What’s true in physical commerce is also true in virtual commerce. My younger son has a prepaid card for World of Warcraft, for example, and soon he will want his own prepaid open loop card so that he can buy things on the Internet. So if I gave him an open loop card, would that mean that all of the closed loop cards would become redundant? Or suppose a closed loop card for all games came along?
People have said to us “what happens if some universal gaming card puts you out of business?” and we say there’s already a universal gaming card — it’s called a pre-paid Visa. If people really want to get their cash onto the web you can buy a pre-paid Visa at millions of outlets across the country.
What we have seen — not only from our digital and retail partner side but from our consumer side — is that the individual cards are very positively received, even just down to consumers enjoying the collectability of them, because we refresh the art periodically. In addition, we have the ability to do a lot more when the cards are individual — for example, with Zwinky, when you bought a card you also received your choice of a free super power. That’s the kind of value you can add when you’re doing a specific unique branded card, rather than when you have a card that merely acts as a payment method.
[From Worlds In Motion – Interview: GMG Entertainment On Pre-paid Cards’ Potential In Retail]
I couldn’t comment on the use of free superpowers as promotional devices, but you can see the point here. If a closed loop card is just a payment mechanism, then what’s the point? A key reason for using closed loop cards is to provide specific value-added services around the payment transaction.
