2. 5/18/2015 2010 PartyGaming - Internal and Confidential 2
Payments Philosophy
RESPECT
Ourselves, Our Players and Our Partners
• What is good for the player is good for us!!!
• How many players did we insult today?
• What are we doing about our insult rates?
• If it happened to me, how would I feel?
• Do it yourself if you can, use a Wallet where you should
• Be a true partner to suppliers, and lose the suppliers that are not partners
• developing unique solutions with the payment suppliers to gain competitive
advantages over the rivals.
• Continually Optimize
3. 5/18/2015 2010 PartyGaming - Internal and Confidential 3
Methods and Markets – Status
Emerging
Existing
Endangered
Extinct
N/A for Method / Market
5. 5/18/2015 2010 PartyGaming - Internal and Confidential 5
Methods and Markets – Existing Player Success Rates
6. 5/18/2015 2010 PartyGaming - Internal and Confidential 6
Germany – Analysis
• Largest market based on revenue share which has been declining year on year
• Comparing decline rates with supplier's data shows Germany cashier
performance is sub optimal
• Bank success rates internally showed inflated success rate on new player
transactions (90%), however suppliers’ data shows only 45-50%
Overall cashier performance is poor based on relative performance of options
and player experience
Overall cashier performance is poor based on competitive advantage
assessment, and shows of potential to increase market share
Opportunity
$35 million in increased deposits (2009)
7. 5/18/2015 2010 PartyGaming - Internal and Confidential 7
Germany – Summary
Options Summary
• Volumes – Cards and Cash are relatively attractive than Banks, however going by German demographics, Banking options should be the
most preferred option
• Success Rates – Cards and Banking options are below expected success rate, relatively Cash have higher success rate and one of the
reason Cash has % share in German market
• Cards and Wallets are the tools for player acquisition going by their volumes and success rate
• Subsequent Deposit Success Rates on Cards and Bank – current performance effects player retention and result in lesser than expected
transactions per player – Cash (Vouchers) does not push player retention due to its discrete nature
• Transaction costs on Cash (Vouchers) – higher than any other options, hence higher transaction from Cash (Vouchers) also result in
higher transaction cost overall
• Chargeback and returns on Cards and Bank – respectively are higher than expected in Germany, ELV is not optimally used and result sin
higher return rates
• Due to the long list of options available on Cashier and low success rates, Cards and Banks are not user friendly but Cash is due to the
frictionless deposit path
• Wallets are relatively weak in Germany due to higher penetration and acceptability of Cards and Banks options – so Wallets availability on
main cashier page in Germany is more noise than value addition
Competitive Review
• We are at a competitive disadvantage and losing market share due to below par success rates on Cards and Banks bank options
require more push in terms of performance to gain market share
• Higher volumes from both new and subsequent players coming through Vouchers, Voucher gives advantage on acquisition however on
subsequent deposits Voucher volumes are too high to be normal ( lower player retention)
• Higher CB rates and return rates result in lesser push of Cards and Banking Options to players, resulting in disadvantage due to their high
adoption rate
8. 5/18/2015 2010 PartyGaming - Internal and Confidential 8
Germany – Strategy
Rescue Strategy
• Conversion – move players from using Vouchers (Cash) to Banks this will impact overall transaction cost for good
• Talk to suppliers, reduce integration issues, change supplier or reduce dependency
• Routing of transactions using BIN Optimization and Sort Code Optimization to reduce the decline rates
• Reduce the number of wallets and thin wallets from Cashier to reduce the noise and clean the cashier from user
perspective
• Use dynamic messaging in case of declines or Player facing transaction problems by switching options based on
performance and faster confirmations
Short Term Implementations
• Solve the problems with SIDs to allow more players to transact
• Discuss with Suppliers the integration issues on DirectPay24 and Giropay
• Primary BIN classification into hostile and friendly BINs
9. 5/18/2015 2010 PartyGaming - Internal and Confidential 9
Netherlands – Analysis
• Emerging Market, players with player values above $1,100, overall fifth largest market
for PG – we are losing market share in Netherlands
• Market requires good bank options, as banks are the preferred means of transaction
• Mistercash performance is poor, we lose more than 15% new players and minimum 2
to 3 transactions per players from this option’s underperformance
• Bank’s Success Rate internally showed inflated success rate on new transactions
(70%), however Suppliers data shows that Success rate are only 55%.
