Thursday, March 7, 2013

Network Branded Prepaid Cards: Transcending Traditional Boundaries

Traditionally, prepaid cards were thought to be for unbanked or underbanked people who cannot get a checking account or qualify for a credit card. As payment trends shifted from cash and checks to debit and credit, prepaid cards were a solution that allowed people without bank accounts to purchase online items, pay over the phone, make collect calls and track spending.

Prepaid cards have matured and found their own value proposition in several areas other than just being a replacement for credit cards and checking accounts. They are uniquely fulfilling the needs that were left unaddressed by traditional payment products:

  •  Student cards for university funds disbursement
    • Rather than waiting for scholarship and loan checks to be cut, mailed and sent, universities can now quickly and efficiently, load funds on student cards that act as both student IDs and prepaid debit cards. Not only is it easier to track allocated funds, inventory, shipping and labor costs of disbursement are dramatically reduced.
  • Teen cards controlled by parents
    • With a prepaid card issued to teenagers but managed by parents, this mutually beneficial option gives both parties freedom and control respectively. Parents are able to load the card at their discretion and monitor how their child is spending the money. Because funds can be loaded remotely (either online, over the phone, or automatic transfers) there is added convenience and security in case of emergencies. Parents can also restrict the cards to be used only at places they would like their children to go to 
  • Commercial prepaid cards for employers/employees 
    • Helping small businesses manage business-related payments, commercial prepaid cards, unlike credit cards, are available to both employer and employee. With card management websites, employers can tailor cards to ensure projects stay on budget and control the type of purchases that the employees can make. Employees don’t have to pay upfront or spend company time on expense reports. Commercial prepaid cards work very well for small employers/businesses that cannot get commercial credit cards or those who do not want their credit history be tarnished because of unscrupulous use by a vagrant employee. 
  • Travel/Forex cards 
    • Travel and Foreign Exchange (Forex) cards reduce your exposure to fraud and does not impact your credit history if lost or misused abroad. With Travel cards, you don’t have to exchange cash or traveler’s checks to foreign currency; saving you time and risk of carrying physical money. Forex prepaid cards can be directly loaded in the currency of your destination country which is not possible with a checking account (debit card) or a credit card. 
  • Government fund disbursement 
    • Government prepaid fund disbursement significantly reduces costs because it doesn’t require printing, posting or handling of checks. Processed payments are deposited directly onto the Government issued card, reducing clerical error, lost postage and mail fraud. 
  • FSA/HSA accounts 
    • Flexible Spending and Health Savings accounts can be used to pay for qualified medical expenses at any time without federal tax liability or penalty. Patients can receive needed care without submitting claims or waiting for approval of benefits. Because consumers are more responsible for their own health care choices, it saves them time and insurance companies’ administrative and customer service costs.
  • Transit cards 
    • Transit cards are much more efficient from the now obsolete token payment process. Not only does the prepaid card heavily reduces cost of minting and storing tokens, it gives passengers options to buy transit packages or pre-purchase rides without having to collect and carry loose tokens. Prepaid transit cards can be easily bought at a kiosk which is not possible for credit cards yet. 
  • Payroll cards/Sales commission/Incentive card 
    • Prepaid cards for employees are an efficient method for wages, compensation and bonus payments. Employers can easily load Payroll cards for payment of services, travel expenses or commission. Like Government distribution, Payroll cards reduce the cost of cutting checks. It’s also convenient for employees because they have access to their money immediately after deposit. Such cards are very useful for adhoc payments of any kind where the payer does not have payee’s bank account or if the payee does not want to share his bank account information for security reasons.
  • Remote check deposit 
    • Remote check deposits are beneficial because it allows companies to deposit checks from their computer rather than having to go to the bank. This eliminates travel expense, reduces admin and paperwork, and allows you to consolidate bank relationships, as well as, have speedier access to deposited funds. Looking at the potential of prepaid cards, Visa in 2012 announced a service, Spyke, which allows all Visa prepaid card holders to deposit a check by taking its picture from their smartphone.

The continued expansion of prepaid options has evolved the payment industry by reducing time and cost, while also, increasing convenience and efficiency in unique ways. Prepaid cards are no longer ‘just’ an alternative to credit cards and checking accounts for underbanked and unbanked.

This was a guest blog written by CoreCard Software, Inc.

About CoreCard Software, Inc. 

CoreCard Software, a leading provider of card management systems and processing services, offers an array of account management solutions to support the complex requirements of the evolving global financial services industry. The CoreCard® software solutions provide the market's most feature-rich platform for processing and managing a full range of card products including prepaid/stored-value, fleet, credit, debit, commercial, government, healthcare and private-label cards as well as accounts receivable and loans. Headquartered in Gwinnett Innovation Park in Norcross, GA with additional offices in India and Romania, CoreCard is a subsidiary of Intelligent Systems Corporation [NYSE Amex: INS]. For more information, call 770-564-8000 or visit
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Wednesday, March 6, 2013

Prepaid Expo Day 3: Morning Recap

In the morning session of the 3rd and final day of the Prepaid Expo, a panel made up of industry executives discussed global markets, in a session titled, "Identifying Key Global Markets". In case you missed the session here is the list of the members of the panel: - Mike Hafer, SVP, Global Prepaid, Western Union - Brian Dunne, Managing Director, Incentive Marketing Association - Lee Manfred, Partner, First Annapolis Consulting - John Yeomans, General Manager, EMEA, FIS For those of you unable to attend the session, here is a quick recap: - Identify what segments you want to play in and what the needs of those segments are. - It has to be intuitive: make it as simple as possible. - The importance of local and cultural knowledge is critical. When you work with a local team, you have to relay on those people to be the experts. You have to listen. - You have to develop around the consumer - don't skip the customer research - Tip: There is quite a difference between wisdom and knowledge. Knowledge is knowing that a tomato is a fruit. Wisdom is knowing not to put it in a fruit salad. Look at the BIGGER picture.

