Banking Up: Delivering Lasting Value in Digital Banking For All
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Banking Up: Delivering Lasting Value in Digital Banking For All

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Everyone can get good everyday banking services no matter their level of income, age, education and bankability. The company Banking Up fulfills this promise with a scalable platform which delivers ...

Everyone can get good everyday banking services no matter their level of income, age, education and bankability. The company Banking Up fulfills this promise with a scalable platform which delivers better services than regular checking accounts to anyone with an Internet connected PC or smartphone.

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Banking Up: Delivering Lasting Value in Digital Banking For All Presentation Transcript

  • 1. Delivering Lasting Value in Digital Banking For All July 2014
  • 2. BANKING UP Banking Up at a Glance We deliver full checking account capability via mobile and web on top of prepaid foundation To Businesses and Financial Institutions with large audiences of cash-based customers All consumers regardless of income & bankability With Highly scalable & quickly configurable platform in an SSAE-16 / PCI-DSS redundant environment Team headquartered in New York, and software development in Europe Achieving 1MM accounts since inception, 24-month account longevity, >80% in direct-deposited funds Scale and innovation trusted by leading issuers like H&R Block $4.6MM in 2013 revenues Banking Up Platform Prepaid (Visa / MC) 2
  • 3. BANKING UP Successful Team Patrice Peyret, CEO Serial entrepreneur with 30 years experience in technology; co-founder and CEO of Mobileway (Sybase); CEO of Integrity Arts (Sun Microsystems); software engineering at Schlumberger, Thomson/RCA and Gemplus Billions of consumers, devices, messages & value creation Carles Guillot - Chief Service Architect Justin Surman - CTO Daniel Clark - Financial Controller Jon Hennen - Director of Operations Board with Financial Technology expertise Investments in over 50 companies >$7B in multiple exits to large strategic acquirers 3
  • 4. BANKING UP The Challenge of Good Banking For All 100MM+ consumers at stake in the US alone Strivers (under-banked) 54MM • "choose to use“ • "financial resetters“ • "men at work" “On The Rise” (mass-banked) 30MM College Students 11MM • Financially aware now • Reluctant transitionners “Angry banked” More MM Source for all numbers: VISA Feb 2013 Offered the wrong products by non- bank market players Median Survival of cash loaded prepaid cards 1.6mo Acquisition cost for checking accounts: $350 in branch $140 online Under-served & over-charged by banks 4
  • 5. BANKING UP $1T Opportunity in the US $0 $250 $500 $750 $1,000 $1,250 2012 2018 Potential Prepaid-based Accounts 2012 2018 Underserved Consumers $649 $778 Mass Banked Consumers $215 $274 College Students $82 $100 Teens $40 $51 $ in Billions Volume comes largely from cash, checks and money orders Segment needs differ All segments strongly prefer to acquire from a financial institution Sources: Visa Inc., U.S. Prepaid Industry Segment Opportunity Sizing Study, August, 2011; Visa Inc., Segmentation Study of Banked Non-Owners of Reloadable Prepaid Cards, December, 2011 Less than 5% of $1.2T prepaid-based market potential have been penetrated so far 5
  • 6. BANKING UP Deposit Pay Card Checks Direct Debit Solution Save Rainy Day Reserve Cash-back earned Health Discounts Cash Salary Checks Transfers Branchless, paperless (but not yet checkless) consumer banking 24x7 access via mobile, PC or tablets Debit card for purchases & ATM access Direct Deposit via ACH Deposit checks at Wal-Mart or at home1 Pay anyone with on-demand paper checks Cash loads at 50,000 retail locations Based on FDIC-insured, Reg. E protected, no-overdraft prepaid accounts No check-eligibility verification2 Lower back-end operating costs (“pooled” accounts) Can be Durbin exempt (higher interchange revenues) 1: Requires smartphone with camera 2: CHEX system in the US 6
  • 7. BANKING UP Address Key Pain-Points 1 2 3 4 5 6 1. Avoid trips to the check casher 2. Receive direct deposits 3. Write checks to your landlord 4. Build a safety net automatically 5. Avoid trips to the phone store 6. Save on everything 7
  • 8. BANKING UP Private-Labeled Services for Businesses Transaction Processor Co-branded Prepaid 2.0 in-a-box Payment Network Issuing Bank Turnkey • Deposits • Payments • Savings for Customers of the Business Extended Processing and Risk Services Bank and Network Management BINs and Programs Set-up Compliance, Risk and Settlement Fee Scheduling & Extended Payments Portfolio Optimization Configurable Loyalty Engine Real-time Reports & Analytics Consumer Interactions Web & Mobile Interfaces Editorial & Marketing Tools $ Black Lists & Fraud Mgmt. 8
  • 9. BANKING UP Extended Processing and Risk Services Platform Services for Financial Institutions F.I’s Processor Extend prepaid platform to deliver full checking capability with real-time CRM Network F.I’s Back-End Systems F.I.’s Staff Bank and Network Management BINs and Programs Set-up Compliance, Risk and Settlement Fee Scheduling & Extended Payments Portfolio Optimization Configurable Loyalty Engine Real-time Reports & Analytics Consumer Interactions Web & Mobile Interfaces Editorial & Marketing Tools A la carte extensions of F.I.’s processor and integration with F.I.’s back-end Most advanced portfolio management tools $ Black Lists & Fraud Mgmt. 9
