Welcome

Welcome

Chair’s News Round

New Name for Association

• From 1st January the association has been renamed ‘UK Gift Card & Voucher Association’

• Principally for external reasons, particularly with PR

• Still confusion about The Va

• Change cost very little

• Objective ‘does what it says on the tin’

Congratulations

• Sainsbury’s for winning Best Card Design at The Card Awards last week

• PPT (PrePay Technologies) launched a new company this week, a partnership with MasterCard International and PPT parent company Accor. New company will be Prepay Solutions.

• Helen Child, G-T-P, new executive member as John Davis has stepped down

Business News

• 20 retailers went into administration last year; high profile Woolworths & zavvi

• BRC Retail Sales Monitor for December showed the worst figures for 14 years

• BRC Retail Sales Monitor for January reported like for like sales up 1.1% (best performance since May) – heavily driven by food sales

Deloitte’s 14th annual consumer & retail sector survey

• In Deloitte’s survey issued just before Christmas, gift cards & vouchers were 6th on people’s Christmas shopping lists, slightly down from 4th position in 2007.

• In the survey women stated their most wanted present is gift cards & vouchers – for men it was clothes!

Gift Cards less popular (USA)

• Many of the surveys ran in the US prior to Christmas were forecasting reductions in gift card spend.

• This was mainly due to the increasing popularity of open loop cards & general economic situation in the US.

Changes to P&I

• P&I magazine published final printed copy in January 2009.

• P&I and Brand Republic among others will now be purely online.

• They will be clustered together headlined by Marketing.

Changes to P&I continued

• Benefits include Marketing doing supplements through year, such as Voucher Essays (Jan 09).

• Next Voucher Essay comes out on day of conference, currently in talks about potential link.

The Retailer

• The Retailer is the British Retail Consortium’s (BRC) publication.

• The Retailer is planning several features with UKGCVA in the coming 12 months

• The next feature will be regarding B2B strategies.

The Current Economic Climate – Challenges for 2009• Press issues particularly focused on retailers

in administration

• Legislation not on Government Agenda

• How will this affect the industry going forward?

• As an industry what should be doing?

• Need to be mindful of all stakeholders, issuers, agents, third party resellers, etc

Background to data analysis

• One of the key objectives of The VA is to gather & collate industry data.

• Every new member has to submit historical sales data for the last three years.

• The VA has collated data on behalf of members for over 6 years to build a picture of the market & help assess trends for the future.

Headlines – Q4

• Total Sales – gift cards 52%, paper vouchers 48%

• Consumer Sales – gift cards 66%, paper vouchers 34%

• Corporate Sales – gift cards 21%, paper vouchers 79%

• Total Sales – 68% consumer, 32% corporate

• Card Sales Consumer – 97% in store, 2% gift card centre, 1% online / other third party

