2. Agenda
• Glimpse of Braintree Partners & Clients
• Current Partner/Client categories
• Potential categories
• Adding a new category, Mass Transit (CUBIC)
8. Upstream – Next steps
‒ Document customer wish list to platform
enhancement
‒ Add complementary categories
9. Adding a New Downstream Category, Mass
Transit – CUBIC
10. CUBIC, quick look
Business divisions
‒ Defense
‒ Transportation (Mass transit tech
solutions)
Financials
‒ Market Cap, $1.4 B
‒ Run rate Mar ’14, Approx $1.5B
‒ YoY Rev. Growth, Approx. $100M
11. CUBIC Transportation Division
‒ Revenue share 37% (Y 2012)
‒ Operations in – USA (HQ), Canada,
Germany, Aus, Sweden, U.K., India
‒ Over $14 billion in revenues collected
‒ Vendor for SFMATA (BART, Caltrain,
VTA, etc.)
12. Case – CUBIC Clipper, San Francisco
New balance
updated on
Clipper
6. User scans
Clipper with
NFC on
machine
5. When
successful
machine
requests
another
Clipper scan
4. User
swipes credit
card to load
amount
required
3. User scans
Clipper card
with NFC on
machine
2. User
locates
machine
1. User signs
up
Clipper Card Loading Process at Kiosk Machines –
Reduced ridership when,
1. Trouble locating ticketing machine (only in big stations)
2. Waiting in queue (possibly missing connection)
3. Ticketing machine out of order
4. Fraud possibility (Card skimming etc.)
5. Choosing alternative transport (Uber etc.)
14. Braintree Proposal (e.g. using NFC)
New balance
updated on
Clipper
5. User loads
Clipper with
NFC app on
phone
4. When
successful
App directs
Clipper scan
3. Employee
uses App to
load clipper
2. MUNI+
App saves
info with
Braintree
1. User loads
visa card
info on
MUNI+ App
Currently not in place possibly because of,
‒ CUBIC’s reluctance for PCI Compliance
‒ CUBIC’s concerns on smartphone Security and Malware
15. Recommended business structure
‒ CUBIC to own
‒ Decision On Technology (NFC, SMS, TCP/IP etc.)
‒ Integrating payment platform
‒ Development/testing of App on various phone platforms
‒ Production Release, & Maintenance of App
‒ Braintree to own
‒ PCI Compliance & Security (2 factor auth. etc.)
‒ API availability on various smartphone platforms
‒ Testing of APIs & Change Requests
‒ Braintree API compatibility & integration with CUBIC system
‒ Support Demonstration & Production Release of App
‒ Could potentially also include,
‒ Participation in Marketing and Awareness Campaigns
‒ Bringing more upstream partners on board (telecom, device, security, QR Code etc.)
16. Sustaining Categories via Product Enhancement
‒ Handle CUBIC’s
‒ Support enhancement requests
‒ Platform/API requests
‒ Platform enhancement requests (upstream partner tie-up needs)
‒ Propose ways of engaging product
‒ Via upstream partners (checkout, billing, accounting etc.)
‒ New ticketing mechanism (QR code)
18. Clipper Usage & Braintree Opportunity
Assumption based on
SF Bay area ridership 5,149,230 Wikipedia
Total number of active Clipper users 1,300,000 www.mtc.ca.gov
Smartphone users 845,000
Smartphone user penetration 65%
(Businessweek)
Braintree revenue per smartphone user per
transaction
$0.30
Braintree revenue potential per month (assuming
every user loads once per month)
$0.30 x 845,000 = $253,500
Only smartphone users & if Clipper user loaded
via NFC, SMS, etc.
Braintree revenue potential per year for SF Bay Area $3 M $253,500 x 12
19. Total CUBIC Revenue Potential for Braintree
Assumption based on
CUBIC ridership worldwide 38 M per day www.cubic.com
Number of smartphone + clipper riders 6.5 M
Clipper usage 25% of total & smartphone
penetration 65%
Annual revenue potential $23.5 M $0.30 x 6.5 M x 12 (User loads once a month)
Annual revenue potential for Braintree, when
smartphone penetration approaches 100%
$36 M 10 M x $0.30 x 12
Annual revenue potential for Braintree, when all
CUBIC ridership approaches 100% on smart card use
$136.8 M 38 M x $0.30 x 12
Total ridership in 2024 38 M + 6.33 M = 44.33 M 1.6% per year of base year 2014, WHO
Annual revenue potential for Braintree in 2024 $160 M 44.33 M x $0.30 x 12
21. Appendix I – Assessment of Braintree Proposal
Advantages
‒ Clipper + Smartphone = Cool, Convenient
‒ Steps 1. and 2. are one time (slide 14)
‒ Six steps to three (3, 4, 5)
‒ Requires only one clipper NFC scan
‒ Less cost to install, maintain, upgrade
machines
Drawbacks
‒ Not all phones have NFC
‒ Not all users have smartphones
‒ NFC option open to abuse by
hackers
Workarounds
‒ Other NFC devices (wearables?)
