Other Hot Topics
SEPA
The Single Euro(pean) Payments Area has recently dominated
discussions in the payments business, but how will
it affect your business?
Read more...
Interchange
With substantial regulator and government interest
in interchange, how will the cards industry be affected?
Read more...
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Prepaid
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| Prepaid is one of the fastest growing
segments of the US cards industry, but how will it expand
in Europe? |
| Prepaid in Europe represents
a major growth opportunity for banks, processors and payment
providers. However, few fully understand its potential
or have made a clear business case for market entry. |
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Increased international attention on the European Prepaid
market reflects a common perception of a rapid growth
in opportunities. However, Europe has had a varied experience
with new card products. The failure of stored value and
most take-up of commercial cards illustrates the need
for market research and careful business case development
prior to launch. Investments must be well structured and
targeted to ensure acceptable returns are realised. |
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A comparison of the two highest profile prepaid products,
payroll and gift cards, illustrates the need to analyse
the revenue streams and cost elements of products well
in advance of launch to ensure appropriate business models
are in place. |
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Analysis of European payroll cards has highlighted the
economics of new product delivery and maintenance. Typically
issuers can expect revenue streams which include: monthly
service fees, loading charges, POS/ATM fees, peer-to-peer
transfer fees, as well as account set up revenues. European
market size estimates place a value of €400m-€500m
on payroll cards by 2010. Payroll cards may therefore
represent an attractive option for issuers and corporates,
particularly in Eastern Europe. |
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Similarly, analysis of open-loop prepaid gift card products
indicates a different set of revenue drivers. They include
card purchase and maintenance fees, POS interchange and
potential breakage. Cost drivers include set-up, processing,
customer service, marketing, and potential write-offs.
These differing revenue and cost elements must be considered
when targeting Prepaid products at specific merchant or
consumer segments. |
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PSE has substantial experience in the prepaid market.
The types of questions we help clients answer are: |
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When should I begin my prepaid
programme, what is the critical number of cards to support
a valid launch? |
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What revenue models should I expect to use and will they
be the same as the US market? |
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What are
the key barriers and inhibitors to market entry?
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What constraints will national and European regulation
place on the growth of Prepaid – eMoney and EMLI? |
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Will prepaid increase footfall, average spend and loyalty? |
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What is the business case for our organisation
to enter this market? |
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Prepaid Publications
Looking for our most recent publications? Find out more by clicking a link
below.
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