Overall cashier performance is poor based on relative performance of options
and player experience
Overall cashier performance is poor based on competitive advantage
assessment, and shows of potential to increase market share
Opportunity
$8 million in increased deposits (2009)
10. 5/18/2015 2010 PartyGaming - Internal and Confidential 10
Netherlands – Summary
Options Summary
• Bank’s success rates are poor resulting in huger opportunity losses in Netherlands, Banks performance needs to
be improved from its current levels
• Cards have good success rates but still below advantageous rate as declines are higher due to transaction velocity
problems
• Wallets in Netherlands are more of noise than advantages when we have very good Bank and Cash Options
Competitive Review
• IDEAL is one of the most used banking option in Netherlands has relatively poor performance on our system,
resulting in loss high value players from this country.
• Due to below par success rate on both Cards and Banks, results in competitive disadvantage and loss of market
share, especially bank options requires more push in terms of performance to gain market share.
11. 5/18/2015 2010 PartyGaming - Internal and Confidential 11
Netherlands – Strategy
Rescue Strategy
• Conversion – move players from using Credit Cards to Banks this will positively impact overall transaction cost
• Talk to suppliers, reduce integration issues, change supplier or reduce dependency
• Routing of transactions using BIN Optimization and Sort Code Optimization to reduce the decline rates
• Reduce the number of wallets and thin wallets from Cashier to reduce the noise and clean the cashier from user
perspective
• Use dynamic messaging in case of declines or player facing transaction problems by switching options based on
performance and faster confirmations
Short Term Implementations
• Discuss with Suppliers the integration issues on IDEAL performance
• Primary BIN classification into hostile and friendly BINs
• Increase the number of suppliers to reduce loss due to downtimes
• Add Direct Debits
12. 5/18/2015 2010 PartyGaming - Internal and Confidential 12
Impact Analysis
• Cards performance is based on sample data given by Optimal, Approval Rate comparison with Playtech Brands – Party approval ratios are 38% against
75% for Playtech brands
• Based on BIN Summary Analysis, overall decline rate is 25%, where 15% of total decline is due to hostile BINs and 12% is expected to be due to
transaction velocity and Integration problems
• Banks performance analysis based on data from Smart2pay shows that more than 40% of unique transactions are declined due to various reasons where
more than 20% are resultant of Integration issues, technicalities and lack of routing
• Neteller analysis shows that number of players lost on this wallet are far higher than what we report due to transaction velocity, routing, their gateway
restrictions etc
• Entropay success rate is almost 45% lower than what we see internally, only 30% of players which goes to their domain are successfully able to make
deposit, others are lost due to various CC error codes
• Analysing the Small Initial Deposit data for EFT, more than 45% of the players are lost during this process of bank account confirmation
• Moneybookers decline rate is more than 35% based on suppliers' information, indicating the huge declines we have on pending transactions
Opportunity Due Methods Underperformance Based on 2009 Volumes
Method
Actual
Success
Rate
Expected
Success
Rate
Unique
Player Failed
Avg Dep per
Txn # of Txn Opportunity Gross Revenue
Cards 80% 90% 80,000 85.00$ 6.9 46,920,000$ 23,460,000$
Banks 83% 90% 8,500 105.00$ 5.1 4,551,750$ 2,275,875$
Wallets 70% 80% 5,500 65.00$ 3.4 1,215,500$ 607,750$
Total 26,343,625$
Opportunity on New Players Due to Methods Underperformance Based on 2009 Volumes
Method Type
Success
Rate
Exp.
Success
Rate RMPs Loss
Avg Dep per
Tranx.
