New Partnership Delivers Mastercard Approved Product to Gaming

The first gaming prepaid card solution to receive official MasterCard approval has recently been launched to the gaming industry. This pioneering solution is the outcome of a new partnership between TransSend, a European based provider of MasterCard prepaid card programmes, and Intercash, a provider of specialist payment solutions to the gaming sector.

The announcement at the end of 2007 from MasterCard that they were changing their rules around prepaid cards in the gaming sector, created the opportunity for the first time for programme managers to bring fully compliant prepaid card programmes to the gaming market.

In the past, the payout method has been a major challenge for the gaming sector. There is now, however, a concerted effort by the industry to produce a card payout product which enables winnings to be paid directly to the customer. Phil Davies, Director of Business Development at MasterCard Europe says, “We re-evaluated our position on the gaming payout programme when it became apparent that there were issuers who wished to approach the gaming sector with the correct methodology in respect to compliance and control, to give us the confidence to do business in this challenging market sector.”

Historically, customers have either had their winnings paid to them by a cheque through the post or transferred directly into their bank account. With the new scheme ruling from MasterCard, prepaid cards can now provide a way for winnings to be paid out instantly. This significant step will allow gamers to access their funds immediately, resulting in a fast, simple and more convenient payout method for customers and gaming companies alike. The card offers the same functionality as any MasterCard branded card. Users can therefore withdraw cash at one million ATMs worldwide, make point of sale payments at over 24 million accepted locations or use the card to make secure transactions online.

The benefits for gaming companies include a reduction in costs in terms of cheque payouts and bank transfer fees, as well as access to a new revenue stream. Prepaid cards increase customer satisfaction, comfort and loyalty by providing instant access to winnings. This makes customers feel safe and secure and boosts customer loyalty by providing a product that customers can use on daily basis.

In response to MasterCard’s announcement, TransSend made the strategic decision to enter the gaming arena with Intercash, who have an existing presence in the sector. Richard Jones, CEO of TransSend, explains, “When we originally looked into the sector, we identified two key elements for any programme manager looking to provide a compliant solution to gaming businesses. We knew that we needed to work very closely with our chosen scheme, MasterCard, and we needed a strategic partner that had a true understanding of the complexities of the gaming sector, relationships with existing businesses in the sector and a greater understanding of their specific needs.”

Intercash, for their part, were looking to bring their industry experience and cardholder management system to Europe. The combination of Intercash’s gaming experience, TransSend’s prepaid programme knowledge and the MasterCard scheme, has therefore resulted in a groundbreaking and market-leading prepaid product for the gaming industry. Patrick Seguev, CEO of Intercash, is keen to emphasise how important the industry is. “The gaming industry has always been at the leading-edge of payment innovations and has continually pushed the boundaries,” he explains. “The very nature of the space it occupies – as an internet-based industry – means it is a truly global proposition at the forefront of the high-tech world.”

Prepaid payment has been an important but complicated issue in the gaming sector and the card payout product represents a significant development in the creation of a fully compliant working prepaid solution. As a result of the partnership, TransSend will be able to launch a significant number of prepaid card programmes to the sizable customer base of Intercash and its partners.
“We are very excited about this venture,” Patrick Seguev, CEO of Intercash commented, “The strategic partnership between our two companies and their powerful teams, the high level of knowledge, and the right technologies and networks combined, will provide the ultimate services to corporations seeking reliable and efficient payment solutions.”

Intercash have been looking for a strategic partner in Europe to benefit from their extensive international experience for sometime, and Richard Jones, CEO of TransSend, believes that the partnership is a perfect merger of expertise. “There is a great synergy between Intercash and TransSend. Intercash bring us significant gaming industry knowledge and we bring substantial prepaid knowledge to the table,” he says. “This agreement is a significant step forward in our strategy to develop partnerships with operators in the payments industry who are leaders in their fields. It is our aim to provide the most innovative, market leading, compliant and secure prepaid card programmes to our customers.”

