Will AmEx Change the Future for Prepaid?

American Express has launched a new prepaid card, one that boasts fewer fees, and one free ATM withdrawal per month. “The average prepaid card typically carries a $10 activation fee, as well as a $10 monthly maintenance fee. The AmEx prepaid card has neither of those costs, however: Instead, the company charges a $2 fee for each ATM withdrawal, with one free withdrawal each month.” With fewer fees, even the card itself is free if ordered online (it will eventually be available in stores for $4.95), and no monthly maintenance will AmEx change the future for prepaid cards?

“Most prepaid debit card users tend to be low-income, have poor credit and limited banking options. Todd Zywicki, a professor at George Mason University, says the new AmEx card could change the game.”

It’s no secret that many Americans have been with faced with some sort of economic hardship over the past few years, will this be their solution? “Prepaid-card use expanded 35 percent last year with more than 1 billion transactions.”

Now that AmEx has produced a more cost effective card, how many Americans will switch to prepaid cards?

Prepaid cards aren’t just for people who are struggling. Many parents sending their children to college could benefit from using prepaid cards instead of regular credit cards, especially now that AmEx’s new card has no maintenance fees. Who will be AmEx’s next competitor?



Kate Devery is a Social Media List Researcher at IIR USA . She studied English and Psychology at Hunter College. She also writes for various pop culture blogs. She may be reached at KDevery@IIRUSA.com

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Lost in Translation Study: New Underbanked Stats for Prepaid

The University of Virginia Darden School of Business and Tayloe Murphy Center released the findings of a major study yesterday that outlines specific steps for how banks and credit unions can capture billions of dollars in deposits by reaching out to Latino and other “unbanked” households across the United States.

The year-long study titled “Perdido En La Traducción: The Opportunity in Financial Services for Latinos has a lot of interesting stats for those in the Prepaid industry to explore:

The study focuses on unbanked Latino households in Virginia and North Carolina. Latinos are the fastest- growing multi-ethnic group in many states, including Virginia, as well as nationwide. Many of the findings can also be applied nationally to any household that is unbanked, regardless of ethnicity, background, geographic location or length or status of residence.

The Latino Market in Virginia:


Virginia has 39,000 unbanked Latino households producing some $23,500 each in annual income.

Conservative estimates put the amount of money that could circulate through Virginia’s banking system due — strictly — to welcoming Latinos into traditional financial services at $917 million annually.

Recommendations from the study to address some of the issues include:


Utilize and expand mobile banking platforms
Demographics matter - know your consumer
Directly address the risks of crime - and benefits of security
Recognize and leverage the residential segregation of ethnic groups
Build on social and reputational networks
Utilize knowledge from public servants
Financial education

To read the complete study, click here.

Explore the topic: Share your thoughts below...
How is the Prepaid industry addressing these issues and attracting the underbanked consumer? Is the industry moving fast enough compared to the needs of the consumer? What are the major challenges?

Valerie M. Russo is a Senior Social Media Strategist at IIR USA with a technology, anthropology, marketing and publishing business acumen. She is a published poet and also maintains a literary blog. She may be reached at vrusso@iirusa.com. Follow her@Literanista. You can meet her in person at Prepaid Expo USA 2012.

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Social Media Critical to Growth of Prepaid

In an age where 93% of all business marketing participates in social media and even brokers at financial firms are now harnessing the power and reach of social media for research, client communication, and to attract potential clients and prospects, it seems that social media is critical to the growth of Prepaid as well.

While compliance guidelines and regulations continue to worry many in the Prepaid industry, they are not alone. If you speak to any social media thought leader, they will tell you that many corporations face challenges in using social media, both externally and internally. However, it is possible to walk that fine line since social media isn't going away. And when you look at its merit and power to reach and educate clients and consumers far and wide, especially the underbanked, the more it seems like a winning situation.

Just look at these 2011 social media stats released last week:



Here is where we look at whose IS doing social media well. Innovation and progress rarely happen in a vacuum. Sometimes it's as simple as looking at leading experts outside of your industry for inspiration and ideas or perhaps even sitting down together for a business strategy discussion.

