Valuedesign Inc. (TSE Mothers: 3960) supplies prepaid card systems to over 800 customer companies. Its systems facilitate cashless payments with prepaid cards that must be preloaded with funds (typically small amounts ranging from several thousand yen to JPY10,000). The company operates in two segments: Private-Label Prepaid Card (93.5% of total revenue, OPM [before adjustments] of 22.1% in FY06/21) and General Purpose Reloadable (GPR) Prepaid Card (6.5% of total revenue, operating loss of JPY53mn).
On August 25, 2021, Valuedesign announced that arara inc. (TSE Mothers: 4015)—a company that competes with its private-label prepaid card operations—became its major shareholder by acquiring 33.27% of its shares. Valuedesign aims to transform itself from a prepaid card services provider into a digital transformation (DX) support partner, providing digital technologies that help customer companies optimize their operations. The collaboration with arara will likely speed up this transition.
The company provides one-stop support services for customer companies that wish to issue and operate their own electronic money. Its server-managed prepaid card system manages transaction data (e.g., deposits and balances) for plastic magnetic prepaid cards and mobile payment apps. While contactless electronic money cards—integrated circuit [IC] cards—can only be read by dedicated card readers, Valuedesign’s magnetic prepaid cards can be read by standard credit card readers installed at cash registers (provided the point of sale [POS] system has been upgraded). This has allowed the company to lower the adoption costs for its server-managed prepaid card system Valuecard ASP Service. The initial cost for customer companies that also require payment terminals is JPY50,000 per terminal (or roughly JPY3mn per terminal if adopting a mobile payment app). The company’s magnetic cards cost roughly JPY30 per card, or less than one-third of the price of an IC card (about JPY100 per card).
In the Private-Label Prepaid Card segment, Valuedesign provides a range of services such as reloadable private-label prepaid cards, single-use gift cards that replace paper gift certificates, and reward point cards. The bulk of its products are reloadable. Unlike general purpose prepaid IC cards designed for public transportation services or shopping, Valuedesign’s private-label prepaid cards can only be used at stores of contracted companies. The contracted companies receive analytics reports from Valuedesign that evaluate the effectiveness of their promotional strategies (e.g., sales growth achieved since adopting the company’s services). These insights help contracted customers devise and implement more effective promotional strategies. Valuedesign’s private-label prepaid cards also confer many benefits to consumers. They are more convenient than cash in many situations, they can be issued without a credit screening (unlike credit cards), and they frequently offer reward points or other customer benefits.
Examples of companies that have adopted Valuedesign’s system are restaurant chains MOS Burger and Skylark (TSE1: 3197), and retailers Lush Japan (cosmetics), Itoya (stationary), and Camel Coffee (Kaldi brand; coffee, food and general merchandise). Adoption is expanding among volume retailers ranging from supermarkets to restaurant chains, shopping centers, drugstores, and home improvement centers. The company says only about 20% of volume retailers and restaurants—its two largest target markets—have adopted private-label prepaid cards, so it sees ample room for further growth in those industries. Overseas, Valuedesign has invested heavily in prepaid infrastructure in the US and China. It has also actively expanded into other parts of Asia, establishing bases in Thailand, India, Malaysia, Singapore, South Korea, and the Philippines. It shut down its Chinese subsidiary in the summer of 2021.
Revenue (FY06/21: JPY2.2bn) breaks down into upfront revenue (JPY746mn) and system usage revenue (JPY1.5bn). Upfront revenue comprises sales of manufactured prepaid cards, system registration fees, sales of dedicated payment terminals in the Private-Label Prepaid Card segment, and customized system development fees stemming from service adoption in the GPR Prepaid Card segment. System usage revenue corresponds to usage fees for the Valuecard ASP Service, which are calculated as a percentage of the amount processed by the system (processing fee rate applied to funds deposited and spent by cardholders). Upfront revenue expands in proportion to the number of contracted stores (one-time revenue), and system usage revenue in proportion to the transaction value (recurring revenue).
In FY06/21, the Private-Label Prepaid Card segment had an OPM (before adjustments) of 22.1%, while the GPR Prepaid Card segment posted an operating loss of JPY53mn. System usage revenue generates higher OPM than upfront revenue, providing a stable earnings base as recurring revenue. Persistent operating losses in the GPR Prepaid Card segment and results in the overseas business have caused fluctuations in earnings and eroded OPM by several percentage points. As a result, the company has posted alternating recurring losses and profit since FY06/15.
Valuedesign operates the GPR Prepaid Card segment as its second core business. In addition to providing all the functions of private-label prepaid cards, GPR prepaid cards can be used at stores that accept international credit card brands such as Visa and Mastercard. While private-label prepaid cards are tied to the stores of the issuing company, GPR prepaid cards are more versatile and can be used globally at stores that accept international credit card brands. However, the annual transaction value in the GPR Prepaid Card segment has peaked at less than one-tenth of the transaction value in the Private-Label Prepaid Card segment. Valuedesign attributes this to the low usage of GPR prepaid cards as consumers struggle to differentiate them as a payment method from credit cards, and to a lack of growth in card issuers as the low average customer spend for such cards is not conducive to profit contributions.
In 2020, Valuedesign decided to move into new businesses that build on its existing GPR prepaid cards operations, including corporate cards and the issuance and management of GPR prepaid cards as an issuer. It also aims to provide DX services, utilizing its insights and expertise accumulated over many years to help contracted companies digitalize business operations such as expense reimbursement. Unlike private-label prepaid cards, which are issued under application service provider (ASP) service agreements between two parties (i.e., Valuedesign and its contracted customers), GPR prepaid cards are issued within a payment settlement system framework that is populated with many stakeholders and in which issuers and acquirers play a central role. Valuedesign aims to become an issuer, positioning itself as a payment settlement company within this framework.
Valuedesign pursues a two-pronged growth strategy. The first part of its strategy is to raise the ratio of transactions made with its prepaid services (prepaid transaction ratio; a KPI), and secure earnings opportunities by offering additional solutions. The company intends to increase the prepaid transaction ratio by supporting digital marketing at contracted companies (in areas such as customer attraction and sales promotion). It plans to strengthen interaction between stores that use its data analytics tools, apps, and digital gift services, and their customers, and supply related solutions. The second part of its strategy is to promote digitalization in peripheral areas, expanding services in settlement and finance-related fields other than private-label prepaid services (including by becoming an issuer).
In FY06/21, Valuedesign reported revenue of JPY2.2bn (-10.3% YoY), operating profit of JPY31mn (-77.1% YoY), a recurring loss of JPY1mn (versus profit of JPY123mn in FY06/20), and a net loss attributable to owners of the parent of JPY56mn (versus net income of JPY77mn in FY06/20). Revenue and profit both declined due to the COVID-19 pandemic, but earnings were strong in Q4, and finished near the high end of the company’s latest forecast range. System usage revenue increased 0.6% YoY as the company had initially expected. Upfront revenue was down 26% YoY due to delays in sales of additional products and orders slipping into the next fiscal year, but this was in line with the company’s revised forecast.
In FY06/22, the company forecasts revenue of JPY2.6bn (+16.9% YoY), operating profit of JPY17mn (-45.9% YoY), recurring profit of JPY9mn (versus loss of JPY1mn in FY06/21), and net income attributable to owners of the parent of JPY4mn (versus net loss of JPY56mn in FY06/21). It believes it will take more time before the usage of its private-label prepaid services recovers in the restaurant industry, and therefore plans to drive growth by focusing on retail sector projects. However, it expects a decline in operating profit on wider losses in the GPR Prepaid Card segment due to service terminations for several projects.
Valuedesign aims to achieve long-term revenue of JPY10.0bn (of which at least JPY8.0bn in system processing revenue) by FY06/25, and has formulated medium- and long-term targets and KPIs to achieve this goal. Its KPI targets are transaction value of JPY2.5tn, 150,000 contracted stores, and a prepaid transaction ratio of 40.0%. The three-year medium-term management plan ending in FY06/23 calls for final-year revenue of JPY4.4bn and operating profit of JPY418mn (OPM of 9.5%). Earnings are currently lagging the medium-term targets announced in September 2020 by one year, and the company plans to revise its medium-term targets for FY06/23 and beyond based on future earnings progress and market conditions.
Shared Research thinks Valuedesign’s strengths are as follows:
Ability to design and offer analytics tools—to measure effects of prepaid card adoption—and corresponding promotional measures informed by data collected from over 800 contracted companies.
Focus on prepaid cards allows for integration of products into existing payment systems while bypassing credit functions and related expenses.
Ability to provide flexible, low-cost services by integrating service design, development, and sales as a company with expertise in managing prepaid card balances and customer analytics.
We see its weaknesses as follows:
Revenue volatility is high, for two reasons: high percentage of one-time upfront revenue and a concentration of customers in the restaurant and retail sectors.
Its position as a subcontractor in the GPR Prepaid Card business prevents it from undertaking sales activities independently.
