Payment Data to Market Prepaid Cards

According to this article on BizJournal, Payment Data Systems Inc. has launched a subsection which will be selling prepaid card products to financial institutions and corporations. The subsidiary that will solely focus on this, FiCentive Inc., will be developing its website and brand over the next couple of weeks.

Louis Hoch, which will be heading FiCentive Inc. mentions:

"With recent merger and acquisition activities in the prepaid card issuing industry, we believe the timing is perfect to position our card-issuing business to capitalize on higher valuation the industry is demanding,"

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Open-Loop Prepaid In Retail: Expanding Consumer Payment Options

We’d like to invite you to attend the Open-Loop Prepaid In Retail: Expanding Consumer Payment Options webinar. Tim Sloane, Director, Mercator Advisory Group will be our featured speaker. Register to view the webinar on Monday, June 16^th from 2:00 to 3:00 PM eastern standard time.

About the presentation:

One of the hottest areas in prepaid over the next few years will be the convergence of open-loop prepaid products within the retail environment. In this Webinar, Prepaid Card Expo speaker Tim Sloane will discuss:

- The growing convergence between open and closed loop prepaid products
- Implications for retailers and issuers
- Strategies for effective and efficient distribution and marketing
- Outlook for profitability of these new card types

About the Speaker

Tim Sloane, Director, Mercator Advisory Group

Tim Sloane is the Director of Mercator Advisory Group’s Debit and Prepaid Advisory Service. In this role he advises members throughout the year on business strategy and prepaid, debit, ACH, and EFT related initiatives. He is frequently quoted in leading industry publications including: American Banker, ATM & Debit News, Bank Technology News, Cards and Payments, Digital Transactions, The Green Sheet, CardLine, Federal Reserve Board Research Papers, Intelecard News, Payment News, The Prepaid Press, Transaction Trends, Transaction World, Windows in Financial Services, Business Week, InfoWorld, CNN, CNET, and CIO.

Tim has spent the past 28 years in the IT industry in senior strategy, marketing, and management positions. He has deep expertise in strategic planning, benchmarking, IT assessments, as well as the positioning and marketing of new products and services. Over the past four years he has built a practice housing the leading Prepaid and Debit analyst coverage available related to these markets.

Click here to register:

https://www1.gotomeeting.com/register/290400777

This web seminar is presented to you by:

The 2009 Prepaid Card Expo

March 9-11, 2009

Orlando World Center Marriott Resort

Orlando, Florida

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Social Networking and Gift Cards

According to this latest article on Nashville Business Journal, Ed Braswell, President of edo Interactive is incorporating social networking and texting in the launch of Facecard, a new prepaid gift card brand.

Just like the popular social networking site Myspace, users will be able to create online profiles where friends and relatives can also sign in and add money to their cards on birthdays and other special occasions. Retailers will also be able to send targeted text messages to this young niche market offering to add money to their cards if they redeem certain rewards in a specified time frame.

Gift card purchases amongst young adults are expected to grow drastically over the next couple of years.

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Gift Cards are becoming Increasingly Popular

According to the 2007 US Gift Card Consumer Insights Survey conducted by First Data. mentioned in this article on ePaymentsnews Network, gift cards have become increasingly popular. In 2007, a total of 90 percent of American adults either purchased or received gift cards, and 60 percent actually did both.

The two most popular occasions where people purchased or received gift cards were for birthdays or Christmas. Other occasions included, mother’s day, father’s day, graduations, and thank you gifts.

Most gift cards purchased could only be used at one retailer, rather than multiple retailers.

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Hawke Awards Recognize Best Prepaid Cards

According to this article at BusinessWire, Blackhawk Network released their awards for best prepaid cards over the last year. As a leader in card based financial solutions, Blackhawk Network also distributes third party prepaid gift cards.

The Best Card Design award went to ITunes. The ability to capture the brand of the company and bring in the elements of the advertising campaign was outstanding.

The Most Innovative Product award went to Target. They had shown the most ability to change to the new use of gift cards from their traditional purpose.

And finally the Industry Pioneer Award went to Nordstrom gift cards. This is due to the fact that they were one of the first major retailers to adapt third party gift cards into their business plan.

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County Government Give through Prepaid Cards

In an article released at Cincinatti.com, they discuss the plan for Clermont County, Ohio to give back to their citizens through prepaid gas cards. Clermont County is partnering with Speedway Prepaid Card, LLC.

The county government will give out prepaid cards (400 worth $10 and 300 worth $20) for those citizens who need transportation assistance who are customers of the Department of Jons and Family Services. This new act is called the Non-Emergency Transportation Program. They will also be giving away prepaid cards 500 cards worth $20 and 500 cards worth $10 to citizens who are eligible under the Temporary Assistance for Needs Families Programs.

Clermont County will only be spending $24,000 by way of receiving a 4% discount.

