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Q&A with Emily Baum, Prepaid International Forum

baum_emilyThe Prepaid International Forum (PIF) is celebrating its 10-year anniversary in 2016. Founded by prepaid pioneers Robert Courtneidge, global head of payments at international law firm Locke Lord; Ken Howes, formerly of Edgar, Dunn & Company; and the late Chris Reddish, PIF has become a voice for prepaid among policymakers and media not only in Europe but also has worked tirelessly to help prepaid establish a strong foothold in key markets like India. Emily Baum, a non-executive board member of the forum and business development director of PrePay Solutions, tells Paybefore more about PIF, where the 23-member group is headed and how the industry is responding to calls for increased prepaid regulation following the Paris terrorist attacks.

Paybefore: Why is this an important year—aside from being a milestone year? What are PIF’s key priorities?

Emily Baum: 2016 is important because of key regulatory changes such as PSD2 [the revised Payments Service Directive], the opportunity of direct integration for our members so we can compete on a level playing field with all financial services providers, and the fact that we are addressing the perception that PIF is only concerned with regulatory issues. We are actively enhancing the commercial benefits of PIF membership and have successfully implemented a consumer-facing PR campaign, gaining positive exposure for prepaid and our members. Industry associations like PIF are necessary and play an important role in keeping members on top of ever-changing market trends and regulations. At the same time, we need to make sure that members are getting value from their membership so the aim for PIF this year is to focus on even more ways in which we can support our members’ bottom lines.

Paybefore: Over the past 10 years, we’ve seen a lot of companies come and go, many struggling to become profitable. If prepaid solves so many problems in payments, why has profitability been elusive?

pif-transPIF at a Glance

Location: London with a chapter in India

Membership: PIF represents a broad array of prepaid providers and key players in the prepaid value chain. The increasing strength of the PIF membership is reflected in its board of directors, which grew from six directors in 2015 to 10 in 2016.

PIF Seal: PIF is developing a form of assurance “mark” that members can use to promote their commitment to the PIF Code of Conduct and industry best practices. The code is voluntary and aims to set a challenging set of principles to ensure the industry is delivering products with high standards.

EB: Back in 2006 there was a lot of regulatory uncertainty and very few proven business models, which meant that many programs failed to scale. Over the years prepaid has gained traction in many markets but many companies still are grappling with the profitability conundrum. Like any product that goes to market, it needs to be simplifying an existing process or solving a problem that the customer currently has. I’ve seen many programs go to market with the belief that if you provide it the customers will come, but marketing and knowing your potential customers plays a huge part in prepaid. Sometimes in the European market this is overlooked, resulting in a product that just doesn’t resonate with its intended users. The revenue streams from prepaid are also unconventional, so it’s challenging for new entrants to adapt. The right partner should guide you through the process to success.

Paybefore: We’ve seen calls from France and others in the EU to enact more regulations on prepaid, following the November terrorist attacks in Paris. Is more regulation needed? How is PIF working with policymakers to ensure that terrorist financing is not happening and the industry can flourish?

EB: The concern that low-value prepaid cards have and can be used for unlawful purposes is taken very seriously by the industry. In response, PIF has developed a number of papers and more recently a position that conveys to regulators and others what the industry is doing to prevent the products from being used for illegitimate purposes. Our latest paper explains that because providers are investing substantial amounts of money in the creation and improvement of transaction monitoring, they can provide law enforcement agencies with valuable intelligence on how and where their products have been used. PIF believes that by removing or restricting these cards there is a risk that criminals will turn to cash, which is truly anonymous and almost untraceable.

Paybefore: PIF is London-based but has worked in Latin American and India in the past, with a renewed focus on the Indian market in 2016. What’s the status of your global efforts?

EB: We’ve always been committed to raising awareness of PIF and prepaid in key markets, particularly where there is a mutual opportunity to learn from experience. As a U.K.-based organization there is a limit to what we can physically do, so we regularly seek out opportunities to speak to our counterparts in other markets to see if we can work together on common issues. PIF is still very active in India and we also are working with our regional chapter patron TSYS with knowledge-sharing activity in the Middle East. Influencing policy on an international level is naturally a challenge and this was the impetus for establishing a legal entity for PIF in India. Our renewed focus there reflects the dramatic pace of change in the Indian payments landscape and the chapter will use its new status to bolster its dialogue with key government agencies and other key stakeholders. A key objective of PIF India this year is to create opportunity for members and help drive the adoption and acceptance of prepaid solutions.

Paybefore: What are the biggest opportunities for prepaid amid the payments and fintech investment boom?

EB: The opportunity to compete on a level playing field and challenge the debit market gives prepaid access to the volumes we always have strived for. Virtual payment products are another growth area, removing the cost center of plastic and creating a diverse and quick payment solution. We can also benefit from new ideas and we are seeing some great shared wallet systems, pre-order systems for restaurants and SME solutions.

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