Investment in prepaid infrastructure is heavily skewed toward the US and China; the company has not been able to address specifics of smaller individual markets in Asia.
|Gross profit margin||-||-||-||29.6%||43.8%||40.6%||42.0%||42.7%||48.6%||46.7%||41.9%|
|Operating profit margin||6.8%||9.9%||2.1%||-||11.6%||-||3.9%||-||5.6%||1.4%||0.6%|
|Recurring profit margin||4.7%||10.2%||1.0%||-||10.0%||-||3.1%||-||5.0%||-||0.4%|
|Per-share data (split-adjusted; JPY)|
|Shares issued (year-end; '000)||-||-||-||1,141||1,141||1,453||1,466||1,470||1,535||1,732|
|Treasury shares ('000)||-||-||-||-||-||0||0||0||0||0|
|EPS (fully diluted; JPY)||-||-||-||-||-||-||21.5||-||49.0||-|
|Dividend per share (JPY)||-||-||-||-||-||-||-||-||-||-||-|
|Book value per share (JPY)||-||-||-||118||253||541||582||477||544||778|
|Balance sheet (JPYmn)|
|Cash and cash equivalents||-||-||-||229||269||519||587||404||682||1,333|
|Total current assets||-||-||-||584||609||810||900||796||1,116||1,754|
|Tangible fixed assets||-||-||-||55||137||247||268||232||154||107|
|Investments and other assets||-||-||-||69||58||36||22||106||126||74|
|Total current liabilities||-||-||-||464||441||277||286||336||543||389|
|Total fixed liabilities||-||-||-||264||247||246||202||159||75||274|
|Total net assets||164||291||581||135||288||785||853||709||847||1,357|
|Total liabilities and net assets||291||769||1,386||862||976||1,308||1,341||1,203||1,465||2,019|
|Total interest-bearing debt||-||-||-||470||414||325||246||202||249||353|
|Cash flow statement (JPYmn)|
|Cash flows from operating activities||-||-||-||-1||182||137||215||5||240||55|
|Cash flows from investing activities||-||-||-||-73||-85||-263||-106||-149||-68||-59|
|Cash flows from financing activities||-||-||-||-79||-57||377||-38||-40||108||652|
|Total asset turnover||325.2%||119.8%||95.8%||110.6%||177.4%||152.1%||155.1%||162.4%||185.7%||127.6%|
|Number of employees|
|Number of employees (excl. temporary workers)||19||22||30||46||46||65||64||72||76||87|
|Number of temporary workers (average)||2||2||2||1||2||3||5||8||10|
On May 12, 2022, Valuedesign Inc. announced that it would retire its treasury shares.
Valuedesign Inc. on March 15, 2022 entered into a share exchange and merger agreement with arara inc. Valuedesign will retire all its treasury shares immediately before arara acquires all outstanding shares in Valuedesign. The share retirement is scheduled for June 1, 2022.
On March 15, 2022, Valuedesign Inc. announced the conclusion of an agreement with arara inc. to exchange shares and merge operations.
On the same day, the company announced changes to executive management.
With the share exchange between Valuedesign and arara scheduled to take place on June 1, 2022, and the current President Toru Onoe now slated to become the representative director and president of arara (which will become a joint holding company following the integration), the company appointed the current Managing Director Shuji Hayashi as its new representative director and president.
|Name||New position||Current position|
|Toru Onoe||-||Representative Director and President|
|Shuji Hayashi||Representative Director and President||Managing Director|
On the same day, the company unveiled its post-integration medium-term management plan.
The figures for the medium-term management plan presented in the table were put together by Valuedesign and arara to show how the business integration wound work to accelerate growth.
|(JPYmn)||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||% of Est.||FY Est.|
|Gross profit margin||44.7%||45.4%||47.6%||48.6%||46.7%||45.9%||46.2%||46.7%||45.0%||47.7%||47.1%|
|Operating profit margin||0.0%||4.3%||6.4%||5.6%||4.8%||3.3%||1.9%||1.4%||-||-||-||0.6%|
|Recurring profit margin||-||4.0%||5.7%||5.0%||1.9%||1.7%||1.2%||-||-||-||-||0.3%|
|Gross profit margin||44.7%||45.9%||51.8%||51.7%||46.7%||45.1%||46.8%||48.2%||45.0%||50.1%||46.0%|
|Operating profit margin||0.0%||7.9%||10.4%||3.1%||4.8%||1.8%||-||-||-||-||-|
|Recurring profit margin||-||8.1%||9.0%||2.8%||1.9%||1.5%||0.0%||-||-||-||-|
|By segment (cumulative)||FY06/20||FY06/21||FY06/22||FY06/22|
|(JPYmn)||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||% of Est.||FY Est.|
|Private-Label Prepaid Card||521||1,137||1,730||2,323||512||1,040||1,531||2,079||442||959||1,450|
|% of total||93.2%||93.5%||93.7%||93.8%||92.2%||92.6%||92.9%||93.5%||93.7%||95.0%||94.8%|
|System usage revenue||349||714||1,080|
|Other one-time revenue||93||244||370|
|GPR Prepaid Card||38||79||117||154||43||83||118||144||30||50||79|
|% of total||6.8%||6.5%||6.3%||6.2%||7.8%||7.4%||7.1%||6.5%||6.3%||5.0%||5.2%|
|System usage revenue||24||42||58|
|Other one-time revenue||5||8||21|
|Private-Label Prepaid Card||83||232||396||556||111||224||344||460||80||218||327|
|GPR Prepaid Card||-7||-24||-40||-46||-2||-10||-42||-53||-25||-57||-86|
|By segment (quarterly)||FY06/20||FY06/21||FY06/22|
|Private-Label Prepaid Card||521||617||593||593||512||528||491||548||442||517||491|
|GPR Prepaid Card||38||41||38||37||43||39||35||26||30||20||29|
|Private-Label Prepaid Card||83||149||164||159||111||113||120||116||80||138||109|
|GPR Prepaid Card||-7||-17||-16||-6||-2||-8||-32||-11||-25||-32||-29|
|By segment (cumulative)||FY06/20||FY06/21||FY06/22||FY06/22|
|(JPYmn)||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||Q1–Q4||Q1||Q1–Q2||Q1–Q3||% of Est.||FY Est.|
|System usage revenue||341||728||1,119||1,469||365||731||1,092||1,477||374||756||1,139||70.4%||1,618|
|Private-Label Prepaid Card||303||655||1,012||1,330||331||662||992||1,351||349||715||1,080|
|GPR Prepaid Card||38||73||107||139||33||69||100||126||25||41||58|
|Other one-time revenue||218||488||728||1,008||191||392||557||746||98||253||390||39.8%||980|
|Private-Label Prepaid Card||218||482||718||993||181||378||539||728||93||244||370|
|GPR Prepaid Card||-||6||10||15||10||14||18||18||5||9||21|
|By segment (quarterly)||FY06/20||FY06/21||FY06/22|
|System usage revenue||341||388||390||351||365||366||361||385||374||382||383|
|Private-Label Prepaid Card||303||353||357||318||331||331||330||359||349||366||365|
|GPR Prepaid Card||38||35||34||32||33||35||31||26||25||16||17|
|Other one-time revenue||218||270||240||280||191||201||165||189||98||155||137|
|Private-Label Prepaid Card||218||264||236||275||181||197||161||189||93||151||126|
|GPR Prepaid Card||-||6||4||5||10||4||4||-||5||4||12|
Valuedesign mainly supplies its server-managed prepaid card system Valuecard ASP Service to restaurants and retailers, which tend to adopt the system ahead of their busy periods—the summer and year-end holiday seasons. For this reason, its revenue typically peaks just before the summer in Q4 and tapers off in Q1 of the next fiscal year. In addition, system adoption by customers can suffer delays depending on progress with projects, and revenue expected to be booked within a fiscal year may therefore be pushed back to the next fiscal year.
Cumulative 3Q revenue fell JPY120mn YoY. There was a JPY81mn YoY decline in Private-Label Prepaid Card segment revenue and a JPY39mn decline in General Purpose Reloadable (GPR) Prepaid Card segment revenue. The JPY169mn YoY fall in one-time revenue in the Private-Label Prepaid Card segment was a significant factor. The transaction value of the private-label prepaid payment service was solid, rising 10.1% YoY to JPY610.5bn.
The company recorded an operating loss of JPY69mn due to a JPY59mn increase in SG&A expenses (with more staff leading to higher personnel expenses), as well as a JPY41mn decline in gross profit.
The company accounted for a decline in the value of some software assets in the Private-Label Prepaid Card segment in light of the changes in the market environment. The company posted an extraordinary loss of JPY25.7mn as an impairment loss in Q3 FY06/22.
arara inc. became the company's largest shareholder on August 25, 2021, with a 33.2% stake in the company. The company stated that it aims to enhance competitiveness and profitability by leveraging the customer base of both companies to jointly develop the digital transformation (DX) and promotional support business for contracted stores.
On January 14, 2022, Valuedesign concluded a basic business integration agreement with arara inc. The company plans to move to a joint holding company structure, following delisting of its shares in May 2022.
On March 15, 2022, the company created a medium-term business plan jointly with arara (see the table below).
|(JPYmn)||1H Act.||2H Act.||FY Act.||1H Act.||2H Act.||FY Act.||1H Act.||2H Act.||FY Act.||FY Est.||FY Est.|
|Cost of revenue||553||631||1,184||664||608||1,273||607||577||1,185||1,511||27.5%|
|Gross profit margin||46.3%||39.1%||42.7%||45.4%||51.8%||48.6%||45.9%||47.5%||46.7%||41.9%|
|Operating profit margin||2.9%||-9.2%||-3.2%||4.3%||6.8%||5.6%||3.3%||-0.5%||1.4%||0.6%|
|Recurring profit margin||2.1%||-10.0%||-3.9%||4.0%||5.9%||5.0%||1.7%||-1.8%||0.0%||0.4%|
In the restaurant industry, the company expects recoveries in new inquiries and in the usage of private-label prepaid services at existing customers to take time given the high probability of lingering impact from a rapid resurgence in COVID-19 infections. In the retail industry, it forecasts strong demand for cashless payments and private-label prepaid services as companies look to prevent infections, an expansion in transaction value among retailers, and corresponding growth in revenue. While companies are rushing to adopt digital transformation (DX) measures against the backdrop of the pandemic, Valuedesign plans to launch full-scale marketing DX services that support digital communication with consumers from FY06/22, and book related revenue. These services will include a smartphone app with reward point and prepaid functions, a digital gift service, and a tool to analyze collected data on member users and purchases.
