Tuesday, February 23, 2010

State of the Market: Unbanked & Underserved

Steve Streit, President & CEO, Green Dot Corporation
Clay Wilkes, CEO, Galileo Processing
Neil Dugan, Vice President, Global Prepaid Product, MasterCard
Jeremy Kulper, Managing Director, The Bancorp Payment Solutions Group
Scott Scovel, General manager, Financial Services, Univision
Hyung Choi, Head of Consumer Prepaid Products, Visa

Here what the panelists had to say about the following question.
What trends do you see in the future?

Clay Wilkes, CEO, Galileo Processing
There has been significant growth in the unbanked & underserved and we should expect to see that continue to growth. Regulations and compliance will have to be updated within the next 5 years in order to keep up with this trend. As far as opportunity there is already innovation in applications, general managing, and payment processing today. Adoption rates should increase as consumers see the value proposition associated with prepaid products.

Scott Scovel, Univision
Here are three changes that Scott foresees in the prepaid industry for the future.
1. Program sponsors are going to primarily focus on education. We will be investing tens of millions of dollars to educate our consumers about the product.
2. There will be more knowledgeable consumers out there, and because of this more prepaid cards will be sold. Once you understand cards it’s easier than carrying a wad of cash and getting hit with overdraft fees.
3. Distributors will be more willing to carry cards.

Hyung Choi, Visa
More consumers will have adopted prepaid debit accounts as their primary transaction account. There is an opportunity for prepaid debit accounts to play a much broader role than the unbanked & underserved industry. The average consumer is using the debit card more than twenty times a month, and so prepaid will also become just as widely used.

What is the future of prepaid savings and can it work?
Savings is a great ideal and makes a lot of sense but the first priority should always be debt reduction. Prepaid tools prevent the overspending of credit cards and overdrafting of bank accounts.

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