Showing posts with label Mercator Advisory Group. Show all posts
Showing posts with label Mercator Advisory Group. Show all posts

Thursday, February 26, 2015

Live at APEX | The Benefit of Linking Bitcoin Implementation to the Existing Payments Structure

Live at Apex: The Benefit of Linking Bitcoin Implementation to the Existing Payments Structure


Welcome to the fourth and final installment of the “Live at APEX” series on the official All Payments Expo Blog. The final session at this year’s conference addressed the benefits of linking bitcoin implementation to the existing payments structure. It focused on the market opportunities for Bitcoin in the under-served and financial wellness categories. I would like to thank our panel, Ed Boyle (Blade), Steve Beauregard (GoCoin), Cathy Corby Iannuzzelli (Corby & Company), and our moderator, Tim Sloane (Mercator Advisory Group) for joining us today. It has been an amazing 3 days and I hope you, the reader, enjoyed reading as much as I enjoyed writing.

Financial services are costliest for the poorest individuals. In fact, “[t]he average underbanked household has an annual income of only $25,500, yet spends 10 percent of that on fees and interest charged by the alternative financial service sector.” To make matters worse, the number of banks in the U.S. reached its lowest total since 1934, in 2013 and this number is continuing to decrease. Rural areas have been hit particularly hard by these bank closures and considering that 85 percent of the poorest counties in the U.S. are rural, the closures disproportionately affect low-income households.

Nearly all non-debt financial services require an initial “cash-in” in order to use the services. Many banks require a minimum balance to open and maintain a checking account, and failure to do so results in a penalty, thereby making opening and maintaining a bank account prohibitively expensive for low-income households. This forces these individuals to turn to alternative financial services, many of which charge “an arm and a leg” to use their services. The question is whether Bitcoin can provide the unbanked and underbanked with improved access to financial services. The answer is YES!

As previously discussed in, “Live at APEX: Digitizing of Money Movement, Remittance, and P2P,” Bitcoin is radically changing the remittance and P2P industries. This is because Bitcoin’s cost structure fits very well within these industries. For example, traditional remittance companies charge 8-12% per transaction, whereas a Bitcoin transaction does not require a fee. It should be noted that to incentivize the Bitcoin network to expedite the transaction, there is generally about a 4¢ fee. Nonetheless, this cost savings is large enough to radically change the remittance industry.

Moreover, unlike banks that require minimum balances, there is no minimum Bitcoin balance requirement. In fact, the smallest amount a person can have is 0.00000001 BTC, called a Satoshi, or approximately 0.00025 of a penny. Because a single bitcoin can be broken down into such small amounts, it can be used to conduct transactions in U.S. dollars, as well as in Tanzanian shilings. This has important implications for remittances and P2P payments because anyone can send value to anywhere in the world, without having to rely on a third party intermediary.

Cross-border transactions can require up to seven intermediaries before they are completed; Bitcoin requires zero. Not only do these intermediaries add to the cost that is borne by customers, but the process is also very time-consuming. This is a reason why companies such as Money Gram and Western Union are able to charge such high fees for remittances; they speed up the process. Their services are still slower, more expensive, and generally less convenient than Bitcoin. They do however solve the “last mile problem,” which is something that Bitcoin has not yet solved. While it is easy to send and receive Bitcoin, only a small number of merchants accept it and it may be difficult to convert into fiat currency, but this is changing.

More than $100 million in venture capital was invested in Bitcoin companies this past year. Companies, such as Ripple Labs and Circle Financial are designing solutions to solve the last mile problem. There has also been significant investment in Bitcoin ATM companies to make it easier to obtain bitcoin (find one near you). Plenty of other areas along the supply chain have also been invested in and are currently being worked on.

Although we are not there yet, by linking Bitcoin implementation to the existing payments structure and decreasing costs, the lives of hundreds of millions of unbanked and underbanked individuals around the world will be improved by giving them access to inexpensive financial services. It does not however end with remittances and P2P payments. E-mail was the first application of the Internet and services such as Netflix were previously inconceivable. A digital currency is only the first application of Bitcoin. The next one is just waiting to be conceived.


Matt Gertler is the Head of Strategy at the Digital Currency Council (“DCC”) and is pursuing his JD/MBA at USC. He is experienced in FinTech, having worked for Venmo, Braintree Payment Solutions, and Earnest before joining the DCC.



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Monday, February 4, 2013

Where Do YOU Think Prepaid and Payments are Headed?

The Prepaid Expo and the Mercator Advisory Group have co-authored a prepaid industry attitudinal survey. Respondents from across the entire prepaid industry will be able to voice their opinion on where they feel prepaid is headed. 


You can participate in the survey here or scan the QR code. The survey has been divided into two separate paths, with tailored questions for GPR players and closed-loop players. Participants will be entered to win a 16GB iPad with retina display.

Results from this survey will be revealed at the Prepaid Expo this March – as well as the winner of the iPad. Data from the survey is exclusive data that you will not be able to find anywhere else. You do not want to miss the opportunity for exclusive industry insights. Click here to register for the Prepaid Expo.

