Summation of Challenges for adhering to CARD act

US Banker takes a good cross-industry look at the fallout of the CARD act on gift cards

Excerpts:

But implementing the required changes will be a challenge, and many worry the short time frame for doing so could hurt sales just as the busy holiday season starts to get underway.

"The industry was hoping they could keep the old plastic on the shelf until January because of the holiday season coming up," says Judith Rinearson, a partner at law firm Bryan Cave, who represents the Network Branded Prepaid Card Association and Retail Gift Card Association. Instead, "everyone is scrambling," she says.

Prepaid players such as American Express and Green Dot Corp. prepped for the regulations by dropping fees, adding disclosures or making changes to the expiration dates on their gift cards. Still, many in the industry are worried about upfront costs that issuers are likely to pass on to consumers—which ultimately could dampen sales.

...

They also anticipate a possible shortage of prepaid cards for sale to consumers, because issuers are going to have to replace cards sitting on retailers' shelves that won't pass the Fed's muster after August.

John Barbella, senior vice president of the payment solutions group at the $2 billion-asset Bancorp Bank in Wilmington, Del., says the main challenge for prepaid issuers like his company is coordinating with all touch points in the gift-card loop—distributors, card associations and retailers—to account for the whereabouts of the stock that needs to be replaced.

...

Rinearson says manufacturers are having trouble including all the necessary disclosures of terms and conditions on the cards. "The rewards cards have to have the words 'promotional rewards card' on the front—it can't be a sticker," she says. And if a card expires in less than seven years, then there also has to be a disclosure on the card's face explaining that the "card expires, but the funds do not," says Rinearson.

Prepaid Expo falls in early March next year, so it should be a good time to take a look at the first wave of fallout of the August implementation.

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Prepaid Expo Europe 2010: a truly international and interactive event

The dust has settled on Prepaid Expo Europe, and we want to thank all of the Sponsors, Speakers and attendees from over 19 countries that helped make our first Europe-based event a great success.

Our much lauded conference Chairs Matthew Lanford of MasterCard and Brian Dunne of Action Solutions guided our 3 days of sessions with passion and enthusiasm, which created interactive sessions addressing the pressing issues facing myriad European prepaid issues

Keynote Speaker Hamish Taylor kicked off the event by sharing his experiences at the helm of Eurostar, Sainsbury Bank, British Airways, to name a couple His imaginative, innovative ways of solving business problems by plucking ideas from outside the industry to solve business problems by identifying customer benefits. These themes of innovation and listening to the customer carried throughout the event, with our speakers referencing how these very ideas should be applied to the prepaid industry.

Among the session highlights: Anthony Olsen of Paypal Europe, Thaer Sabri of Electronic Money Association and Siobhan Moore of Salans took us through the regulatory minefield of doing prepaid business throughout Europe, answering dozens of questions from the crowd. Iwan Mathys talked about the details of his wildly growing prepaid business at Swiss Post with his distribution guru Christian Lindner from Retailo. Tony Craddock of Global Prepaid Exchange hosted a conversation about contrarian views on loyalty and incentives with Mark de Quervain of Vue Entertainment, Niki Akhurst of Smartbox and Kevin Turnbull from Spafinder. Steve Shutts talked through how he and the Norton Group solved Animal's prepaid programme requirements. And the case studies and panel discussions

In addition to the impromptu networking taking part throughout the Conrad Brussels, attendees, speakers and sponsors all gathered for Prepaid Expo's receptions, the highlight of which was MasterCard's Diamond Cocktail Reception. All attendees received a glass of champagne with a stone in the bottom… but only one lucky delegate from Brazil walked away with a real .75 carat diamond valued at 2,700 Euro!

