“Progress in Prepaid” Podcast Series Surveys Legislative Landscape

NBPCA’s Top Lobbyist Expects Prepaid Bumps Tied to Financial Regulatory Overhaul, But Plans To Get Over ‘The Hill’
By Marc Dresner, IIR USA

The bad news: The U.S. prepaid and stored value industry is definitely a candidate for collateral damage in Washington’s crusade to reform the financial services industry.

The good news: We’re popular with both retailers and consumers; we have Congressional sympathizers on both sides of the aisle; and prepaid is among a handful of financial services models that satisfies the post-Great Recession imperative of living within one’s means.

Episode Two of IIR’s “Progress in Prepaid” podcast interview series features Joi Sheffield, president of Washington, DC-based Sheffield Brothers, and the government relations strategist for the Network Branded Prepaid Card Association (NBPCA).

According to Sheffield, it would be “awfully surprising” if the prepaid industry escaped ongoing regulatory scrutiny of financial services in 2011.

But Sheffield also noted that despite the colossal Kardashian Kard blunder, the prepaid industry has generally managed to maintain the public’s trust – and inferentially, legislators’ trust – by good overall conduct and responsible corporate citizenship.

Sheffield also noted that mid-term election shifts in the balance of power favoring Republicans – particularly in the House – might usher in a “friendlier climate and environment for the banking industry.”

Click here to listen now

But a larger question looms: how will the Treasury Department's new Bureau of Consumer Protection treat prepaid?

To listen to the podcast interview: Click Here

Read the transcript: Click Here

Editor’s note: Representatives from the NBPCA will be featured on panels at IIR’s 2011 Prepaid Expo – the world’s largest meeting for prepaid industry professionals in both closed- and open-loop markets – March 6-9 in Orlando, FL. Register today!

About Joi Sheffield
As Government Relations Strategist for the Network Branded Prepaid Card Association (NBPCA), Joi Sheffield is responsible for managing the Government Relations Working Group which conducts outreach on behalf of NBPCA members in matters of legislation, regulation, and law enforcement.

Ms. Sheffield is a distinguished attorney with 17 years of experience managing banking and finance issues on Capitol Hill and with regulatory bodies. She is also the founder of Sheffield Brothers, a Government Relations and Corporate Strategy consulting firm founded in November 2006. The firm represents clients on financial services and insurance-related issues before the U.S. Congress and the Administration.

Prior to founding Sheffield Brothers, Ms. Sheffield served as Banking Counsel and Minority Staff Director for United States Senator Tim Johnson of South Dakota, then Ranking Member of the Financial Institutions Subcommittee of Senate Committee on Banking, Housing and Urban Affairs.

About the Author
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 mdresner@iirusa.com

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Prepaid Marketplace: Exclusive to Prepaid Expo registered attendees

The doors to the Prepaid Marketplace are open! Speakers, attendees, sponsors and exhibitors are encouraged to join this online networking hub for Prepaid Expo 2011 to help everyone make the most out of the conference experience.

Use this tool to:
• See who is coming to Prepaid Expo and who is open to meetings
• Set up meetings with other delegates, sponsors and exhibitors
• Create your own profile so other delegates can easily connect with you • View the conference program and create a personalized agenda
• View the Exhibit Hall map to identify company locations, Wi-Fi hubs, lounges and special features • Download company information
• Reach out to attendees you didn’t connect with after the Expo concludes

You must take action to participate... create a profile today and check it out!

To sign up, visit: http://prepaidmarketplace.crowdvine.com/

Only paid registered attendees are allowed to sign up and your conference registration needs to be confirmed before you can actively participate in the Marketplace.

Questions or problems with the Marketplace? Email aprimavera@iirusa.com

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Paybefore 2011 Award Winners Named, Battle for Best-In-Category Begins!