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Tuesday, March 5, 2013

Prepaid Expo Day 2: Evening Recap

In our evening session today titled, "What's driving the Payments Market? Future through the eyes of the investors" there was a venture capitalist panel discussing what truly is pushing the payments market forward. The panel of venture capitalists was made up of: - Arjan Schutte, Managing Partner, Core Innovation Capital - Ramneek Gupta, Managing Director, Venture Leader, Citi Ventures - Scott Feldman, Director, Susquehanna Growth Equity - Michal Petrzela, Principal, Lightyear Capital For those of you who missed it, here is a quick recap: - Mobile payments phenomena: due to smartphone and tablet usage - 1.5 billion people have desktop internet access as well as mobile access (mobile is continues to grow rapidly) - Top 15 payment oriented companies collectively generate 50 billion in revenues - Based on slowing growth rate, dropping margins and more competition it is no surprise we've already witnessed five powerful acquisitions in 2013 - Advice for entrepreneurs: develop and cultivate relationships with everyone, leverage your network, and think about who will find your business valuable one day.

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Prepaid Expo Day 2: Mid Day Recap

"Are GPR Cards a Destination or a Journey?" was an interactive panel with many industry heavyweights debating the trajectory of prepaid GPR cards. The panel was moderated by the CEO of Paybefore Marilyn Bochicchio and the panel was made up of: - Dan Henry, CEO, Netspend - Brett Adams, Lead, U.S. Prepaid Products, MasterCard Worldwide - Mark Putnam, SVP & Divisinal Manager of Prepaid Solutions, First Data - Adam Rust, Director of Research, Reinvestment Partners Incase you missed the session, here are some highlights: - There are 68 million people that are underbanked - for many, GPR cards are the only choice (18-23% of all people get turned down on traditional banking options) - Over the past few years, the total cost of ownership for prepaid cards has steadily decreased - Prepaid options that are totally transparent can lead to increase trust from the consumer - Mobile enabled features is key: it all comes down to combining the paper and the digital worlds - The appeal of prepaid is about having immediate access to your funds

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Prepaid Expo Day 1: Evening Recap

The Annual Paybefore Awards take time to recognize key players in the prepaid industry who have made significant strides in the space. This year there were many deserving candidates but the list below are the "Best-in-Category" winners. Congratulations to those who won an award. Paybefore Awards: Best in Category Winners Best Network Branded Gift Card Program - Western Union Gift and Greeting Card Most Effective Closed Loop Prepaid Card Program - Do It Yourself Home Improvement Gift Card Best GPR Card Program U.S. - PayPal Prepaid MasterCard Best GPR Card Program International - American Express Global Travel Card Best Third Party Payroll Program - ALINE Card by ADP Best Corporate Payroll Card - Walmart Money Network Payroll Distribution Service Best Prepaid Incentive Reward Rebate or Loyalty Card Program - Vitality Healthy Food Card/Walmart Best Benefits Distribution Card Program - Aetna Flu Care Card Best Business to Business Prepaid Card Program - TPC Payables Prepaid Visa Card Outstanding Mobile Wallet or Mobile App - Moneto Prepaid MasterCard and Mobile App Best Virtual or Digital Program - 10$ Starbucks eGift for 5$ LivingSocial Deal Most Effective Marketing Campaign - Visa National Consumer Campaign 2012 Best Retail Merchandising - Green Dot Retail Marketing Best Prepaid Card or Packaging Design - Simple Visa Best Consumer Value - BlackBoardPay Most Effective Solution - UEPS/EMV Debit SASSA MasterCard Best non-US Based Program - Power to Pay Most Innovative Program - MTA Reload Card Best Retail Based Prepaid Card Program - Walmart Expanding the Boundaries of Prepaid - Discover Outstanding newcomer - Kaiku Visa Prepaid Card Breakout Company of the Year - Rev Worldwide Industry Achievement - Brooks Smith: President and CEO of InComm & Roy Sosa co-founder and CEO Rev Worldwide

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Monday, March 4, 2013

Prepaid Expo Day 1: Mid Day Recap

Sheryl Connelly, Global Consumer Trends and Futuring, Ford Motor Company kicked off the Prepaid Expo this afternoon with a Keynote address titled "Futurist: How to innovate for what you don't anticipate". Here are some highlights from the session: Wildcard Analysis: how do we predict the future? How can we deal with unplanned occurrences - Katrina, the recession, etc... Trends: a deep rooted long held value or behavior. How do we study these trends to plan for the future? Scenario Planning: a way to provoke new thinking, while entertaining every possibility. From a baby boom to an alien invasion, you need to think through every possible scenario as you look towards the future.

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Prepaid Expo Day 1: Morning Recap

Richard Crone, Founder and CEO of Crone Consulting LLC, just spoke in one of the opening sessions at the Prepaid Expo. His session titled "Advanced Mobile: Strengthen Your Mobile Core" drew an interactive audience eager to learn from what Richard had to share. Here is a quick recap just incase you missed out: "The one who enrolls is the one who controls" - Mobile Payment Apps are not actually about payments, they are about the big data. You controls the consumers data - not a third party source. - The amount of time consumers have spent in retailer apps has skyrocketed 525% from Dec. 2011 to Dec. 2012 - Companies that use mobile apps saw an increase in sales and operational effectiveness, higher conversion rates, and higher retention rates - Mobile Apps are about recognizing your best customers - not displacing the cashiers in the store. - The average smartphone user has 40 apps on their phone and only uses 15 of them.

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