Total Sales Consumer v Corporate

Consumer / Direct68%

Corporate32%

Consumer v Corporate

45% 45% 44% 32%

55% 55% 56% 68%

0%20%40%60%80%

100%

Q1 Q2 Q3 Q4

Consumer

Corporate

Product Channels % Share Total Sales

Retailer71%

Agency26%

Leisure3%

Product Channels % Share Total Sales

14%

18% 15% 26%3% 3% 3%3%

83% 79% 82% 71%

0%10%20%30%40%50%60%70%80%90%

100%

Q1 Q2 Q3 Q4

Retail

Leisure

Agency

Product Channels % Share

Agency33%

Leisure2%

Retailer65%

Agency22%

Retailer74%

Leisure4%

CorporateCorporate ConsumerConsumer

Sales By Product – Total Sales

Paper48%

Gift Cards52%

Sales By Product – Total Sales

50% 52% 50% 48%

50% 48% 50% 52%

0%

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4

Gift Card

Vouchers

Sales By Product

Paper79%

Gift Cards21%

CorporateCorporate

Paper34%

Gift Cards66%

ConsumerConsumer

Sales By Product - Consumer

24% 27% 25% 34%

76% 73% 75% 66%

0%

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4

Gift Card

Vouchers

Sales By Product - Corporate

82% 82% 80% 79%

18% 18% 20% 21%

0%

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4

Gift Card

Vouchers

Sales – Cards Only

Closed Loop97%

Open Loop1%

Restricted Loop2%

Sales – Cards Only

2.50% 3.00% 3.00% 2.00%0.50% 1.00% 1.00% 1.00%

97% 96% 96% 97%

0%

20%

40%

60%

80%

100%

Q1 Q2 Q3 Q4

Closed LoopRestricted LoopOpen Loop

Sales – Cards Only

Direct Sales99.95%

Online0.05%

Direct Sales97.0%

Gift Card Centres

1.0%

Other Third Party and Online

2.0%

CorporateCorporate ConsumerConsumer

Card Sales By Channel - Consumer

91%

98% 97% 97%1%

1%1% 1%

6%

1%1% 1%2%

0% 1% 1%

86%

88%

90%

92%

94%

96%

98%

100%

Q1 Q2 Q3 Q4

3rd Party

Gift Card Centre

Online

Direct Sales

Andrew Johnson

Director General

Update on Payment Services & Emoney Directive• Payment Services Directive changes have

been agreed by Parliament and will apply from November 2009.

• The key area for us is ‘Limited Network’

• Emoney Directive is now under consultation (closes 14 April)

• GCVA met with Treasury and FSA yesterday

• ‘Limited Network’ is biggest issue here also

Update on Payment Services & Emoney Directive• Currently the definition of Limited Network will

transfer from PSD to EMD

• However, some EU countries are questioning the broad definition and this needs to be ratified:– It should apply to specific pre-paid instruments, not

fungible designed to address very precise needs– The commission shall adopt measures to ensure

convergent application of the provisions referred to under paragraphs 3

Update on Payment Services & Emoney Directive

• Fungible – – cluefungible |ˈfənjəbəl|adjective Law(of goods contracted for without an individual specimen being specified)

able to replace or be replaced by another identical item; mutually interchangeable : money is fungible—money that is raised for one purpose can easily be used for another.DERIVATIVESfungibility |ˌfənjəˈbilətē| |ˈfəndʒəˈbɪlədi| |-ˈbɪlɪti| nounORIGIN late 17th cent.: from medieval Latin fungibilis, from fungi‘perform, enjoy,’ with the same sense as fungi vice ‘serve in place of.’

Update on Payment Services & Emoney Directive• And this means….?

– Limited Network open to interpretation

– Other countries want clearer definition

– Lack of understanding about the market (especially from mainland Europe)

• Action– Agreed in association with Salans (our lawyers) to

draft a list of product models and submit them to Treasury

– All members can feedback into the consultation

Update on Payment Services & Emoney Directive• Payment Services Directive Seminars by FSA

on:– 23 March, Birmingham

– 25 March, Canary Wharf

– 26 March, Bradford

– 31 March, Canary Wharf

– 01 April, Edinburgh

– Details from Andrew

VAT – harmonisation on vouchers across Europe – the story so far

Toby O’Reilly

Ernst & Young

Toby O'Reilly Ernst and Young

• Commission working on EC proposal

• Draft proposal available April/May 2009

• Proposal is not an EU priority

• Opportunities to influence

• UK Government starting ‘informal’ consultation process

• Lots to do to reach consensus

• Implementation unlikely to be 2012 or earlier

VAT and vouchers - EC proposals

Toby O'Reilly Ernst and Young

• More detailed update

• Focus on opportunities to influence

• Can we shout with one voice?

• Who cares?

• Understand what you want

• Consider VA strategy and next steps

This afternoon

Conference 2009

Arun Glendinning

Vice Chair – The VA

Conference 2009

• Wednesday 29th April 2009• Queen Elizabeth II Conference Centre

• G-T-P title sponsor

• 1 remaining sponsorship opportunity and some exhibitions stands available

Sponsors & Exhibitors

• Other Sponsors & Exhibitors are:– Smith & Ouzman– Cognitronics– PrePay Technologies– Stored Value Solutions– Thames Card– Kalamazoo– DX Group– CPI Card Group– The Gift Card Centre– Canvey

Agenda & Speakers

• Speakers– Stephen Robertson, BRC– James Quilter, P&I– Leigh Anne Ambrose,

Marriott USA– Carman Wenkoff, Subway

USA– Florian Welsch, cadooz,

Germany

• Agenda– Incremental sales analysis– Business to Business– USA & European markets– Gifting and Loyalty– Legal & Regulatory– Contactless Payments– Open Loop Gifting– Research on new

technology

Events

• Association Events:

– Social Event, Wednesday 18th March, Pub Quiz, TigerTiger, London. £30.

• Non-Association Events:– Card Awards –

congratulations to Sainsbury’s winning Best Card Design

– Prepaid Card Expo, Orlando, Florida. 9-11th

March