Increase payment platform adoption by growing partner/client categories
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Transcript of Increase payment platform adoption by growing partner/client categories
Increase Payment Platform Adoption by Adding Categories, Braintree
Bhaskar Jayaraman: [email protected]
Agenda
• Glimpse of Braintree Partners & Clients• Current Partner/Client categories• Potential categories• Adding a new category, Mass Transit (CUBIC)
Upstream Partners
Partners (Downstream)
Current PartnersGlimpse of Current Partners & Clients
Clients (Downstream)
Downstream – Platform integratorsUpstream – Platform enhancers
‒ e-commerce platforms (Shopify, Drupal, Goodsie)‒ Hospitality (airbnb, HotelTonight)‒ Online marketplaces (taskrabbit, livingsocial, Belly)‒ Entertainment (AngryBirds)‒ Niche verticals (GitHub, stackoverflow)‒ Payment solutions (innerfence, levelup)‒ Retail (Trunk Club, Fab, Poshmark)‒ CRM (Belly)‒ F&B (OpenTable)‒ Social network platforms (FB)‒ Blogging platforms (Wordpress)‒ CDN (CloudFlare)‒ CSP/ISP (serverdensity)‒ SaaS (Animoto, Basecamp)
Current Downstream Categories (Clients & Partners)
Potential Downstream Categories (e.g. in Appendix I)
Clients (Direct categories)
Those who integrate Braintree on their solutions
- Entertainment- TV/Music/Gaming
- Lead aggregators
- Device/App SDKs- Smartphone/Tablet- Wearable platforms- Automobile dashboard
- Mass Transit Vendors
- Employee benefit providers
- Mobile providers
- Micro/Crowd Finance
- Niche technology (QR Code, NFC, SMS etc.)
- Retail Energy (Gas, Electric)
- Wallet (Not fully thought through)
- Accounting software
Partners (Indirect Categories)
Those who integrate Braintree on their platforms
(e.g. Catering niche verticals in eCommerce, CRM)
- Food
- Finance
- Video
- Education
- Pharma
- Hotels
- Airlines
- Utilities
- Wireless hotspots
Downstream – Next steps
‒ Grow each category‒ Add more categories‒ Fill gaps in platform
Current‒ Processing partners (Wells Fargo)‒ Underwriters/Financiers (Appleseed)‒ Checkout Partners (Taxcloud)
Upstream Categories
Potential‒ QR Code partners (Scan)‒ NFC (Sequent)‒ Augmented Reality (Layar)‒ IVR‒ SMS‒ VoIP (Twilio)
Upstream – Next steps
‒ Document customer wish list to platform enhancement
‒ Add complementary categories
Adding a New Downstream Category, Mass Transit – CUBIC
CUBIC, quick look
Business divisions‒ Defense
‒ Transportation (Mass transit tech
solutions)
Financials‒ Market Cap, $1.4 B
‒ Run rate Mar ’14, Approx $1.5B
‒ YoY Rev. Growth, Approx. $100M
CUBIC Transportation Division
‒ Revenue share 37% (Y 2012)
‒ Operations in – USA (HQ), Canada,
Germany, Aus, Sweden, U.K., India
‒ Over $14 billion in revenues collected
‒ Vendor for SFMATA (BART, Caltrain,
VTA, etc.)
Case – CUBIC Clipper, San Francisco
New balance updated
on Clipper
6. User scans
Clipper with NFC
on machine
5. When successful machine requests another Clipper
scan
4. User swipes
credit card to load amount required
3. User scans
Clipper card with
NFC on machine
2. User locates
machine1. User signs up
Clipper Card Loading Process at Kiosk Machines –
Reduced ridership when,1. Trouble locating ticketing machine (only in big stations)
2. Waiting in queue (possibly missing connection)
3. Ticketing machine out of order
4. Fraud possibility (Card skimming etc.)
5. Choosing alternative transport (Uber etc.)
Proposal – Increase Ridership & Clipper adoption via Mobile
Braintree Proposal (e.g. using NFC)
New balance updated
on Clipper
5. User loads
Clipper with NFC
app on phone
4. When successful
App directs Clipper
scan
3. Employee uses App to load clipper
2. MUNI+ App saves info with Braintree
1. User loads visa card info
on MUNI+ App
Currently not in place possibly because of,‒ CUBIC’s reluctance for PCI Compliance
‒ CUBIC’s concerns on smartphone Security and Malware
Recommended business structure
‒ CUBIC to own‒ Decision On Technology (NFC, SMS, TCP/IP etc.)