Revenue in this segment comprises upfront revenue, system usage revenue, and other revenue. Upfront revenue is generated from initial registration fees, and sales of manufactured plastic cards and related devices. System usage revenue corresponds to system usage fees calculated as a percentage of the prepaid card transaction value (deposits and spending amounts). Other revenue is earned on other prepaid payment-related services.
The company estimates domestic upfront revenue by combining (1) the order value to be recorded in FY06/22 based on completed orders, (2) anticipated revenue for potential new orders to be placed in FY06/22 (calculated based on historical data for similar projects), and (3) revenue for the expected volume of additional cards to be printed for existing customers. The company estimates system usage revenue by calculating expected growth in FY06/22 based on data for each customer in FY06/21.
Valuedesign forecasts growth in upfront revenue predicated on completed orders, revenue estimates for projects it is likely to win (such as projects for supermarkets and home improvement centers), and revenue from projects carried over from FY06/21.
In terms of system usage revenue, transaction value has held strong for supermarkets, home improvement centers, and other retailers. In FY06/21, Valuedesign made moderate progress with the acquisition of large projects that are expected to contribute to growth in FY06/22. It assumes growth will be driven by the provision of services to the retail industry. At the same time, it expects the restaurant industry to remain affected by the pandemic, and has therefore adopted conservative assumptions for transaction value and system usage revenue for customers in this industry. It also sees earnings contributions from the aforementioned marketing DX services making full-scale contributions from FY06/22.
In the overseas business, Valuedesign compiles its forecasts for upfront revenue and system usage revenue using the same method as for its domestic operations. In FY06/22, it expects business growth overseas to be driven by system usage revenue at its consolidated subsidiaries in Thailand and India, but it has adopted a cautious growth outlook for Southeast Asia and India as these have suffered worse economic fallout from the pandemic than Japan.
Revenue in this segment consists of upfront revenue and system usage revenue. The former is mainly generated from system development in connection with service adoption, while the latter is collected as a percentage of prepaid card transactions (payments and deposits). For FY06/22, Valuedesign forecasts upfront revenue on par with the FY06/21 level on the assumption that it will book upfront revenue for the same high-probability projects as in FY06/21. It has estimated system usage revenue based on FY06/21 transaction values for each customer, but it expects GPR prepaid card services at several partners to be downsized or terminated in FY06/22. As a result, it forecasts a decline in revenue and a wider segment loss.
Valuedesign estimates its cost of revenue by applying an average cost of revenue ratio derived from historical data to its sales value projections (underpinned by unit sales assumptions) for prepaid cards, prepaid card top-up machines, and other products in completed and projected orders. The company calculates manufacturing costs by estimating the number of external support staff necessary for system development and operation in the relevant fiscal year. In FY06/22, it looks for cost of revenue to rise in tandem with growth in upfront revenue, and other costs to expand marginally due to modest increases in personnel and enhancements to system equipment. On the whole, it looks for a 27.5% increase in cost of revenue and manufacturing costs.
In SG&A expenses, the company forecasts increases of 4.1% in personnel expenses (based on personnel employed in FY06/21 and sales staff to be hired in FY06/22) and 17.5% in agent commissions fueled by growth in system usage revenue. It expects other expenses to more or less decline or remain on par with the FY06/21 level. On the whole, it forecasts a 6.6% YoY increase in SG&A expenses in FY06/22.
The company forecasts JPY7.5mn in non-operating expenses such as interest payments.
|Results vs. Initial Est.||FY06/12||FY06/13||FY06/14||FY06/15||FY06/16||FY06/17||FY06/18||FY06/19||FY06/20||FY06/21||FY06/22|
|Revenue (Initial Est.)||1,897||2,123||2,295||2,622||2,598|
|Results vs. Initial Est.||8.3%||-2.7%||7.9%||-15.2%|
|Operating profit (Initial Est.)||50||-197||53||103||16|
|Operating profit (Results)||32||63||22||-177||188||-12||80||-65||138||31|
|Results vs. Initial Est.||59.0%||-||159.7%||-69.8%|
|Recurring profit (Initial Est.)||30||-210||43||90||9|
|Recurring profit (Results)||22||64||11||-188||163||-44||65||-81||123||-1|
|Results vs. Initial Est.||115.1%||-||185.3%||-|
|Net income (Initial Est.)||29||-172||1||48||4|
|Net income (Results)||22||58||20||-550||150||-87||33||-150||77||-56|
|Results vs. Initial Est.||14.7%||-||-||-|
Valuedesign’s results alternately overshoot or undershoot its initial forecasts by a relatively wide margin. Because the company closes its books in June and its core customers operate in the retail and restaurant industries, its earnings are affected by the sales outlook for the summer—the busy season—at such customers. Depending on the state of progress with projects, the adoption of its services by retailers and restaurants can sometimes be delayed, which in turn can push revenue recognition into the next fiscal year. In FY06/21, the company revised down its initial full-year forecast to account for the effects of a prolonged decline in prepaid service usage in the restaurant industry due to a state of emergency and other factors. In FY06/20, results exceeded the initial forecast due to positive effects from the government’s cashless payment and consumer tax rebate program. Persistent operating losses in the GPR Prepaid Card segment and results in the overseas business have also caused fluctuations in earnings and eroded OPM by several percentage points. As a result, Valuedesign has posted alternating recurring losses and profit in each year since FY06/15.
|Medium-term plan targets (JPYmn)||FY06/20||FY06/21||FY06/22||FY06/23||FY06/25||Change||CAGR|
|Act.||Initial targets||Act.||Initial targets||Est.||Targets||Targets||FY06/20–FY06/23|
|Domestic private-label prepaid||2,276||2,025||8,000|
|% of total||91.9%||91.1%||80.0%|
|GPR prepaid, overseas operations, and new businesses||201||198||2,000|
|% of total||8.1%||8.9%||20.0%|
|Operating profit margin||5.6%||3.9%||1.4%||7.1%||0.6%||9.5%||12.0%|
|Medium-term plan KPIs|
|Transaction value (JPYmn)||539,334||760,618||1,500,000||2,500,000|
|Prepaid transaction rate||13.0%||13.8%||30.0%||40.0%|
|System usage revenue (JPYmn)||1,469||1,465||1,477||4,000||8,000|
|Processing fee rate||0.27%||0.19%||0.27%||0.32%|
|Upfront revenue (JPYmn)||1,008||1,157||746||400||2,000|
On September 25, 2020, Valuedesign unveiled its first three-year medium-term management plan, which spans from FY06/21 to FY06/23. The numerical targets included in the plan are as follows.
|Revenue||JPY2.6bn (result: JPY2.2bn)||JPY3.2bn (new forecast: JPY2.6bn)||JPY4.4bn|
|Operating profit||JPY103mn (result: JPY31mn)||JPY227mn (new forecast: JPY17mn)||JPY418mn|
In FY06/21, the company revised its forecast down to reflect impact from projects that were pushed back to the next fiscal year, but earnings finished at the high end of its forecast range. Earnings are currently lagging its medium-term targets (announced in September 2020) by about one year. The company plans to review its targets for FY06/23 and beyond as necessary while taking into consideration future earnings progress and prevailing market conditions.
Along with its medium-term management plan, the company released medium- to long-term targets to help achieve its goal of JPY10.0bn in revenue in five years (“Timely Disclosure Materials on Fundraising,” released on August 18, 2020). The medium to long-term targets and underlying KPIs are as follows.
|System processing revenue||JPY1.5bn||JPY4.0bn+||JPY8.0bn+|
|Prepaid transaction ratio||13.0%||30.0%||40.0%|
To increase its number of contracted
companies (contracted stores), Valuedesign believes it needs to expand and
diversify its sales channels (partners), and improve its sales capacity by
strengthening relationships with partners (for example, by jointly developing services).
Specifically, it aims to diversify its sales channels by including point of
sale (POS) terminal manufacturers, marketing-related companies, banks and
payment settlement companies, IT service providers and software as a service
(SaaS) providers, and companies involved in the operation of shopping
facilities (such as real estate developers and leasing companies). It plans to offer
and supply prepaid functionality as a standard feature for POS terminals to POS
terminal manufacturers, data analysis and customer relationship management
(CRM) tools to marketing-related companies, as well as newly developed methods
to top up prepaid cards and interconnected payment settlement services to banks
and payment settlement companies. It intends to collaborate with IT service
providers and SaaS providers to develop mutually beneficial services such as
mobile order systems. Finally, the company aims to work with shopping facility
operators, proposing and implementing plans to recommend prepaid solutions to individual
tenants or roll out such solutions across entire shopping facilities.
Valuedesign not only targets consumers who are already accustomed to prepaid payments (those who make 20–40% of transactions with prepaid payments), but also aims to capture consumers who still mostly rely on cash or other means of payment (20–30%). By promoting prepaid payment solutions and the digitalization of peripheral services, the company believes the share of prepaid card and prepaid app users can be raised from the current 40% of total consumers to 70%.
