Monday, November 29, 2010

Consumers Turn to Prepaid for a Debt-Free Holiday Season

Judging by the lines outside of Walmart and Target this Black Friday it seems as if consumers are en route to spending the same if not more money than they did last holiday season. What's interesting is that consumers are moving away from creating more debt by staying away from credit cards. If you don't believe me you can take a look at these two different reports that proves this theory.

This article in MarketWatch discusses how a recent online survey conducted in November by Harris Interactive for Green Dot finds that most holiday shoppers are shunning away from using credit cards as their primary payment source. The biggest payment sources this holiday season are prepaid cards, debit cards, checks, and cash. It's evident that consumers want more financial control and are making strides in creating a debt-free holiday.

A separate study conducted by the Consumer Federation of America detailed in this article on CreditNet shows most consumers showed an uncertainty in paying off credit card debt, and this is the reason for the sudden switch. So however you position it consumers will be turning to prepaid cards to avoid hefty finance charges, atm fees, and late payment fees.

Do you plan on using prepaid for that flat screen purchase this holiday season?

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Thursday, November 18, 2010

Study Says Prepaid is Primed For International Expansion

By Marc Dresner, IIR USA

If there’s any truth to the old business adage, “You’re either growing or you’re dying, “ then the prepaid industry is living LARGE overseas!

I recently received some topline stats from Mercator Advisory Group’s inaugural Global Prepaid Card Market Potential Ranking (2010), and the numbers make a compelling case for crossing the pond.

While the U.S. prepaid market – with roughly $330B in loads since 2009 – will likely remain the undisputed 600lb gorilla for years to come, Mercator’s results indicate the rest of the world is primed for prepaid.

The study pegged the aggregate prepaid market opportunity for the top 30 non-U.S. markets at a – cough – respectable $762.2B over time.

(Note: the italics indicate a caveat. Mercator emphasized that the figure above and those that follow are based on a series of relative assumptions and not projectible to a specific year, so please do not go galloping into, say, Eastern Europe without a coat and due diligence.)

BRIC markets have captured the attention and imagination of just about every industry eyeing international expansion – and they show tremendous promise for prepaid – but there is a reason they’re still referred to as “emerging” markets. Mercator’s study suggests that, at least short-term, the best investment opportunities lie in Western Europe.

The top five most promising markets for prepaid expansion are:

1. Germany ($111.0B)
2. Italy (100.7B)
3. France ($74.5B)
4. U.K. ($74.4B)
5. Spain ($45.3B)

It’s a political cliché, but this much is true of Europe: government is BIG, as in capital “B” billions big for prepaid. And this trend is not isolated to Europe. Across all 30 markets Mercator examined, government appears to be the best prospect for prepaid.

Global prepaid opportunity estimates by segment:

1. Government ($425.3B)
2. Store Gift ($164.5B)
3. Open Gift/GPR ($59.6B)
4. Payroll ($51.8B)
5. Incentive Cards ($42.4B)
6. Campus Cards ($18.6B)

Of course, the extent to which each of these segments proves fruitful for expansion differs by country and is subject to a plethora of complex market, cultural and regulatory factors.

International expansion is an intimidating and complicated undertaking, but the numbers paint a promising picture for prepaid.

So…to help U.S. players navigate this new frontier, IIR USA’s Prepaid Expo will close Wednesday March 9th with a series of presentations specially focused on international expansion.

If this particular study is of interest, you’ll be pleased to know that Mercator’s director of international advisory services, Terry Xie, will be among those speakers. Xie plans to review the study findings and implications in detail and offer strategic recommendations for prepaid companies looking to cross borders.

Two final notes:

First, I’m sure some of you took issue with my comment about the relative nascence of BRICs for prepaid. I’m just the messenger. India, for example, ranked 13th out of 30 markets studied.

A panel also slated for Wednesday March 9th at the Prepaid Expo will focus exclusively on India, and will provide deeper insight into the country’s growth potential as well as barriers to entry.

Second, if you are not already aware, IIR USA has joined forces with the UK’s Gift Card and Voucher Association to bring you The Gift Card, Gift Voucher, and Reloadable Card Event on March 30 in London. If Mercator is correct, you won’t want to miss the most comprehensive prepaid event on the continent!

Marc Dresner is an IIR USA communication lead with a background in trade journalism and marketing. He is the former executive editor of Research Business Report, a confidential newsletter for the marketing research and consumer insights industry. He may be reached at

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Monday, November 15, 2010 Giftcards Go Social

Not only can you post generic "happy birthday" on your friends' facebook walls, but now allows consumers to post personalized gift cards on their friends and family members' walls. I know what you're thinking...will anyone be able to to use the gift cards since it's posted publicly on a wall for everyone to see? This post on internet retailer helps to clarify this question.

The answer is no. Even though anyone can see the gift card on the wall, only the recipient has acccess to the amount and claim code. What's interesting is that this is's 2nd move to link with facebook. Earlier this year amazon allowed it's users to sign in to it's website with their facebook profile in order to receive personazlied recommendations on books, movies, and accessories.

So what's next in social for the dynamic two?

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Friday, November 5, 2010

GreenDot Corp.: Behind the Numbers

Here's a great article about why GreenDot exceeded Wall St's expectations this quarter.

Essentially the recipe was:

An Increase in the Number of Reloadable Cards Issued, an Increase in the Number of Cash Transfers, an Increase in the Number of Active Cards, topped off with an Increase in the Gross Dollar Volume Loaded.

Did I mention Steve Streit, CEO of GreenDot will be interviewed on stage by Fast Company Editor Bob Safian at Prepaid Expo?

Since increasing profitability and volume is at the heart of every session we put together for Prepaid Expo, insights will be shared on how companies like GreenDot do it.

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