It’s official and it is on! With a record number of submissions from across the globe, judges for the 5th Annual Paybefore Awards™ announced the first round of winners for 16 categories in what was reportedly the most intense competition in the awards’ history. But the real contest is only just beginning… Three to four winners within each category must now duke it out for the supreme distinction of “Best-In-Category,” to be awarded live before capacity crowds at the 2011 Prepaid Expo USA March 6th through 9th in Orlando, FL – the largest gathering of prepaid industry professionals in the world! The Paybefore Awards recognize exceptional achievements in the prepaid and stored value industry – and the pressure for “Best-In-Category” is mounting. According to Paybefore CEO Marilyn Bochicchio, the 2011 crop of candidates marked a milestone in quality. “This year’s entries showed exceptional creativity and thoughtfulness in using prepaid to solve real-world payment issues and provide outstanding convenience, safety and control for the individuals who use these products,” Bochicchio said. Prepaid Expo Program Director Hollie Goldman said the ferocity of this year’s competition augers well for the prepaid market, in general. “Every indicator I’ve seen suggests the prepaid industry is poised for dramatic growth. A meld of technological ingenuity and socio-cultural and economic trends has opened the door for innovative prepaid solutions in government and commercial sectors, both domestic and abroad,” said Goldman. “At a time of such tremendous progress,” Goldman added, “ is it any wonder that this year’s Paybefore winners have raised the bar? Take a look at the case studies; you’ll find some remarkable stories. We’re delighted to host this year’s awards, but I don’t envy the judges. The 2011 Best-In-Category competition is brutal.” In fact, the flood of outstanding nominations has prompted Paybefore to introduce two new “Judges’ Choice” awards: one recognizes an entrant that defies categorization, while the other represents an emerging break-through program. In addition to the Best-In-Category and Judge’s Choice Awards, Paybefore will also announce the winner/s of its prestigious Paybefore Industry Achievement award at the event. This honors the individual/s who’ve made the most significant contribution to the prepaid industry either within the past year and/or over the course of a career. For more information about IIR’s Prepaid Expo USA 2011 taking place March 6-9 in Orlando, FL or to register, please visit www.iirusa.com/prepaid For more information about Paybefore, please visit www.paybefore.com

2011 Paybefore Awards Winners Best Consumer-Funded Prepaid Program MyPlash Teen Card Plastic Cash International UpSide Visa Plastyc Inc. PASS from American Express American Express Best General Purpose Reloadable Program: In-Person Sales Channel Western Union MoneyWise Prepaid MasterCard Western Union H&R Block Emerald Prepaid MasterCard H&R Block H&R Block Bank Progreso Financiero Ventiva Visa Prepaid Card Progreso Financiero Best General Purpose Program: Online Sales Channel SmartyPig Cash Rewards Card SmartyPig AccountNow Gold Visa Prepaid Card AccountNow PayPower Blackhawk Network Best Prepaid Program Media Advertising The Western Union MoneyWise Prepaid MasterCard Direct Response Television Campaign Western Union Acquirgy Moroch Visa Prepaid Debit Marketing Campaign Visa Inc. Community Financial Outreach Program MasterCard Worldwide Green Dot National Television Campaign Green Dot Corporation Best Prepaid Program Direct Marketing Prepaid Cards Sweeten Invitation to Shop at New and Remodeled Stores Walmart First Data AccountNow Gold Visa Prepaid Card AccountNow The Bancorp Bank ICW Master Account Prepaid Program Itz Cash Card Ltd. Best Web Sales Channel The American Express Gift Card American Express GiftCards.com GiftCards.com LLC PayPal/MoneyPak Sweepstakes Green Dot Corporation PayPal Inc. Best Government-Funded Prepaid Program TranZtec Prepaid TruCa$h MasterCard DCR Strategies Inc./TruCa$h TranZtec ENERGY STAR Citi Prepaid Services Helgeson Enterprises Blackboard Pay Campus Card Program Blackboard Inc. Best Business-to-Consumer or -Employee Prepaid Program Auto Purchasing Program Reward and Program Referral Cards Zag.com InteliSpend Prepaid Solutions TotalPay and Money Network Check Program ADP Mocapay Partners with Wow Bao to Provide Mobile Experience Mocapay Best Corporate-Funded Prepaid Incentive, Reward, Rebate or Loyalty Program Plata Promociones NovoPayment Servitebca Mexico Subaru Foundations Subaru of America Inc. Carlson Marketing Home Depot’s B2B Incentive eGift Card Program The Home Depot CashStar Best Third-Party Prepaid Product Retailer CVS/pharmacy Green Dot Corporation Kroger One Stop Card Shop Holiday Mega Event Kroger Aktif38 Aktif Bank Best Gift Card Program Western Union Online Gift and Greeting Card Western Union  Walmart Gift Card: Save Money. Live Better. Go Global. Walmart First Data Vanilla Visa Gift Card InComm The American Express Gift Card American Express Best Prepaid Card Design MyPlash Plastic Cash International The American Express Bundled Gifting Solution American Express Gift It. Spend It! Ceridian Stored Value Solutions Best Virtual or Mobile Prepaid Application MetroPCS Virtual Prepaid MasterCard Net1 Virtual Credit Card Inc.  The Bancorp Bank U.S. Bank AccelaPay Mobile Banking Application U.S. Bank FIS ePayment Solutions Monitise Americas SWAGG Outlier Inc. Best Consumer Value in Prepaid Zoompass Mobile Wallet and Prepaid MasterCard Program Enstream LP SmartyPig Cash Rewards Card SmartyPig Walmart MoneyCard Walmart GE Money Green Dot Corporation Most Effective Prepaid Solution Tour Operator Program Convenient Cards Wal-Mart Associate Electronic Pay Program Wal-Mart Stores First Data Corp. TravelexOceanPay Prepaid Solutions Inc. Travelex Best Non-U.S.-Based Prepaid Program Grass Roots Prepaid Cards Grass Roots  FIS noQ24x7 Prepaid Card Program Itz Cash Card Ltd. Aktif38 City Card Aktif Bank Most Innovative Prepaid Program SWAGG Outlier Inc. Citi Flu Care Card Citi Prepaid Services MetroPCS Virtual Prepaid MasterCard Net1 Virtual Credit Card Inc.  FSV Payment Systems Inc. The Bancorp Bank

