Hotel giant moves into prepaid services??
French hotel group Accor Services has moved into prepaid card services with a new joint venture with payment network MasterCard Europe.
The companies says the JV, called PrePay Solutions, will combine the prepaid and electronic payments expertise of both organisations for business players looking to benefit from the fast growing European prepaid market. The prepaid market in Europe is expected to double from Eur14bn in 2008 to Eur26bn in 2009 and to grow to €130bn in 2015. Accor and MasterCard said they aimed to have 5% of the prepaid services market by 2015.
Accor Services, the largest hotel group in Europe, will be the majority shareholder with 67%, with MasterCard Europe holding a 33% stake in the company.
The announcement has led to speculation that Accor isexpanding its services division prior to a partial flotation or spin-off. The JV will market prepaid card-based solutions that aim to enable corporations, public sector and financial corporations to cut costs and enhance efficiency. The card-based turn-key solutions will cover areas such as rewards and loyalty, gifting, expense management, and card payment for under-banked people.
The venture will be built around UK-based PrePay Technologies, which Accor acquired in 2007. Pre-Pay Technologies has nine years’ marketing and operating experience in the prepaid solutions sector, and privided services in the issuance of 20 million cards covering a range of prepaid solutions to the UK. It also has a licence to issue e-money in 17 European countries.
PrePay Solutions will provide services to Accor Services and MasterCard, with the aim of enabling each firm to develop solutions for its respective clients: corporate and government clients for Accor Services, banks and other financial institutions for MasterCard. The JV will also market prepaid solutions direct to its own customers such as retailers.
The PrePay Solutions Board of Directors is comprised of seven members: in addition to the Non-Executive Chairman and the Managing Director; Accor Services has three representatives on the board and MasterCard two members.
“This partnership is aligned with Accor Services’ strategic commitment to driving organic growth of 10 to 18% a year after 2010, versus 8 to 16% today. The strategic agreement positions Accor Services as a major player in the value-added prepaid market” said Serge Ragozin, chief executive of Accor Services.
“Prepaid is the fastest growing sector in the payments industry,” concluded Javier Perez, president of MasterCard Europe. “Customer financial institutions and merchant partners across Europe are looking for turnkey prepaid solutions, particularly those focusing primarily on the private label prepaid segment as well as innovative offerings to deliver the value that their customers have come to expect.”