Wednesday, September 30, 2009

AMEX drops Gift Card Fees

American Express announced today that it will drop monthly fees associated with gift cards--effective immediately. The Washington Post says, the credit card law that President Obama signed in May prohibits gift cards from expiring for the first five years. Fees can't be assessed unless the card has been dormant for at least 12 months. The gift-card provision of the law takes effect in August 2010. Seeking to stay abreast of changes and to keep a good face with its customer's American Express has voluntarily eliminated its fees just shy of one year in advance.

Are other prepaid card or gift card providers to follow?

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Tuesday, September 29, 2009

Western Union Offers New Reloadable Prepaid Visa Cards

This post on highlights that Western Union now offers two fee-friendly reloadable Visa prepaid cards called the Western Union MoneyWise(TM) and Gold Card Visa prepaid cards. These cards do not carry monthly maintenance fees, purchase transaction fees, or customer service fees.

Tim Sloane, vice president client services and director Prepaid Advisory Service for Mercator Advisory Group mentioned:

"When you take into account activation, maintenance and transaction fees - among other costly additions - the typical reloadable prepaid card user can be charged upwards of $200 in fees over the course of a year. Western Union's new reloadable prepaid programs finally deliver the value proposition consumers have been long waiting for in this market."

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Monday, September 28, 2009

More rebates coming in the form of prepaid cards

According to, 53% more of rebates are being placed on prepaid cards than in 2008. Many customers are not satisfied with this new rebate distribution method, as it doesn't allow them to deposit it, they are encouraged to spend it. For the many reasons companies are turning to prepaid sales cards include increased sales in stores.

While there are many perks for using prepaid cards to distribute rebate money, have you found a backlash from your customers if you've switched the way you give rebates? While giving a prepaid card does encourage a recipient to spend the money, is the reaction the same when a rebate is worth $10 as opposed to $100? Share your reactions with us.

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Friday, September 25, 2009

Prepaid cards replace checks as rebate payment of choice

Erica Sandberg of reports that many businesses -- from office supply stores to wireless companies -- are switching to prepaid cards, and the reasons are multifold. One is the likelihood of boosted sales. According to rebate analyst Hal Stinchfield, CEO of Promotional Marketing Insights, a well-featured rebate card can result in "double-digit or sometimes triple-digit sales growth during the promotion period."

Has your company seen an increased growth in prepaid cards as rebates? We'd like to hear your thoughts.

Prepaid cards replace checks as rebate payment of choice

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Wednesday, September 23, 2009

The next BIG ONE

Tony Craddock, CEO of Giftex Prepay recently posted an interesting discussion topic in the LinkedIn group People in Prepaid. I thought it was a great topic and wanted to share Tony's post as well as my response. To view the entire thread visit the forum group via the link provided.

Tony's Post:
If corporate loaded prepaid is going to be such a big deal, what will come next after incentive, motivation and reward? Being in the prepaid business, you'll know that there are only three types of prepaid application: consumer loaded, corporate loaded and government loaded. Corporate loaded has been led by those lovely people in the incentive, motivation and reward industry. I'm looking forward to meeting with a few of the IMR industry's leaders at the MoShow in Chicago later this month. They have achieved a great deal with vouchers and cards already.

But I want to know what people in prepaid think is going the be the next Big One in corporate loaded prepaid. So kick off this discussion by sharing an example of a company or card that has used prepaid to solve a business problem. What was the idea? What was the benefit? Did it work? What did you learn? Go on. Take a moment out of your busy schedule and tap a reply. After all, you can’t have a ‘discussion group’ if its members don't discuss. Best wishes, Tony

My Response:
I think the "Next Big One" won't necessarily be a new product but an extension of existing products. Processors can extend the usefulness of prepaid products by supporting the inclusion or insertion of merchant level or market basket data in the financial authorization path. I think about verticals such as insurance, warranty, loyalty, and incentive. How would these organizations benefit from being able to take product or service level data from the point-of-sale and insert this information into the authorization path? Organizations would be able to extend authorization parameters beyond a simple "yes, there is enough money on the card for the transaction" or "no, there is not enough money on the card for the transaction."