Demand is rapidly rising for prepaid cards that (1) improve consumer convenience by allowing top-ups via cash deposits, from a credit-card-linked app, or through a bank withdrawal; and (2) allow for deposit amounts. The company is steadily expanding methods to transfer funds to its prepaid cards.
With a view to achieving its overall revenue target of JPY10.0bn in FY06/25, Valuedesign plans to concentrate on establishing a new earnings foundation (GPR prepaid business, overseas operations, and new businesses). Its revenue targets by business are shown below.
Background and strategy: government measures (2x increase in rate of cashless payments), measures to improve the prepaid transaction ratio in the business (from 15–20% to 30–40%), and transition from prepaid processing operations to marketing support operations through focus on digitalization and data utilization
Background and strategy: utilization of existing assets such as vast store network (customer base) and partner network in Japan and overseas, and acquisition of new resources through M&A activity to develop new payment settlement and promotional services (such as corporate prepaid services)
To establish a new earnings base, Valuedesign plans to focus on the GPR prepaid business, overseas operations, and new businesses. On August 18, 2020, it announced it would procure JPY1.1bn in funds through the issuance of its 11th series of share acquisition rights through a third-party allotment (allotment date: September 30, 2020, allottee: Milestone Capital Management, Co., Ltd.). It plans to use the JPY1.1bn in funds procured as follows.
The company will invest in (1) recruiting and training sales staff, (2) expanding private-label prepaid systems and peripheral services, and (3) expanding their capacity.
The company will invest in (1) developing general purpose platforms, and (2) establishing an operational management organization to support profit generation.
The company will invest in (1) developing new businesses through M&A deals and capital and business alliances, (2) expanding and enriching services, and (3) recruiting new sales staff and securing the capacity to develop IT systems.
Valuedesign leads the Japanese market for server-managed private-label prepaid cards by service adoption, having rolled out its services to over 800 customers. It uses its expertise to support the branding and promotional efforts of its contracted customers. Specifically, it supplies a server-managed private-label prepaid card system that facilitates the management of transactions made with plastic magnetic prepaid cards and mobile payment apps (such as deposits and balances). It provides one-stop services to customer companies that wish to issue and operate their own electronic money. While contactless electronic money cards (integrated circuit [IC] cards) can only be read by dedicated card readers, the company’s magnetic prepaid cards can be read by standard credit card readers installed at cash registers (provided the point of sale [POS] system has been upgraded). This has allowed the company to lower the adoption costs for its server-managed prepaid card system Valuecard ASP Service. The initial cost for customer companies that also require payment terminals is JPY50,000 per terminal (or roughly JPY3mn per terminal if adopting a mobile payment app). The company’s magnetic cards cost roughly JPY30 per card, or less than one-third of the price of an IC card (about JPY100 per card).
As of end-June 2021, the company had deployed its server-managed private-label prepaid card system Valuecard ASP Service to 812 companies and 88,684 stores in Japan and overseas, and issued a cumulative total of 104.8mn private-label prepaid cards. In FY06/21, the annual transaction value for its private-label prepaid cards reached JPY760.6bn. Growth continues to accelerate each year in tandem with market expansion. Some examples of companies that have adopted Valuedesign’s system are restaurant chains MOS Burger and Skylark (TSE1: 3197), and retailers Lush Japan (cosmetics), Itoya (stationary), and Camel Coffee (Kaldi brand; coffee, food and general merchandise). Adoption is expanding among volume retailers ranging from supermarkets to restaurant chains, shopping centers, drugstores, and home improvement centers. Valuedesign says only about 20% of volume retailers and restaurants, its two largest target markets, have adopted private-label prepaid cards to date, so it sees ample room for further growth in those industries. Overseas, the company has concentrated on investments in prepaid card infrastructure in anticipation of a shift to full-fledged cashless societies in the US and China. It has also actively expanded in other parts of Asia, setting up bases in Thailand, India, Malaysia, Singapore, South Korea, and the Philippines. It shut down its Chinese subsidiary in the summer of 2021.
Private-label prepaid cards not only function as gift cards that can be used at issuing stores or chains (like gift certificates), but also constitute a form of electronic money that can be leveraged as a promotional tool by issuers. In addition to being a method of payment, they provide opportunities for companies to lock in customers. Private-label prepaid cards have been issued in large numbers in the US, where the issuance value already exceeds several tens of trillions of yen. A key feature of such cards is that they are issued in the name of the contracted company rather than the card manufacturer. Any funds transferred to the cards become revenue reserves (advances received) for the contracted company. Valuedesign manages data on card transactions such as deposits and balances, and produces the cards and mobile apps for contracted companies. It also sells prepaid cards issued by contracted companies through gift card mall popup stands, which it operates as an intermediary at shopping centers, convenience stores, electronics mass retailers, and other locations. Each store that sells a private-label prepaid card to a consumer becomes a sales channel for other stores, driving customers to and promoting sales at other stores. In addition, Valuedesign operates Value Gift, a service that issues or awards digital gift cards (redeemable funds) sent in the form of digital codes through email and social network services (SNS). Because Value Gift integrates with Valuecard ASP Service, the service can be used by all of Valuedesign’s contracted companies without the need for additional development.
Valuedesign operates the aforementioned Private-Label Prepaid Card segment (closed loop; FY06/21: 93.5% of total revenue, OPM [before adjustments] of 22.1%) as its core business, and has positioned the GPR Prepaid Card segment (open loop; 6.5%, operating loss of JPY53mn) as part of its new businesses. In this segment, the company partners with credit card companies, and offers general purpose reloadable (GPR) prepaid cards that can be used at stores that accept Visa, Mastercard, and other international brands. In the US, where credit card usage is among the highest in the world, Visa-branded GPR prepaid cards are used in scenarios ranging from payments of employee salaries and casualty insurance premiums to receiving government tax refunds. When salaries are paid to Visa-branded GPR prepaid cards, the funds are sent digitally and remain on the employer account until they are withdrawn as cash by the recipient, allowing employers to accrue additional interest until the funds are claimed. Another benefit to employers is that they can pay daily wages to part-time workers without having to prepare cash at their business offices. In Japan, however, it is still not possible to withdraw cash from prepaid cards. As a result, practices that are common in the US—such as payments of salaries, insurance premiums, or tax refunds to prepaid cards—remain prohibited. Valuedesign expects the ban on such practices in Japan (and other parts of Asia) to be lifted in the future, and it is therefore building the foundations for future growth by investing in prepaid card infrastructure.
Valuedesign supports the marketing and promotional initiatives of its customer companies through its server-managed prepaid card system Valuecard ASP Service. It employs a business model of supplying private-label prepaid card services tailored to the purchase trends and store systems of contracted companies. It not only provides an essential payment method for business transactions, but also supports the promotional, marketing, and branding initiatives of its customer companies.
Valuecard ASP Service manages all transaction data and communication on a server, which means contracted companies can use the service by simply installing dedicated payment terminals. Supermarkets and other stores can also integrate the system into their existing point of sale (POS) registers by adding a payment settlement application, removing the need to install dedicated payment terminals. Server-managed private-label prepaid card systems are used to manage plastic magnetic cards sold either as a novel type of gift cards or as prepaid cards for personal use. As the balance of these cards is managed over the Internet in real time, the cards do not have any inherent value, but they can be reloaded and reused repeatedly like other electronic money solutions. Since FY06/17, the company has also offered Value Wallet, a service that facilitates prepaid payments through a smartphone app (by displaying a barcode) rather than a plastic card.
Several companies provide server-managed prepaid card systems in Japan, but Valuedesign seeks to differentiate itself from rivals by highlighting its support for corporate sales promotion when selling to customers. Based on data collected from existing users of Valuecard ASP Service, its server-managed prepaid card system, the company designs and offers services that support the creation of sales promotion measures using prepaid cards, including customer reward and promotional strategies. It also provides Value Insight, an analytics tool that visualizes the effects of adopting Valuecard ASP Service, and periodically checks and analyzes the effects of post-adoption measures.
The services offered by the Private-Label Prepaid Card segment and GPR Prepaid Card segment both rely on the functions of the company’s server-managed prepaid card service.
Prepaid cards are a type of cashless payment instrument. They facilitate payments at brick-and-mortar stores (e.g., convenience stores and restaurants) and online stores, and provide convenient features and services to consumers. The Japanese government aims to bring the share of cashless payments in Japan up to 40% by the Expo 2025 Osaka, Kansai, and to 80% in the more distant future, which would mark the highest level in the world. Prepaid cards are preloaded with funds that can subsequently be spent on purchases of products and services. They are available in two types: single-use and reloadable. Single-use prepaid cards have a predetermined balance (e.g., JPY1,000 or JPY3,000), and are often sold in the form of gift cards such as book store gift cards and QUO cards.
Reloadable prepaid cards can be reloaded once their balance is drawn down, and used repeatedly. Funds can be added to these cards through dedicated top-up machines, paying cash at convenience store registers, or transferring funds from a bank account, but the actual transfer methods differ by card type. There are three major categories of reloadable prepaid cards: (1) retailer- issued prepaid cards (e.g., nanaco, WAON, and Rakuten Edy), (2) public transportation prepaid cards (e.g., Suica, ICOCA, and PASMO), and (3) international credit card brand prepaid cards (e.g., carrying the Visa, Mastercard, or JCB brand).
