Home Hot Topics It’s time to stop thinking about prepaid as a product

It’s time to stop thinking about prepaid as a product


Credit and debit are still popular payment options for consumers, but those products have suffered from a dearth of innovation. Prepaid, on the other hand, is where all the innovation is happening. Why? Because there’s a large growing market for prepaid, and it’s all use case driven. The prepaid space is inherently more competitive, making innovative features and customer experience important differentiators to consumers.

Too often prepaid is thought of solely as a product, a “J” hook card you can buy at a retail location or a payroll, gift or travel card. The reality is that prepaid is so much more than a product. It’s a solution—a solution that enables virtually any payment use case and embeds an exchange of value into a business process.

For example, airlines can combine a prepaid card with their loyalty program to deliver significantly more value to their premium customers. Instead of a plastic card that does little beyond providing entrance to an airline club, when merged into a prepaid card, it can become a branded, differentiated experience with a multi-currency payment wallet. Gen Y and Millennials who aren’t drawn to traditional banks with branches and products with fees want better ways to save, manage, and spend their money. They are drawn to digital “first” features found in prepaid like offers applied during a transaction and P2P transfers to share money with friends and pay bills.

Use cases like these help explain why the prepaid card market is growing and expanding from its roots in the underserved and young markets into middle and high net worth households and consumers of all ages.

With prepaid, there’s a premium on innovation. Unlike credit or debit card products, it’s unusual for a customer to carry multiple prepaid cards because there’s no real benefit in doing so. This means that to make it the preferred choice of the customer, a prepaid card needs to have innovative features that set it apart from the rest. And the program doesn’t even need to have a card. Prepaid embedded in a mobile wallet or app can store value and enable transactions for a consumer experience where the financial application enables a broader value proposition.

The “secret sauce” to innovation in prepaid is an integrated processing platform. Such a platform delivers a great customer experience that marries traditional “banking” functionality with loyalty programs, real-time messaging, card and spending controls, multiple purses, and multiple currencies. And it does so without sacrificing performance or reliability.

Legacy credit and debit processors struggle to meet the evolving needs of the dynamic payments market by focusing solely on the transaction, optimizing only for scale and efficiency at the expense of innovation. Prepaid processing platforms must execute the payment process perfectly every time. But the growing use cases served show that innovation is paying off because a one size fits all approach just does not work. Prepaid is not a product; it’s a solution. And, it’s a lesson that can be applied to credit and debit as well.

Want to know more about prepaid innovation? Cathy Corby Iannuzzelli, SVP, Global client Success, I2C INC will be moderating the panel discussion prepaid innovation 10: Harnessing innovation in B2B & B2C Prepaid, taking place at the  All Payments Expo in New Orleans, March 21–26, 2016.

Cathy Corby Iannuzzelli
Cathy is a recognized thought-leader in the payments industry, with 30 years of leadership experience working with major financial institutions and processors in strategy, product, marketing, business development, and relationship management. As founder and president of Corby & Company, Inc., she assisted processors, banks, program managers and distributors in developing, implementing and managing prepaid programs.

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