In a webinar presented by The 2009 Prepaid Card Expo, two industry veterans suggested program managers consider researching opportunities in the international realm. Ray Stanton, Managing Director at Stanton Consultancy Ltd., and David T. Shewmaker, Managing Director Europe for StoreFinancial, proposed that since competition in the U.S. market continues to grow, companies should expand their reach into an increasingly prepaid-savvy world.
"Prepaid is largely a saturated market in the U.S.," Stanton said. "If you go to just about every shopping mall, every retailer within that shopping mall, there is some form of prepaid card. You can't seem to get away from it." The U.K. market, for example, is largely untapped, Stanton claimed. "I think that the U.K. now in particular is in a land-grab type of environment," he said. But for U.S. companies to stake their claims in the U.K. and other international markets, companies "need to have the right products to be targeted at the right time for the right set of consumer habits," Stanton said.
Businesses must understand the complexities of individual countries when rolling out programs, Shewmaker said. When StoreFinancial rolls out gift card programs in U.K. shopping malls, Shewmaker reminds himself to "always take my U.S. glasses off and look through the eyes of what's going on in the U.K."
As an example, Shewmaker noted that it was cost-prohibitive to roll out one-time-only or instant-issue gift cards embedded with near field communication-enabled chips, but U.K. clerks had been taught to only accept chip and PIN smart cards to minimize fraud and heighten security. So it was "a little more involved" to educate retailers on the benefits of the cheaper mag stripe gift cards popular in the United States, he said.
U.S. businesses must also recognize the European market has a complex regulatory landscape. For instance, StoreFinancial had to postpone a rollout of gift card programs in Italian shopping malls because it didn't have clarification on regulations that governed single-load gift cards in Italy, Shewmaker said.
Cultural differences must also be considered. Stanton said Italy has become a popular market for prepaid cards because Italians are generally leery of credit cards. "There is much more a usage of cash or debit within Italy," he noted. "Coupled alongside that is that the cost of credit cards and debit cards is extremely high. So they want an attractive option.
"Choose your markets carefully. Look to see what the attitude toward card usage is, whether a country is more cash-based, such as the south and the east of Europe, or whether they have an affinity with plastic to start with."
Stanton related a survey that reported only 10 percent of European respondents knew what a prepaid card was. That statistic speaks to the substantial investment businesses must make in education, as well as to the large, potentially lucrative opportunity for U.S. prepaid players looking to branch out globally.
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