Iculsys Pre Paid Debit The Payment Solution For The Future

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  • The online payment solutions industry has experienced intense growth in recent years and has become a highly competitive market. PayVision.com is a company that offers Payment Solutions worldwide. They have a set of credit/debit cards that are in cooperation with several major European, American and Asian banks. PayVision's payment services accept more than 150 currencies and also offer competitive rates to customers.
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  • 1. Prepaid Debit The Payment Solution For The Future March 2008
  • 2. Topics of Discussion
      • What is a Prepaid Debit Card?
      • How does it work?
      • Why would your members want one?
      • Who is offering them?
  • 3. Topics of Discussion
      • Why should you care?
      • What’s available to you?
      • What do you need to know to offer them?
  • 4.
    • Prepaid is a Debit CATEGORY
      • Account or Card is PRE Funded
      • Transactions are authorized and posted
      • against the Card Balance, NOT a DDA or Checking Account
      • *Stored Value – Europe – Rest of the world VALUE is on PLASTIC not Card Account
    What is a Prepaid Debit Card?
  • 5.
    • Non Reloadable - Typically Instant Issued
      • Gift – One Time Usage
      • Closed Loop and Open Loop – Branded
    • Reloadable – Typically Personalized
      • Multiple Use – Ongoing Relationship
      • Open Loop – Branded
    Card Categories
  • 6. Reloadable: Segment Market
      • General Purpose Cards
        • Everyday Spending
      • Travel Cards
        • Alternative to Travel Cheques
      • Payroll Cards
        • Provides alternative to traditional payroll
        • Set up and managed by company’s FI
        • Saves money over traditional means
      • Family / TEEN Cards
        • Parental Control and Monitoring
  • 7. Prepaid Debit Overall
    • The 3 rd Evolution of the Card Payment Business:
      • Credit - Pay Later
      • Debit - Pay Now
      • Prepaid - Pay Before
    • The fastest growing payment form in 20yrs!
  • 8. Prepaid Debit - Mainstream
    • 2007 Year End Estimates
      • Greater than 7 Billion Transactions
      • Over $175 Billion Dollars Spent
      • Prepaid revenues for Visa/MasterCard will exceed $1.35 billion by 2010 – largest payment segment
      • Overall Awareness of Product – 75% with a greater than 90% satisfaction ratio.
      • * Network Branded Prepaid Card Association
      • * Edgar, Dunn & Company 9/07
  • 9.
    • Easy to understand and use for Consumers
      • Accepted and works like a reg Debit Card
        • Funds can be accessed via ATM, PIN POS
        • and Signature Channels – VISA / MC
      • Cardholder determines spending limits
        • How much to put on and when
        • Cards can be re-loaded as needed
        • Improved Budgeting and Control
    Benefits of Prepaid
  • 10. Benefits of Prepaid
    • Convenience
    • Control
    • Security
    • Privacy
  • 11. PLASTIC IS KING!!
  • 12. Marketplace – Who is offering?
    • Green Dot
    • H&R Block
    • Retailers:
      • Wal-Mart
      • Target
    • Credit Card Issuers – Capital One
  • 13. GREEN DOT
    • First ever Prepaid cards sold at neighborhood retailers with worldwide MasterCard ® Debit or Visa ® Debit and ATM acceptance
    • Green Dot - Everyday
    • Green Dot - Uso Diaro (customized for Spanish-speaking customers)
    • Green Dot - Student
  • 14. GREEN DOT
    • Costly for Consumers
      • $9.95 avg Retail
      • $2.50 - $4.95 avg Load Fee
      • $2.50 ATM w/d
      • $4.95 Monthly Maintenance
    • Avg Annual Cost to Cardholder: $210 per Card
    • * Initial cost NOT included – Estimated 2 loads per month @ $2.50 + 3 ATM w/d a month
  • 15. H&R Block - Emerald Savings TM
    • Prepaid MasterCard
      • Available to tax clients only
      • Tax Refund automatically loaded onto card
      • Can accept direct deposits
      • Can be re-loaded via Money Gram, Green Dot, Western Union
      • Fees Vary
      • Additional Savings & IRA Accounts offered
  • 16. Wal-Mart and Target
    • 2 of the 5 largest Retailers on the band wagon!
