Market opportunity for pre-paid cards set to grow


Pre-paid is set to undergo explosive growth in the coming
year, according to a survey conducted by Firstsource Solutions in Miami.



Fifty percent of payment industry professionals surveyed
expect wider adoption of pre-paid cards as more consumers move away from credit
cards and cash. Nearly 30 percent of respondents said that more consumers would
become loaders” (i.e. depositing more money to their pre-paid accounts).



We’re seeing a growing interest in pre-paid cards in
consumer segments that weren’t originally drawn to using such a form of
payment,” said Tim Smith, senior vice president, Banking Financial Services
& Insurance, Firstsource.



Our findings support recent research about the upward
trend in the pre-paid market which shows that an estimated $37 billion was
loaded onto prepaid cards last year, compared to $18 billion in 2009 and $9
billion in 2008,” Smith added.



Survey respondents indicated that there is a huge
opportunity for the pre-paid market to expand its customer base beyond the most
likely consumer targets. Over 40 percent indicated that increased scrutiny from
regulators regarding loading and set-up fees will pose the greatest risk to the
industry. Additionally, 47 percent said educating card holders on the nuances
of a pre-paid will be critical to successful adoption and overall growth in the



Firstsource’s survey
also examined sentiment on the current regulatory climate in the payments
industry. While Dodd-Frank was top-of-mind for 45 percent of payments
professionals, the Consumer Financial Protection Act has fallen off the radar
for most industry executives (only 9 percent of respondents indicated it was
currently a priority issue).



The majority of survey respondents (66 percent) said that
social media platforms have played a critical role in enhancing the customer
experience. 74 percent of the respondents agreed that social media will be a
significant factor in customer service in the future.



Nearly 35 percent said their organizations use Twitter to
connect with customers and monitor online conversations while 30 percent used
Facebook to do so. Only 20 percent used blogs, while 18 percent used video
sharing or other forms of social media.



Despite contrary belief, social media adoption has become
much more sophisticated in the payments industry. Banks and credit card issuers
are using social media platforms not only to improve the customer experience
but to develop new products and service offerings based on customer



By Team
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