According to CreditCards.com, Joshua Finer, owner of VirtualWorks, misrepresented prepaid cards to his customers and was fined $52,000 by the FTC. Consumers who were applying for a loan or were lead to believe the card was free were actually charged $54.95 through a default setting by the online checkout's function. Read the full article here.
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At the Wall Street Journal, they look at the new regulations that are going to allow state laws for prepaid cards the impact the way the cards work nationwide. Consumer groups believe that prepaid card holders shouldn't receive less protection than other cardholders, and there is a possibility that soon state consumer laws could trump federal, in which case state laws are more stringent. So how do we find a balance with state and federal laws that strikes a balance between consumer protection and still encourages financial innovation?
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According to Bankaholic, they see the WalMart MoneyCard as the best value for a prepaid card. They state it has the lowest fees, all of which are waived if they are direct deposited, which is important in today's economy. They also state that the deposits are FDIC insured. What do you think? Is WalMart the best prepaid card for consumers? What do other cards offer that WalMart doesn't?
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According to Fox Business, convince store chains have voted Coinstar E-Payment Services as top prepaid performer.
Mike Skinner, general manager, Coinstar E-Payment Services, had this to say about the award:
"We are honored to be acknowledged as a leading prepaid provider by our customers. This recognition not only points to Coinstar's leadership in the Pay As You Go industry, but to the dedication of our retail partners to make the prepaid category successful."
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In an article at CreditCards.com, they address that many consumers are switching from credit cards to prepaid debit cards for budgeting purposes. Growth is expected as well, as the article predicts that $7.1 billion will be loaded onto prepaid cards in 2009.
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We'd like to once again thank all the attendees, sponsors, speakers, partners, and exhibitors that helped make the 2009 Prepaid Expo USA a huge success! Browsing the web I came across several impressions and perspectives of the event from various speaker blogs and news articles. Take a couple of minutes to read them below.
http://www.incentivemag.com/msg/content_display/publications/e3i24543ccff7b407085c0dd7775daf2431
http://www.incentivemag.com/msg/content_display/incentive/e3i71419f4d58d0cd4c43f5d5eace076394
http://www.paymentsnews.com/2009/03/prepaid-execs-see-underbanked-consumers-as-opportunity.html
http://speakingofchange.blogspot.com/2009/03/silo-busting-by-organizational.html
http://www.metaprepaidcardexpo.com/
http://www.philliouselwanes.com/?s=8&p=24&id=6
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Each year the team strives very hard to create a great experience for all of the attendees at the conference. We seek out remarkable and timely speakers, intent on bringing you presentations on the issues and challenges the Prepaid industry is dealing with. This year we especially focused on creating a broader community of Prepaid professionals who would not only benefit from the experience at the conference, but be able to continue and share perspectives and ideas throughout the year.
We feel that the 2009 Prepaid Expo has achieved this, and we hope those of you who attended, or followed us here on the blog, through our event site, our LinkedIn group or on twitter, will continue the discussions and idea-sharing that was fundamental to the overall experience of the conference.
Finally, our Conference Director, Keith Kirkpatrick, took a few moments during the closing hours of the conference to share his final thoughts:
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Speaker:
Anil D. Aggarwal, Chairman and CEO, Txvia
Anil begins the presentation by discussing how companies like eBay, Google, Facebook, and Amazon conduct fundamental business practices. Txvia has utilized these same principles and practices to prepaid card processing.
Anil mentions that there is a 3rd leg to the payments stool.
Prepaid industry has a wide spectrum of products
- Consumers now want more personalized products
- Vertical market applications
- Marketing, sales, and distribution channels
- Different geographic markets
Some of the principles adopted by companies like Facebook and eBay which can also be adopted for prepaid processing:
- The market is not only defined by the masses but now also by market of niches
- Teams and 3rd parties need to collaborate to help manage complexity and co-create value
- Think in terms of being a “platform” and not a “product”
Anil then passes the presentation on to Anne, also from Txvia, where she goes over sample models and sample IDE Development screens from their core offerings.
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Moderator:
Kay Segal, Vice President, CSP Information Group
Speakers:
Scott Burslem, Other Income Manager, Travelcenters of America
David Taylor, Category Director, Exxon Mobil Corporation
Mike Triantafellou, President & CEO, Handee Marts, Inc.
Mike Skinner, General Manager, Coinstar E-Payment Services
Frank Squilla, Senior Vice President of Sales, Incomm
Here are a couple of questions and answers from the panel discussion.