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Thursday, January 19, 2012

China Prepaid In Brief: What You Need to Know


Prepaid TV™ unpeels an appealing, but complex market

By Marc Dresner, IIR

At an estimated 13-17% CAGR, China’s prepaid market (approx. US$230 billion in 2010) is poised to overtake the US as the world’s largest before the decade ends.

It’s a not the model we’re accustomed to in the West—and not without its quirks—but with such a rapid adoption rate, China’s prepaid market has legs and is running fast!

Take gas cards, for example. The two major State-owned gas station operators don’t take credit cards, and dealing in cash is becoming increasingly cumbersome as more and more members of China’s expanding middle class take to the roads in cars. Solution: prepaid petrol cards! And they’re being aggressively pushed.

According to Terry Xie, Director of the International Payments Advisory Service at Mercator Advisory Group, while barriers to entry can prove daunting, China offers significant opportunities for foreign players with the right amount of capital who understand the market.

And Xie says don’t be intimidated by China's increasingly tight regulatory environment; it may actually catalyze growth!

In a three-part interview with Prepaid TV™ – the official streamcast network of Prepaid Expo — Xie provides a blueprint for navigating the world’s second largest prepaid market and some considerations for foreign interests who would like to do business in the People’s Republic.


Click on the links below to tune in!

Part I: China’s Massive Prepaid Market

Part II: Understanding Open Loop

Part III: The Regulatory Environment for Prepaid

ABOUT PREPAID TV™
Prepaid TV™ is an executive interview series featuring the leading voices in prepaid today, along with a few rising stars that you should know about.

Each month, we’ll deliver fresh insights and answers from a variety of perspectives – networks, banks, retailers, programs and providers – on the forward-facing issues that matter most to the prepaid industry.

Prepaid TV™ is produced by Prepaid Expo, the world’s largest, most comprehensive and independent forum dedicated to meeting the information and business needs of the entire stored value community.

For more information or to register for Prepaid Expo taking place March 12-14 in Las Vegas, please visit www.iirusa.com/prepaid


ABOUT THE AUTHOR/INTERVIEWER
Marc Dresner is IIR USA's communication lead. His background is in trade journalism and marketing research. Prior to joining IIR, Dresner was the 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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Wednesday, September 14, 2011

Significant Growth in Closed-Loop Cards:


Mercator Advisory Group’s recent market assessment indicates a growth in the closed-loop prepaid market, increasing by 13 percent since 2009. A closed-loop prepaid card may only be redeemed where it was purchased, whereas an open-loop prepaid card can be used at multiple locations. Growth in the closed-loop prepaid market has been driven by the In-Store Gift Card segment, which continues to grow and develop as retailers move from thinking about prepaid cards as a plastic version of paper gift certificates to a multi-functional promotions and sales tool," says Ben Jackson, senior analyst in Mercator's Prepaid Advisory Service and author of the report.

The growth in the close-loop prepaid market coincides with our nation’s recession. Are more Americans relying on prepaid cards during this economic hardship? What other factors could potentially affect the rise of closed-loop usage? Mercator Advisory Group’s chart below measures just how far closed-loop prepaid cards have grown in the U.S. within the last seven years. For full size image click here.






To learn more about prepaid cards or our 2012 expo please visit www.prepaidexpousa.com.



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Tuesday, June 7, 2011

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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Thursday, November 18, 2010

Study Says Prepaid is Primed For International Expansion

By Marc Dresner, IIR USA

If there’s any truth to the old business adage, “You’re either growing or you’re dying, “ then the prepaid industry is living LARGE overseas!

I recently received some topline stats from Mercator Advisory Group’s inaugural Global Prepaid Card Market Potential Ranking (2010), and the numbers make a compelling case for crossing the pond.

While the U.S. prepaid market – with roughly $330B in loads since 2009 – will likely remain the undisputed 600lb gorilla for years to come, Mercator’s results indicate the rest of the world is primed for prepaid.

The study pegged the aggregate prepaid market opportunity for the top 30 non-U.S. markets at a – cough – respectable $762.2B over time.

(Note: the italics indicate a caveat. Mercator emphasized that the figure above and those that follow are based on a series of relative assumptions and not projectible to a specific year, so please do not go galloping into, say, Eastern Europe without a coat and due diligence.)

BRIC markets have captured the attention and imagination of just about every industry eyeing international expansion – and they show tremendous promise for prepaid – but there is a reason they’re still referred to as “emerging” markets. Mercator’s study suggests that, at least short-term, the best investment opportunities lie in Western Europe.

The top five most promising markets for prepaid expansion are:

1. Germany ($111.0B)
2. Italy (100.7B)
3. France ($74.5B)
4. U.K. ($74.4B)
5. Spain ($45.3B)

It’s a political cliché, but this much is true of Europe: government is BIG, as in capital “B” billions big for prepaid. And this trend is not isolated to Europe. Across all 30 markets Mercator examined, government appears to be the best prospect for prepaid.

