Topic: Cashplus increasing market exposure
General purpose cards are the singularly most compelling commercial formula for prepaid cards according to Advanced Payment Solutions' (APS) Chief Executive Rich Wagner, who believes card issuers will find greater opportunities emerge from a general purpose card than by running single purpose driven programmes, such as gift, teen and travel cards.
Addressing European senior executives from leading retail companies and banks at the second annual Prepaid Cards in Europe Conference in London, Mr Wagner offered the performance of APS' own brand general purpose portfolio of cashplus prepaid MasterCard cardholders as an example of how general purpose cards offer invaluable learnings about transaction patterns and consumer behavior.
Based on a review of one year of transaction statistics, Wagner maintains a well marketed and distributed general purpose card can capture multiple categories using just one application.
"Transaction and cardholder analysis of the cashplus prepaid MasterCard portfolio shows the one card is concurrently being used as a general purpose card, a government payments card, a teen card, a payroll card, an expense card and a money share card."
The biggest challenge for new entrants, he says, is to know which opportunity to focus on first and to remain focused on that strategy.
"It is all too easy to expend development hours and funding to create multiple prepaid card applications, chasing after what has traditionally been perceived as separate prepaid opportunities. But what we have seen with cashplus is that consumers are working it out for themselves. They are actually designing their own applications from within the general purpose category.
"They may want their government benefit paid onto their card, but they still want to pay their DVLA online. They might not be able to get a bank account, but they will still holiday abroad. Counting on just one motivation for buying a prepaid card is short sighted and could lead to disappointing returns.
"A general purpose card allows the cardholder to choose how and when they use the card, and if it is for multiple uses, they will increase the amount that is loaded onto the card each month to meet more of their payment requirements.
"There are business costs associated with every card on issue. The focus should be on making everyone of those cards work for the consumer, which in turn will yield returns for the issuer. If the cardholder is using the card less than what was forecast, or not at all, then it becomes a loss generator."
Mr Wagner challenged big brand retailers to look beyond store cards to learn how they can develop complementary products and services to enhance business performance.
"While store cards tie customers back into your business, they also hold you back from unlocking the secret of how you can get customers to spend more of their money with you."
He claimed general purpose cards can provide co brand partners with a plethora of customer spending data outside of their business.
"You know they are downloading your music online, but what else are they buying online, and would they buy it from you if they had the chance?" he says.