Q: What products have you seen do best in retail?
A: We have seen increased adoption of reloadable cards that have been particularly popular with unbanked consumer. Such consumers have used it as a great vehicle for cash back, purchasing groceries, and gas purchases. Consumers are increasingly looking for cards that they can pick up and use anywhere, not just one store. The result is that Visa and MasterCard branded cards have done extremely well.
Q: What are some different product offerings and integration that have been growing in the prepaid industry?
A: Music and online-gaming (Xbox, PS3, Wii) have shown a tremendous spike in the use of prepaid. The result has been a definite move into these industries as they offer the opportunity for an underserved market who regularly purchases incrementally within these environments.
Q: When you test a product, what is the lead time that you traditionally need to setup a skew?
A: Depending on the size of the company it can take anyway from 2 weeks to 2 months time frame.
Q: What are some of the pieces of the puzzle that make success when you bring out products to market?
A: The importance of coordinating technology resources cannot be understated. It has become essential to have the necessary lead time with technology teams to properly prepare every aspect of the launch.
Here is a short clip of the panel discussion:
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Speaker:
Alpesh Chokshi, President, Global Prepaid, American Express Company
Here are a few points from his presentation.
Alpesh discusses how now is the perfect time to invest in innovation initiatives with prepaid. As a result Corporate Social Responsibility (CSR) is now more important than ever because of economic conditions. It is an opportunity to demonstrate to customers an offering of safety, security, and control.
Alpesh then discussed various examples from American Express and their use of CSR. He described the “Make Mine A $ Million Business” that has offered small business owners the tools such as marketing, back-office support, and strategies to help grow their business. In time one in four participants were able to bring their business to reach one million dollars in revenue . In another example American Express, as the largest travel agency in the world, has worked with several partners across the world to invest in and help preserve tourist attractions that are often neglected and in disrepair.
Going even further, Alpesh made two major announcements on behalf of American Express
1. That American Express would begin converting their cards to recyclable materials from standard plastic
2. The launch of "Gift Cards 101" – A program to support the entire prepaid industry to help educate consumers on all aspects of using prepaid cards
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Moderator:
Gary L. Palmer, Chairman-Elect, NBCPA and EVP, Fidelity National Information Services
Speakers:
Brian Triplett, Global Head of Prepaid, Visa
Laura Kelly, Senior VP, Global Prepaid & Debit Product Solutions, MasterCard Worldwide
Steve Streit, Founder & CEO, Green Dot Corporation
Anil Aggarwal, Chairman and CEO, Txvia
Stefan Happ, VP & GM, North American Prepaid Cards, American Express
Todd Brockman, President, Galileo Payments
Grant Rogers, Senior VP, Meta Payment Systems
Farhan Ahmad, General Manager Prepaid & Director of Emerging Payments, Discover Networks
Here are some of the questions and answers from the panel discussion.
Q: How is the financial crisis affecting opportunities in the prepaid industry?
A: The payment business is alive and well even though we are going through an economic downturn. This is a huge time for prepaid to shine because consumers are looking for safety, budgeting, and more control of their use. Mobile has become an increasingly important utility to get people to use their prepaid cards more often.
Q: In what ways do you see growth being fueled in prepaid?
A: MasterCard is working on more reload networks across the globe. From an innovation perspective, MasterCard is working on combining different offerings from issuers to help bring about innovative products. Visa is working with their partnerships to help companies penetrate these new opportunities, to drive preference for branded products, and to help with performance drivers for business. American Express is dedicating their focus on execution making sure that everyone in the chain is working collaboratively to issue the best end product to consumers. Galileo believes that reporting and analytics for clients is a key driver that will be able to fuel prepaid in the future. Galileo also announced that this week they launched Galileo Analytics. This new offering will provide product managers the ability to develop actual business intelligence, not only with reporting on the transactional data but also information on cardholders in order to begin to move into portfolio management. Anil, CEO and Chairman of Txvia, believes that there are still opportunities in processing that has not yet been addressed yet. Some of these niche issues and markets are missed sometimes, but they are very important and we need to focus on profitable deployments.
Here’s some footage from the panel discussion:
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Keynote Address: How Globalization has Re-Shaped the Investment Landscape: An Economic Outlook for 2009
Mark W. Yusko, President & Chief Investment Officer, Morgan Creek Capital Management, LLC
Yesterday, the session began with opening remarks from Keith Kirkpatrick, conference director for the Prepaid Expo, followed by additional remarks from Marilyn Bochicchio, President of Paybefore. Mark was introduced by Marilyn followed by warm applause from attendees.