Prepaid Expo recognizes the challenges facing prepaid professionals and strives to meet those needs. In an effort to learn from those who have survived the challenges presented by a maturing industry and inspire the seasoned prepaid executives, Prepaid Expo is looking beyond prepaid for inspiration.

First, we will bring the leading experts from Airlines, Pharmaceuticals, Finance, etc., to address the Prepaid Expo audience on how they came out on top when facing similar challenges. Second, we created VIP sessions for each outside expert, giving senior executives the opportunities to get their questions answered by the experts in a private forum like setting.

If you would like a chance to discuss your business needs and challenges with your peers and experts at Prepaid Expo 2012, sign up today and save the date: March 12-14, 2012. We will see you in Las Vegas!

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Mercator Forecasts 68% CAGR for Prepaid Card Industry In 2011

Prepaid TV™ Series Explores GPR Payroll, Social Media Distribution and More!

By Marc Dresner, IIR USA

As a baby, my parents used to brag that I should be on television. The neighbors said I had a face for radio…

This much is certain: I like to ask questions. Call me insatiably curious or plain nosey, it’s why I became a business journalist.

So when Prepaid Expo offered me an opportunity to host a new online video interview series focused on the prepaid card biz, I grabbed my pad and pen and went hunting for victims to grill.

And I’m mighty pleased to say I’ve landed interviews with some of the leading authorities in the open- and closed-loop prepaid card industry today (along with a few rising stars that you ought to know about).

On behalf of Prepaid Expo, today we’re delighted to air the first of those interviews in the debut segment of Prepaid TV™!

Episode One features a five-part interview with Mercator’s VP and director of prepaid services, Tim Sloane, who was gracious enough submit to a broad discussion on key trends in prepaid and what they mean for retailers, networks, banks, programs and providers.

Part 1: New Entrant Impact – Sloane says the prepaid sector – closed- and open-loop – is poised for a staggering 68% CAGR this year! How much of that is going to come from new players, and who are they?

Tune in to episode one of Prepaid TV™.



Part 2: Prepaid & Social Media – The distribution channel mix is changing. See how social media is fueling consumer interest in prepaid products.

Part 3: Prepaid & Payroll – GPR and prepaid financial services are expanding their footprint. Could cards kiss paper payroll checks good-bye?

Part 4: Game Changing Technologies – Process management is getting extremely complex. Take a look at some automation tools and outsource providers making a difference.

Part 5: Retailers – This ain’t your grandma’s gift card; retailers are getting into the financial services game. Expect prepaid to play a in big way.

Bookmark us and stay tuned for episode two, featuring MasterCard’s Neil Dugan, SVP of Global Prepaid.

Prepaid TV™ marks yet another step in Prepaid Expo’s commitment to deliver year-round access to key executives and thought leaders.

Let me know what you think! And thanks for watching!


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. Follow him @mdrezz.

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Digital Photography, Digital Media, Digital….Wallets?

“According to Urban Wallace Associates, more than 6 million U.S. shoppers bought digital gift cards within the past 6 months — a 150% increase since last measured three years ago.” Cards have proven to be convenient and favorable to most consumers because people like to know exactly what they’re purchasing. The transition from paper to plastic seemed to be almost effortless, and it was only a matter of time before it turned digital. Digital transactions are becoming more and more frequent each day, so much in fact that The Square estimates that it “will reach 1 billion in payment volume within a year.”

Last week, Google announced its latest digital development, Google wallet, which will be out this summer. “The first participating retailers will be Macy's, Subway, Walgreens, Toys "R" Us, Bloomingdale's, Guess, and Noah's Bagels. For the payments service, Google is partnering with Sprint, MasterCard, Citi, and FirstData. Eventually boarding passes, tickets, and more will come to the Google Wallet." Coupons and discounts will be offered, and to pay it’s a simple as waving your phone over a terminal. Androids will be the first phone to have Google wallet and it will be interesting to see how phone companies choose to compete with this latest feature, especially with the announcement of a similar service, Visa’s e-wallet. Visa announced their e-wallet will be out this fall in Canada and the United States. “It'll cover all sorts of payment situations, including e-commerce, mobile commerce, micropayments, social networks, and person-to-person payments.”

You can bet with the release dates of both devices set for summer/fall there is sure to be buzz in the upcoming months. Do these services signal the end of “cards” as we know them? What do you think?

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