On July 1, TSYS completed its acquisition of NetSpend Holdings Inc.
The move brought a fourth operating segment into the fold for TSYS, and introduced the payments giant to NetSpend’s 68 million underbanked consumers in the U.S.
Yet according to Troy Woods, president and COO at TSYS, and Dan Henry, CEO at NetSpend, the new partnership is perhaps most exciting for a simple reason: the prepaid industry is on the rise.
Market Platform Dynamics CEO Karen Webster spoke with Woods and Henry about the acquisition, how prepaid’s market is changing, new products on the drawing board and more.
Webster began the conversation by noting that while open-loop prepaid is a fast-growing industry, it still represents a small sliver of overall payment card volume. Webster asked Woods and Henry what it would take for prepaid to ignite in the same way that debit has ignited as a payments tool, and asked how the prepaid market is changing overall.
“I think as we all know this particular type of product is moving more and more upstream,” Woods said. He noted that education around and promotion of prepaid products are helping to raise its public profile, even in the face of some “regulatory overhang” that the industry must deal with.
Woods also cited initiatives by American Express and Chase – plus prepaid mainstays like Green Dot and Rushcard – as evidence that prepaid is moving forward.
“It’s clearly gaining traction in the mainstream, and that’s good,” Woods said.
Henry said he agreed with Woods, but also added that prepaid is exciting because of the opportunity that exists in the market.
“[Prepaid is] very fast growing but it’s still a small sliver of overall card volume, so there’s still tremendous growth ahead,” Henry said.
And according to Henry, that growth will come as suppliers further realize that prepaid options don’t compete with debit or credit options. Instead, prepaid’s convenience, control and value-added capabilities pit it against a much older payments tool.
“I still see prepaid as having its largest competitor as cash,” Henry explained. “Any issuer or financial institution that adds prepaid card to their suite of products, really, they’re not competing with, in my opinion, with their existing products. What they’re doing is giving their consumers a convenient tool to replace cash.”
To hear more Webster, Woods and Henry on payroll cards, future prepaid products, how NetSpend and TSYS will work together and more, listen to the full podcast below.
*If you have trouble with the audio player above, click here.
President and Chief Operating Officer of TSYS
Troy Woods, president and chief operating officer of TSYS, has been a critical influence in the company’s strategic decisions for the past two decades. Woods has been involved in directing the company’s international expansion, strategic planning activities, negotiations with major clients, and the continual improvement of TS2, the company’s core payments engine. Under Woods’ leadership, the company has expanded to Canada, Mexico, Europe, Brazil and the Asia-Pacific.
Woods started his career at Columbus Bank and Trust Company (Columbus, Ga.) in 1970, working part-time in the bankcard department and eventually becoming a vice president. He left the company in 1977 to become a senior vice president for consumer lending with AmSouth Bank in Birmingham, Ala. He rejoined TSYS in 1987.
Woods is a member of the TSYS Board of Directors, and also serves on the Board of Directors for the companies that comprise TSYS’ Merchant Services Segment. Woods serves on the Board of Directors for several civic organizations as well, including the YMCA of Metropolitan Columbus (Ga.), West Georgia Honor Flight and the Greater Columbus Georgia Chamber of Commerce. He is also a member of the Board of Trustees for Columbus State University and the River Center for the Performing Arts in Columbus, Georgia.
Woods earned a bachelor’s degree from Columbus State University (Columbus, Ga.), and also graduated from the University of Virginia’s Graduate School of Retail Bank Management and Louisiana State University’s School of Banking of the South.
CEO of NetSpend
Dan is well known throughout the financial services industry as an entrepreneur, investor and long-time champion for the underbanked. A pioneer in the field, he co-founded Euronet Worldwide, a global leader in processing secure electronic financial transactions. He established the company’s first European office in Budapest, Hungary, and led the development of its European business. He served as the firm’s President andChief Operating Officer until the end of 2006, and maintained a position on its Board until his appointment as CEO of NetSpend in 2008. When Dan stepped down from his executive role, Euronet had annual revenues in excess of $600 million, a market capitalization of $1 billion and operated 26 offices in 23 countries, staffed by more than 1,100 employees. Today, Dan is passionate about NetSpend’s opportunity to provide empowerment tools to underbanked U.S. consumers.