The Prepaid Press - September 15, 2008 - (Page 21)

PAYMENTS September 15 · 2008 - 21 “The grocery consumer is different from the convenience store consumer, is different from the mom and pop consumer,” said Llach. “We need to understand the consumer behind the retailer to understand how best to develop a program for that consumer.” Llach said the key to success for retailers is creating a prepaid destination within the store, which will draw consumers. “you’ve got to have a selection of categories, wireless, online cards, payroll cards, open loop reloadable cards,” added Llach. “All of these cards sell extremely well when you have a prepaid destination in the store. If the cards are scattered throughout the store and the consumer doesn’t know where to go to get it, they won’t buy it.” Open loop cards are growing at a fast rate, lead by payroll and government benefits/refunds OPEN LOOP PREPAID CARD SEGMENTS Growth Rate BUSINESS INCENTIVES GOVERMENT BENEFITS/ REFUNDS Gift cards and electronic food stamps account for the majority of closed loop prepaid volume CLOSED LOOP PREPAID CARD SEGMENTS Growth Rate PETROLEUM The size of each circle is proportional to the annual dollar volume of the segment. INSURANCE BENEFITS Identical circle colors indicate similar features and functionality GIFT PAYROLL CONSUMER INCENTIVE Underbanked, Still a Major Market Does the prospect of 100 million potential customers excite you? According to Keven Lake, CEO of Futura Card Services, Visa and MasterCard reloadable debit cards are growing exponentially, making it the fast growing prepaid segment. Lake said that Futura is focused on partnering with the ISO channel, and to overcome some of the barriers in this channel. One of the challenges is that every ISO has a different architecture, so flexibility is important. “It’s easy to talk about this growing marketplace. It’s easy to talk about how exciting it is and the growth,” said Lake. “If you look at the barrier to entry in this channel, you really have to start with your program managers.” Lake said the program manager has the primary responsibility for getting the cards out into the marketplace. The program manager must find value added features that will give the product a competitive advantage for it to be successful. But, Lake says that with the shrinking commissions in prepaid wireless and LD, prepaid debit products could enable ISOs to increase their profit per terminal in a relatively short period of time if they are successful in reaching the underbanked. Mobile Payments – The New Frontier As in the Prepaid Wireless sessions, a lot of attention was focused on mobile payments. These new applications are a true convergence point of prepaid wireless and alternative payments. “What we are talking about how two major industries are converging and the impact that it is going to have,” said T. Jack Williams of eCommLink. “There is nothing in the middle of the road but yellow stripes and dead armadillos. Now is the time for you to make a decision.” St a r t i n g w i t h S&H Green Stamps, Williams traced the history of alternate payments through prepaid debit cards, looking at the roots of mobile payments. Williams said that three processing T. Jack Williams spaces will emerge, eCommlink physical, virtual and mobile, and that the effect will be a global effort. Williams sees physical cards as being the primary medium for transactions because it has the greatest resistance to fraud. But, he sees mobile, particularly RFID based payments, as having the ability to displace cash, especially for transactions under $25. PayZone’s Bruce Burke said that there are many companies looking at mobile payments right now, but the important factor is how the payments are transacted, and the technologies they utilize. “Are you paying your bill from your mobile phone, directly over the air to the provider?” he asked. “Are you dealing with a bank along the way, or are you talking to an interface in a retail store and providing the information to your mobile phone through the contactless interface and on through the processor?” Burke said that Java programming powers more than 4.5 billion devices including 800 million PCs and 2.1 billion mobile phones and other handheld devices. He said that other technologies that are increasingly available in mobile phones, like Bluetooth, allow offers and information to be pushed to users in the immediate vicinity. “The technology is going to drive mobile payments,” he said. “you’ve got to have the capability, and a lot of today’s mobile phones have more processing power, more memory and faster connections than the credit card terminal in a retail location.” Industry Average HEALTH REMITTANCE CONSUMER INCENTIVE FOOD STAMPS TRAVEL TEEN/ FINANCIAL SERVICES Industry Average GIFT BUS.EVENTS, MTQS, & RELOC. BENEFITS 1.0 Relative Market Share 1.0 Relative Market Share Source: Boston Consulting Group; Mercator Advisory Group; Dove Consulting; Lightspeed Research THE BAR JUST GOT RAISED TURNKEY ELECTRONIC POS We are excited to announce the opening of our state of the art customer support center; over 50 dedicated professionals to be your back office with an unparalleled level of service. • Customer Support • Customer Set up/Training • Proactive Customer Retention • Back Office Accounting • Product Management • Terminal Management • Electronic Airtime • Integrated Long Distance • Bill Payment • Stored Value • Cross Border • Global Roaming Recipient of "2008 TSP of the Year Award" from Boost Mobile AGENTS WANTED 212.219.2220 sales@prepaypoint.com Built EXCLUSIVELY on distributor alliances

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The Prepaid Press - September 15, 2008 ISOs Hold Key to Growth in Prepaid Industry Contents From the Publisher: The Show Goes On Regulatory Rundown: Early Fall Regulatory Beat 5 Minutes With Brian Rudolph, Co-owner, Krush Communications TPPEXPO’08 Spotlight Dateline Expo: Prepaid Wireless Update 2008 Wireless in Brief MetroPCS Available at Best Buy Western Capital Resources Inc. to Acquire PQH, Inc. TracFone Launches SafeLink Wireless Prepaid Wireless Roundup CIT Secures Financing for Prepaid Wireless Company MetroPCS Premiers Loopt Social-Mapping Services Virgin Mobile USA Reports Financial Results Dateline Expo: Prepaid Calling Card Update 2008 Inc. 5000 Recognizes Viscom International USAC’s “Carrier’s Carrier” Rule Comes Under Attack NetIQ Extends VoIP Management to Microsoft Office Transverse Launches OSS/BSS Open Source Platform Calling Cards in Brief Dateline Expo: Prepaid and Alternative Payments Update 2008 NETELLER and TransSend to Offer Cards Payments in Brief U.S. Treasury Introducing Direct Express Debit Card Visa Launches New Mobile Payment Services SCX Global Acquired by Rev Worldwide Metavante Selected by Corporate Network eCom ACE and NetSpend Launch March of Dimes Card AccuPOS Announces AccuCount Software Springbok Offers Private Label Prepaid Cards Prepaid 101: ATMs and Prepaid NACS Releases State of the Industry Report PaySpot to Distribute Futura Cards Hypercom Lands Element Payment Services Retail Focus in Brief Our Advertisers Contact Us

The Prepaid Press - September 15, 2008

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