Valuedesign’s private-label prepaid cards can only be used at stores of the issuing company, and in this sense differ from general purpose electronic money solutions (i.e., the retailer-issued, public transportation, and international credit card brand prepaid cards mentioned above), which can be used at a range of domestic stores. While they lack the versatility of their general purpose counterparts, Valuedesign’s private-label prepaid cards offer other benefits to consumers including discounts and reward points. The company positions these cards as promotional tools that can attract consumers to stores and increase repeat purchases, thus strengthening customer loyalty.
GPR prepaid cards offer the same versatility as credit cards, but differ from credit cards in the timing of payments. While GPR prepaid cards must have a preloaded balance before they can be used to make payments, credit cards defer payments and withdraw these from a cardholder’s bank account at a later date. As prepaid cards can only function when they have a preloaded balance, there are less concerns over overspending. Put differently, prepaid card payments are a type of advance payment, while credit cards defer payments based on the cardholder’s creditworthiness evaluated through a credit screening at the time of application. Prepaid cards (including GPR prepaid cards) do not require a credit screening and can be applied for by submitting basic personal information such as name, address, and date of birth. In addition, individuals who apply for a credit card must generally be 18 years or older (high school students are not eligible), while the age requirements for prepaid cards tend to be less strict. Although the precise terms and conditions vary by card type, prepaid cards can be sold to individuals as young as elementary school students as long as they can provide a mobile telephone number and email address. Stores that accept prepaid cards are charged a processing fee on corresponding purchases, but prepaid card payments resemble cash in that they are settled immediately, and they offer tangible benefits by expanding the customer base and locking in customers.
Prepaid cards hardly ever incur annual fees, but credit cards in principle do (although some exceptions exist). Credit cards are generally offered in a range of tiers—each conferring a different status—that are tied to creditworthiness and historical usage (e.g., bronze, silver, gold, platina, and black). The different tiers are meticulously differentiated by their eligibility for certain services. In some cases, transferring money from a credit card to a private-label prepaid card may cost less than loading it with cash.
Prepaid cards can be issued to virtually anyone with ease, and used at a particular store or a range of stores. Their characteristics can be summarized as follows.
- Prepaid cards rely on advance payments, which means cardholders can only spend preloaded funds.
- Like credit cards, prepaid cards can be widely used at contracted or affiliated stores.
- Unlike credit cards, prepaid cards can be issued without a credit screening.
- Depending on the private-label brand or issuer, prepaid cards may offer reward points or cash rebates.
Private-label prepaid cards are server-managed prepaid cards that can be issued by contracted companies under their own brand. They are sold as plastic magnetic cards, and have gained traction as a novel type of gift cards and as prepaid cards for personal use. Stores that adopt private-label prepaid cards essentially add a new product category to their existing product lineup. When sales of regular products lag targets or during promotional periods, focusing on the sale of private-label prepaid cards can drive sales growth.
Valuedesign provides an analytics tool that centrally manages prepaid card transaction data collected from companies that have adopted the Valuecard ASP Service. The tool visualizes the effects of the service, periodically checks and analyzes the effects of promotional strategies at contracted stores, and helps these stores enhance promotional effects (e.g., by strengthening customer loyalty) through a plan-do-check-action (PDCA) cycle. Because private-label prepaid cards can only be used at contracted stores or their affiliates, Valuedesign can compile analytics reports on prepaid card issuance volume, deposits, spending, and store rankings by prepaid card usage, and accordingly offer more effective promotional measures for contracted stores to contracted companies. It can also draw on insights gained from promotional campaigns launched at other customer companies and their effects to offer more concrete promotional strategies. Such information is valuable to contracted stores because it can help them lock in customers. This has fueled growth in contracted stores, the total number of cards issued, and the total value of funds deposited on such cards.
The correlation diagram for the Private-Label Prepaid Card segment below displays the data, fund, and payment flows between Valuedesign, contracted companies, contracted stores, and end users (consumers). When end users deposit funds on or make payments with their prepaid cards at a contracted store, their card balance and transaction history is checked in real time at Valuedesign’s customer management center. Concurrently, the deposit or payment amount are added or deducted by the company’s balance management center through communication with the contracted store’s point of sale (POS) register or dedicated payment terminal. A percentage of the processed amount (calculated by applying a predetermined processing fee rate to the processed amount) is collected by Valuedesign under contract as a system usage fee. Once the deposit or payment has been processed, the prepaid card is returned to the end user along with the purchased product in case of purchases made with prepaid cards.
Contracted companies reconcile their advances received and revenue each time an end user makes a deposit on or a payment with a prepaid card at one of their stores, and they also browse and cross-check the revenue and balance data on Valuedesign’s balance management center. Contracted companies pay monthly ASP usage fees (consisting of a standard fee and system usage fees) under the Valuecard ASP Service agreement, and Valuedesign periodically checks and analyzes the effects of promotional measures at contracted stores. The fees for the consulting services provided by the company are included in the standard fee portion of the ASP usage fees.
General purpose reloadable (GPR) prepaid cards are issued in partnership with companies such as Visa and Mastercard. In addition to offering all the functions of private-label prepaid cards, GPR prepaid cards can be used at stores that accept the aforementioned international credit card brands. While private-label prepaid cards can only be used at contracted stores or their affiliates, GPR prepaid cards are accepted globally at merchants affiliated with the international credit card brands, making them more versatile. GPR prepaid cards can also be used in a broader range of settings than popular Japanese electronic money cards such as Suica and PASMO, which are only accepted in Japan.
Unlike credit cards, GPR prepaid cards must be preloaded with funds, eliminating concerns over overspending. As they also do not require a credit screening, GPR prepaid cards can be used by virtually anyone at any store that accepts credit cards, making them a convenient method of payment. In addition, they have access to a wider range of top-up methods than their private-label counterparts, including transfers of reward points issued by certain companies, transfers from credit cards, cash deposits at stores, and transfers from a bank account. In other words, GPR prepaid cards are a versatile and reusable electronic money solution that utilizes the payment settlement infrastructure of existing credit card companies such as Visa and Mastercard and is available to all consumers.
In Japan, the bulk of the companies that issue GPR prepaid cards (issuers) are credit card companies. Prepaid cards require funds to be preloaded before they can be used and are mainly geared toward small-amount purchases (typically several thousand yen). Credit cards, on the other hand, are issued based on a credit screening, and defer payments of higher amounts (several thousand yen to over JPY10,000) to a later date. Individuals who hold a credit card can apply for a prepaid card and differentiate the usage of these cards based on their purchase objectives, but consumers who are not eligible for a credit card due to insufficient creditworthiness (such as young individuals, people with low incomes, and some foreigners) can only apply for a prepaid card. In the US market, credit cards companies such as Visa and Mastercard view GPR prepaid cards as a tool to expand their end users, and increase processing fees. In Japan, where GPR prepaid cards are not regarded as financial products, the profit contributions of such cards to credit card companies have been small, and the resulting lack of issuers has undermined growth in the number of GPR prepaid card cardholders.
In the US, where credit card usage is among the highest in the world, Visa-branded prepaid cards are used in scenarios ranging from payments of employee salaries and casualty insurance premiums to receiving government tax refunds. When salaries are paid to such prepaid cards, the funds are sent digitally and remain on the employer account until they are withdrawn as cash by the recipient, allowing employers to accrue additional interest until the funds are claimed. Another benefit to employers is that they can pay daily wages to part-time workers without having to prepare cash at their business offices. In Japan, however, it is still not possible to withdraw cash from prepaid cards. As a result, practices that are common in the US—such as payments of salaries, insurance premiums, or tax refunds to prepaid cards—remain prohibited. However, the Japanese government is considering exceptional regulations that would support the launch of e-payments (payroll cards) for salaries.
At present, Japanese law stipulates that wages shall be paid in currency and in full directly to the workers (Article 24-1 of the Labor Standards Act), but bank transfers are permitted exceptionally under an additional provision. The Ministry of Health, Labor and Welfare (MHLW) is coordinating with the Financial Services Agency (FSA) and related industries to expand this exceptional rule by including fund transfer service providers, and relevant discussions are underway in the Labor Conditions Subcommittee of the Labor Policy Council. The approval of digital salary payments is believed to be an essential measure to support the promotion of cashless payments and meet the demand for increased diversity in wage payments, including to pay foreign workers and part-time workers. However, the protection of salary recipients is a prerequisite for such a system, and the development of a protection scheme for funds and personnel information is therefore regarded as critical.
Valuedesign operates its GPR Prepaid Card segment in collaboration with Dai Nippon Printing Co., Ltd. (TSE1: 7912), which undertakes cardholder data management projects for several credit card issuers. Dai Nippon Printing develops the system to manage the data of prepaid card cardholders (cardholder management system), while Valuedesign builds the system to manage the balances of the prepaid cards in circulation (balance management system). Under the partnership, Valuedesign provides its balance management system to Dai Nippon Printing, which subsequently supplies it along with its own member management system to the credit card companies. Valuedesign has built reliable system infrastructure for which it has obtained the Payment Card Industry Data Security Standard (PCI DSS) certification, and it centrally manages payment data for its GPR prepaid cards on its servers.
