Legislative problems aside, prepaid still
offers great opportunity to issuers – provided the value
proposition is right.
Bad news tends to make big news. So it is
little wonder that the impact of
Germany’s home-grown anti-money laundering regulation was the
biggest news in the prepaid market this year. The AML laws were
passed in the German Bundestag at the beginning of December and
under the regulation, any e-money product distributor will need to
apply and comply with fairly stringent
Know Your Customer (KYC) standards.
Go deeper with GlobalData
Although the strict legislation looks likely
to curb money laundering, its provisions also mean that prepaid
cards can be reloaded up to a maximum of just €100 ($133.82) before
a full KYC procedure needs to take place.
The issuer then needs to archive that
information for five years – turning Europe’s largest economy into
a restrictive, complex and costly environment for the globally
growing and lucrative prepaid business case.
Regardless, from Milan
to
Mumbai, where we held our annual Prepaid Summits, prepaid is
growing significantly. The proposition continues to see major
investment from all major card schemes. MasterCard now sees huge
uptake among Europe’s mass market. But in Milan, VRL research
indicated mobile payments were still facing barriers to consumer
adoption, although discussions at the event did conclude prepaid
could play a key role in overcoming them.
One way to overcome this would be partnering
up: According to
Vesta, partnerships with mobile operators, which already have
an existing expertise in prepaid top-up, content purchases and bill
payment services, could drive the adoption of prepaid
m-wallets.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataFor alternative payment methods such as
prepaid to take off, banks, telcos and retailers have to pool their
expertise to offer incentives to drive mobile payment adoption. One
country that stood out in particular was
Japan, where consumers have started using prepaid and post-paid
e-money purses which are integrated into payments cards and mobile
phones to make quick and convenient contactless transactions both
at the POS and online. Its approach to technology, business models
and – perhaps most importantly – a light-touch regulatory regime,
has helped prepaid e-money become a genuine and powerful
alternative to cash.
Take
Lyca Mobile, which has developed from selling international
phone cards, to a telecoms network, to launching a payment card
programme. As a prepaid mobile network, Lyca is perfectly
positioned to capitalise on the use of prepaid for international
remittance. And this is the biggest opportunity in m-commerce.
In 2011 we also looked at prepaid in terms of
its potential to turn emergency response contributions, welfare
payments and NGO disbursements on its head. Authorities can have
control as to where the money is being used and how it is used.
2012 will undoubtedly be an exciting year –
many industry insiders have forecast the take-off of NFC and
m-/e-wallets in 2012, so let’s see what type of partnerships
emerge.