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MasterCard and Visa Battle Latest Regulation Plan

The ePaymentnews Network reports that Visa and MasterCard are protesting lawmaker’s latest move to regulate the interchange fee that credit card issuers’ member banks charge merchants. This regulation would force MasterCard and Visa to negotiate directly with retailers to come up with an interchange fee for each transaction. If they can not agree on one, a panel of three judges in the Justice Department would establish the rates.

Currently, only huge merchants like Wal-Mart have the authority to negotiate interchange fee rates. It will be interesting to see how this latest legislation will affect the credit card industry. Read the full story here.

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MasterCard for Mothers

In a recent article at All Pay News, they shed light on the first MasterCard pay as you go card available in the UK. Altair Financial Services International Plc (Altair) and Blueberry Card Services Ltd came together to launch this card to help new mothers manage their finances as well as save money on day to day expenditures that have to with children called the BeBee Card

With the cost of £14.95 a year, these mothers will have access to hundreds of discounts on items that are made for new babies, as well as discounts at grocery stores. Also following suit is the balance information that can be obtained by sending a text. This is an incredible example of companies finding the right target market, and using incentives that appeal especially to them.

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Travelex Cash Passport

According to this article on PayBefore.com, on May 1, Travelex launched a new Master Card branded prepaid card. This card, Cash Passport, is geared specifically at travelers who are dealing with converting currencies. This card allows travelers to lock the exchange rate at the time that the card is loaded.

Launching at the beginning of this month, the card has already shown to be very successful, selling 46 cards on it’s launch day.

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Visa and Aconite to Partner

Finextra.com reports that Visa Europe has partnered up with SSP software prepaid provider Aconite, in order to enable its users to perform secure prepaid transactions online without the need for online authorization. Balances will be stored in “shadow accounts”, and once the balance is completely reduced, purchases will not be able to be made until the prepaid card is topped off via an online transaction.

The CEO of Aconite, Mike Woods sees a huge market in this industry as he mentions:

“From our experience there is a high demand for a solution that enables issuers to rapidly embrace the enormous potential that pre-paid brings such as gift cards, payroll and travel, and to address segments such as youth and unbanked.”

Other partnerships in the works for Visa include an effort to team with Monitise, to develop a mobile prepaid account where users can create prepaid accounts from their cell phones, and load it on the debit cards and credit cards.

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CardEx to Deliver Cost-Free Gift Cards to its Corporate Clients

With gift card sales increasing from $83 billion in 2006 to $97 billion in 2007, CardEx Inc has announced that it would provide its clients and agent banks gift cards without any upfront costs for the actual card plastic. Gift cards typically can run upwards of $5.95, so many companies are saving money. CardEx is also waiving shipping and handling charges on bulk orders, orders of 300 gift cards or more.

The cost-free program is designed for CardEx’s generic, non customized cards, but it will still continue to offer its premium customizable cards at competitive market prices.

(Source: Press Release Newswire)

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Growth of Electronic Forms of Payment in Nigeria

As reported by the ePaymentsnews Network, there has been a record boost in the adoption of electronic payments in Nigeria. These transactions vary including ATMs, POS terminals, mobile, and internet and bank branches accessing the network. The number of epayment monthly transactions quickly rose from 50,000 in 2004 to 13.6 million in March 2007 and 51.2 million in March 2008.

An obvious reason for the growth spurt and increased reach is the ability of Nigerian nationals to access their accounts away from the bank locations via card services. Transactions are expected to grow even more as card payment services continue to progress in Nigeria.

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One-stop Providers versus Best-of-Breed solutions

Over at our sister site, we've posted a new "Five Questions" feature with Martin Ferenczi, the CEO of Oberthur Card Systems. Ferenczi mentioned that a key headache for many prepaid customers is using multiple vendors to create their prepaid programs.

I'd be curious to hear others' thoughts on the pros and cons between using of one-stop solution providers versus the benefits of putting together a best-of-breed solution using multiple vendors. It's certainly a discussion that goes beyond prepaid, but I think it's really important when dealing in a market with intense competition and innovation.

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Elite Shares Club Announces New Prepaid Card for Members

As reported by Business Wire, Elite Shares Club has announced a new Visa debit card, offered through Bank of America, for its exclusive members. This card will allow club members to purchase exotic automobiles, use jet charters, book luxury vacation residences, and additional amenities.

Members usually only get jet charters and a couple of weeks of stay at luxurious residences, but with the Elite Shares Club membership Visa Card, members get many more amenities without having to deal with the hassle of several membership fees.

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The Legal Clean Up in Prepaid

A few months ago, Business Week wrote an article detailing the possible ways prepaid cards have been used for fraud. These cards have been a vital part of the money laundering chain. The beginning of the article details how a high end escort service in Charlotte, North Carolina used the cards to provide paychecks to its workers.

Since the creation of these cards in the 1990s, their uses have expanded. Originally, they were created in order to make it easier for employers to pay their workers. Now, they are used for those people who do not wish to have a debit/credit card, as well as undocumented workers or high schoolers.

