From Milanto Mumbai, prepaid is growing significantly. The proposition continues to see major investment from all major card schemes, who remain firm in their belief that opportunity abounds.
This issue of Cards International really does present a global picture. We discuss the major anti-money laundering problems faced by issuers in Germany, look at the development of e-money products in Japan, and in our country survey identify particular prospects in Peru.
Go deeper with GlobalData
But the conversation has moved on from identifying opportunity to capitalising on them. And is that happening as quickly as the schemes would like? No. There is certainly frustration around the way prepaid is marketed, and to who. Visa, MasterCard and American Express all brought interesting research to the table at Prepaid Summit Europe.
The picture painted was a fascinating one. The consensus among delegates (and backed up by Visa Europe primary research) was that online spending is the primary driver behind prepaid. This is logical, particularly in Europe where the unbanked population is relatively small, and the e-commerce landscape is still rather fragmented.
So in Europe, prepaid cards are primarily a solution to the fear of online payments fraud. A survey conducted by IT company Avira has found in a July that 70% of consumers either do not shop at all online or do it, but are worried about their financial security.
But what was really interesting, according to the aforementioned Visa Europe research, was the way the cards use quickly extended beyond the world of e-commerce. The key message was that while general purpose reloadable prepaid products should be marketed as convenient and a secure way to pay online, issuers need to be poised to develop wider relationships with customers who take them.
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By GlobalDataMarketing a prepaid card on its strength as a budgeting tool may not, therefore, be the best approach, but adding functionality to the product that enables people to use it as such is clearly important.
New thinking
American Express Laura Kelly caused ripples of concern and admiration when she discussed what she hopes will be the issuers cash-killer a prepaid card with no purchase or ACH reload fees. In fact, the only fees it does incur are for ATM withdrawals and cash reload.
As such, this product is overtly being marketed at the banked segment. And with the Durbin Amendment starting to bite, the price point of that cash reload fee could see prepaid products competing more directly with current (checking) accounts.
James Ratcliff
james.ratcliff@vrlfinancialnews.com
