Throughout the world, with the exception of the United States, the majority of private subscribers to mobile networks are “pay-as-you-go” customers.

Developed markets
In the developed markets, these customers purchase scratch cards from retail outlets which entitles them to a fixed amount of airtime. When the airtime has been used up, the customer purchases another scratch card in order to top up his/her telephone. This system is expensive and inefficient both from a distribution and an administration perspective, and over the past two years, the mobile operators have been trying to get “pay-as-you-go” customers to move from scratch cards to Electronic Top Up (ETU). In the UK, approximately 55% of “pay-as-you-go” customers are now using ETU systems to purchase airtime. The Cardlink software is one of the most robust and complete systems which handle Electronic Top Up.

Less developed markets
In the less developed markets, ETU services are still in their infancy. In many of the larger emerging markets “pay-as-you-go” customers are still using scratch cards exclusively. The mobile operators would like to convert the majority of these customers to the use of ETU services. Cardlink intend to concentrate on these markets where the growth opportunity is maximized.

Typically Cardlink’s licensing fees equate to 1% of transactional value. By way of example, in a market where “pay-as-you-go” revenues are US$100m, Cardlink’s revenue would be circa US$1m (Cardlink operates under a minimal cost base and whilst it supplies 24/7 support to manage and maintain the software, the robust nature of the system has meant that the support costs are low).

The opportunity
The opportunity for Cardlink is to access as many emerging markets as possible. The company’s principal focus is the markets of Latin America, North Africa and the CIS: all regions where mobile telephony is growing rapidly and “pay-as-you-go” customers are almost entirely dependent on scratch cards for acquisition of additional airtime.