Friday, February 25, 2011

“Progress in Prepaid” Tours India, Country of Contradictions

It’s the world’s second-largest population and 90% don’t have a debit or credit card, so why should U.S. prepaid services proceed with caution?
By Marc Dresner, IIR USA

Tour these great United States and you’re bound to find a few cultural differences at each state line. Take New York and Texas. Heck, they’re practically different countries. And California might as well be another planet.

But for one in search of genuine diversity, my destination of choice would be India.

U.S. prepaid interests appear to share my wanderlust, except not only would they like to visit; many are keen to take up residence.

The attraction is obvious: As the country with the second-largest population in the world, India is not only a rising financial superpower with a growing middle class, but it’s also the world’s largest cash economy.

In fact, according to Naveen Surya, Managing Director of ItzCash Card Ltd. – a multi-purpose prepaid card company based in Mumbai – less than 10% of India’s 1.2 billion residents have a credit or debit card! Cash only, folks. Seems like a prepaid dream!

But before you pack your bags and rush out the door, you’ll need to contend with that diversity aspect I mentioned earlier.

You see, India is also the world’s seventh-largest country, and to illustrate the extent of differences you’ll find from region to region, and state to state, this big boy boasts roughly 29 different languages, with multiple dialects particular to each language.

No single prepaid product solution can possibly accommodate India’s myriad socio-cultural particularities. There’s a massive learning curve, even for native Indians like Surya, who only speaks a “paltry” two of the country’s tongues.

In an interview for our third episode of IIR’s podcast series, “Progress in Prepaid,” Surya takes us on a tour of India from a prepaid perspective.

We’ll explore issuance and infrastructure issues, the regulatory landscape, and opportunities for closed-, semi-closed and open-loop prepaid products in a country of contradictions, where cash is king but mobile penetration is high enough that mobile prepaid could take hold within just three to four years!

To listen to our podcast click here, or to download the transcript, please click here.

Editor’s note:
Want to learn more about prepaid in India? Naveen Surya will be moderating a panel titled “India: Next Growth Destination for the Prepaid Industry," at IIR’s Prepaid Expo USA on March 9 in Orlando as part of a session track devoted to international prepaid markets.

There’s still time to register for the industry’s largest gathering for network-branded prepaid and stored-value decision makers and influencers March 6-9. Visit for details.

About the Author/Interviewer

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

Share this article with your social network, just click below to share now!

Friday, February 18, 2011

Plastics Perspective: Arroweye CEO Reviews The State of Prepaid

Editor's note: I recently conducted an email exchange with Render Dahiya, president and CEO of Arroweye Solutions (Chicago, IL), which in short order became a compelling interview.

We covered a lot of ground: everything from regulation to the Kardashian Kard bungle to the need for speed in the custom card space and, of course, mobile migration from a plastics producer's point of view.

Arroweye, btw, is a marketer and on-demand producer of customized plastic gift, prepaid, debit and credit cards and, increasingly, virtual products.

I trust you'll find our digital conversation as stimulating as I did.

Ps. Please be sure to check my additional notes at the interview's conclusion for more information!

Q. How would you describe the state of the prepaid card industry?

Growing, but facing some uncertainty. The statistics in terms of growth in load and programs are amazing. Prepaid to me has some of the most creative problem-solvers in the financial services industry. They are looking at where consumers have needs and are coming out with products that satisfy those needs – that’s what’s driving so much success.

Uncertainty, though, stems from government regulation. Is financial reform going to restrict the industry? What new rules and regulations are going to impact my card program and its profitability? This uncertainty is one of the reasons I believe prepaid program managers must look for flexibility from their platforms. It’s another reason why I like digital on-demand solutions; they give the program manager flexibility.

Q. You mentioned financial regulation. More specifically, what’s your take on the regulatory environment with regard to the prepaid market?

As we all know, once an amendment is passed the fun has only just begun. The amendment only provides an outline for the new environment, but agencies and staff write and form the actual detailed rules. I think we all have to operate in a bit of a state of flux until all the rules have been written. Right now the focus is on debit, but it would be naïve to think that parts of prepaid would not eventually be examined and impacted by financial regulation.

Prepaid to me has already proven to be one of the most innovative groups in the financial services industry and, because of that, I believe once we know the new ‘rules,’ the industry will quickly adapt and focus on differentiating their product/s from those of their competitor/s.