Now the door opens up to new opportunities such as claims adjudication, direct marketing and data mining. I'm sure the list of things we can think of to do with gobs of purchase data goes on and on... The challenge for organizations will be understanding all the moving parts on the acquiring and issuing side including ecosystem dynamics, message formats, and everything else in the middle. It's a big mountain to climb but absolutely possible.

So what do you think will be the bext BIG One in prepaid?
Randy San Nicolas is the author of Prepaid Enterprise.

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Western Union introduces prepaid cards

According to The Banking Business Review, Western Union has introduced a new line of prepaid cards that have lower fees for its users. The card can be used anywhere, reloaded at any Western Union store and no monthly maintenance fees, purchase transaction fees or customer service fees. Read more here.

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Monday, September 21, 2009

Mercator's Latest Research Shows Growth in Open Loop Prepaid Card Market

This post from PR-Inside highlights how Mercator's 6th Annual Network Branded Prepaid Market Assessment shows that prepaid has been growing during the economic downturn and will continue to grow after as well.

Tim Sloane, Vice President of Client Services and Director of Mercator Advisory Group's Prepaid Advisory Service mentions:

"Mercator Advisory Group believes the prepaid industry will continue to show growth in 2009. However, being in the right channel with the right product is becoming critical to the growth of prepaid products and represents a significant volume opportunity for issuers. It is clear to Mercator that no other payments market is riding out the current economic downturn as effectively as prepaid and I can't think on any better payments market to be in during a recession."

Make sure to check out the post for some highlights of the full report.

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Thursday, September 17, 2009

Prepaid Debit Card vs. Big Bank

Sara Huffman of decided to do an experiment using her "big bank" checking card and a prepaid debit card. Huffman chose a Silver Prepaid Mastercard, which promised free unlimited purchase transactions anywhere credit cards and debit cards are accepted, and most importantly, no overdraft fees. Huffman was approved for this card immediately.

One of the best features that Huffman discovered was, Two minutes after each purchase I got an email from Silver Card telling me I had made a purchase, how much the purchase was for, and best of all, how much money was left in my account. What a great feature!

We encourage you to read Huffman's entire account here.

And finally, from Huffman, While there is almost no truly free banking, using a prepaid credit card is an alternative to going with the Big Banks. It isn't for everyone, but if you get hit with multiple overdraft charges every month or so, you might find it's just as simple and much, much cheaper.

What did you think of Huffman's experiment? As a prepaid card professional, did you learn anything from her experiences?

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Wednesday, September 16, 2009

Intercash Launches New Prepaid Card Program

According to this article in Intercash has launched a new prepaid card design program which will be expected to be released in late 2009. Patrick Seguev, CEO of Intercash Europe mentions:

“We have been working hard to meet the demands of the prepaid industry and have come up with solutions that are until now unseen in this industry. With our new card’s features we have a product that is not only cost-effective, but will meet and exceed any merchant’s needs.”

Merchants will be able to load all Intercash cards issued by any participating merchant, something that they were not able to do before.

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Tuesday, September 15, 2009

Prepaid Expo Europe 2010 - call for case studies

Accepting Submissions for Case Study Presentations for the 2010 Prepaid Expo Europe April 7-9 2010 in Brussels

The 2010 Prepaid Expo Europe agenda and program are now being developed, and I am accepting proposals for specific case studies highlighting successful prepaid programs. If you’d like to be considered, please send an email with the following information to Andrew Borowiec at , by October 6, 2009 for consideration. Please note the following instructions:

I am looking for prepaid case studies from the following market segments:
• Retail and direct sellers (open & closed loop programs)
• Corporate-funded programs (loyalty, reward, rebate, incentive, promotion)
• Commercial applications (payroll, HR, administrative, sales & marketing support, etc.)
• Affinity programs (e.g. prepaid programs marketed toward affinity groups, inc. associations, colleges and universities, religious groups, etc.)
• Government programs (state and federal programs)
• Mobile payment applications (e.g. cell phone payments, airline tix, etc.)