The distribution of funds in the GPR Prepaid Card segment starts with the processing fees (3.25% of the payment amount) paid by affiliated merchants to the credit card company (issuer). The issuer then pays system usage fees commensurate with the payment amount for the prepaid card (calculated by applying a predetermined processing fee rate to the payment amount) to Dai Nippon Printing as compensation for its cardholder management system services. Finally, Dai Nippon Printing pays Valuedesign a percentage of the amount processed by the company’s prepaid card balance management center (similarly calculated by applying a processing fee rate to the processed amount). While the rate used to calculate the company’s system usage revenue has been low but steady at about 0.24%, the transaction value in its GPR Prepaid Card segment has remained fixed at around JPY50.0bn.
On August 18, 2020, the company released “Supplementary Materials Related to the Issuance of the 11th Series of Share Acquisition Rights through a Third-party Allotment” in accordance with timely disclosure rules. In this notice, it outlined the policy below to cultivate next-generation revenue streams by building a new business model for the GPR Prepaid Card segment.
Fully revamp GPR prepaid card system, including apps and infrastructure
Build organization to move into issuance management operations for GPR prepaid card (i.e., assuming issuer functions)
The company aims to build the new business model on the following timeline.
FY06/22: Develop system, introduce service, issue new cards, and test adoption
FY06/23: Launch service, drive growth in commission revenue
Valuedesign has thus far operated its GPR Prepaid Card segment with the aim of providing a versatile payment method, but the transaction value in the segment has peaked at around JPY50.0bn. In addition, segment revenue has entered a downtrend since hitting a record of JPY283mn in FY06/18, while operating losses have expanded. At the same time, growth in card issuance has slowed down as it approached 10mn units. In FY06/14, when the company launched the business, it issued over 6mn cards, not far removed from the 7.1mn cards issued in the Private-Label Prepaid Card segment. By FY06/20, however, the number of GPR prepaid cards issued by the company lagged far behind its private-label counterparts (over 100mn issued). At present, the bulk of the GPR prepaid cards are intended for personal use on the assumption that cardholders will repeatedly deposit funds on the card to make purchases. However, differentiating such prepaid cards from credit cards or other general purpose payment methods has proven difficult, and usage has been low as a result. GPR prepaid cards, which do not quality as financial products, generate low margins for credit card companies, and the credit card companies have therefore been reluctant to enter this business as issuers.
Valuedesign supplies processing systems that manage prepaid card deposits and balances to Dai Nippon Printing (a provider of cardholder management services) and credit card issuers, and collaborates with those companies in sales and services. As it deals with many stakeholders, the company focuses exclusively on major projects in an effort to maximize profit. This makes it difficult for Valuedesign to utilize the strengths developed in its Private-Label Prepaid Card segment—namely, its customer base and ability to design services and resolve challenges in collaboration with customers. In other words, the company essentially waits for credit card companies to issue new GPR prepaid cards, settling for a passive approach as it cannot undertake sales activities independently.
Revamp original usage model
Corporate usage (B2B payment settlements)
Fund transfer payment model, such as payments of salaries and outsourcing fees
Corporate prepaid cards are the prepaid alternative to corporate credit cards used for expenses and the settling of accounts. These cards facilitate the management of expense budgets and can be distributed to employees with minimal restrictions, so Valuedesign expects related demand to expand in the future. Corporate credit cards are commonly used to pay business travel and entertainment expenses. However, the drawbacks of such cards is that they are subject to a credit screening, which can be an obstacle for some companies, and that they incur operating costs such as annual fees. In contrast, corporate prepaid cards do not require a credit screening, lowering the hurdle to obtain them, and they provide an easy way to control expenses as they need to be preloaded with funds. They can also be used for large purchases as they are not subject to a spending limit. The market for corporate credit cards is estimated to be worth roughly JPY3tn (source: Corporate Credit Card Market Size, estimated by Credit Saison, FY2018).
Valuedesign has already secured over 800 customer companies in its Private-Label Prepaid Card segment, and it plans to supply corporate prepaid cards to its existing customers and their corporate clients in the foreseeable future. By supplying corporate prepaid cards not only to its own customer companies but also to their corporate clients, Valuedesign can collect extensive data on the spending patterns of such corporate clients on behalf of its contracted customers. For example, let us imagine a scenario in which Valuedesign’s customer company is a home improvement center chain and its corporate client is a building contractor that uses a corporate prepaid card supplied by the company. In such a case, Valuedesign could provide data on expenditures by the building contractor not only at the stores of the home improvement center chain, but also at other stores, gas stations, and during business trips. This valuable information could be used to steer the building contractor toward the stores of the home improvement center chain and increase customer loyalty.
Once the company becomes an issuer, it will be able to design, develop, and sell its service model in an integrated manner, and thus flexibly provide services at a low cost.
To become an issuer, Valuedesign will need to obtain an international brand (Visa, Mastercard, etc.) license from a credit card company. It plans to take advantage of the Bank Identification Number (BIN) sponsorship model to obtain a BIN number through a sponsor (credit card company). Under this model, the company will be regarded as a partner of the sponsoring credit card company by the international credit card brands. However, it will qualify as an issuer under Japanese law because it will obtain the authorization to operate electronic money under the Payment Services Act.
If Valuedesign can successfully internalize not only prepaid card balance management, but also cardholder management and issuer functions, it will be able to design, develop, and sell its service model in an integrated manner, which in turn will reduce the number of stakeholders in the payment process. The issuer commission (2.3%) that is collected from the processing fees paid by merchants (3.25%) will then become a new revenue stream. If the company can also become an acquirer, it will earn the amount obtained after subtracting the brand fee (0.05%), bank transfer fees (JPY400/transfer), network usage fees and record storage fees (JPY7/time), and other fees from the processing fee paid by the merchants (3.25%) (note: the processing fee rate and cost assumptions are based on a model provided by the Ministry of Economy, Trade and Industry [METI]). In either scenario, Valuedesign would secure a processing fee rate of at least 2.3%, or multiple times its existing rate for GPR prepaid cards (roughly 0.24%), and if the company can succeed in expanding the transaction value for its GPR prepaid cards at the same pace as its private-label prepaid cards, this will pave the way for growth in its operating cash flow.
In its “Supplementary Materials Related to the Issuance of the 11th Series of Share Acquisition Rights through a Third-party Allotment” (announced on August 18, 2020 in accordance with timely disclosure rules) and its medium-term management plan (unveiled on September 25, 2020), the company signaled plans to create new businesses through M&A deals and capital and business alliances. It said it would strengthen collaboration with companies in (1) advertising and marketing, (2) data analysis, and (3) finance to promote the joint development of new businesses.
The company envisions the following business models for each area.
The company’s private-label prepaid cards already possess an advertising or marketing function as a promotional tool. Thanks to the popularity of mobile apps, mobile advertising or marketing have become a cost-effective alternative to newspaper ads and direct mail. Mobile apps have already become the mainstream channel to serve ads to large segments of the population, such as female office workers, students, and the younger generation.
In February 2021, the company launched the digital marketing tool Value Insight as a Software as a Service (SaaS) designed to increase the benefits of adopting a prepaid card service. The tool integrates and analyzes data ranging from private-label prepaid payment usage to point of sale (POS) purchase information, app usage trends, and customer attributes, thus facilitating promotional measures that are precisely targeted at individual customers. The company is considering a partnership with an artificial intelligence (AI) developer to enhance the accuracy of the tool’s data analysis by adding AI functions.
Assuming Valuedesign becomes an issuer and accumulates massive funds, the company will need to invest these in the financial industry, which will require the creation of a proprietary credit model. As a result, it will have to consider a collaboration with a company that already engages in credit operations. Valuedesign sees potential demand in the following areas of the finance industry.
Develop GPR prepaid cards into retail financial products ahead of the anticipated removal of the ban on electronic payments of salaries (payroll cards)
In recent years, prepaid card payment settlements have outgrown their status as an extension of traditional vouchers and evolved into retail financial products that resemble bank accounts in some countries. They can now be used to collect salaries or pension benefits, withdraw cash, or send funds to other cardholders. In some developing countries, governments are setting up prepaid payment infrastructure to ensure individuals without a bank account can engage in cashless payment transactions such as obtaining public benefits or salaries, and send or pay funds through mobile phones or other digital technologies. Because prepaid settlement service operators do not lend the funds they manage, they can provide payment settlement services while benefiting from looser regulations than companies operating in the banking industry.
Source: Nomura Journal of Capital Markets, Winter of 2017
Provide general purpose payment methods (resembling credit card settlements) at reduced cost. Capture latent demand for GPR prepaid cards with low processing fees.
Provide small-amount financing services to individuals who need additional funds after already having reached the spending limits on their credit cards and maximized credit card loans, revolving payments, and cash advance services.
An Application Service Provider (ASP) is a company that provides services and related applications over the Internet. A key feature of ASP services is that they can be used from any location. They can be simultaneously accessed or operated by a large number of users on a network, and can be made available to anyone with a computer or smartphone connected to the Internet. ASP services are provided in a range of fields such as customer management, operational and sales promotion, management of a company’s internal finances, and payroll processing. Historically, applications and services were installed directly on computers. To enable use across an entire company, the software had to be installed on the computers of all employees, and this process had to be repeated when a computer was replaced (either as part of an upgrade cycle or due to a hardware failure). ASP services remove the need to install software on individual computers by allowing computers to access the service through a network connection.
Moving to an ASP service can also be expected to lower costs. For example, let us assume a company looks to adopt an internal system that is tailored to its business flow and characteristics. Customizing commercial software or developing new software to achieve this goal would result in a huge upfront cost. To prevent this, the company can deploy an already-developed and available ASP service, which will significantly reduce its initial cost burden. Because such a service also does not require on-site management or maintenance, the only running costs incurred to keep using the service are system usage costs, contributing to a reduction in post-deployment expenses.
