The Prepaid Value Chain Exposed
NEW RESEARCH REPORT BY MERCATOR ADVISORY GROUP
Prepaid products are based on design tradeoffs that select attributes from hundreds of options (fixed amount vs. variable amount, embossed vs. named vs. anonymous, or Visa vs. MasterCard vs. regional EFT network support, etc.) as well as hundreds of go-to-market models. “The Prepaid Value Chain Exposed” reviews these considerations and go-to-market models and introduces the Value Chain Map, a tool for planning and comparing prepaid implementations.
“By using the Value Chain Map to help readers understand the difference between existing Prepaid Cards, including: Prepaid Payroll, Open Prepaid Money Cards, Open Prepaid Gift Cards and Prepaid Malls (all defined categories in the report), this report not only introduces a valuable tool it also shows how that tool can be leveraged to great advantage…” according to Tim Sloane, Director of Mercator Advisory Group’s Debit Advisory Service and author of the report.
The report also identifies the regulatory environment that has created significant risk for early adopters deploying prepaid solutions that operate over traditional credit and debit networks through convenience stores and other retail channels. The report indicates that the credit and debit networks have had a difficult time adjusting their operating rules to meet the needs of prepaid solutions and that in the rush to bring product to market there is often a lack of consistency in how the rules are applied — especially regarding consumer protection. But, the consumer is not the only one who should be careful, this report also identifies a potential risk that every merchant faces when selling these products in any of the states that regulate money transmitters and how enterprise operations that intend to deploy prepaid solutions for payroll, benefits, healthcare or insurance can be left exposed to potential litigation if they don’t make sure a clause that is common in most end user agreements is not removed.
On the Prepaid Mall front (where merchants are offering not only their in-store cards but also cards of affinity merchants at checkout), this reports looks at a market that is fast becoming a footrace, where the winners will have either the largest aggregation of retail outlets or the largest aggregation of prepaid products and services. This has made for strange bedfellows and the consolidation has just begun. The report identifies where additional competition will likely come from, including existing processors, networks, and wholesale and retail distributors.
In analyzing these markets and options, this report introduces a methodology that will help prepaid organizations better understand their competitive strengths and weaknesses and help plan go-to-market strategies.
Clearly, the major prepaid markets are evolving at an incredibly fast pace and the consolidation that began in 2003 has picked up speed in 2004 as major processors, issuers and networks decide the time is right to buy into the market or decide to widen current offerings into new prepaid segments. This report offers a survival guide to those in the business and a buyers guide to those considering acquisition of a prepaid solution.
One of Ten (10) Exhibits included in this report
The report is 35 pages and contains 10 exhibits.
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