The partnership’s prepaid card was launched at the ICEi show in January 2008, and the level of interest it generated confirmed how exciting a development this is for the gaming industry. For Alastair Graham, TransSend’s Head of Marketing, the reaction was a complete validation of their strategy. “The response was incredible” he says. “We could not have asked for more from a marketplace launch. We have brought the right ingredients together to offer a really solid proposition for the gaming sector and the sector recognises this.”

If the partnership between Intercash and TransSend represents a commercial match, then Seguev believes the product of their agreement, the prepaid card, is equally well-suited to its market. “The prepaid card is ideal for the online gamer,” he says. “By their nature, the people that play on the internet are savvy and high-tech. They want to have something that can be instantly loaded and that allows them to access their funds straight away – whether they want to pay for something at a point of sale or withdraw cash at an ATM.”

The easiest way to describe the prepaid card is through the debit card analogy. It is effectively a debit card without the associated bank account. Winnings are loaded instantly onto the card and it is this speed and the simplicity of the process that makes it such an attractive product explains Graham. “Gaming customers want a fast, secure and reliable way to access their winnings. That is what prepaid offers. It is instantaneous and is there in the gamer’s pocket when they need it, thereby eliminating the inconvenience of travelling to a bank to cash or deposit a cheque.”
From the cash management perspective, the card removes potential problems and is more cost-efficient for the companies. Furthermore, it gives gaming companies a way of maintaining contact with the customer by providing a branded product that is effectively the payout mechanism; a device that Seguev explains is mutually beneficial. “If you are providing that level of service, then you are increasing the level of customer satisfaction and, in return, your customer loyalty strengthens,” he says. “There are many wins for both the customers and for the gaming companies themselves.”

The idea is that the prepaid card becomes a brand extension for online sites. The level of service that they provide online can start to be provided offline when the customer is presented with the winnings from their game. Ensuring these winnings are presented securely is an invaluable part of such a service; a measure that Graham assures is firmly in place. “One of the important things with our prepaid cards is that they have Chip and PIN functionality so are inherently more secure for all point of sale transactions. Furthermore, a prepaid card is different to credit and debit cards as spending is limited to the amount of cash that is on the card. Consequently, there is a lower risk than if you were using your credit card. Put simply: you do not open yourself up to losing everything you have got in your bank account.”

Whilst prepaid solutions operate in other markets, Seguev is keen to emphasise the importance of the gaming industry. “As the gaming industry is a pioneer of innovation in the payments industry, providing customer satisfaction when it comes to payout is one of the factors that actually drives the market. Providing the correct services to this industry will also benefit other industries, as the drivers in the online gaming industry are the same drivers for the prepaid industry.”

Jones sees an interesting future for the gaming market. “Recent developments in the US have changed the focus of gaming companies away from the States towards other regions such as Europe and Latin America. The ability to service these markets should be centred on the ability to collect and return money to and from customers. This is the business we are both in,” he explains. “The areas that are largely cash-centric will see the most interesting developments. This will benefit gaming companies as they will now be able to operate more fully in these countries.

The prepaid solutions market is forecasting rapid growth in the coming years, with the European market alone expected to grow 110% per annum until 2010. Seguev anticipates an interesting time for prepaid in the gaming market. “The future is going to present plenty of exciting opportunities, within which prepaid will be a key factor,” he says. “It is an exciting way of moving money. TransSend and Intercash want to be at the forefront of the prepaid revolution, as do MasterCard and the gaming companies. Just as we were the first to have an official recognised gaming payout card programme that carried the MasterCard brand, we want to be the first to announce the exciting new developments in prepaid.”

The partnership between Intercash and TransSend may well pave the way for a number of similar moves in the prepaid world. The prepaid market is developing from its infancy; consolidations are taking place at a dramatic pace and some of the companies present at the original development of the prepaid sector are finding it hard to move out of this infancy stage.