Many ASP services operate under a business model in which profit growth is driven by user expansion. For this reason, they are typically designed to be easy to use and feature a sophisticated user interface. Because they are easy to configure, users do not have to invest much time in learning how to operate the services after deployment, which further reduces costs. The largest benefit of ASP services is that, unlike leased or other services, they can be used on an as-needed basis by, for example, signing up for a monthly contract.
ASP services remove the need to prepare a proprietary management system. Companies that develop such a system in-house are likely to incur heavy running costs as the servers that store related data require periodic maintenance, such as security measures and hard disc upgrades. In an ASP service, data storage, security measures, and server management are handled on the ASP side, which means user companies do not need to employ personnel with specialized knowledge or conduct maintenance. While applications that are installed on office computers cannot be operated externally in principle, ASP services allow applications to be accessed and data to be managed from any location over the Internet. In this way, they facilitate work scenarios such as using a smartphone to manage tasks performed by employees working from home, or using a tablet to hold meetings with customers while in transit.
Services that allow customers to use software and access data over the Internet are sometimes referred to as cloud services. ASP and cloud services can be used interchangeably in the sense that they both refer to using services over a network. In a narrower sense, however, the cloud refers to the set of technologies that enable the provision of ASP services, whereas ASPs are providers of such services. It is also worth noting that a distinction may be made between ASP and cloud services in the e-commerce field. For example, an ASP-hosted e-commerce website is often characterized by inferior expandability or customization. While the initial and monthly outlays for such a website may be low, costs can balloon at a later stage when the website needs to be rebuilt to enable integration with external services amid sales growth. In contrast, cloud-based e-commerce websites have more expensive monthly fees than ASP-hosted websites, but they can be tailored to the needs of individual companies, and facilitate integration between core and external systems. This means costs can be lowered in the future when a company decides to switch to a more customized website.
Software as a Service (SaaS) is another term that is sometimes mixed up with ASP and cloud services. As explained above, ASP services are offered by application service providers, whereas SaaS refers to software that is provided over the cloud. In practice, the terms are used interchangeably as there is no major difference between the two. That said, some vendors consider SaaS to be an evolution of ASP services, and therefore distinguish the terms. ASP services and SaaS are also sometimes differentiated as single-tenant and multi-tenant services, respectively. The former denote a setup in which software and servers are prepared for a single user, while the latter imply multiple users sharing servers and software.
The company promotes its Valuecard ASP Service (launched in February 2007) as a proprietary, cloud-based electronic money issuance service. It refers to its Value Insight service (launched in February 2021) as a SaaS-style digital marketing tool designed to increase the benefits of adopting prepaid services.
The revenue of the company—which operates as an ASP—breaks down into upfront revenue and system usage revenue. Upfront revenue comprises sales of manufactured prepaid cards (plastic cards with a magnetic stripe), system registration fees, sales of dedicated payment terminals in the Private-Label Prepaid Card segment, and customized system development fees stemming from service adoption in the GPR Prepaid Card segment.
System usage revenue corresponds to system usage fees for the Valuecard ASP Service, which are collected as a percentage of the amount processed by the system (predetermined processing fee rate applied to funds deposited and spent by cardholders). In other words, system usage revenue is calculated by applying a processing fee rate to the transaction value.
Upfront revenue tracks the growth in the number of contracted stores (one-time revenue), while system usage revenue increases in proportion to the growth in transaction value (deposits and payments; recurring revenue). System usage revenue generates higher OPM than upfront revenue, and includes compensation for consulting services (provision of data analysis and other services).
Transaction value denotes the aggregate prepaid card spending at all contracted customers. It is calculated as follows: Transaction value = number of contracted stores x average end users per store x average transaction value per end user (deposits and payments). This formula assumes that deposit amounts will eventually be settled as payments, and that the average transaction value is equivalent to the average settlement value. For the sake of convenience, each user ID is assumed to represent one user. The transaction value in the Private-Label Prepaid Card segment expanded sharply from FY06/16, when the company entered into large contracts with volume retailers such as supermarkets, drugstores, and home improvement centers. Transaction value doubled YoY to JPY150.3bn in FY06/17, and rose further to JPY760.6bn in FY06/21.
The processing fee rate can be derived by dividing system usage revenue by the transaction value. Using the formula above for transaction value, we can further modify the formula for the processing fee rate as follows: (1) processing fee rate = system usage revenue / (number of contracted stores x average end users per store x average transaction value per end user); (2) system usage revenue / (number of contracted stores x average end users per store) = system usage revenue per end user; and (3) processing fee rate = system usage revenue per end user / average transaction value per end user.
The average processing fee rate in the Private-Label Prepaid Card segment has fallen by 0.1pp YoY in recent years, dropping from 0.45% in FY06/18 to 0.35% in FY06/19 and further to 0.25% in FY06/20. The decline has been driven by the company’s pursuit of large contracts with volume retailers. The standard processing fee rate in the company’s Private-Label Prepaid Card segment is 2%, but the rate drops to below 1% for volume retailers and other large customers (and even to 0.02% for ultra-large customers) due to volume discounts. In FY06/21, outstanding contracts with large customers pushed the processing fee rate down to 0.18%.
In the GPR Prepaid Card segment, the processing fee rate is stable at around 0.25%. The revenue in this segment is the amount obtained by subtracting the card issuer and cardholder management company (Dai Nippon Printing) fees from the processing fees paid by merchants to credit card companies (3.25% of the payment amount). As a result, the processing fee rate is set lower than in the Private-Label Prepaid Card segment.
By end-June 2021, Valuedesign had supplied a cumulative total of 123.7mn private-label prepaid cards to a cumulative total of 88,684 contracted stores. In FY06/21, it recorded transaction value of JPY760.6bn in its Private-Label Prepaid Card segment. According to the company, some 60,000 of the aforementioned 88,684 stores remain under contract. It says the departure of a major customer reduced the number by about 10,000 stores. The company generates standard fees (several tens of thousands of yen per month) regardless of whether its prepaid cards are used at contracted stores.
The number of cards issued corresponds to the number of card IDs, and also includes IDs for mobile app users. Although one individual can in principle own multiple cards and IDs, the company equates the number of cards (IDs) issued to the number of end users for the sake of convenience. The utilization rate or ratio of active users (defined as users that engage in a transaction at least once, whether a deposit or payment) to total users, is roughly 97%.
About 10 contracted companies cancel their contract each year (the bulk of these are small or medium-sized companies, and such cancellations have increased during the COVID-19 pandemic), resulting in outflows of about 2,000 contracted stores or 40,000 cards per year (FY06/21 estimate). The annual net increase/decrease in the number of contracted companies (contracted stores, issued cards) is calculated by subtracting the number of cancellations among contracted companies (contracted stores, issued cards) during the year from the number of new contracted companies (contracted stores, issued cards) during the year. In FY06/20, Valuedesign added 87 contracted companies (10,598 contracted stores, 12.9mn issued cards) on a net basis. After factoring out the cancellations, it can be inferred that the company added a total of about 97 new contracted companies (87 net increase + 10 cancellations), 12,598 new contracted stores (10,598 + 2,000), and 12,988,000 cards (12,948,000 + 40,000). To calculate the annual churn rates, we divide the annual number of cancellations among contracted companies (contracted stores, issued cards) by the annual number of new contracted companies (contracted stores, issued cards). Based on this formula, the churn rates were about 10% for contracted companies in FY06/20 (10 / 97), 16% for contracted stores (2,000 / 12,598), and 0.3% for issued cards (40,000 / 12,988,000). Contract cancellations chiefly occur among small and medium-sized companies or micro enterprises (roughly 20 cards issued per store = 40,000 cards / 2,000 stores). Valuedesign supplies its services mainly to large customers such as major supermarkets and volume retailers with high number of issued cards per contracted store, and this trend is also apparent in its churn rates.
The average annual system usage revenue per contracted store held more or less steady at around JPY18,000 from FY06/18 to FY06/20, but declined to JPY16,000 in FY06/21. Actual system usage revenue varies among stores by about 2x, with the gap being influenced by promotional measures for—and the overall degree of support behind—prepaid card sales at individual stores. In an effort to balance system usage revenue across contracted stores to the extent possible, Valuedesign offers improvement measures informed by analysis of historical data at its balance management center, and provides promotional services to support on-site operations.
To increase the system usage revenue per contracted store, the company monitors the prepaid transaction ratio at its customer companies as a KPI, and undertakes basic initiatives such as supporting promotional measures for prepaid card sales, expanding methods to transfer funds to cards such as top-up machines, and offering prepaid card top-up campaigns, while tracking discrepancies between monthly projections and results.
In FY06/20, the average annual transaction value was JPY5,483 per private-label prepaid card (calculated by dividing the annual transaction value by the cumulative number of cards issued). It has hovered between JPY5,000–6,000 since FY06/16, but the processing fee rate for private-label prepaid cards has consistently declined each year. The average transaction value per GPR prepaid card had trended at around JPY6,000–7,000 through FY06/20, or JPY500–2,000 higher than the corresponding values for private-label prepaid cards (this trend reversed in FY06/21). This was attributable to the wider usage of such cards at different stores, including overseas, and to the diverse range of methods available to transfer funds to GPR prepaid cards.
