Time for prepaid to take the stage
With so many developments in every inch of payments, one segment that tends to get neglected is prepaid.
While not considered glamorous or trendy like Apple Pay, it’s starting to make real strides in that direction. The problem is making sure people know about it.
At the Prepaid International Forum’s (PIF) Innovation Day 2016, a panel of experts on the prepaid market got together to discuss the sector. One thing that kept cropping up was reputation or how prepaid is actually viewed by the public.
Samee Zafar, director at Edgar, Dunn & Company, believed that prepaid is ‘very versatile’ and ‘prepaid accounts are set to be more relevant’.
The 2016 Advanced Payments Report shared this view and stated: “General purpose reloadable prepaid cards do much more than just store value.”
Howard Allen, CFO and co-founder of Payfriendz, said: “Prepaid needs to move away from its old associations.”
If unsure what that means, Clint Wilson, CEO of ParentPay, defined its ‘old associations’ as ‘gambling and adult content’.
Alastair Graham, CEO of agechecked.com, summed it up nicely with regards to this trend. He said: “Most consumers don’t know or care what prepaid is. Prepaid is in a fantastic position to pick up customers quicker than banks can.”
This is a point rarely talked about. Most consumers would not even recognise the concept of prepaid cards. Despite the prominence of gift cards, and the Oyster card in London, these are not thought of as prepaid cards, simply cards.
Graham continued to say that due to prepaid systems being, on average, much newer than banks’ systems, they could adapt quicker than banks lumbering with the weight of legacy systems, and could therefore attract customers at a faster rate.
Allen agreed and added: “Prepaid is a perfect alternative account. Banking is clunky; it is very ‘in your face’ to sell you something, not to service you.”
Wilson thought that prepaid companies had a different set of values to banks. He said their goal was firstly to ‘deliver something convenient and valuable’ before finding a value for themselves.
A member of the audience asked if Facebook was on a similar wavelength to prepaid companies with regards to service. Allen didn’t think so.
He concluded: “Facebook is a platform and a bit indifferent to payment mechanisms. I think they just want to own the customer journey. I don’t think prepaid is a thrust for Facebook.”