The global market for prepaid cards is projected to reach US$3.1 trillion by 2022. This market has expanded and diversified significantly in recent years, with new solutions appearing from both dedicated prepaid solution providers and payments firms looking to offer prepaid as an additional benefit, extending their portfolio. However, where there is great market opportunity, there is intense competition. To survive in this landscape and stay ahead of the curve, providers must be ready to scrutinize the efficiency and scalability of their offering, and apply a laser focus to customer acquisition and delight.
This efficiency depends on innovation, and a drive to streamline existing processes, to ensure prepaid card providers are able to scale, develop new products, deliver a fantastic user experience, and operate smoothly in both established and new markets. There are five important factors to consider:
It is crucial that providers have end to end visibility of the whole payment process. However, this should not be reliant on manual effort. Time spent manually processing payments is not only inefficient, but can often lead to errors which can be expensive to rectify, and frustrate users. Cumbersome processes and out of date systems should not dictate the size of transaction that providers are focused on. Automation quickly takes the cost and manpower headache out of dealing with smaller transactions, equipping providers to keep pace with the digital economy, which is characterized by higher volumes of lower value payments.
- Minimize Risk
Global economic trade has significantly increased over the last twenty-five years, yet the Foreign Exchange (FX) marketplace remains opaque to many. Traditionally, businesses have been restricted to using a fixed day-rate, building FX exposure into their business model. Increasingly, businesses are realizing the benefit of accessing real-time, which not only enables price transparency but reduces FX risk and provides them with P&L certainty.
- Local payout
The ability to pay in and out locally should not be overlooked. The impending Payment Services Directive (PSD2) is driving an increasingly open payments marketplace, opening the door for technology to shake the foundations of the correspondent banking model. Local payout capability can be significantly cheaper than through SWIFT, ensuring your clients receive payment in full, without international banking fees or currency conversion charges. Direct access to a live currency market is a core component of Centtrip's offering - you can read more about our work together here.
- Network reach
Network expansion can be costly – but is not an option when serving either consumer or business customers who have come to expect worldwide access from all services. Intense competition means that there’s no time to gradually get up to speed, adding a few currencies at a time. These real-time global transactions shine a spotlight on the importance of access to the live currency market. It is only by providing clients with access to live FX rates that they will get the best possible deal.
“Prepaid card” is perhaps a misnomer – prepaid functionality can be tied to a card, or other solution such as e-wallet, and flexibility is key. In today’s environment, it isn’t just the early adopters that are embracing financial technology to manage their funds. Consumers of all ages are becoming increasingly used to being able to do what they want, when they want, how they want. Consequently, prepaid providers need to offer a range of options to be successful.
The market is booming, but there’s no need for prepaid providers to re-invent the wheel in order to stay competitive. The ability to automate payments allows prepaid card providers to tap into existing networks to maintain visibility of the process, and reduce FX and operational risk, while offering customers instant, transparent and fair exchanges rates on international currency transfers. With payment mechanics taken care of, prepaid card providers are free to focus on the heart of their offering, finding new ways in which they can extend their offerings to drive new customer acquisition.