The Prepaid Press - April 15, 2008 - (Page 8)

PREPAID BUSINESS April 15 · 2008 - 8 Mark Herrington, President, First Data Global Prepaid Services Interviewed by Gene Retske 5 MINUTES WITH realize the value proposition for trying to initiate a project and going through the time, effort and expense of rolling it out. If you get 70% of the way to electronic, you are still writing checks to some portion of the population. GR: Is this a debit card? MH: This is like a debit card you buy at a retail location off a J-hook. It is a debit card, you register it and it can be reloaded. The product we offer for the application in that channel is really the same product; it’s just packaged more specifically for that channel. GR: How about consumer acceptance? Is that a problem? MH: No, not from the employee side. It’s companies being concerned about the laws I mentioned earlier. If you are a large national employer and you have employees in twenty to thirty of the states, your concern, when you want to roll out a program, is giving your employees an option of being paid by check or by direct deposit. For those who do not have a bank account, the alternative of a payroll card is offered. The employees are generally very enthusiastic about the idea of having a debit card. But, the employer is generally going to have a person here or there that is not happy for some reason and may want a paper check. Some of the state laws say you have to still provide that paper check. So, where you have those states that have those types of laws on the books, the employers are reluctant to roll out these programs very aggressively. Therefore, the value proposition of realizing the savings by getting to 100% electronic doesn’t exist. And, the goal of the employer is to get completely away from writing checks because of the cost and administration of checks. GR: So, how do you get around this problem, without changing the law? MH: We have, over the course of the last few years, developed a product that is packaged in such a way that there is still a check component that they are offering. Employees can still get a check instrument. It is called a money network check that is tied to the account, where they can get 100% of their funds without paying any fees. That has been the key to our success in the payroll card channel. GR: Does that meet the legal requirements for getting a check? MH: Not in all cases. In the most stringent states, the actual wording is ”paper negotiable instrument.” And, in most cases, converting plastic to cash doesn’t meet the requirement. GR: What has to be done to get government out of the way of these transactions? Do laws have to be changed? MH: Yes, at the state level. It is not a federal issue. They will change, it’s just happening slowly. But, the trend is positive. It is an education issue. There are concerns over fees, and protection of the consumer and not all programs are created equal. What they are not taking into account, is even if you give a person that doesn’t have a bank account a payroll check, we both know what they have to do, where they have to go and the expense they incur to convert that check to cash. There is just a lot of education that is required that we have to be proactive in providing. We’ve had a lot of success and we are at the point where we can warrant that our program is compliant in 44 states. And, we are beating on the doors of the other ones. We expect to be there in the next few months. This is an effort we have been engaged in for the last 5 years. Mark Herrington is the president of FirstData Global Prepaid Services. Visit FirstData online at www.firstdata.com. One of the most promising payments areas is payroll cards, employers paying employees using a debit card. FirstData has been at the forefront of the effort, from both the marketing of the program and getting the needed regulatory changes made. Mark Herrington, the president of First Data Global Prepaid Services, was an original founder of Money Network, and has been actively involved in payroll cards since the very early days. He shared his thoughts on payroll cards, and the future, with TPP. GR: Where are payroll cards? Are a lot of companies using them? MH: The last number I’ve seen is probably dated, but it is safe to say that less than ten percent of the companies in the U.S. have deployed payroll card programs. GR: That is still quite a few. MH: It’s still relatively unpenetrated from our perspective. GR: Why is that? MH: There is a lack of clarity around a lot of the compliance issues that you run into at the state level. All the states interpret how you have to pay your employees a bit differently. GR: What are some of these inhibiting factors? MH: Some states allow you to mandate direct deposits, which are no different than a payroll card, and ends up looking just like a direct deposit. There are some 20 states that allow that. The balance of the states have laws, generally, that will require you to still make available to employees their net pay via a paper negotiable instrument. A lot of these laws were on the books from decades ago, for various reasons - so that employees could get access to their money. But, when you talk about just the payroll card, you end up saying that needs to be optional, because employees still have to have access to their pay via paper negotiable instruments, therefore a check. GR: What about rolling out a program to just those employees who are willing to go electronic? MH: If you are a large employer looking to roll out a program, and trying to eliminate checks, unless you can get 100% of the way, you really can’t TPPEXPO’08 SPOTLIGHT TPPEXPO’08 OFFERS UNIQUE CONFERENCE You’ve probably been to dozens of trade shows and conferences. Maybe a lot of them in Las Vegas. So, you may ask, ‘what is different about The Prepaid Press Expo ’08 in Las Vegas, August 19-21, 2008?’ Good question! Let’s look at why this event is the prepaid show in 2008. This show is backed by The Prepaid Press, the most highly regarded prepaid publication. Our readership is comprised of the leading companies in the industry, and is the most widely read by all prepaid sectors. No one covers the entire range of prepaid -- service providers, ISOs, card providers, distributors, retailers – like TPP. Nobody. Because we have the widest distribution of readers in prepaid, tppEXPO’08 will have the largest and most influential group of speakers, presenters, exhibitors and sponsors in the industry. However, it is the conference where the clear leadership of TPP shines the brightest. tppEXPO’08 has partnered with industry leading research firm and conference organizer, The Pelorus Group, to help produce the industry’s most informative, and most affordable, conference program for prepaid services. These tracks were created specifically to provide you with the critical information you need to learn, adapt, and thrive in today’s competitive prepaid marketplace. We are not selling speakerships, or offering them to sponsors or exhibitors, as many other shows do today. Our responsibility is to provide paid attendees with the best information available. We have designed the conference sessions with the attendees in mind. Most conferences spread the sessions for a particular track over the entire duration of the trade show. This is good for the hotel, but not convenient for attendees, who want to experience the entire show, but in their time. For this reason, each of the three tracks – Calling Cards, Wireless and Payments – runs in a single day. So, you don’t have to decide between missing some sessions or spending three days to get it all. All of the Prepaid Calling Card tracks run on Tuesday, August 19, 2008, Prepaid Wireless on Wednesday and Payments on Thursday. Attend one, two or all, but each one will only take one day of your time. About the sessions. We have designed, with the help of Pelorus, sessions that will highlight the most important issues and trends in the industry, presented by the people who have been closely involved with these developments. We suggest you go to the web site at www.prepaidpressexpo.com and click on “conference,” to see the details on the sessions. Each day is shown, along with the sessions for that track. Keep in mind that there will likely be new developments between now and August, so there may be some modifications to the currently published agenda. But to give you an example of what will be offered, in the Prepaid Calling Card track, there are sessions on what markets are hot, how to tailor offerings and applications to maximize revenues, how to make cards safe and what the future may bring. In Prepaid Wireless, there have been many changes, as the MVNO model continues to evolve. What are the opportunities that are relevant in 2008, and beyond? And, what is the impact of greater mobile bandwidths and phones with more capabilities, like multimedia? Payments have also had draconian changes over the last few years. There are new opportunities in the fast growing area of gift and debit cards. But, the markets are new and non-traditional. We will focus on the new areas and new techniques that will yield success. If you can only go to one conference this year, one that will cover the entire spectrum of prepaid, The Prepaid Press Expo 2008 is your show. Prepaid Wireless “Distribution and Retailing Strategies The Potential to Change Market Dynamics” Michael Keresman, President, Cardinal Commerce tppEXPO’08 Welcomes its Newest Sponsor Payments ”Stored Value Market Today Capitalizing on Evolving Opportunities” Steve Mott, BetterBuyDesign The Prepaid Press Expo would like to welcome Via One as our newest Senator Sponsor. Our thanks to Via One for their sponsorship of the Colosseum Meeting Area. We will open the meeting scheduler on www.prepaidpressexpo.com in the coming weeks, so you can begin arranging appointments with the exhibitors you want to meet. Looking forward to seeing you there! Via One – www.viaone.com Prepaid Calling Cards “Building a http://www.firstdata.com http://www.prepaidpressexpo.com http://www.prepaidpressexpo.com http://www.prepaidpressexpo.com http://www.viaone.com