Q. Outside of the regulatory space, what trends are you seeing specific to prepaid that our audience should monitor? And which ones are likely to be short-lived versus long-term?

It seems as though celebrities are jumping on the prepaid bandwagon while it’s hot. The ill-fated Kardashian Kard, Russell Simmons and even radio personality Tom Joyner are backing prepaid. If it works, it could be a successful tactic to sell cards. But given the negative buzz surrounding these programs, it seems as though it may have caught the most attention in all the wrong places.

Day to day, I see more and more clients push for two key things: 1. Get new card programs to market faster, and 2. Customize these programs for their clients. We have some clients in the incentive space that are running programs that may only issue 1,000-2,000 prepaid cards, but their expectation is not only to launch in less than two weeks, but to co-brand and personalize those cards.

In the past, these two tasks were almost mutually exclusive. To attempt to satisfy these goals, one would have to issue a generic card and spray the client’s logo in black on top of the card. The new technologies on the market now allow companies to accomplish both goals: to issue highly customized cards in short runs, fast and on-demand. Visa, for example, has recognized this requirement and is piloting some new programs to speed up approvals of card programs.

Q. How do prepaid card issuers gain a competitive edge? I.e., how to stand out in a crowd?

There isn’t one answer for all issuers; it is highly dependent on the market their program is focused on. In rebates and incentives, I think it goes back to a point I made earlier: have the ability to launch quicker than your competitors and brand all aspects of the program for your client, from card artwork to packaging. Possibly come up with ways to drive the consumer to use that card back at the place they earned it from through offers customized specifically to them.

If you are in the GPR space, it’s all about how to drive reload and top-of-wallet usage. I believe that comes from understanding the needs of the consumer – the user receiving the card – and then building a card program that matches their needs. You want a program that in every way makes them feel like it was tailored specifically for them. Obviously the rules and any rewards that come through that program will do this, but also the individualism must show through the artwork and branding of the delivery of the card. There are ways to drive emotional ties that increase usage and reload. This holds true for almost all consumer products, not just prepaid.

Q. As a manufacturer of plastic, I’m interested in your take on the rise of mobile. Is plastic on its way out?

I think social, mobile and plastic all have their own place in the prepaid market. I also suspect it’s premature to evaluate mobile’s true impact on plastic payment cards. Mobile payment technology, like any new innovation, takes time to develop. From security, functionality and acceptance at the POS…there are many unknowns on a broad scale. My sense is that mobile and plastic will both be key components of a company’s business strategy moving forward and that they will complement one another in a robust and realistic prepaid portfolio.

I’m biased, of course, insomuch as we specialize in the manufacturing and personalization process and the impacts of a long-term move to mobile are different for us than others. In the long term, if a subset of people move away from plastic, it only aids our value proposition since we operate in an on-demand model and we don’t have millions of cards in a vault sitting in inventory that will go unused. Our clients will not be exposed to a one-size-fits-all decision. They will have more flexibility to adapt to their consumers needs and issue unique cards to the consumers that want them.

Additional editor's note: Render Dahiya will be participating on a panel at IIR's Prepaid Expo USA taking place March 6-9 in Orlando, FL. The topic title: "Revolutions in Package Design and Card Manufacturing Practices That Help Attract Customers and Keep Costs Under Control"

The event is nearly sold out, but there's still time and space to be a part of the industry’s largest gathering for network branded prepaid and stored value decision makers and influencers!

For more information or to register, please visit

Hope to see you there!


Render Dahiya is the former SVP of FedEx Kinko’s U.S. Operations, and later Culligan International's EVP of North American Dealers.

Dahiya joined Arroweye in November 2007, and became CEO in May of 2008. After earning his stripes in the closed-loop sphere – with a client roster that includes Macy’s, Borders and eBay – Dahiya helped lead Arroweye into the open-loop industry in 2009 by obtaining Visa Vendor approval. This certification marked Arroweye as the first company to manufacture and print the Visa logo on-demand while simultaneously personalizing a payment card.


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

Share this article with your social network, just click below to share now!

Friday, February 11, 2011

Gift Cards Are Going Digital

By David Stone, Founder and CEO, CashStar
The Digital Age has arrived. Consumers by the tens of millions are now interacting, transacting and experiencing digitally unlike ever before.