(Right: Attendees gather around the Prepaid Expo jeweler to see if their stone is the real deal! Below: Matthew Lanford of MasterCard presents diamond to winner)

In all, it was a great launch of the Prepaid Expo event into Europe. Have ideas and suggestions about next year's event? Email me! hgoldman@iirusa.com

ATTENDEES: Look for your e-survey in your inbox. Fill out the evaluation for chance to win a free pass to a future Prepaid Expo (surveys must be completed by May 26)

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Prepaid cards versus rebate cards

In a recent article at Fox Business, they look at the difference between prepaid cards and rebate cards given out to replace rebate checks. Rebate cards are not currently protected by the Credit CARD Act of 2009. Many consumers confuse rebate and gift cards, as they do look similar. But they aren't because a rebate represents free money to a consumer, rather than money that has been placed on a card by a consumer to make purchases. The best way for consumers to avoid fees and expiration on rebate cards is for them to use them.

What do you think? Should rebate cards and prepaid cards be held to the same standards? Or is there a clear distinction between the two? While the money loaded onto a rebate card isn't the consumers, do they still have a right to always have access to that money?

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Pakistani government to implement prepaid cards for electricity payments

Citizens of Pakistan will soon be paying for their electricity via prepaid card. A recent article discusses the implementation of payment for the utility through prepaid cards. By citizens paying for power through prepaid cards, the government won't be losing money due to electricity theft and individuals not paying their bills. It will save the government money in respect that they will no longer have to find individuals who are stealing electricity. Read the full article here.

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Which prepaid cards win with consumers?

In a recent article at The Storefront, they reveal the top 10 most frequently purchased prepaid cards by consumers. A survey conducted by Global Prepaid Exchanges shows that these are the most popular among consumers:

1. Bath & Body Works
2. Red Lobster
3. iTunes
4. Amazon
5. Nordstrom
6. T.G.I. Friday's
7. Lowe's
8. Walgreens
9. Olive Garden
10. Home Depot/Outback Steakhouse (a tie)

Read the full article here. Does the ranking surprise you? Are there any cards that were left off the list?

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What about the remaining balance on prepaid cards?

An article in the Silicon Valley Mercury News looks at what happens to the remaining balance on prepaid cards. According to the article, laws state that if a balance left on a card is less than $10, then the card holder can request cash. Do you think this is more beneficial to the card holder or the company? If a card holder knows that they can receive cash on remaining balances, will this encourage them to make more re-purchases on those prepaid cards?

Read the full article here.

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Do you think gift cards will triple by '14?

Hollie Goldman, Conference producer for Prepaid Expo, recently highlighted some key findings from the Javelin report on our Prepaid Professionals LinkedIn group. Here it is below.

The Javelin report discusses key trends and users of prepaid cards and the market forces influencing change in the prepaid space. Javelin forecasts that prepaid usage will more than double by 2014, while gift cards will more than triple — with the latter expected to attain $6 billion five years into the future.

Do you think this will cause gift card usage to change dramatically over the course of the next 5 years?

The article can be found here: http://atmmarketplace.com/article.php?id=11841

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Prepaid market falls then rebounds in 2009

The prepaid industry fell in 2009, but began to rebound by the end of the year. US consumer usage fell from 61% from 66% earlier in the year.

According to Mary Monahan, managing partner and research director of Javelin, "Lower costs and enhanced functionality are luring consumers back and boosting the volume and dollar value of cards they purchase."

Read the full article here.

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Starbucks Prepaid Cards go Mobile

According to Mashable, there are now 1,000 Starbucks stores across the nation located in Target that can sync up with the Starbucks Mobile Card App. The iPhone app can be used to both make purchases and add money to the card.

What does this mean for the prepaid industry? Do you see more companies coming out with apps that will allow one to manage prepaid cards on their SmartPhones? While it's only available at 1,000 Starbucks across the nation, I think many companies will take note and strive to make their prepaid cards available for use in more than one form.

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Healthcare Reform, How will it affect the Prepaid industry for those involved with healthcare credit cards and debit cards?

This topic discussion recently came up on our Prepaid Professionals LinkedIn Group and it's one that should be on the mind of prepaid issuers in the healthcare industry. Where do we go from here?

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Zygna to start providing virtual prepaid cards

According to Virtual Worlds News, Zynga is teaming up with InComm and will be providing virtual prepaid cards for their suite of online games. Prepaid cards are already available at retail locations including 7-11, Best Buy, Target and others. Zynga produces virtual games including Farmville, Mafia Wars and YoVille. Read the full article here.

