The Green Sheet Online Edition
November 09, 2009 • Issue 09:11:01
In-depth look at branded prepaid
ite Group LLC released a new study on the prepaid sphere: Branded Prepaid Card Processors: A Vendor Evaluation. The October 2009 report is divided into three sections:
- An overview of the branded prepaid card market that looks at processing trends and compares surveyed processors over a set of criteria
- A ranking of participating processors in the following categories: processing system, card program functionality, cardholder account administration, program implementation, card expiration and reissue, billing and fund management, compliance and cardholder security, and correspondence. Features and functionality offered by the processors are also discussed in this section.
- Profiles that consider the strengths and weaknesses of the following nine branded prepaid card processors: eCommLink Inc., Fidelity National Information Services Inc. (FIS), First Data Corp., FSV Payment Systems Inc., Galileo Processing Inc., i2c Inc., Metavante Corp. (now a subsidiary of FIS), Springbok Services Inc. and TxVia Inc.
Twelve companies participated in the study, which consisted of a combination of interviews and a questionnaire. The amount of detail gathered in this process determined whether a company could be profiled in the report's final section.
"Among branded prepaid card processors, there is no one-size-fits-all solution," said Adil Moussa, Analyst with Aite Group and the report's author. "Processing vendors serving the branded prepaid card market vary on price, level of service and technology platform, among other things. "Issuers and program managers entering the branded prepaid market should evaluate their needs carefully and match them with the strengths of the processor they choose. Technology should not be ignored, and processors using antiquated processing systems offer little benefit."
Trends in branded prepaid market include a demand for less expensive products due to the recession. Wal-Mart Stores Inc.'s practice of charging just $3 apiece for purchase, reload and monthly fee is cited in the report as putting downward pressure on pricing. However, Aite is skeptical that $0 fee cards will take hold due to the economics behind prepaid cards.
A second trend is the need to make changes in light of burgeoning legislation, which can increase the complexity of program management, increase costs and necessitate implementation of new technology to accommodate mandated changes in prepaid card programs.
A number of prepaid card processors are eyeing markets outside of the United States. The prospect of growing abroad has appeal because the barriers for credit card issuing, such as the difficulty of evaluating creditworthiness in countries that lack credit bureaus, are not problems in the prepaid sphere. Aite believes the initial areas of opportunity in foreign markets are in nonreloadable gift cards, corporate incentive cards and general purpose reloadable cards.
According to the report, technology is "always going to play a major role in processing"; whether branded prepaid card processors can respond quickly to evolving market needs will be critical to their ability to remain competitive, and this will require investment in new technology.
Want to know how your favorite branded prepaid card processor stacks up against the competition? For more information, visit www.aite.com.
3DSI aims to have your back
hree Delta Systems Inc. (3DSI) kicked off National Cyber Security Awareness Month in October 2009 by offering a free white paper, Solving the Security Risk of Credit Card Breaches: An Introduction to CCIDS.
While a primary aim of the paper is to explain the benefits and features of Credit Card Customer Identification Storage, 3DSI's solution to the challenge of securing payment systems to protect sensitive cardholder data, the paper also provides an overview of the state of data security, specific problems the payments industry faces and the potential risks to businesses that do not adequately protect their systems from data breaches.
The white paper, which is available at www.3dsi.com, discusses the fallout from some of the most prominent breaches of recent years.
It also identifies four risks businesses face when taking on the responsibility of collecting and managing sensitive card data: financial losses, unnecessary exposure, loss of customers and legal liability.
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