Facebook now has well over 500 million users; eBooks are more popular than printed ones; 80% of U.S. adults regularly use the Internet for more than four hours a day; and smartphone penetration is at nearly 40% of the U.S. population.

What does this mean for gift cards?

  • Consumers want and will be able to buy their cards anywhere, anytime, from the most convenient and cost-effective channel.
  • Personalization is moving to a whole new level, which will enable more gifting opportunities. In the digital world, the ability for consumers to express themselves increases dramatically.
Retailers are quickly realizing this opportunity.

At CashStar, we have seen such retail clients as The Home Depot, The Gap, CVS/pharmacy, Starbucks, Chili’s, Williams-Sonoma and others embrace these new channels; they have rolled out some of the most innovative gift card programs in the market and we’re proud to have been part of that.

Here are a few predictions for how the Digital Age will affect gifting:
  1. Instant Communication: The email channel will grow and become a primary means of sending and distributing gift cards. Speed, convenience and cost will drive the transition from plastic to digital.
  2. Social Gifting: We have all heard the buzz about “Facebook Commerce.” As consumers become more comfortable socializing and communicating through social networks, this channel will continue to grow in importance for retailers: first as an engagement tool, primarily, and then as a commerce channel as well. Retailers who have active, engaged Facebook fans will witness the most growth for their digital gift cards. Smart retailers will also utilize the social channel as a means of acquiring customers and deepening relationships. “Social gifts” and incentives are valuable tools in this milieu.
  3. Mobile Gifting: Mobile is an emerging channel that will develop as smartphone penetration increases and retailers begin the process of enabling point-of-sale redemption. Retailers will want to make sure their customers’ mobile purchases – and the recipients’ experiences, especially – are as friction free as possible. So retailers: build or partner wisely.
  4. A richer gifting experience: In the digital world the customer experience becomes king. Simply offering a “plastic-like” alternative or a message with a “code” will not impress the savvy, discerning digital consumer. They will want digital personalization options and a friendlier, easier user experience.
I welcome your thoughts, and I hope to have further discussions with each of you next month in Orlando.

Thanks, David

Editor’s note: David Stone will chair a session focused on innovations in prepaid with executives from The Home Depot, The Gap, Nokia Mobile Financial Services and Rev Worldwide at IIR’s Prepaid Expo USA March 6-9 in Orlando, FL – the world’s largest gathering of prepaid industry professionals in both closed- and open-loop markets.
For more information or to register, please visit

David Douglas Stone is co-founder and CEO of CashStar, the digital gifting and incentives company. He has more than 20 years of executive management experience in Fortune 500 and emerging growth technology companies with a strong emphasis on innovative payment systems and loyalty solutions.

Share this article with your social network, just click below to share now!

Monday, February 7, 2011

Government's move to Prepaid cards

Check out this Forbes blog post commenting on the Government's move to prepaid cards. It's right on the heels of us locking in our panel on the very topic scheduled for March 7 at Prepaid Expo.

Daniel Rose from MASTERCARD WORLDWIDE will be leading a discussion with Chris Paton, JP Morgan Treasury Services, JB Donaldson, ACS, (XEROX COMPANY), Nora Arpin, Director of Government Electronic Solutions, COMERICA, and Robert J. Schmitt, Manager Banking Services, Department of Treasury, Commonwealth of Virginia to discuss how the government's move to paperless is progressing, and what it means for end user adoption and the prepaid industry as a whole.

Share this article with your social network, just click below to share now!

Tuesday, February 1, 2011

Survey for Prepaid Expo Attendees: How well do you know the Prepaid Consumer?

Think you know the Prepaid consumer?

Take a fast survey to find out. Our partners at TSYS will compare Prepaid Expo attendee responses with those from consumers and present the findings at the Prepaid Expo session titled “What Consumers Think about Prepaid Cards as Incentives” on Tuesday, March 7th.

All responses are anonymous, and the survey will take only a few minutes to complete. Survey closes on February 11th.

A link to the survey and more details can be found in the Prepaid Marketplace:

Or, send me an email at and I'll give you a link to the survey (we're keeping responses to Prepaid Expo attendees only, hence the screening!).

Share this article with your social network, just click below to share now!