Take a well-thought-out prepaid program – and a data-backed understanding of its performance – and mix in strategies for increased customer engagement. What do you get? Just a few of the tactics that i2c follows in its efforts to fuel the global growth of prepaid products. In a recent interview, i2c’s General Manager Scott Salmon discussed methods for international prepaid success, including how data plays a critical role in finding and engaging customers around the world.
Following a Dubai presentation on ways for businesses to profit in the prepaid market, i2c’s General Manager, International Scott Salmon caught up with PYMNTS to elaborate on the five key tactics that i2c follows to help its clients succeed in the prepaid business. Salmon also unveiled the company’s plans to expand further into Asia Pacific, Central Europe, the Middle East and Africa, offered his insight on the current U.S. prepaid model, and noted how i2c is prepared to meet the evolving needs of developing prepaid markets around the globe. Read more for a breakdown of the discussion.
FIVE TACTICS FOR PREPAID SUCCESS
Salmon recently did a presentation in Dubai to address ways to be profitable in the prepaid business, and these can differ in developed and emerging economies. But the basics, he said, are the same.
Salmon highlighted the five key tactics for making that happen:
1) Defining a value proposition: It’s very important to define a value proposition for a prepaid card that allows a cardholder to do what they’re doing today, but better.
2) Being information-based: This is critical in terms of understanding how a program is performing and how engaged the cardholders are, and how one can improve that engagement.
3) Recognizing the program life cycle: Applying different strategies along the launch, growth and maturity stages.
4) Segmenting the base: There are under performing customers, average performing customers, and high-performing customers – and the strategy is to deploy tactics to increase that engagement, understanding why certain customers are the best performing ones.
5) Engaging with customers in an intelligent way: That is, using things like campaign management tools, like what we have integrated into the i2c platform, to continue to improve the value and help cardholders realize that value.
Overall, said Salmon, there’s tremendous growth that the company is seeing with prepaid across a number of different categories.
“We already support clients in South Africa, the Middle East, Japan, China, the Philippines, and Australia, and we’re expanding that support,” he said. “We want to continue to help clients in driving growth in prepaid, and we feel that we’re uniquely qualified to do that.”
IS THE US PREPAID MODEL FLAWED?
Earlier this year, one of the largest banks in the US Chase & Co. announced plans to sell or exit its prepaid card business. Many large financial intuitions in the US have challenges with the complexity of the prepaid business. This raises the question: Is there something wrong with the prepaid model in the US?
According to Salmon, there is not. What is seen in prepaid at the most fundamental level, he said, is that because it’s pre-funded, the risk and the cost dynamics of prepaid cards allow banks and other organizations to target many different types of opportunities that they can’t necessarily target with credit and debit products alone.
“Different organizations find that they have different business propositions for prepaid, and some modify them over time. What we’ve seen with Chase is just that,” said Salmon. “I don’t think it shows a problem with the prepaid model in the U.S.”
THE STATE OF PREPAID IN KEY GLOBAL MARKETS
Salmon recentlyjoined i2c to lead the company’s growth in Asia Pacific, Central Europe, Middle East and Africa (APCEMEA). Given his past experience as head of global prepaid products at Visa, he noted that prepaid is certainly not as mature in these markets as it is in the U.S. However, he added that there are some markets where it’s really advanced, like in Australia and in India, while others are clearly in an emerging state.
In APCEMEA, specific prepaid categories like travel, online spending, mobile and mobile payment, corporate, commission payments, and government disbursement are seeing “tremendous growth,” added Salmon.
“We’re seeing active engagement not only by banks but also by non-bank organizations like retailers and government organizations,” he said. “This is because they’re seeing the value proposition of prepaid cards as distinct from debit and credit, the value that they can provide to various organizations, and really importantly to the end cardholder.”
MEETING THE NEEDS OF EMERGING PREPAID MARKETS
i2c, said Salmon, offers a suite of payment services ranging from processing to program management and a number of different packaged product solutions. It has core capabilities in four areas: issuer processing for prepaid, as well as debit, credit, commercial and mobile payments. It has acquiring services supporting things like mPOS, as well as a transaction settlement solution. Just as important is it’s wealth of tools in the loyalty and marketing area.
The company recently opened an office in Singapore, where Salmon is based, to partner more closely with organizations in emerging markets and help them understand the value of the i2c platform.
“I think what you see with i2c is that we have a flexible platform that’s modular-driven. That’s important because it allows organizations like banks, retailers, airlines, travel agents, and more to customize solutions for cardholders,” he said. “That increases engagement, the value of that card to the end cardholder, and allows the banks or retailers to optimize their overall business proposition for prepaid.”
Another way that i2c is meeting these needs, said Salmon, is with its very efficient operational support. For example, the company can launch programs in 30-45 days.
“That’s important because these markets are evolving quickly,” he said. “We think the combination of the technology platform and operational support are key in supporting market needs on this side of the world.”
Scott Salmon
General Manager, International, i2c
Scott has over 25 years of experience in strategic planning, product development and product management for some of the world’s leading financial services companies. Prior to i2c, he was Head of Prepaid Products, Asia Pacific, Central Europe, Middle East and Africa at Visa, where he spent 20 years of his career in various strategy and product roles. Before Visa, Mr. Salmon was engaged in a variety of consulting and product management roles in the retail banking sector. As i2c’s General Manager, International, Scott is responsible for developing i2c’s business in key global markets.
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