The Federal Reserve’s prepaid numbers are lower than many industry estimates, which vary greatly. The discrepancy resulted because the Fed’s study focuses on purchase transactions with prepaid cards and not on fund-load amounts, as some industry studies have done, according to the Federal Reserve. The size of the prepaid market “is dramatically lower than anybody expected,” says Tony Hayes, a partner in the Retail Banking practice of Oliver Wyman, a New York-based management consulting firm.[From CardForum | PREPAID MARKET NOT AS LARGE AS INDUSTRY BELIEVES, FED SAYS]
There doesn’t seem to be any shortage of new prepaid products coming into the market though. Payments News picked up another one only last week: a colour-coded pre-paid card in the U.K., aiming to solve the problem of age verification and convenience together:
The UreLife card is available at launch for five age groups; 12-15 years, 16-17 years, 18-20 years, 21+ years and 60+ years. Cards are colour-coded according to the age category of the cardholder and a colour photograph, PASS hologram and printed date of birth makes the card unique.[From Payments News: UK’s First Prepaid Debit Card With Built-In Proof-of-Age – April 16, 2008]
This is one of those odd cases whether the users (ie, teenagers) are not the target market: it’s the parents (and, to some extent, retailers) who will create the demand. Let’s hope it’s more cost-effective than the raft of other prepaid cards in the U.K. market at the moment.
As you might expect, I’m particularly interested in the overlap between prepaid opportunities and new technology, where I genuinely do believe that the appropriate combination of product and channel can still make a real difference. So I’m looking forward to Prepaid 08 this year to find out how the sector is developing. In fact, the kind people from Prepaid 08 have asked me to chair the session on NFC at their excellent event in London this year and, what’s more, their unsurpassed kindness, generosity and commitment to the greater good means that they’ve given me a conference pass worth an astounding ONE THOUSAND THREE HUNDRED AND NINETY FIVE pounds Sterling — plus VAT — to award as a prize on this Blog. So if you’re going to be in London on the 24th and 25th June 2008 and you’d like to come along and learn all about the prepaid business, all you need to do is be the first person to respond on this thread with the name of the co-inventors of the first prepaid smart card product I worked on, which was NatWest’s Mondex card.
In the traditional fashion, this competition is open to all except for employees of Consult Hyperion and members of my immediate family. The prize must be claimed within one month. Oh, and no-one can win more than one of the Digital Money Blog prizes per calendar year.
These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]