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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