Shape of category continues to shift as opportunities expand.
New services and the mobile wallet will continue to shift what’s required of the register, so communicate with your point-of-sale provider to make sure your system has some longevity.
When it’s time for an upgrade, discuss with your provider the services you’d like to be able to accept—near field communication payments, chip-and-PIN cards—and work together to determine the best system.
Also look at your system’s capabilities and what new technologies might fit. Jackson points to Starbucks’ mobile application: “They said, ‘OK, we know we have scanners in all of our stores, so we’re going to create a bar code that can be scanned by those scanners. Here’s what we have, here’s what we can do with that.’ ”
Along with advances to prepare for the influx of the mobile wallet, Betti recommends talking to your POS provider about capabilities to do a swipe reload and a variable amount denomination to be loaded onto cards. InComm works with a number of POS companies to make this available, though some older systems still don’t allow for it.
And don’t forget your customer demographic—are they tech-savvy, or will it take years for them to catch up to the mobile revolution? “[Retailers] need to pay attention to what their customers are doing, and what they think their customers are going to do,” says Jackson. “So first know your customer, and I think that’s a question that retailers always face.”
Looking Under Rocks
The Wild West prepaid landscape is ever-changing, and new segments are surfacing that could become new profit centers for prepared retailers. Mercator and InComm are watching transit cards and toll systems and the potential for c-stores to be centers for reloading as well as picking up cards and transmitters. Transit now accounts for 3.8% of total closed-loop prepaid loads in 2011, according to Mercator.
Other segments to watch include utility payments, land lines and even prepaid cable.
A bright spot on the horizon could very well be online gambling. Multiple states are now working through legislation that would allow retailers to sell cards in their stores that consumers could then take home, go online and use to gamble.
While some merchants are concerned about negative pushback from the community, others find it very promising. “Especially for the c-store industry, it’s something that will really, really do well,” says Betti.
Calling cards, utilities, transit, online gambling—with a pipeline of new categories and advances in digital and mobile payments, opportunities are ripening for the retailer who wants to become a destination for financial services. They key, says Jackson, is the word “destination”: “Retailers need to make the c-store seem like a one-stop shop for all sorts of services, and the way they can offer those services is through prepaid.”
Straight Off the Show Floor
Prepaid suppliers and merchants met in Las Vegas in August for The Prepaid Press Expo as well as the CSP Prepaid & Financial Services Forum, hosted by InComm. A number of new products and services were rolled out at the show that emphasized not only the expansion of the category, but also suppliers’ desire to differentiate themselves with unique services:
- 7 Dias Y Noches. A new prepaid calling card from Vivaro that allows unlimited calls to Mexico for seven days from one U.S. number to two different Mexican numbers. The card works from any phone and can be used to call cellphones in Mexico as well as landlines.
- Conexion Directa. The only product of its kind available in U.S. stores, Conexion Directa from Vivaro allows a Mexican phone number to call a U.S. number unlimited for 30 days—avoiding the high tariffs callers in Mexico typically face. The $19.99 card is rechargeable and there are no contracts, fees or limits on number of calls.
- My Vanilla GPR. From InComm, this card is meant for consumers who are very familiar with and interested in the perks of general prepaid reloadable cards, and use them as banking alternatives. The card includes services such as ATM access, signature and PIN, online account access and more.
- Monthly4G. T-Mobile’s prepaid program allows customers to get unlimited monthly phone, text and Web service for $50 per month. Any phone can be used, including smartphones.