  • 10. BANKING UP Clients Portfolio of Accounts Accounts Opening Costs Banking UP Share of interchange Private Label Deployments Accounts Revenues Businesses Platform Services Accounts Operating Costs Financial Institutions Private Label Deployments Platform Services revenues: ≈1% of POS payments (interchange) + monthly, ATM and support service fees costs: processing, Bank BIN & network, support, optional share of interchange to Client revenues: set-up fee + recurring operating fee + per-account monthly success fee costs: platform hosting & monitoring, program management service bureau staff Business Model Interchange & Fees Processor & Bank BIN Outreach to Consumers 10
  • 11. BANKING UP Exemplary deployment (UPside Visa® Card) Virtuous Market Player Industry Validation • Low price ($0 -$4.99/month) / rich features • Best Life Time: 24 months • Best direct deposit performance: >80% in $ • 4-time winner of Paybefore magazine awards • First to implement CFSI’s prepaid fee box • First “Compass Principles” Champion • “Project Catalyst” partnership with CFPB • VISA’s top innovating partner • Powering H&R Block’s 3MM Emerald MasterCard® • Wal-Mart’s first deployment for Rapid Reload® The Metrics Of Success 11
  • 12. BANKING UP H&R Block uses Banking Up to: • Communicate and let their franchisees communicate with customers via the card account online dashboard (whenever people check their balance and statements) • Increase the longevity of accounts through key services: pay rent and bills with paper checks and top-up prepaid cell phones • Measure & analyze the behavior of customers via our real-time CRM service Case Study: 1in7 Americans file taxes with H&R Block at 11,000 retail tax offices 3MM Emerald Prepaid cards issued / year to receive tax refunds +100% year over year users + 40% direct depositors + 80% re-loaders Measured in May 2013 12
  • 13. BANKING UP Competition Basic or partial service Full DDA service Proprietary Processing Adapts to Legacy Back-Ends 2 1 Now part of FIS 2 Acquired by Google 3 Acquired by BBVA 1 3 13
  • 14. BANKING UP Who’s Interested? 5th US TV Network Reaches 93.8MM households. 1.8MM daily average viewers US Largest Prepaid Network 25MM subscribers; most are under-banked #434 of Fortune 500 Serves 14,000 Financial Institutions in 110 countries 4000 GOOD THRU 03/16 DEBIT CARDHOLDER NAME 4000 1234 5678 9010 14
  • 15. BANKING UP Pooled Peer-Lending Platform First-to-Market with “Financial Services Ladder” Give Access to Credit and Help (re)build FICO Scores Secured Credit Card where security deposit = prepaid savings purse Unsecured Credit Card = 2nd-step upgrade from secured card Prepaid Card = “everyday payments”. Always safe. (Secured) Credit Card = “credit building payments”. Use with caution. Prepaid and Credit cards remain entirely separate for compliance with CFPB & Treasury rules Help (re)build a Safety Net Incentivize savings with higher-than-market interest rates Partner with Peer Lending platform with insurance protection to generate the required interest rate Deposit Pay Save Prepaid Card Borrow Secured Credit Card Security Deposit Deposit Pay Save Prepaid Card Un-secured Credit Card Decisioning 15
  • 16. BANKING UP Addressing Industry-wide Problems with Partners Keep un-banked employees away from check cashers Make both Direct Deposit & Checks easy to accept by un-banked employees Employer Portal inviting Employees to self-enroll in GPR Card + install a Mobile Deposit Capture App Better for Employees: use with multiple jobs or when changing job Better for Employers: no change to payroll system, no regulatory worries Potential partners: IDology, Ingo Money, prepaid card providers (H&R Block, TracFone, Univision…) Don’t leave the un-banked out of the Affordable Care Act Fast payment-enablement of ACA applicants with online & mobile prepaid card sign up combined with in-store pick up at nearest participating retailer Potential partners with retail card distribution capabilities: H&R Block, Blackhawk, Incomm… 16
  • 17. BANKING UP Funding $4.3MM Series A $6MM Series B led by CoreVC Next: extension of Series B Fund expansion of platform for new vertical markets EBITDA positive by end 2014 17
  • 18. BANKING UP Unique Opportunity $1T Opportunity to serve everyone online + mobile Solution delivers great value regardless of asset and income level Multi-channel distribution: banks, employers, insurances, other F.I.’s Product validated by direct-to-consumer model; scales with private label partners Proven platform Leverages online & mobile Internet, Visa and EFT networks Expandable with fast iterations and open published APIs Chosen by large US issuer for its consumer financial services Proven consumer-facing business model Spend <$25 to generate >$120 life-time revenue on >$4,500 gross deposits Increase lifetime value with single-minded focus on expanding customer relationships Proven team Successful repeat entrepreneurs Experts in consumer & financial services technologies 18
  • 19. BANKING UP info@bankingup.com 1-212-671-1015 Banking Up 55 Broad Street, Floor 7 New York, NY 10004 19