Tranx per
Player
Opportunity on
New Player
Deposits
Opportunity as
Existing
Players
Total
Opportunity Gross Revenue
Cards 70% 90% 81000 115.00$ 1.65 15,369,750$ 36,146,250$ 51,516,000$ 25,758,000$
Banks 55% 85% 4500 80.00$ 1.35 486,000$ 1,771,875$ 2,257,875$ 1,128,938$
Wallets 65% 80% 6500 70.00$ 1.15 523,250$ 950,625$ 1,473,875$ 736,938$
Total 27,623,875$
Expected Annualized Gross Revenue Opportunity Based on 2009 Volumes 53,967,500$
Annualized EBITDA Impact 16,190,250$
13. 5/18/2015 2010 PartyGaming - Internal and Confidential 13
Core Projects
• Transactional Profiling Payments Engine
• Least Resistance Routing
• Least Cost Routing
• Dynamic Cashier
• Smart Switching Capabilities
• Dynamic context sensitive messaging for retry strategies
• Conversion initiatives or pop up chat for specific issue resolutions
• Retry strategies with the engine constantly adjusting for optimization
14. 5/18/2015 2010 PartyGaming - Internal and Confidential 14
Payments Next Steps
• Finalize initial list of short term and core changes that we have identified for Payments
• Determine the expected financial impact for each item on the list and begin implementation of
items that are not dependant on external teams
• Work with Product and Dev to determine the resources required for each item that has
dependencies
• Prioritize the items internally and determine based on the current pipeline when they can be
launched
• Identify additional resources required to launch sooner, the timing of launches and ROI on any
additional cost
• Return to the Execs with the results and determine how to move forward
15. 5/18/2015 2010 PartyGaming - Internal and Confidential 15
Norway
Gaming Ban to be effective from June 1st 2010. The ban is to target Financial Services Providers who assist remote Gambling companies
who operate in Norway without a Norwegian Gaming licence.
Complete Across the Board 7995 Block: Issuers to decline all authorizations with MCC 7995 wallets would be impacted as Neteller and
MoneyBookers use MCC 7995 while funding via card
Possible actions to retain market share:
• Entropay to be used as card backup to address card demand
• Enhanced error messages educating customers how to proceed with the deposit
• Conversion initiatives to migrate customers from solutions that would become extinct
Credit Card Declines
• Entropay Promotion – Similar to the one running in Canada
• Promotion by emails to the customers proactively and reactively for failed deposits and failed conversions
• Event Detection System to strategically deliver a popup to the affected base of players
• Client marketing tool for RMP Norwegian players and one with previous credit card transactions when they log on promote our conversion
initiatives
• Campaigns for conversions via 2 methods currently in our cashier, Instant Banking for Bank Transfers and UKash vouchers for Cash
• Live agent (Push Chat) assistance
Short Term and minimal Development Required
• Process enhancements to existing solutions and addition of methods from existing suppliers
• Entropay to improve the conversion process and success rate overall
• Ewire (real-time bank and card transfer service): Currently offer in DKK. Integration of NOK and SEK for Deposits and enabling cash outs in
the 3 currencies
• Citadel Instant Banking: Refine the Instant Bank transfer process and once establish will require some protocol changes yet to be determined
on our end
• Paysafecard: Addition of this solution in Norway and with local currency (NOK)
• GluePay (real time bank transfer service) based in Scandinavia, allowing customers to pay and receive money to and from merchants
instantly and securely
It is important to note that is it is a Complete Across the Board 7995 Block, we need to prepare for the domino affect of the bank or
some of the banks in Norway becoming hostile for the alternative payments ultimately ending up at gaming sites
16. 5/18/2015 2010 PartyGaming - Internal and Confidential 16
Belgium – Analysis
• Emerging Market, players with player values above $1100, huge Casino potential – we
need to improve markets share
• Market requires good bank options, as banks are the preferred means of transaction,
MisterCash one of the dominant option is available with us.
• Mistercash performance is poor, we lose more than 15% new players and minimum 2
transactions per players from this options underperformance
• Banks Success Rate internally showed inflated success rate on new player transactions
(70%), however Suppliers data shows that Success rates are only 55-60%.
