The Prepaid Press - September 15, 2008 - (Page 26)

RETAIL FOCUS September 15 · 2008 - 26 ISOs Hold Key to Growth in Prepaid Industry Partnerships, Know-How Critical to Unlocking Opportunity By Ingrid Ricks from page 1 but have left out an important part of the overall market,” adds Teri Llach, Group Vice President for Blackhawk Network. “That is definitely the situation.” Understanding the Stored Value Opportunity Because stored value represents such a broad spectrum of prepaid products, it is difficult to define, let alone provide overall stats on growth. But both Betti and Llach report huge strides in the category – experiencing what Llach says is “double and triple growth”, even in the mature chains. And neither of them sees any signs of Most large aggregators in the stored value space have specific ISO/agent programs in place designed to make it easy for them to get into the business without upfront costs or headaches. slowing down. “If we take a look at our product portfolio and envision a bell curve, we still see wireless, ringtones, music and gaming on the upswing of the bell curve,” notes Betti. “The only thing we see on the down side of the bell curve is long distance.” Llach, whose company offers numerous closed loop gift card products, says that category sector has grown considerably over the past few years as gift cards have shifted from a convenience product, to something that is preferred over a physical gift. And she says the demand for open loop debit cards – once thought of as a product for the unbanked – is skyrocketing, thanks in large part to the credit crisis currently facing Americans. “Prepaid debit cards have taken hold very quickly – I think because people are sick of credit card bills and worried about identity theft, and these types of products don’t have those issues associated,” notes Llach. It’s a sentiment shared by Steve Mott, Principal of BetterBuyDesign, a payment systems consulting firm that tracks the open loop stored value market. He sees prepaid debit cards as one of the biggest emerging opportunities in the stored value space. “Prepaid debit cards really have evolved into the mainstream,” says Mott. “They are ideal for teens that are not eligible for credit cards, and give older people a way to manage money. you have to be in a cave not to realize that credit cards are not a good thing these days. With prepaid debit cards, there are no gotchas or surprises.” Along with prepaid debit cards, Mott says he sees a “huge proliferation of interest” in payroll cards, corporate incentive cards, and health care service cards – particularly from smallto medium-sized businesses. “There are a lot of opportunities here for smaller merchants and if I were an ISO, I would be very interested in trying to figure out how to get into that market,” notes Mott. “Their strength is their feet on the street and the relationships they have with these businesses.” October 5-7, 2008 Sheraton Wild Horse Pass Resort & Spa | Chandler, AZ THE ATM TRACK: THE DEBIT TRACK: THE PREPAID TRACK: CONFERENCE CHAIRPERSON: Partner, KEYNOTE SPEAKERS: Executive Vice President, ThankYou Rewards Network Playing in the Stored Value Space Because of the complexities in processing and delivery and the sheer number of stored value products available, it is virtually impossible to get into the business without partnering with an aggregator that can provide a turnkey solution. But before selecting a partner to work with, Llach recommends that ISOs and agents conduct informal surveys to find out what customers at the merchant locations they service want. From there, she says, it is easier to shop around and find a partner that delivers the stored value products and brands that best fit their needs. Most large aggregators in the stored value space have specific ISO/agent programs in place designed to make it easy for them to get into the business without upfront costs or headaches. Llach says her company offers agents a turnkey, best practices solution that combines products, processing and delivery with merchandising, training and years of industry research that helps them get off on the right foot. “We don’t just give them a rack and say `see you’. That doesn’t work,” says Llach. “We help them get the right kind of rack, and make sure it is placed in the right spot in the store. We also provide them insight on what products work well where. We have the research and the history that we share.” Along with the processing and delivery issues involved with stored value cards, prepaid debit cards come with their own set of regulations and security requirements that make working with a partner that understands and adheres to these requirements critical, notes Keven Lake, President of Futura Card Services, which specializes in prepaid debit cards. “With these types of cards, you have to be PCI compliant,” says Lake, referring to the Payment Card Industry Data Security (PCI DSS) compliance rules. “For example, you have to have a warehousing and logistics model that secures the product until it gets into the store. That’s the kind of service we offer to ISOs if they partner with us. “ Succeeding in the Stored Value Space When it comes to succeeding in the stored value space, Betti says standards such as proper merchandising and in-store placement is critical. While a lot of independent merchants don’t have room to put up a display, Betti says it is essential for the ISO to communicate the importance of placement to the owner and to help them develop some sort of site that is going to attract Executive Vice President, the attention of consumers. He adds that adequate, ongoing employee training is a must. “Educating the clerk is monumental,” says Betti. “Clerks are not going to feel comfortable selling products they aren’t familiar with, so the more education an ISO can give owners or clerks to make them familiar, the more successful the program is going to be. Running contests or incentives are great motivators for getting them to learn and push the products.” Like Blackhawk Network and Futura Cards, Betti says InComm provides ISOs with a complete turnkey program that includes training manuals, merchandising assistance and suggestions for product placement. But while his company provides all of the tools necessary for success, Betti says it ultimately comes down to the ISO or agent and their ongoing commitment to the merchants. “My biggest thing with any agent I have ever worked with is their interest level in maintaining the merchants they bring,” notes Betti. “It is very important that ISOs make sure they are making face-to-face contact with merchants on a weekly basis. All too often, they sell a merchant and walk away and think that is enough. But so many merchants are looking for tomorrow and without maintaining that relationship, it is easy for someone else to get their attention.” Ingrid Ricks is an industry writer and president of Ricks Communications, a pr and marketing firm. She can be reached at ingrid@rickscommunications.com. www.sourcemediaconferences.com/ATMDebit08 800-803-3424 | 212-803-6093 http://www.sourcemediaconferences.com/ATMDebit08 http://www.sourcemediaconferences.com/ATMDebit08

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

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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