‒ Integrating payment platform
‒ Development/testing of App on various phone platforms
‒ Production Release, & Maintenance of App
‒ Braintree to own‒ PCI Compliance & Security (2 factor auth. etc.)
‒ API availability on various smartphone platforms
‒ Testing of APIs & Change Requests
‒ Braintree API compatibility & integration with CUBIC system
‒ Support Demonstration & Production Release of App
‒ Could potentially also include,‒ Participation in Marketing and Awareness Campaigns
‒ Bringing more upstream partners on board (telecom, device, security, QR Code etc.)
Sustaining Categories via Product Enhancement
‒ Handle CUBIC’s‒ Support enhancement requests
‒ Platform/API requests
‒ Platform enhancement requests (upstream partner tie-up needs)
‒ Propose ways of engaging product‒ Via upstream partners (checkout, billing, accounting etc.)
‒ New ticketing mechanism (QR code)
Strategic and financial assessment
Clipper Usage & Braintree Opportunity
Assumption based on
SF Bay area ridership 5,149,230 Wikipedia
Total number of active Clipper users 1,300,000 www.mtc.ca.gov
Smartphone users 845,000 Smartphone user penetration 65% (Businessweek)
Braintree revenue per smartphone user per transaction $0.30
Braintree revenue potential per month (assuming every user loads once per month) $0.30 x 845,000 = $253,500 Only smartphone users & if Clipper user loaded
via NFC, SMS, etc.
Braintree revenue potential per year for SF Bay Area $3 M $253,500 x 12
Total CUBIC Revenue Potential for Braintree
Assumption based on
CUBIC ridership worldwide 38 M per day www.cubic.com
Number of smartphone + clipper riders 6.5 M Clipper usage 25% of total & smartphone penetration 65%
Annual revenue potential $23.5 M $0.30 x 6.5 M x 12 (User loads once a month)
Annual revenue potential for Braintree, when smartphone penetration approaches 100% $36 M 10 M x $0.30 x 12
Annual revenue potential for Braintree, when all CUBIC ridership approaches 100% on smart card use $136.8 M 38 M x $0.30 x 12
Total ridership in 2024 38 M + 6.33 M = 44.33 M 1.6% per year of base year 2014, WHO
Annual revenue potential for Braintree in 2024 $160 M 44.33 M x $0.30 x 12
Questions?
Appendix I – Assessment of Braintree Proposal
Advantages‒ Clipper + Smartphone = Cool, Convenient
‒ Steps 1. and 2. are one time (slide 14)
‒ Six steps to three (3, 4, 5)
‒ Requires only one clipper NFC scan
‒ Less cost to install, maintain, upgrade
machines
Drawbacks‒ Not all phones have NFC
‒ Not all users have smartphones
‒ NFC option open to abuse by
hackers
Workarounds‒ Other NFC devices (wearables?)
‒ 2 factor authentication for NFC
‒ SMS
‒ TCP/IP (Web interface, Chat app)
‒ Over the phone
Drawbacks of Workarounds‒ SMS costs $$
‒ Updates to Clipper card take 3-5
days‒ via TCP/IP & Phone
‒ Possibly also via SMS, OOB
Appendix II – Potential Downstream Categories
Partners (Indirect Categories)
- Food (e.g. Mowingo, LAI)
- Finance (e.g. Pareto)
- Video (e.g. Zumobi)
- Education (e.g. Serco)
- Pharma (e.g. Sales Vision)
- Hotels (e.g. Guestware)
- Airlines (e.g. Mobiata)
- Utilities (e.g. TIO Networks)
- Wireless hotspots (e.g. ZyXEL)
Clients (Direct categories)
- Entertainment- TV/Music/Gaming (In app purchases on Roku,
Xbox, Beatport)
- Lead aggregators (e.g. Reply, Stik)
- Device/App SDKs (Smartphone/Tablet, Wearables,
Dashboard displays)
- Employee benefit providers (e.g. Wagewokrs)
- Mass Transit (e.g. CUBIC)
- Mobile providers
- Micro/Crowd Finance (e.g. m.Paani)
- Niche technology firms (QR Code, NFC, SMS etc.)
