Prepaid Distribution in the United States
Mercator Advisory Group, November 2012, Pages: 25
New Research Shows How Closed-Loop Prepaid Program Managers Drive Volume And Program Profitability
For prepaid card program managers, distribution is top priority. New research from Mercator Advisory Group, Prepaid Distribution Strategies in the United States, examines the methods available to prepaid card program managers as they look for new opportunities to get their cards in front of potential customers.
The report provides an overview of ways that prepaid card issuers and program managers can expand their reach by placing their cards in new locations and leveraging new technologies. The report also discusses the dollar volume loaded onto prepaid cards in both direct-to-consumer and business-to-business channels.
Distribution plans must include both business and technological facets, and this research covers the current state of the digital card market. While these cards and channels will become increasingly important, until now adoption has been slow.
The prepaid card industry needs to study what business channels and technological channels will give them a competitive edge. It is not enough to simply be where your competitors are or to beat them to a market. The report also considers the actions issuers and program managers should take regarding mobile wallets.
"Due to thin margins, prepaid programs depend on volume for profitability. So, getting cards into many hands is critical to success," Ben Jackson, senior analyst, Mercator Advisory Group's Prepaid Advisory Service and author of the report, comments. "Program managers, whether handling open-loop or closed-loop cards, have a variety of distribution options. Understanding those options requires a grasp of both business and technological considerations."
Highlights of the report include:
- The factors affecting profitability for prepaid card issuers, the eight main channels used to support card sales
- The channel that witnessed growth even after government mandated changes in regulations implementing by the CARD Act of 2009
- Findings from Mercator Advisory Group's CustomerMonitor Survey Series showing how card buyers seek out prepaid cards and that their preferences are subject to change
- The advances offering new ways to sell cards to customers and how quickly retailers and consumers are adopting them
- The approach growing in popularity with program managers selling general purpose reloadable cards
-Business-to-business distribution types, the engine driving growth, and the business considerations needed in distribution plans.
Executive Summary
Introduction
Technology and Distribution: Plastic Remains the Dominant Form
Mobile Prepaid Cards
Virtual Prepaid Cards
Understanding the Prepaid Distribution Channels
Internal Channels
External Channels
Examining Segments in External Distribution
Card Malls
Open Money Financial Services Cards (General Purpose Reloadable Cards)
Business-to-Business Distribution
Conclusion
On the Business Side, Multichannel Distribution Is Essential
On the Technical Side, Diversity Will Remain
End Notes
Copyright Notice
- 7-Eleven Inc.
- AAA
- Account Now Inc.
- Ace Cash Express
- Advance America
- Affinion Group
- Aimia Group (Formerly Carlson Marketing)
- American Express Co.
- Apple Inc.
- Bed
- Bath & Beyond Inc.
- Best Buy Co.
- Blackhawk Network
- Cash America International Inc.
- CashStar Inc.
- Check City
- CoinStar Inc.
- Community Financial Service Center
- Dillard's Inc.
- DimpleDough Inc.
- Discover Financial Services
- Dunkin' Brands
- Gap Inc.
- Giftango Corp.
- Google Inc.
- Green Dot Corp.
- H-E-B
- InComm
- iCardMall.com
- Isis
- JPMorgan Chase Bank
- Maritz Holdings Inc.
- MasterCard International Inc.
- Murphy Oil Corp.
- National Retail Federation
- NetSpend Holdings Inc.
- SCVNGR Inc. (DBA LevelUp)
- Speedway LLC
- Starbucks Coffee Co.
- Target Corp.
- Transaction Wireless Inc.
- UniRush LLC. (RushCard)
- Visa Inc.
- Wal-Mart Stores Inc.
- Winn-Dixie Stores Inc.
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