The global market for prepaid cards is projected to reach $3.1 trillion by 2022, according to research firm Global Industry Analysts. This growth is driven by the increasing need for the financial inclusion of underserved and unbanked consumers, the provision of innovative card features and services, increasing volumes of online transactions and a rising demand for cost-effective electronic payment solutions.
The future is going to be built on new technologies playing an important role and deeper integrations that enable providers to make consumer interaction more engaging than ever before. As an industry, we need to educate the market and build the infrastructure and distribution necessary to support and facilitate this evolution.
Entering New Markets
In general, InComm has taken a direct-entry approach (i.e., we set up in the market, hire the staff and build the business from the ground up). However, there are many complex markets throughout Latin America and Asia where the formulation of partnerships allows us to understand and familiarize ourselves with market nuances, regulatory dynamics and operational pitfalls more quickly and thoroughly.
Formulating the right entry strategy is not as simple as wash, rinse and repeat. There are always exceptions, and a clear understanding of where, why and how is imperative to success. In Russia, due to the unique retail landscape as well as legal and tax implications, we used a digital-first approach to access a massive network of kiosks, more than 500,000 of which are dedicated to payments and not banking. In Southeast Asia, we formed partnerships to leverage processing technologies enabling product and retail partners to offer physical and digital products simultaneously in store.
We can’t overlook the importance of creating solutions to address the diverse needs of international markets. In Japan, for instance, by developing a cloud-based solution, making it easier, simpler and more efficient to integrate merchants, we reduce integration times by more than 50 percent, therefore vastly improving speed to market. In Canada, we developed a B2B fulfillment portal to facilitate self-service ordering for medium and small businesses looking to buy in bulk. In Brazil, we revolutionized the sale of insurance through self-service kiosks. Time and time again the belief and commitment to facilitate evolution through technology has enabled us to help global consumers find convenient ways to buy products while continuing to support retailers in an increasingly competitive digital age.
In the current global retail marketplace, the only constant is change. This is being driven by an eclectic, evolving and growing consumer base, allied and influenced by interconnected, pervasive technology. This connectivity introduces a variety of factors, ranging from economic and political to social and technological, that influence perception and behavior, ultimately affecting every aspect of how, when, where and why we buy.
For example, according to a research article published by Pew research in February of 2016, more than a quarter of the world’s population uses smartphones. In June of 2015, an article published in TechCrunch estimated that by 2020 more than 6.1 billion smartphones will be in use worldwide. And, on Aug., 24, 2015, 1 billion people used Facebook in a single day—that’s one-seventh of the world’s entire population.
Older, Digitally Savvy Consumers
The result is an expanding, highly connected, sophisticated, informed and demanding population. Adding to this complexity, per the UN, is the fact that the proportion of people over the age of 60 will double between 2007 and 2050. This future older generation is increasingly digitally savvy, socially connected, healthy and active. This unprecedented shift in demographics, technology and attitudes will create huge opportunities and challenges for brands and retailers alike, particularly for international organizations that also must factor in different rates of change and differing cultures.
While traditional brick-and-mortar may still be a preferred purchase destination for prepaid, communication regarding inventory and offers needs to become more personal and timely. It’s a symptom of turbo-charged change sitting alongside adherence to long-standing values and behaviors. It’s truly all about satisfying the needs and wants of instant gratification as consumers are demanding the shortest, easiest and most enjoyable route to their purchases, which means we need to make everything simple, frictionless and fast.
While we have a sense of this magnitude of change, the factors influencing it and the speed at which it’s accelerating us into the future, it can’t be predicted with any real certainty exactly how all the pieces will settle. The only constant is change itself, which is something to embrace and move toward, not run away from.
Frank Monaco is EVP and general manager at InComm International. Its footprint spans 33 countries and services in excess of 400,000 retail partners around the globe.
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore presents many points of view to offer readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.