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Lessons from a Master Thief... only at Prepaid Expo Europe

New Keynote Speaker Announcement for Prepaid Expo Europe

Hamish Taylor: A “Master Thief” Provides Insights into How to Ensure Long-Term Growth in the Prepaid Industry
Former CEO of Sainsbury Bank and Eurostar shares how to apply innovative strategies to reap the benefits of a burgeoning sector

Prepaid programs in Europe are at risk of not achieving their true potential. Executives anxious to jump on the Prepaid and gift card bandwagon might not be doing the proper due diligence to ensure that what they’re offering is what their customers actually want. Hamish Taylor has sat at the helm of Sainsbury Bank and Eurostar and led branding at British Airways... and his biggest successes with these legendary brands came as a result of applying revolutionary strategies from outside the given industry. His record of innovation by transferring ideas between sectors has garnered him the dubious title of “master thief”—but it is these very tactics from established industries that need to be applied to the relatively new Prepaid space in order to ensure success.

Prepaid Expo Europe is honoured to have Hamish share his amazing and entertaining anecdotes about turning businesses around by going “beyond the data” and listening to the customer. Hamish will offer specific actions that you can apply to your prepaid program to ensure that your strategy is a growth strategy, ensuring long-term market dominance.

View the Prepaid Expo Europe Homepage

View the most up-to-date Prepaid Expo Europe agenda

Register Before 16 April for € 200 off the standard rate, use code XX2003BLOG1

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MasterCard and Visa expected to see major profit increases

With the use of prepaid cards growing 22% a year over the next three years, Visa and MasterCard are both expected to grow their profitability. Much of this is accredited to the wide use of the cards. It is believed that by 2012, $526 billion will be loaded on to prepaid cards. Read the full article here.

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Paragon Dynamix launches credit score enhancement for prepaid cards

As we reported yesterday, a few prepaid card companies are working to help users enhance their credit rating. Paragon Dynamix is one of those companies. In a press release, the company says that the new platform, allows any prepaid debit card with a bill pay feature to be able to report payments to the three major credit bureaus: TransUnion, Experian and Equifax.

“Through a special relationship, we have taken a very complicated (and previously unattainable) process and made it into a simple, once-a-month task for prepaid debit card program managers”, said Paragon’s President Phillip Huston.

The fully functional data-reporting platform is a turnkey solution for prepaid debit program operators. “In designing the product, we knew it had to be easy to implement, be automated to report monthly, and that it had to actually impact an individual’s three-bureau credit score...up or down,” said Huston.

Learn more by downloading the press release: Paragon Dynamix launches credit score enhancement for prepaid cards

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It’s Coming: a True Credit Builder for Prepaid Debit Cards

GetDebit reports that several prepaid debit card issuers and processors have committed to a new feature that will take recurring monthly payments made on their billpay platform, and report them to the three major bureaus, Equifax, TransUnion and Experian.

The recurring monthly payments (anything with a regular monthly billing cycle, such as rent, car insurance, cell phone bill, utility payments, etc.) are reported as trade lines on each of the three bureaus.

Learn more: It’s Coming: a True Credit Builder for Prepaid Debit Cards

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Conference Roundup: IIR USA’s Prepaid Expo

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."

Original Post from CMB Blog: http://blog.cmbinfo.com/bid/35755/Conference-Roundup-IIR-USA-s-Prepaid-Expo

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Prepaid Expo team mourns passing of Sir Brian Pitman

The Prepaid Expo Europe team was saddened to learn of the sudden passing of Sir Brian Pitman. We were truly honoured to add Sir Brian, legendary banker and inspiring businessman, to our upcoming program.

Our condolences and our prayers go out to his family and friends.

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Prepaid Expo USA 2010 Wrap-Up

If you haven't yet checked out our live footage we've captured from the Prepaid Expo USA 2010 event in Las Vegas make sure to see it on the Prepaid Expo website. You'll find a Flickr slideshow as well as some YouTube clips we've uploaded. Don't forget to upload some pictures if you attended the conference!