Mark began his keynote presentation by discussing how global stocks are down in some cases as much as 99%, but even aware of this investors continue to choose to keep investing in US markets. He points out that while the economy is down, this is the best opportunity to invest but the issue is where to invest.
He points out that the current crisis has people hoarding cash rather than spending or investing. The result is that last year has been the 2nd worst year for the markets. Mark quotes, Mark Faber who said, “A surplus of cash leads to a shortage of sense.” Which is exactly what happened in Japan’s case during the mid to late '90s.
Mark then begins to relate the changing reality of the world economy that positions BRIC countries such as China, India, Russia and Brazil as ascendant, quickly expanding market economies. China in particular will outpace even the US over the next 20 years.
He points out that our economy has become increasingly like a 'banana republic, “writing checks that our body can’t cash.” With this flux in the global economy he clearly makes the case that now more than ever, is the best opportunity to invest markets outside of the US, particularly emerging, developing nations.
Here’s a clip from Mark W. Yusko’s keynote speech:
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We like to thank all of our exhibitors and sponsors who helped us to make the 2009 Prepaid Expo USA a remarkable success. Many of them held contests and raffles this year. Here are a list of the winners:
NBPCA - Prize: Netbook Computer - Winner: Leana Hersch from Oberthur
Papier Studio - Prize: $100 Visa Card - Winner: Helen Child
First Bank of Delaware - Prize: TV - Winner: Ashvin Lad from Discover
- Prize: Nintendo Wii - Winner: Carol VanCleef from Patton Buggs
Oberthur - Prize: $50 Gift Card - Winner: Juan Gerardo Pina Prieto from Sivale
- Prize: $50 Gift Card - Winner: Eddie Sawyers from SCL
- Prize: $50 Gift Card - Winner: Judy Karlin Rubin from Discover
Metavante - Prize: Callaway Putter - Winner: Dave Willmott from Cash Pass Network
Vehicle Admin Services - Prize: iPod Touch - Winner: Christina Schleifer from The Capital Corporation
FIS - Prize: Nintendo Wii - Winner: Alina Gonzalez from Belize Bank
Prepaid Resources - Prize: 2.5g of Gold - Winner: Philip Cormier from ACE C/C
MasterCard - Prize: Choice of Flip Mino HD Video Camera or iPod Touch
Winners: Bill San Giacomo from Instant Tax Service
Jenny Bustos from Springbok
Steve Turzol from Bancorp
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Moderator:
Tim Sloane, Director, Debit Advisory Service, Mercator Advisory Group
Panelists:
Scott Johnson, VP of Account Management, Galileo Processing
Scott, Galit, Executive VP, Meta Payment
Tim Coltrell, CEO, Account Now
Chris Britt, Chief Product Officer, Green Dot Corporation
Tim Sloane began with a brief introduction of each of the panelists and their general perspectives on the topic. He then opened up the discussion to questions to the panelists:
Q: What are some key issues to address when launching new functionality in card programs?
A: Products must first address consumer needs. A company must invest heavily in research, surveys and other forms of market research are vital in understanding what the consumer truly wants. Another thing is to make sure that there is great value to the consumer. There should also be a reward system set up in which customers are rewarded for consistently using the product.
Q: How do you determine the costs of different features of customer service while rolling out new features?
A: It’s important to balance speed and functionality. Ultimately, you must really understand the value proposition.
Q: When introducing a modest change, is there a standard process being followed to make sure that all the ends are tied together?
A: Need strong project management discipline to carefully deliver and roll out all related processes that come along with new features.
Q: There is an argument out there that many prepaid platforms have become a “me too” industry, are there true opportunities for innovation in the industry?
A: Financial services in general are easy to copy products from other people but it really comes down to execution. It is a continuous process to improve the product and add new functionality to it. It takes a level of technical experience to implement this.
Q: Another complexity is managing the inventory of cards, do you find that a challenge?
A: Make sure you have a great processing partner to ensure that your customers are receiving mailings of their cards.
Q: What is the best new feature that will be launched in the UK within the next 12 months?
A: A new feature to look out for in the upcoming months is SMS texts and alerts stating balances for consumers.
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Speaker:
Carol Kinsey Gorman, Ph.D., Author, Coach and Consultant, Kinsey Consulting Services
Carol began her keynote address with a story about her husband and the collaboration she encountered from the hospital team when he was at the hospital for a couple of weeks. Just like her example, she mentions that the secret to a successful business is a highly collaborative culture. No matter the industry, eliminating silos in the business model is crucial to the successful growth of an organization. Silos have been around since the early 1920’s, and so it has been branded into the minds of executives for a very long time.