Overall cashier performance is poor based on relative performance of options
and player experience
Overall cashier performance is poor based on competitive advantage
assessment, and shows of potential to increase market share
Opportunity
$5 million in increased deposits (2009)
17. 5/18/2015 2010 PartyGaming - Internal and Confidential 17
Belgium – Summary
Options Summary
• Volumes – Cards and Cash are relatively attractive than Banks, however going by Belgium customer preference, Banking options should
be the most preferred option.
• Cash (Vouchers) outweighs other options due to easy availability and no transaction friction result in higher success rate
• Cards and Wallets are the tools for player acquisition going by their volumes and success rate
• Going by subsequent deposit success rate on Cards and Bank, current performance effects player retention and result in lesser than
expected transactions per player. However Cash (Vouchers) does not push player retention due to its discrete nature
• Transaction Cost on Cash (Vouchers) is higher than any other options, hence higher transaction from Cash (Vouchers) also result in
higher transaction cost overall
• Wallets are relatively weak in Belgium due to higher penetration and acceptability of Cards and Banks Options. So Wallets availability on
main cashier page in Belgium is more of noise than value addition
Competitive Review
• MisterCash one of the most used banking option in Beligium has relatively poor performance on our system, resulting in loss high value
players from this country
• Due to below par success rate on both Cards and Banks, results in competitive disadvantage and loss of market share, especially bank
options requires more push in terms of performance to gain market share
• Higher volumes from both new and subsequent players coming through Vouchers, Voucher gives advantage on acquisition however on
subsequent deposits Voucher volumes are too high to be normal ( lower player retention)
18. 5/18/2015 2010 PartyGaming - Internal and Confidential 18
Belgium – Strategy
Rescue Strategy
• By Conversion initiative, move players from using Cards to Banks this will positively impact overall transaction cost
• Talk to suppliers, reduce integration issues, change supplier or reduce dependency
• Routing of transactions using BIN Optimization and Sort Code Optimization to reduce the decline rates
• Reduce the number of wallets and thin wallets from Cashier to reduce the noise and clean the cashier from user
perspective
• Use dynamic messaging in case of declines or Player facing transaction problems by switching options based on
performance and faster confirmations
Short Term Implementations
• Discuss with Suppliers on integration issues on MisterCash performance
• Primary BIN Classification into hostile and friendly Bins
• Reduce the number of wallets and thin wallets
• Add Direct Debits
• Improve our Bank Transfer offering
19. 5/18/2015 2010 PartyGaming - Internal and Confidential 19
Brazil – Analysis
• Emerging Market, largest market in South America
• Due to limitations on deposit options and unusually low Credit Cards Success
Rate, penetration rate is too low – market requires more Cash and Bank options
, where we have major competitive disadvantage
• Credit Cards including Entropay are not the solution for increasing penetration
as Entropay success rates are no different than CC deposits – Entropay data
shows that success rate through their option is not more than 30%
Overall cashier performance is poor based on relative performance of options
and player experience
Overall cashier performance is poor based on competitive advantage
assessment, and shows of potential to increase market share
Opportunity
$2.5 million in increased deposits (2009)
20. 5/18/2015 2010 PartyGaming - Internal and Confidential 20
Brazil – Summary
Options Summary
• Credit Cards and Entropay are no good in this market
• Banks are hostile as well to make any penetration in the market
• Overall Brazil is under severe competitive disadvantage from cashier perspective
Rescue Strategy
• Talk to suppliers, reduce integration issues, change supplier or reduce dependency
• Routing of transactions using BIN Optimization and Sort Code Optimization to reduce the decline rates
• Reduce the number of wallets and thin wallets from Cashier to reduce the noise and clean the cashier from user perspective
• Use dynamic messaging in case of declines or Player facing transaction problems by switching options based on
performance and faster confirmations
• We need Hybrid (Cards-Bank-Cash Mix) Solutions to penetrate in these markets
Short Term Implementations
• Primary BIN Classification into hostile and friendly Bins
• Increase options to facilitate Bank and Cash transactions
• Explain New Credit Card Alternatives to Entropay's MCC 6012
• Entropay Enhancements