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Doesn’t Your Four-Year-Old Have a Prepaid Credit Card Yet?

Odysseas Papadimitriou – CEO and Founder of CardHub.com – believes we need to start teaching our kids about money management at a very early age. And he thinks prepaid cards may be the answer. I think he’s on to something, but I also have a few concerns. Is my four-year-old really ready for a prepaid card?

In a January 5th article for Fox Business, Papadimitriou observed
that while most parents take the time and care to teach their children social norms and values – along with how to tie their shoes and how to read – we’re sorely lacking when it comes to teaching them how to manage money.

I think the bigger issue may be that many parents don’t know how to manage money, themselves, and modeling their behavior is probably doing twice the damage to their children.

I have two young children, and trying to talk them into *not* buying a “Happy Meal” – plus toy – is tough. They expect the toy; the meal is almost secondary.

Hypothetically (in case anyone from DCFS is reading), if I gave each of my kids a prepaid card, while they would not go hungry, they most assuredly would also not forego the toy for a less expensive but equally nutritious menu item.

Where, I wonder, did they pick up this behavior? Let’s face it: Many adults want more than they can afford and turn to plastic to deflect the pain of paying on the spot. We’ve heard this ad nauseum since the “Great Recession” hit: Americans don’t know squat about saving.

When you are free, visit your local big box electronics store with all of those impressive 50-plus-inch plasma TVs and mobile gadgets practically begging to jump off the shelf and into your loving arms. I’d venture 90% of those purchases are on a credit card of some type.

Papadimitriou also warned in his article that while the recession gave many of us a much-needed kick in the pants, now that things seem to be blowing over it appears “consumers have reverted back to old spending habits…We must educate our children about financial responsibility so that future generations may avoid the hardships that we have endured. But that might be easier said than done.”

My point is that teaching the next generation fiscal responsibility is a great idea, but maybe it should be done in a fashion similar to addiction therapy? Because we are instant gratification junkies, and children model what they see.

Therefore, Papadimitriou’s solution is to “simply educate your children through practical experience…After all, you don’t teach kids how to ride bikes by talking to them about it or reading them books; you throw some training wheels on and place them on the seat.”

In this case, prepaid cards would be the training wheels needed to prepare our children for the financial Tour de France that is life.

I like these analogies. But responsible parents don’t stop at training wheels; they buy a helmet, knee and elbow pads, etc… And it also helps if the parent knows how to ride a bike in the first place.

I also don’t dispute his premise, but my issue with Papadimitriou’s logic is that he’s talking about kids, not teens and young adults.

I would love to see some variations of this strategy for those instant gratification addicts I mentioned earlier: people who haven’t been schooled on finance 101 and have a history of fiscal irresponsibility to unlearn before they attempt to teach their children how to manage money.

This could represent a massive marketing opportunity for the prepaid industry: Helping parents learn how to teach their children financial responsibility by example.

Parents need help and if you can find the right “simple” method, you will win the hearts of parents all over the world.

In conclusion, I have a suggestion for parents of young children who may not be ready for a prepaid card, but want to start teaching financial responsibility early: Donate the “Happy Meal” toys to less fortunate children in 3rd world countries.

As both prepaid industry professionals and parents, what do you think?

ABOUT THE AUTHOR
Yury Rush is IIR’s director of new media marketing, a devoted father of two children ages 4 and 8, and a certified troublemaker. He may be contacted at yrush@iirusa.com

Edited by Marc Dresner - Photo credit

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