Also, here's a look back at the Live blog posts from the event.

Clinton Praises Prepaid at Expo

Panel Discussion: Card ’09/Regulation E

First Data to resell DimpleDough solution

Panel Discussion: Managing the Media Landscape

State of the Market: Prepaid Around the World

Developing an International EBT Business: Winning Strategies for Multi-Country Prepaid Benefits

The Value of Data Analysis & Segmentation for Prepaid Healthcare Portfolio

Keynote Address: Robert L. Johnson, Chairman, The RLJ Companies

Government Prepaid Programs Case Study: Direct Express Debit MasterCard

State of the Market: Unbanked & Underserved

Market Focus Session - Implementing Prepaid Payroll in the Transportation Industry: Yellow Cab Co-Op

Panel Discussion: State of the Market Open Loop Programs

The Bancorp Bank Teams Up with UniRush to Issue the Prepaid Visa® RushCard

The 2010 Paybefore Awards Ceremony

Panel Discussion: A Vision of Prepaid Presentation

Green Dot Opening Opening and Keynote Address - How ING Direct Succeeded By Being A Rebel With a Cause: Driving Success Through Innovation

Opportunities for Closed Loop Gift Card Growth

Prepaid Expo USA 2010 Kickoff!

Welcome to the Prepaid Expo USA 2010 Conference!

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The world’s largest conference company announces the launch of the Performance Marketing Expo to be held this September in Miami Beach

IIR (The Institute for International Research), the company responsible for industry leading brands such as FUSE, Front end of Innovation, The Market Research Event, GAIM, and PREPAID Card Expo, is launching a brand-new affiliate marketing/performance marketing event.

The Performance Marketing Expo, will take place September 27th-29th in South Beach at the Miami Beach Convention Center. Consistent with other IIR conferences, The Performance Marketing Expo features best-in-class educational sessions, industry insider top level speakers, super-affiliates with proven earning power, the premier online merchants and retailers, affiliate networks, and hundreds of affiliates eager to network and grow their business (and their earning potential).

What makes this event stand out from all the rest? It will include facilitated business networking and quality content brought to life by the best storytellers, representing merchants, affiliates and networks.

TOP SUPER AFFILIATES JUST CONFIRMED AT The Performance Marketing Expo
Stephanie Nelson, Coupon Mom
Todd Martini, Alex's Coupons
eCoupons * MarketAmerica * TrialPay * Parent Media
The program is currently being finalized. For More Information about getting involved, please email kpotanka@iirusa.com or visit our contact page if you have specific questions.

Join The Performance Marketing LinkedIn Group

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Clinton Praises Prepaid at Expo

Former U.S. President Bill Clinton held up prepaid as an example of the technology available that can help solve some of the nation’s thorniest problems during his keynote address at Prepaid Expo USA in Las Vegas yesterday. “The world is too unequal, too unstable and too unsustainable. The great test for the United States is whether we can find profitable ways to answer the ‘how’ question. Can we find solutions that reduce inequality, instability and unsustainability?” Clinton offered up prepaid as a way to address some of the profound problems facing the country today, calling the industry “key” to helping mitigate those problems. Clinton suggested six ways prepaid could help. He said prepaid could “bridge the gap between the cash economy and the mainstream.” He noted the rise of prepaid in government programs, especially the Direct Express program for receiving Social Security benefits on a prepaid card, calling them a “safer, cheaper and more convenient way to do your business,” that cuts down on overhead for government. Clinton called out other prepaid programs that give teens tools to enhance their financial literacy, make remittances available to immigrants sending money home and, with the devastation in Haiti weighing heavily on his thoughts, a convenient way to provide disaster victims aid. “The Red Cross was able to save $7 million, even before Hurricane Katrina, by replacing the paper process with prepaid cards.” Clinton spoke to 1,700 attendees at the industry’s largest conference just 10 days after having two stents implanted to restore blood flow to a clogged artery.

Used with permission from Paybefore.
Link: http://www.paybefore.com/

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