- Retail Energy (Gas, Electric)
- Wallet (Not fully thought through)
- Accounting software (e.g. Xero)
Appendix III – SF Bay Area Public Transport Ridership
Agency Name Daily Ridership (www.wikipedia.org) Clipper?
ACE 3,700 No
BART 421,800 Yes
Caltrain 47,060 Yes
SMART — —
Muni Metro 160,100 Yes
VTA Light Rail 33,600 Yes
AC Transit 236,000 Yes
SamTrans 46,070 Yes
MUNI 297,700 Yes
VTA 107,900 Yes
Golden Gate Ferry 5300 Yes
Total Ridership 5,149,230
Total active clipper cards in circulation 1.3 M (www.mtc.ca.gov) or 25% of ridership
Appendix IV – Clipper Usage & Braintree Opportunity
Assumption based on
SF Bay area ridership 5,149,230 Wikipedia
Total number of active Clipper users 1,300,000 www.mtc.ca.gov
Smartphone users 845,000Smartphone user penetration 65% (http://www.businessinsider.com.au/us-smartphone-penetration-ticks-up-in-the-fourth-quarter-2014-2)
Average times balance is loaded per month Once Assuming they commute daily
Average annual transport expense of household in SF $10,466 http://www.bls.gov/ro9/cexsanf.htm
Average spent on public transport in SF 12.2% http://www.bls.gov/ro9/cexsanf.htm
Amount spent on public transport per month $106 ($10,466 x 12.2%)/12
Total amount spent on transport by all riders per month $546 M 5,149,230 x $106
Total amount spent on commuter expense per month $273 M Assuming 50% goes to this and rest go to taxi and airplane travel
Total amount spent by Clipper users per month on public transport per month $68.9 M $106 x 1,300,000 x 50%
Amount spent on Clipper as a percentage of total ridership spend 25% = 68.9/273
Regardless of the money spent of clipper Braintree revenue per smartphone user per transaction $0.30
Braintree revenue potential per month $0.30 x 845,000 = $253,500 Only smartphone users & if Clipper user loaded via NFC & SMS & assuming every user loads once per month
Braintree revenue potential per year for SF Bay Area $3 M $253,500 x 12
Appendix V – Total CUBIC Revenue Potential for Braintree
Assumption based on
CUBIC ridership worldwide 38 M per day http://cts.cubic.com/en-us/aboutus/companyfacts.aspx
Active Clipper or similar smart card users worldwide 10 M per day Assuming 25% of all
Number of smartphone riders 6.5 M Assuming average penetration of 65%
Total number of times they load clipper card Once every month
Revenue potential for Braintree via NFC/SMS solution per month $1.95 M $0.30 x 6.5 M
Annual revenue potential $23.5 M $1.95 M x 12
Annual revenue potential for Braintree, when smartphone penetration approaches 100% $36 M 10 M x $0.30 x 12
Annual revenue potential for Braintree, when all CUBIC ridership approaches 100% Clipper or similar smart card use $136.8 M 38 M x $0.30 x 12
Ridership growth annually (2010, 50% people lived urban areas & by 2030 this will be 60%) by 1.6% per year of base year (2014)
Extrapolated using data from -http://www.who.int/gho/urban_health/situation_trends/urban_population_growth_text/en/
Total ridership in 2024 38 M + 6.33 M = 44.33 M 1.6% per year of base year (2014)
Annual revenue potential for Braintree in 2024 $160 M 44.33 M x $0.30 x 12