Prepaid Technology from FIS

R
ecently, in the UK, two prepaid cards were launched - one, 'Cash Manager' for adults looking to budget in times of tightened spending, and the other, 'Load & Go', aimed at teens looking for a safer alternative to cash and who want to shop online but may do so only by borrowing their parents' cards.
Imagine a card for teenagers, age 13 and up.
With this card, parents can teach children to manage money. Children may only purchase goods that are 'allowed' e.g., the card can be programmed to bar a purchase at an adult internet site or at a liquor store. Plus, the card can be given to children who study and live far away where spending cannot be watched. The company that launched them, 02, is UK's leading mobile company.
A TELCO LAUNCHING PREPAID CARDS?
Analysts feel that a teko can bring a fresh approach to financial services. The card is in a way a step toward integrating the wallet and the mobile phone. Also, majority of prepaid programs have been developed by building a customer base. This telco comes with millions of existing customers with which it communicates regularly. Marketing the program to these customers will not be as costly as reaching out to new customers. While different business models may drive a tel co to launch Prepaid, reduction of customer churn also makes a reason for entering this business.
IN A RECESSIONARY GLOBAL MARKET?
u.s. data shows that spending on credit and debit cards have decreased in the last quarter of 2008. While the total appears to be up on a yearly basis, statistics point toward reduced spending in many countries in 2009. Thus, budget-consciousness and use of cash to control expenditures will reflect in consumer behavior, implying, increased preference in the usage of ATM and prepaid cards over credit cards.
PREPAID OPPORTUNITIES IN INDIA
The Indian psyche is well versed with concepts like small­value, pre-loaded and prepaid. Majority of Indian mobiles are on prepaid plans and small packets of Lays or sachets of L'Oreal are a rage in India. Though on a higher value note, the prepaid travel card has caught the Indian consumers' fancy and a growing number of Indians opt for a one-time or reloadable card instead of forex or TCs. Considering the huge increase in outbound travel (business and leisure), this is an area of growth. However, scope still remains for understanding the complete prepaid proposition. Education by technology providers to banks and end-users is the way forward. Technologically, India
is ready to accept many - if not all - of the following: in Consumer - Gift Card, Merchant Gift Card, Teen/Student Card, Personal Reloadable Card, Travel Cards, Money Transfer Cards; in Commercial - Payroll Card, Incentive Card, Corporate Gift Card, Promotion Card, Catastrophe Card, Insurance ClaimCard, Employee Benefits, Employee Reimbursement; and in Government - Court Ordered Payments, Benefit Disbursements, Unemployment Payetc.
As critical as the decision to go prepaid, is the bank's technology partner. An ideal provider should have a CV that reads:
a) Industry expert with a background in banking and financial services
b) Core Competency & depth of experience - a pioneer, present & committed to India; IT is never reinvented!
c) Size-big processor, large R&D spend, world-wide operations for bandwidth, reach and efficiency
d) Customer Support - local, global, telephone and internet
One company that fits the above description is Fidelity National Information Services or FIS. This USD 5.14 billion company invested U5$30 Million in its prepaid technology in 2008. A pioneer and leader, FlS was world's first prepaid-only processor, in business for more than 10 years. As world's largest, PIS is a full service provider with a multitude of offerings. Its total cards on file today are 192 million with a value load of 11 billion USD, equal to 25 percent market share globally. With over 40 years in banking technology, FIS has been global #1 in banking in the FinTech 100 rankings for four consecutive years and 95% of FIS revenues are derived from services to the BFSI segment.
Present since 1998, FIS has 4000+ employees in seven centers in India, serving the banking and financial services industry. Of that, 250+ constitute its Prepaid Team with expertise in implementation, operations, technology and live support to consumers. Shrihari Bhat, Country Manager, FIS India, says, "Prepaid is poised for tremendous growth and acceptance in India and banks and NBFCs must cash in on this opportunity."
Looking back, in recessionary year, a teko launches prepaid cards in the UK; in India, banks brace up for prepaid products; leading technology providers offer their knowhow in the market and the writing on the wall favours prepaid over credit cards. To conclude, if you are a product manager or marketer, you may want to finalize your own prepaid product and launch it soon. Raksha Bandhan has heralded onset of the festival season. Gifts, bonuses, incentive payouts, weddings, holidays etc., are all waiting for you to capitalize on. Prepaid may not just be a trend. It could actually help you max your 2009 performance targets!