These are the reasons why businesses should sell reloadable prepaid cards
With prepaid card technology becoming more sophisticated, many consumers from diverse demographic and age backgrounds, are using reloadable prepaid cards as their first choice of payment solution. In fact, according to a study conducted by Mastercard, global prepaid growth is expected to grow at an annual rate of 22% through to 2017, reaching $822-billion If retailers want products to fly off their shelves, they should seriously consider selling prepaid cards. Here’s why:
Your customers could include bigger businesses wanting to use prepaid cards as an alternative means of payment and reimbursements
The MasterCard survey revealed that large companies have begun using prepaid cards as an alternative payment means. Things like meal vouchers, healthcare reimbursements and fuel money are being loaded onto prepaid cards. In some cases, salaries are transferred onto prepaid cards. Corporations using prepaid cards have reported a reduction in fraud and processing costs, as well as a smaller environmental footprint because less paper is used. Asserts MasterCard, “The total (global) commercial prepaid opportunity is projected to read $325-billion by 2015.”
Consumers want transparency about fees
Visa Inc has tried to reduce the confusion around fees associated with prepaid cards by introducing its Visa Prepaid Designation qualification onto consumer reloadable prepaid products. Visa explains: “Consumers have been confused by an often complex prepaid landscape. As a prepaid leader, we felt it was important to go beyond current requirements in the marketplace and bring transparency to this growing product area. This Visa designation will signify a new level of simplicity, protection and opportunity, enabling cardholders to confidently manage their spending every day.”
“Banked” customers view prepaid cards as smart cash with more willing to purchase prepaid cards
Prepaid cards are seen as important additions to those with credit and debit cards. “Approximately 48% of the global prepaid open loop opportunity lies within the general population of banked consumers looking to segment their spending on top of their existing payment cards.” Further research, as quoted by Payments Leader, indicated users showed a high co-ownership of prepaid cards and traditional banking products.
Of course, those who purchase prepaid products come from a varied consumer and demographic base. In South Africa particularly, prepaid cards are hugely popular with the so-called “unbanked” as they are able to store, withdraw, deposit and transfer funds without having a traditional bank account.
Those who use or purchase prepaid cards do so to keep track of their finances
Those who use or purchase prepaid products believe that they play a positive role in financial management. Because there is only a finite amount of money on the card, the possibility of overspending is eradicated.
Businesses seeking to increase profits are selling prepaid cards
Retailers should consider selling Reload Mobile Money cards, which can be bought off the shelf, just like any other product. Reload cards act like a bank account, which is activated using a customer’s cellphone number, giving them access to funds via cellphone banking and a linked Visa card.
Reload card is a Visa card, and can be used for purchases everywhere Visa is accepted. All ATMS can be used too or, a customer can withdraw money at the Shoprite, Checkers and Pick n Pay tillpoints. In addition, Reload users can transfer funds to other Reload card holders. With this particular prepaid card, interest is earned on balances over R500, offering the customer significant added value. Should a customer want a statement, they can access one online at no cost.