by Julie Kurd
Director on CMB's Financial Services, Healthcare, and Insurance Practice
1,700 of us converged in Vegas at IIR's Prepaid Conference in February to talk about this new frontier business, "pre-paid"(think about it as your money (you know, debit) available to you anytime, anywhere).
We used to think of prepaid simply as a prepaid debit card but now the prepaid world is converging with the mobile applications world and a magical thing is happening...in the near future you may not need your wallet anymore, because your phone is holding everything, including your money. Some of the smartest frontiersmen and women from the Fortune 500 spoke, presented, mingled and shared thoughts about the world of tomorrow.
When one thinks of the staggering estimate of 70,000,000 people who are ‘unbanked' or ‘under banked,' that is, living paycheck to paycheck, overdrawing their bank accounts to steep fees (if they still have an account), sometimes using pawn shops, payday loans and other financial instruments that come with steep fees, the prepaid world is asking: Why couldn't life be better for these people? Why couldn't the money just arrive on a card in their wallet on payday? Or better yet, why couldn't the money just zip over to their mobile phone?
And if they're transferring money to loved ones in foreign countries, why couldn't you send it via your phone and get a reply message back when the recipient actually receives the money (and what amount they actually received)? Why couldn't governments save millions of dollars by using pre-paid to reduce administrative burdens of check administration?
Many of the leaders in the prepaid industry attended and spoke at the conference. Some of the highlights:
- Brian Triplett, VISA talked about the broad opportunity to have better public/private relationships and partnerships. He got us all thinking about how we can better partner with government entities in a way to drive better value to the constituent base. He interviewed former President Bill Clinton as well. Together, they explored the central concept of infrastructure and ‘the old way of doing business' being a key constraint as well as how prepaid can transform the administrative burden for the healthcare industry, government payments (unemployment, social security, Medicare, jury duty, employees etc.).
- Alpesh Choksi, AmEx President Prepaid spoke about how he expects prepaid to transform the lives of people all over the world. He says that the economic crisis has helped with articulating financial security, safety and control which is exactly what prepaid provides. People are now connected to their money in new, non-traditional networks. New devices are being born every day and two-way devices such as phones now allow people to service differently... direct to consumer tailored marketing campaigns based on location etc. are really not at all far-fetched or constrained by budgets or tools anymore.
- Laura Kelly, SVP of Global Prepaid and Healthcare for MasterCard talked about prepaid as being ‘smarter, bigger, better.' These are not small splashes...Her "Smarter" stood for the innovation as evidenced by the Easy Link prepaid card in Singapore which is both a transit card AND a shopping card. Her "Bigger" is a walloping large payroll program launched by WalMart that saved 258,000 pounds of paper and gas for associates to drive to the store for their paycheck. Finally, her "Better" stood for better for the consumer. She used the example of social security prepaid cards that are now being used by nearly 900,000 people in this country to provide a more secure way of getting money directly to the people who need it without fear of checks disappearing from mailboxes.
- Farhan Ahmad, GM of Emerging Business at Discover talked about the need to get new innovative products to market in less than 6 months. No small feat for a large company. He and his team are considering mobile payments as an emerging solution that can fundamentally affect the infrastructure for the USA with "better, safer, more convenient access to people's money where/when they need it."
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