For your proposal, please include the following information:
• Proposed description of your case study
• Your contact details
• Speakers full names, titles and companies (with full contact details; full address, phone, e-mail)
• Target audience for your session
• Specific details on the case study, including:
Background on the customer challenge and needs
Vendor selection process, including details on the criteria used to vet and choose vendors
Details on the program design, including goals and go-to-market strategy
Recap of program launch and operations to date
Discussion on program metrics, including results (is it profitable, does it support other organizational goals?)
Rough details on future direction of the program.

• Four-five benefits or takeaways the audience will leave with after attending the session indicating why attendees will be interested in the session
• Any other comments you’d like me to consider

Submission of an entry does not guarantee a spot on the agenda, nor does it mean the format you suggested will be used. Incomplete entries will not be considered. I will absolutely contact you if I am interested in learning more about your program. Thank you.

Andrew Borowiec
Finance & Investments Division
Institute for International Research (IIR)
Direct Dial: +1 646 895 7468
Fax: +1 212 661 3708

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Prepaid Credit Cards are being used to move illegal funds to Mexico

According to this article in smugglers have been using prepaid cards to export illegal funds to Mexico. Arizona Attorney General Terry Goddard mentioned that currently there is no legislation or laws regulating prepaid credit cards, so launderers have done exported funds with incredible ease without violating any laws.

The Attorney General also stated that most of the cards are issued from offshore banks in the Dominican Republic, Panama, and the Cayman Islands. The problem with the cards is that they can be loaded up anonymously and so it can be harder to trace. He plans on creating legislation that would make carrying more than $10,000 across the border of Mexico on prepaid cards illegal. Looks like only time will tell if such a regulation will ever be passed in the near future.

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Tuesday, September 8, 2009

US Treasury Pushes to Deliver Social Security Benefits Through Prepaid Debit Cards

According to this post on the Chicago Tribune the US Treasury has been campaigning this year to get Social Security and Supplemental Security Income recipients to switch to a prepaid debit card. Currently, millions of Americans are getting a check from SS at the end of the month.

Every year the US Treasury receives about 1.4 million complaints from SS recipients, and so Direct Express is a safe, convenient way for recipients to get their government money without worrying about fraud. Sending prepaid cards instead of checks also saves the government a lot of money. 500,000 people so far have signed up to receive their government benefits through prepaid debit cards, but when will the rest of Americans join?

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Thursday, September 3, 2009

Prepaid cards might not be so bad for college students after all

We recently posted on our blog a POV from the Baltimore Sun that explains that prepaid cards might not be the best option for college students because of hidden fees. Today's post on the Baltimore Sun offers a different perspective on that opinion, mentioning that it unfairly portrayed the functions of a reloadable prepaid card.

In the post, the author specifies that credit cards can potentially carry the risk of debilitating debt for college students, if not used properly, and so prepaid cards are a much better option. ATM Fees and overdraft fees from debit cards are far more costly and expensive than prepaid card fees. Not to mention most of the fees on prepaid cards are dependent on the card holder's usage. What's your take on it?

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Wednesday, September 2, 2009

Owner of Virtual Works fined for misrepresenting prepaid cards

According to, Joshua Finer, owner of VirtualWorks, misrepresented prepaid cards to his customers and was fined $52,000 by the FTC. Consumers who were applying for a loan or were lead to believe the card was free were actually charged $54.95 through a default setting by the online checkout's function. Read the full article here.

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Tuesday, September 1, 2009

SmartCard Marketing Systems Offers Prepaid Gift Card Options

The PayPers reports that SmartCard Marketing Systems is to market the prepaid gift cards via its website. As a result of the deal, online customers can activate, load and select shipping options on the cards on their website. SmartCard Marketing Systems markets MasterCard and Visa-branded prepaid cards, as well as prepaid wireless and long-distance cards and payment processing services.

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