Table of Contents Feed for the Digital Edition of The Prepaid Press - April 15, 2008

The Prepaid Press - April 15, 2008 Motorola to Split Mobile Payments: The Saga Continues Contents The Retske Report: Election Year and Woody Hayes Regulatory Rundown: 2008 First Quarter Mobile Update 5 Minutes with Mark Herrington tppEXPO’08 Spotlight New Handsets Announced at CTIA Prepaid Wireless in Brief Prepaid Wireless Roundup Virgin Mobile Reports Earnings of 6 Cents Movida Files Chapter 11 LiveWire Mobile Acquires Groove Mobile Boost Selects Vesta for Transactions RadioShack to Offer Trumpet Mobile Service Virgin Offers New Pay as You Go Plans Book Review: Webster’s New World Telecom Dictionary Management Changes at IDT Spot Rates Calling Cards in Brief The State of Prepaid Technology: Productive Coexistence FTC Asks Court to Halt Prepaid Calling Card Scam Louisiana Community Mulls Tax on Prepaid Cards Pactolus Wins VON Magazine Award iBasis Lowers Pakistan Rate for Pingo The Legal Line Biometric Update: Keep Your Shirt On AccountNow Ends Upfront Fees Evolution Benefits Acquires SmartFlex Payments in Brief NetSpend to Offer Bill Payment and Top-up Union Bank Introduces Contactless Card Ingenico Announces Development Kit Prepaid 101: Stupid Card Tricks PLS Offering Walk-In Bill Payment Spend Gift Cards ASAP Credit Card Breach at Hannaford Bros. NACS Withdraws Opposition to Tobacco Bill Study Finds Gift Card Packaging Increases Sales NACS Names International VP Inflatable Display Provides Inexpensive Signage Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - April 15, 2008

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