But now, the government is creating legislation to cut down on the way these cards can contribute to money laundering and illegal activity. Issuers will soon be held accountable for the money laundering that occurs with the issued cards.

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Delta offering Prepaid Gift Cards

In order to show thanks to their customers who frequently travel between New York City and the West Coast, Delta is teaming up with American Express to offer a $50 prepaid gift card for every flight purchased with an American Express card on their website.

Continuing to innovate through their frequent flyer program, Jeff Robertson, the managing director of SkyMiles, looks to continue to offer perks to Delta’s coast-to-coast flyers:

"This promotion is yet another example of how Delta and American Express have teamed up to offer our East and West Coast flyers the opportunity to experience our products," said Jeff Robertson, managing director of Delta's SkyMiles program. "Delta continues to expand our offerings in coast-to-coast flying, and this provides yet another incentive to choose Delta."

(Source: Prime News Wire)

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CardEx Moves; Plans to Expand in Next Year

In a recent article at AllPayNews, they reveal that CardEx has made the announcement that they are relocating to a 10,000 foot facility in Yorka Linda, California. This newer center aids their desire to double in size over the next year, in addition to providing a bigger call center and state of the art training facilities for its employees.

The CEO, Alan Safahi, believes that having the majority of his business in one space will allow for better opportunities to grow his business along with implement his strategies for the business more effectively. It also allows the company to have more control over the processes of ordering and fulfilling requests.

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Times Media and Tuxedo to Partner

Fiextra.com reports that the newest partnership between Times MasterCard Prepaid Card and eccount, powered by Tuxedo Money Solutions will offer its UK customers the ultimate in security. According to the Association of Payment Clearing Services, there was a 25% increase in fraudulent activities with credit and debit cards in the UK. This partnership will allow customers to transfer money from their eccount to their debit cards, if and when they need to spend money. This creates for more security because once the purchase is complete the card no longer becomes useful for a fraudster. The post also highlights:

The card also features chip and pin, giving complete security for internet use, everyday payments and as a worldwide travel card with access to 1.3 million ATM's and over 25 million merchants. Up to £500 can be withdrawn from ATM's daily.

Mark Simon, CEO of Tuxedo Money Solutions mentions:

"By partnering with The Times we can explain the benefits of prepay to a target audience that have very real concerns over the safety of their money when shopping online and whilst travelling - our industry leading eccount solution is just what is needed."

This partnership signifies a growing interest in the European market to have greater control on security and to help better manage spending habits.

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Are Prepaid Cards right for teens?

One of the major target markets for prepaid cards is for teens. Teens are not allowed to be issued real credit cards, but also need to learn about money management before they are of a legal age. Here are two different perspectives of allowing the use of prepaid cards for teenagers. I think both show the control is in the parents hands.

But ABC 40 brings up the point that parents could be teaching their children how to fall faster into debt. According to the news story, once the teenager runs out of money on their card and goes back to their parents, the parents just reload the card instead of teaching the children about money spending habits or how to control the money they have on their card.

At Suite Life 101, they encourage giving teens prepaid cards in order to help them build awareness of money management. The prepaid card for this group can be most beneficial. Parents can monitor the spending habits of the teen, and guide them to the right decisions, as this article states. The value of prepaid cards for teenagers is providing them with learning more about money management, debt, and credit cards and prepares them for the future.

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Build Your Prepaid Brand

In a recent article at Paybefore.com, they took time to sit down with the top prepaid card retailers of the world, along with marketing and branding companies in order to figure out what was the best way to build your prepaid brand for the long term.

The overall need is to develop a long-standing relationship with your customers, not just a one-and-done situation. The relationship that has to be formed between the company and the customer must be reflected in both the advertising and the way the card is presented. After the discussion, they came up with six ways to develop this long term relationship:

1. Know your customers – Knowing their demographics such as where they live is not enough. Find out why they use the card and what they use the card for and offer services according to their needs.

2. Choose your name wisely – In order to be noticed, differentiation is essential. And since your brand name is the first thing a customer will notice, it’s important to give the right, long lasting impression to your future buyer.

3. Listen to your customers – Tailor your marketing campaigns to their needs. Appeal to them, and make your product relevant. College students do not need the same thing as older, established households, and let your marketing efforts reflect that.

4. Be consistent -- With both the products and services you offer and with the partners you select to influence your campaigns. Since long term is the goal, your message needs to stay the same.

5. Make an emotional connection – Yes, you will attract your customers according to your pricing, but appeal to them in other ways. Make sure your marketing campaign reflects this.

6. Stay in the process for the long haul – This involves dedication from senior management. Keep up the brand development and stay consistent with your product.

Establishing a consistent marketing and branding presence for the long term should be the goal for every company getting into the prepaid segment. But tailoring this message to the unique requirements and perspectives of your audience is an essential component of longevity.

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