Carol gave an example of how IT departments generally have a tough time communicating what they do to executives. Most successful organizations bring the business managers of different divisions and business units and given them an opportunity to understand the IT team's capabilities and offerings in order to communicate it back to their respective business units. By bringing in these managers, companies now have opened up communication between their business units and IT team.
Carol then highlighted the detriment of hoarding knowledge within organizations. The “hoarding instinct” comes into play now especially because of our economic situation. People want to store information and knowledge within themselves and not share it across different business teams. She highlights that very successful organizations often actively pursue spreading such knowledge across the organization and improve understanding and communication. Businesses must be open to change because it is what will keep then competitive during these tough times.
Silos not only cause duplication of efforts, lack of innovation, and lack of communication, but it directly results in the loss of efficiencies and dollars tied to the bottom line. Here's a brief excerpt from Carol's presentation:
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Speaker:
Elizabeth Buse, Global Head of Product, VISA, Inc.
Elizabeth Buse started her keynote address after some opening remarks from the conference chairperson, Marilyn Bochicchio. She went right into personal consumption expenditures and how much of it is related to prepaid opportunities. There isn’t a consistent report to assess how much of it is prepaid opportunity, but VISA has taken a bottom-up approach into trying to understand the prepaid opportunity.
Merchants ,financial institutions, government more now than ever, want to jump into prepaid opportunities and manage risks. This means that the market needs choice control efficiency. The industry has to enable certain control options for consumers. Streamlining costs becomes increasingly important as retailers want to attract new customers but don’t want their spend to increase dramatically.
This trend continues not only domestically but across the globe in countries like Brazil, Philippines, South Africa, India, where opportunities for the prepaid industry for the under banked is immense.
In an economic downturn, companies must invest heavily in innovation now. Innovation in the prepaid market is vital to its survival. Elizabeth mentions that Visa’s press release today of their adoption of MoneyGram Link is an excellent example of innovation that prepaid companies should be mimicking. Being able to deliver consistently and keeping our promise to our consumers should be the driving factor for innovation within prepaid.
Take a look at some video footage we captured from Elizabeth's keynote address below:
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Marilyn Bochicchio, CEO of Paybefore, starts off the 2009 Paybefore Awards Ceremony by thanking the judges that have reviewed all nominations.
Here are the categories for the awards ceremony and the best in category award winners.
· Best Consumer-Funded Prepaid Card – Walmart MoneyCard
· Best Business/ Corporate- Funded Card – TeacherDollars and U.S Express Dual Purpose Corporate Card
· Best B2C Corporate-Funded Prepaid Card - Verizon Wireless Rebate Program
· Best Government Funded Prepaid Card of Program - g2g Youth Opportunity Card
· Best Third-Part Card Retailer – Variable Load Program
· Most Innovative Prepaid Product, Service or Card - ItzCash Octroi Automation
· Best Non-US Based Prepaid Card or Program - paysafecard
· Best Prepaid Marketing or Awareness-Building Program - NBPCA
· Best Prepaid Materials Design – Anne Geddes Card Designs
Now the winner for the highest recognition in the industry
Industry Achievement
Matt Gillin, CEO & Founder – Citi Prepaid Services
Steve Streit, CEO & Founder – Green Dot Corporation
Brad Hanson, President – Meta Payment Systems
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During Tuesday morning's track sessions, we sat in the Gift Card Retailer Alliance – Breaking New Ground to Advance the Closed-Loop Gift Card Industry
Speakers:
Carman Wenkoff, President, Value Pay Services LLC (Subway Card Programs)
Tom Boucher, Senior Program Manager, Gift Cards, Best Buy
Attendees welcomed Carman from Value Pay Services when introduced. Carman begins with an overview of the association’s goals and initiatives. Here is the code of principles for the association.
- Adoption of more consumer friendly policies, programs, and best practices
- No expiration or dormancy fees
- Collaborate together to address external issues
- Working respectfully with other members of the association
Carman then passed the presentation over to Tom from Best Buy where he further discussed some of the information and benefits of the association. Some of the benefits include access to reports shared within the association, listing on the RGCA website, access to special vendor rates and programs, and opportunities to participate in all projects organized by the RGCA. In order to request membership to the association each applicant must review the code of principles and then apply at the RGCA website.
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