Global prepaid opportunity estimates by segment:

1. Government ($425.3B)
2. Store Gift ($164.5B)
3. Open Gift/GPR ($59.6B)
4. Payroll ($51.8B)
5. Incentive Cards ($42.4B)
6. Campus Cards ($18.6B)

Of course, the extent to which each of these segments proves fruitful for expansion differs by country and is subject to a plethora of complex market, cultural and regulatory factors.

International expansion is an intimidating and complicated undertaking, but the numbers paint a promising picture for prepaid.

So…to help U.S. players navigate this new frontier, IIR USA’s Prepaid Expo will close Wednesday March 9th with a series of presentations specially focused on international expansion.

If this particular study is of interest, you’ll be pleased to know that Mercator’s director of international advisory services, Terry Xie, will be among those speakers. Xie plans to review the study findings and implications in detail and offer strategic recommendations for prepaid companies looking to cross borders.

Two final notes:

First, I’m sure some of you took issue with my comment about the relative nascence of BRICs for prepaid. I’m just the messenger. India, for example, ranked 13th out of 30 markets studied.

A panel also slated for Wednesday March 9th at the Prepaid Expo will focus exclusively on India, and will provide deeper insight into the country’s growth potential as well as barriers to entry.

Second, if you are not already aware, IIR USA has joined forces with the UK’s Gift Card and Voucher Association to bring you The Gift Card, Gift Voucher, and Reloadable Card Event on March 30 in London. If Mercator is correct, you won’t want to miss the most comprehensive prepaid event on the continent!


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



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Wednesday, December 2, 2009

Good News for Prepaid Cards?

DigitalTransactions.net sees a "sunny" forecast for prepaid cards as we continue with the tough economic climate. Says the article, "...But prepaid cards remain the one bright spot, according to a new market analysis from Mercator Advisory Group Inc. Maynard, Mass.-based Mercator’s latest annual forecast, for 2009-12, predicts that combined load volume on closed-loop and general-purpose, or open-loop, prepaid cards will hit $525.8 billion in 2012, up 112% from $247.6 billion last year."

For a more in-depth analysis of this forecast, please visit the original article.

The Latest Forecast Is Especially Sunny for Prepaid Cards

Do you think that Prepaid cards are set to flourish? What other factors may be contributing to the success of prepaid cards?



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Monday, September 21, 2009

Mercator's Latest Research Shows Growth in Open Loop Prepaid Card Market

This post from PR-Inside highlights how Mercator's 6th Annual Network Branded Prepaid Market Assessment shows that prepaid has been growing during the economic downturn and will continue to grow after as well.

Tim Sloane, Vice President of Client Services and Director of Mercator Advisory Group's Prepaid Advisory Service mentions:

"Mercator Advisory Group believes the prepaid industry will continue to show growth in 2009. However, being in the right channel with the right product is becoming critical to the growth of prepaid products and represents a significant volume opportunity for issuers. It is clear to Mercator that no other payments market is riding out the current economic downturn as effectively as prepaid and I can't think on any better payments market to be in during a recession."

Make sure to check out the post for some highlights of the full report.



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Wednesday, August 12, 2009

Consumers Gain Control of Finances with Prepaid Cards

According to this latest post on PRNewswire more and more consumers are turning over to using prepaid cards instead of credit cards in order to regain control of their finances once again. John Chaney, CEO of PreCash mentioned "Prepaid debit cards combine the best features of cash and credit cards. For consumers who are watching their budgets, the newest generation of prepaid cards are better than a credit card."

A recent study by Mercator shows that prepaid usage has nearly doubled from $4.2 billion to $7.2 million this year. With the economy at a low, the future seems bright for prepaid.



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Friday, March 27, 2009

Prepaid Cards More than What you Bargained For?

Washington Independent recently published an article that although mentioning that reloadable prepaid cards among the "unbanked" have grown tremendously the past two years according to market research from the Mercator Advisory Group, there are several downsides to using prepaid cards.

The article states that even though prepaid cards don't charge overdraft fees, they still remain expensive to use. Many card issuers can charge up to $10 a month on maintenance fees, not to mention fees for reloading the card and customer service fees. Prepaid cards at times can also incur cancellation fees, depending on the issuer.

So, are prepaid cards expensive in your opinion? What are your thoughts?



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Tuesday, August 26, 2008

5th Annual Network Branded Prepaid Market Assessment

Keith KirkPatrick, the executive director for the 2009 Prepaid Card Expo, recently forwarded to me the first of Mercator Advisory Group’s annual series of three reports that will provide analysis of the prepaid industry. The report will include a review of the dollars loaded in network branded prepaid products in 22 different market segments.

Here are a couple of highlights that stood out:

  • There was a total load of $38.66 Billion in 2007 on all Network Branded prepaid solutions. This is an increase of 44.5% from 2006. The total load for all 33 Prepaid Segments in 2007 (Open & Closed) was $218.3 Billion, which is $20.4 Billion more than in 2006, an increase of 10.3%
  • Network Branded Gift Cards grew by 70%, becoming a $5.03 Billion market at the conclusion of 2007.

Members of the Mercator Advisory Group have full access to the report which contains 30 pages and 13 exhibits. Make sure to visit the site and become members in order to stay up to date with the latest prepaid trends.



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