Valuedesign defines the prepaid transaction ratio as the share of private-label prepaid card transactions within the aggregate transactions (cash and e-payments) recorded by a contracted store. It maintains databases by industry and individual store to demonstrate the correlation between increases in the prepaid transaction ratio and expansion in store sales. The impetus for this goes back to the time current President Toru Onoe worked at JCB Co., Ltd. While selling the QUICPay tool for that company, he was asked by pilot customers how much they could expect their sales to increase if they adopted the tool, and he struggled to provide a satisfying answer. This experience taught him an important lesson.
The company defines the actual number of transactions (deposits and payments) made with its prepaid cards as a percentage of the total cards issued as the utilization rate (or active user ratio). It gauges whether users have engaged in at least one transaction (deposit or payment) in the most recent month. It says that major contracted stores have a utilization rate of about 40% to 50%. The economic benefits for Valuedesign, its contracted stores, and end users tend to expand when end users reload their cards in monthly increments of JPY10,000 rather than transferring a lump sum of JPY100,000 that remains unused.
From an accounting standpoint, contracted stores record unused prepaid card balances as advances received, and these are only booked as revenue once end users spend the funds. Balances on private-label prepaid cards typically expire after a period of time, and expired balances are recorded as miscellaneous income by contracted stores. While expired balances only account for a fraction (several percentage) of the profit generated from prepaid cards, they can compound into large amounts over time, and can therefore not be neglected by contracted stores. In this way, contracted stores derive numerous benefits from private-label prepaid cards, including advance payments that do not need to be refunded, increased store traffic, and advertising effects by promoting consumption.
|Prepaid Card business||FY06/12||FY06/13||FY06/14||FY06/15||FY06/16||FY06/17||FY06/18||FY06/19||FY06/20||FY06/21|
|(stores, companies, '000 cards, JPYmn, JPY)||Non-cons.||Non-cons.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.||Cons.|
|Private-Label Prepaid Card|
|Cumulative number of contracted stores at year-end||8,302||10,321||12,158||34,149||48,239||53,298||56,800||69,562||80,160||88,684|
|Net contracted stores added during the year||3,032||2,019||1,837||21,991||14,090||5,059||3,502||12,762||10,598||8,524|
|Number of new contracted stores||5,502||14,762||12,598||10,524|
|Number of contracted stores that cancelled service||2,000||2,000||2,000||2,000|
|Upfront revenue per new contracted store (JPY'000)||226.2||58.2||93.7||85.4|
|System usage revenue per contracted store (JPY'000)||17.8||18.1||17.8||16.0|
|Cumulative number of contracted companies||270||328||381||435||500||570||630||703||790||812|
|Net contracted companies added during the year||58||53||54||65||70||60||73||87||22|
|Number of new contracted companies||70||83||97||32|
|Number of contracted companies that cancelled service||10||10||10||10|
|Number of stores per contracted customer||31||31||32||79||96||94||90||99||101||109|
|Cumulative number of cards issued at year-end ('000)||2,628||3,935||7,157||12,557||21,137||32,871||58,961||91,896||104,845||123,662|
|Net increase in cards during the year ('000)||710||1,308||3,222||5,401||8,579||11,735||26,089||32,936||12,948||18,817|
|Number of new cards issued ('000)||26,129||32,976||12,988||18,857|
|Number of cancelled cards ('000)||40||40||40||40|
|Segment transaction value (JPYmn)||17,837||31,905||46,376||59,704||72,322||150,340||218,816||325,054||539,334||760,618|
|Transaction value per contracted store (JPYmn)||2.1||3.1||3.8||1.7||1.5||2.8||3.9||4.7||6.7||8.6|
|Deposit amount per card issued (JPY)||7,848||9,722||8,362||6,057||4,293||5,567||4,766||4,309||5,483||6,657|
|Overseas transaction value (JPYmn)||125||161||153||3,192||4,700||3,775|
|Domestic transaction value (JPYmn)||31,905||46,376||59,704||72,197||150,179||218,663||321,862||534,634||756,843|
|System processing fee rate||0.45%||0.35%||0.25%||0.18%|
|GPR Prepaid Card|
|Cumulative number of cards issued at year-end ('000)||6,020||6,078||7,750||8,515||9,085||9,470||9,626||9,684|
|Net increase in cards during the year ('000)||58||1,672||765||570||385||157||58|
|Number of new cards issued ('000)|
|Number of cancelled cards ('000)|
|Segment transaction value (JPYmn)||5,325||13,764||34,544||54,944||64,676||66,307||57,002||47,426|
|Deposit amount per card issued (JPY)||885||2,275||4,996||6,756||7,350||7,147||5,970||4,912|
|System processing fee rate||0.26%||0.24%||0.24%||0.27%|
|Total transaction value (JPYmn)||17,837||31,905||51,701||73,468||106,866||205,284||283,492||391,361||596,336||808,044|
|Private-Label Prepaid Card||792||743||993||828|
|GPR Prepaid Card||-||-||-||-||-||826||112||21||15||-|
|System usage revenue||473||634||1,032||1,244||1,631||912||1,150||1,303||1,469||1,395|
|Private-Label Prepaid Card||979||1,142||1,331||1,350|
|GPR Prepaid Card||171||161||138||45|
|Share of new orders by store category, annual turnover by customer companies||FY06/12||FY06/13||FY06/14||FY06/15||FY06/16||FY06/17||FY06/18||FY06/19||FY06/20|
|Home improvement centers||14%||44%|
|Home improvement centers||-||62,860||519,684|
Valuedesign’s private-label prepaid card services enable contracted companies and contracted stores to issue and manage prepaid electronic payment instruments under their own brand at a low cost. Such instruments can function as cashless payment tools that can be deployed with ease, as promotional tools that utilize reward points and coupons, or as effective marketing tools driven by digital data. Valuedesign’s main services are outlined below.
Valuecard ASP Service is a cloud-based service that allows contracted customers to issue electronic money instruments under their own brand. Valuedesign provides comprehensive support for system operations, including campaign proposals, operational support for stores, and support for compliance with the Payment Services Act, and contributes to sales growth and improved efficiency at contracted stores.
Value Wallet is a unique store app equipped with private-label prepaid card functionality. It eliminates card issuance costs and the need for customers to carry a prepaid card, and enables in-app promotion and analysis of customer trends. As an entirely digital method of payment, it has the potential to further expand the benefits of adopting a private-label prepaid payment service.
Value Gateway is a service that connects to various payments services that work with QR or other codes. It allows customer companies to adopt various code-based payment services (including those using QR codes) alongside the company’s private-label prepaid payment services.
Value Gift is a digital code issuance service that allows users to digitally transfer redeemable funds through emails or social network services (SNS). It integrates with Valuecard ASP service, and can therefore be used by all contracted companies without any need for additional development.
Value Insight is a digital marketing tool offered as a Software as a Service (SaaS). It is designed to enhance the effects of adopting prepaid payment solutions. It integrates and analyzes data ranging from private-label prepaid payment usage to point of sale (POS) purchase information, app usage trends, and customer attributes, and thus facilitates promotional measures precisely targeted at individual customers.
Valuedesign mainly supplies private-label prepaid cards to restaurants chains such as MOS Burger and Skylark, and retailers such as Lush Japan (cosmetics), Itoya (stationary), and Camel Coffee (Kaldi brand; coffee, food and general merchandise). Adoption is expanding among volume retailers ranging from supermarkets to restaurant chains, shopping centers, drugstores, and home improvement centers. The company says only about 20% of volume retailers and restaurants, its two largest customer segments, have adopted private-label prepaid cards, so it sees ample room for further growth in those industries.
By strengthening sales promotion targeted mainly at supermarket stores with high prepaid transaction values (deposits and payments) in collaboration with point of sale (POS) vendors, the company succeeded in doubling the transaction value YoY to JPY150.3bn in FY06/17, and further expanded it to JPY760.6bn in FY06/21. Supermarkets accounted for 14% of the domestic transaction value in FY06/16, but that share increased rapidly to 51% in FY06/17 and further to 62% in FY06/19. The annual turnover for customers (with annual turnover of at least JPY10.0bn) placing new orders in FY06/19 was up 8.3x YoY for home improvement centers, 2.1x for the restaurant chains, and 52% for supermarkets and drugstores.
According to disclosures by Valuedesign, customers that generate 10% or more of its revenue include Dai Nippon Printing (16.2% in FY06/19, 12.5% in FY06/20, and 15.8% in FY06/21) and Pepper Food Service (TSE1: 3053; 19.2%, 7.0%). The former is also a major shareholder (8.50% of total voting rights as of end-December 2020) and business partner (business and capital alliance entered in March 2009). In addition, Dai Nippon Printing operates as a resale agent for Valuedesign’s private-label prepaid cards under an agency agreement. Valuedesign launched its GPR Prepaid Card business with the support of Dai Nippon Printing.
In October 2015, Pepper Food Service launched the Niku Money prepaid payment service, which has attracted many customers over the years. However, it plans to terminate the service in December 2021. From September 2020, Pepper Food Service started accepting payments through QR codes, credit cards, and public transportation electronic money systems. Valuedesign’s revenue from prepaid payment services supplied to Pepper Food Service dropped 56.5% YoY in FY06/20 due to the effects from depressed earnings at Pepper Food Service amid the COVID-19 pandemic and to the termination of the Niku Money service. Valuedesign expects revenue from this customer to decline further in FY06/21 and FY06/22. However, Pepper Food Service plans to retain its Niku Mileage reward point service, so Valuedesign will continue to support this service.
Private-label and GPR prepaid cards supplied by Valuedesign