‒ 2 factor authentication for NFC
‒ SMS
‒ TCP/IP (Web interface, Chat app)
‒ Over the phone
Drawbacks of Workarounds
‒ SMS costs $$
‒ Updates to Clipper card take 3-5
days
‒ via TCP/IP & Phone
‒ Possibly also via SMS, OOB
23. Appendix III – SF Bay Area Public Transport
Ridership
Agency Name Daily Ridership (www.wikipedia.org) Clipper?
ACE 3,700 No
BART 421,800 Yes
Caltrain 47,060 Yes
SMART — —
Muni Metro 160,100 Yes
VTA Light Rail 33,600 Yes
AC Transit 236,000 Yes
SamTrans 46,070 Yes
MUNI 297,700 Yes
VTA 107,900 Yes
Golden Gate Ferry 5300 Yes
Total Ridership 5,149,230
Total active clipper cards in circulation 1.3 M (www.mtc.ca.gov) or 25% of ridership
24. Appendix IV – Clipper Usage & Braintree
Opportunity
Assumption based on
SF Bay area ridership 5,149,230 Wikipedia
Total number of active Clipper users 1,300,000 www.mtc.ca.gov
Smartphone users 845,000
Smartphone user penetration 65%
(http://www.businessinsider.com.au/us-smartphone-
penetration-ticks-up-in-the-fourth-quarter-2014-2)
Average times balance is loaded per month Once Assuming they commute daily
Average annual transport expense of household in SF $10,466 http://www.bls.gov/ro9/cexsanf.htm
Average spent on public transport in SF 12.2% http://www.bls.gov/ro9/cexsanf.htm
Amount spent on public transport per month $106 ($10,466 x 12.2%)/12
Total amount spent on transport by all riders per month $546 M 5,149,230 x $106
Total amount spent on commuter expense per month $273 M
Assuming 50% goes to this and rest go to taxi and
airplane travel
Total amount spent by Clipper users per month on public
transport per month
$68.9 M $106 x 1,300,000 x 50%
Amount spent on Clipper as a percentage of total
ridership spend
25% = 68.9/273
Regardless of the money spent of clipper Braintree
revenue per smartphone user per transaction
$0.30
Braintree revenue potential per month $0.30 x 845,000 = $253,500
Only smartphone users & if Clipper user loaded via NFC &
SMS & assuming every user loads once per month
Braintree revenue potential per year for SF Bay Area $3 M $253,500 x 12
25. Appendix V – Total CUBIC Revenue Potential for
Braintree
Assumption based on
CUBIC ridership worldwide 38 M per day http://cts.cubic.com/en-us/aboutus/companyfacts.aspx
Active Clipper or similar smart card users worldwide 10 M per day Assuming 25% of all
Number of smartphone riders 6.5 M Assuming average penetration of 65%
Total number of times they load clipper card Once every month
Revenue potential for Braintree via NFC/SMS solution per
month
$1.95 M $0.30 x 6.5 M
Annual revenue potential $23.5 M $1.95 M x 12
Annual revenue potential for Braintree, when smartphone
penetration approaches 100%
$36 M 10 M x $0.30 x 12
Annual revenue potential for Braintree, when all CUBIC
ridership approaches 100% Clipper or similar smart card use
$136.8 M 38 M x $0.30 x 12
Ridership growth annually (2010, 50% people lived urban areas
& by 2030 this will be 60%)
by 1.6% per year of base year (2014)
Extrapolated using data from -
http://www.who.int/gho/urban_health/situation_trends
/urban_population_growth_text/en/
Total ridership in 2024 38 M + 6.33 M = 44.33 M 1.6% per year of base year (2014)
Annual revenue potential for Braintree in 2024 $160 M 44.33 M x $0.30 x 12
Notas do Editor
Lead aggregators – SubscriptionsSDKs – Developer integrationEmployee benefit providers – Benefit enablement via appsMass Transit –Tickets, passes, parking meters using appRetail Energy – Mobile appsAccounting software – IntegrationWallet - Street Vendors, Mom-pop retail, Duty-free