broad knowledge of banking systems to her new role.
Alexis Wilson and Andy Ireland both join as Marketing Executives. Having joined the marketing department from the Contis customer service team, Alexis carries an extensive knowledge of the company’s products and services into her new job. A trained graphic designer, Andy will assist clients in card design generation and implementation. Both will assist in all aspects of company and client marketing.
Posted in Latest News
January 3rd, 2013
EU basic banking legislation: A step too far?
Since the European Parliament opened up the market in 2011, authorised e-money institutions have become a new force in European financial services, one capable of offering consumers a bona fide alternative to traditional banking. Just in the nick of time, too. The ‘unbanked’ are on the rise and all but one of the high street banks having withdrawn their services for the newly bankrupt. In 2013, it will fall to Credit Unions and e-money institutions to extend their reach and work together to provide effective support to those in financial difficulty.
Efforts are already underway and Contis has witnessed a surge in its engagement with Credit Unions in 2012, together with widespread adoption of its bespoke prepaid credEcardplus financial solution.
But all this may be about to change. In 2012, MEPs have been calling for European legislation to be tabled in January which will make having a bank account a legal right for the 10% of EU citizens that sit outside the traditional banking system. These include, amongst others, homeless people, those on very low incomes, students, people with no credit record and expatriate workers. If passed, the legislation would drag the banks kicking and screaming back to a market where they clearly don’t want to be.
While any move to widen the options for consumers in financial difficulty should be applauded, forcing the hands of traditional banks is not a smart move, and unless the banks outsource their services, the whole operation will be counterproductive for consumers.
By adopting forward thinking e-money solutions like credEcardplus, Credit Unions are now able to provide many of the traditional money management facilities that banks are refusing to offer, like an e-account together with an account number and sort code, for example, which is capable of supporting standing orders, money transfers and benefit payments. By taking this route, members can also benefit from ATM access and worldwide payment acceptance, again, all without a traditional bank account, via Credit Union-issued prepaid and debit cards powered by the major payment schemes. What’s more, many of the unbanked are now reaping benefits that they simply couldn’t get from traditional banking, like cash back from incentive reward and loyalty schemes linked to their e-account.
But Credit Unions and e-money institutions don’t command the same level of consumer awareness as major banks, so it’s safe to say that the proposed legislation will cause many to automatically opt for a banking service, when in reality, a Credit Union membership would be far better suited to their needs.
With this in mind, e-money institutions and Credit Unions should be joining forces to show leadership in 2013. They must work together to maximise consumer awareness of their services, banging the drum loud and clear about their value and the benefits they offer members over traditional banking.
But if this legislation does goes through, these actions alone will not be nearly enough. E-money providers will also need to demonstrate to the banks how servicing this market can be sustained in the long term. Taking on a fully managed, outsourced prepaid and debit service from an e-money provider like Contis is just about the only way a high street bank will be able to build an offering that fulfils its legal obligations without revenue loss and disruption to its priority operations.
Despite its infancy, the e-money industry will have a big role to play this year if it is to adequately represent the interests of the individuals it serves.
Posted in Blogs
December 12th, 2012
Contis Group has designed and powered a new, innovative multi-purpose financial services solution for customers of Nowtel, the pan-European telephony group specialising in calling cards and mobile virtual network operations.
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Posted in Latest News
October 30th, 2012
Contis Group, one of Europe’s leading end-to-end prepaid solution providers, has strengthened its board with the appointment of seasoned technology professional, Kirsten English, as a Non-Executive Director.
Kirsten has held various Executive and Non-Executive positions at various firms listed on London, Dublin, NASDAQ and Oslo stock exchanges and brings a great depth of knowledge and experience in technology and strategic development to Contis.
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Posted in Latest News