      • Collectively : $150 Billion in Annual Revenues
      • Prepaid “Debit” Cards Cross Sold at check out
      • Immediate discounts apply
      • Additional Savings for future purchases
      • Accepts Direct Deposits
      • NO NEED TO OPEN NEW CHECKING
      • Moving toward - Decoupled: Transactions ACHed to FI
  • 17. Capital One – Decoupled Cards
    • No need to open NEW checking or move Direct Deposit
    • Debit Transactions are ACHed to Cardholder’s checking account daily
    • Typically Pre-Approved
    • Automatic offers to Credit Cardholders
  • 18. IMPACT TO CREDIT UNIONS
    • Loss of Debit Interchange Income
    • Loss of Deposits - Deposit Income
    • Loss and Erosion of Checking Account Base and PFI Relationships
  • 19. Ignoring Prepaid Debit:
    • The biggest threat our Industry has seen to date:
      • 18.8% of CU’s Non-Interest Income comes from Debit Interchange
      • Total Non Interest Income 2 nd qtr 2007
        • $4.8 Billion
        • *Callahan’s 2007 Non-Interest Income Survey
  • 20. John F Kennedy, April 12, 1959
    • The Chinese use two brush strokes to write the word “CRISIS”. One brush stroke stands for DANGER; the other OPPORTUNITY.
    • In a crisis, be aware of the danger – but recognize the opportunity.
  • 21. Deciding WHAT to offer
    • Convenience Services: Not a Main Product
      • Gift Cards
      • Travel Cards
    • General Purpose: Main Product
      • New Markets – Unbanked, Niche Markets
      • Growth in current products
        • Supports Credit and Debit
        • Maintains current DDS Base and Direct Deposits
  • 22. Deciding WHAT to offer
    • CUSTOM Programs
      • CU Manages Program- Plastics, load sites, CS
      • CU Assumes All Risk – Fraud, Overages, etc..
      • CU Earns All Income – purchase, loads, breakage
    • Agency Programs
      • CU Partners with Proven Provider
      • No Risk – No Liability
      • CU Earns Partial Income – purchase, monthly fees,etc
  • 23. CU MONEY – Everyday Money
    • $500 Implementation Fee – Waived thru 3/31
    • Price to CU: $2.00
      • CU Sets Price to Member - $3.95 to $5.95 avg
    • CU Monthly Support Fee: $50 – Waived 1 st 6 months
      • CU Earns $.50 per active card
    • FREE Internet Site
    • 4 FREE Monthly Customer Service Calls
    • Unlimited Loads
    • Loads and Monthly Fees to Members significantly lower than competition
    • CU can customize with their LOGO
  • 24. CU MONEY – VISA Travel Money
    • $500 Implementation Fee – Waiver Extended thru 3/31
    • Price to CU: $2.00
      • CU Sets Price to Member - $3.95 to $7.95 avg
    • No Monthly Fees for CU
    • No inactivity fee for 1 st 11 months for member
    • FREE Travel Enhancements
    • FREE Internet Site
    • 4 FREE Monthly Customer Service Calls
    • Loads and Foreign Currency Exchange Rate to Members significantly lower than competition
    • CU can customize with their LOGO
  • 25. CU MONEY – Gift Cards
    • NO START UP COST
    • Price to CU: $1.25
      • CU Sets Price to Member - $2.50 - $3.50 avg
      • Unlimited Website and VRU access
      • One Time Use – NO RELOADs
      • NO ATM Access
  • 26. CU MONEY – 2008 Additions
    • Payroll Card
    • Family Card
  • 27. CU MONEY Prepaid Debits
    • For Convenience
    • For Service
    • For Growth
    • For your Future………………….
  • 28. Prepaid Debit A Cost Affordable, RISK FREE Solution For Credit Unions!!