he concept of paying in advance for goods and services used to elicit warnings of "buyer beware." Not anymore.

The prepaid market overall is growing by leaps and bounds. Analysts say the prepaid wireless phone industry alone will be worth $4.4 billion by the end of 2003.

As impressive as that sounds, though, the sky is virtually the limit these days when it comes to things you can pay for before you use them.

Vendors with offerings in this market segment now include wireless and long-distance telecommunications companies, stored-value card issuers, Internet access providers and satellite TV services.

Many consumers choose to make purchases this way for a number of reasons. The idea of prepaid services appeals to people who might not qualify to open accounts dependent on good credit.

There also are a growing number of credit-laden people with limits and budgets stretched to the max, choosing to forgo monthly bills for the convenience of buying amounts of service time or specific dollar amounts on payment cards at a local retailer.

As the number and variety of providers in the prepaid market increases, it also is proving to be a good source of revenue for retailers and the sales agents who sell financial services and products.

For Merchant Level Salespeople, selling prepaid solutions means having a whole new dimension of products to pass along to merchants, who in turn also get a piece of the prepaid pie when they sell the services to their own customers. Many merchants are becoming "cash collection agencies" for a growing variety of prepaid product providers.

A company called PRE Solutions makes the connection between vendors, agents, retailers and consumers. It has formed partnerships with vendors, retail outlets and payment services providers to give customers access to a wide variety of products on a prepaid basis.

Those partnerships are put together and presented to merchants as a package, complete with signage, vendor logos and a multi-application terminal programmed to accept credit and debit payments and dispense the prepaid receipts.

As PRE Solutions' Senior Vice President of Sales, Les Cowie is responsible for developing the company's distribution channels. His enthusiasm for PRE Solutions' system is based in large part on the sales opportunities it gives to the MLS as well as the simplicity and logic behind the program's benefits. Having built the "feet on the street" program in Florida for First Horizon before joining PRE Solutions, Cowie knows this channel well.

"A major part of our growth strategy is that we understand both small and large merchants. We also understand the world of independent contractors," Cowie said. "Acquirers have been trying to give ISOs something else to offer merchants, to keep their foot in the door."

PRE Solutions has a completely different approach to vendor partnerships and means of implementation. Other prepaid solutions depend on a supply of plastic cards that retailers sell to customers with set amounts of time or money on them. PRE Solutions has instead formulated a complete program for selling prepaid services that includes everything a merchant needs.

The company offers real-time electronic delivery of PINs or cards that have no value until activated at the point-of-sale.

PRE Solutions has developed partnerships with dozens of service providers - such as AT&T Wireless, Long Distance and Worldnet Service; Verizon Wireless; T-Mobile; and Next Estate Communications - to sell prepaid services on specially programmed multi-application terminals or through software integrating PRE Solutions with the merchant's system.

The merchant location is able to accept payment from the customer and print a receipt that includes a PIN number and phone number for the desired vendor, which the customer uses to access the service that was just purchased. Cowie described his company's approach to prepaid as a win-win solution for all parties concerned - agents, merchants and customers: "This gives independent agents a real foot in the door. Once they're in, they have an opportunity to explain how the merchant can make money without purchasing any new inventory.

"It also gives the agent a chance to churn terminals. ISOs provide multi-application terminals to lease or buy. Our solutions are packaged in one terminal - credit, debit, prepaid, even gift cards."

While it's not necessary that merchants replace their old terminals, Cowie said most choose to upgrade. PRE Solutions transactions are run through Ingenico and VeriFone multi-application terminals.

The sales agent enjoys an upfront commission or recurring income from all of the transactions made on the terminal, and merchant retention is high. "Merchants don't jump when you're offering them value," he said.

Retailers also benefit from increased customer loyalty.

"For merchants, it means profitability, too," Cowie said. "There is a lot of freedom in what the merchant can do with our program. They can choose which vendors they want to sell prepaid services for. We offer all national wireless services as well as many regional cellular providers.

"Merchants collect the cash. Since the system works on a PIN delivery system with a printed receipt that cannot be used without the PIN entry, there is no need for a hard card and therefore no shrinkage (employee theft). We ACH their accounts weekly, leaving behind their commissions.

"Stores also get free marketing materials. We provide a variety of sizes and styles of merchandising elements with logos, for large and small merchants."

The materials are brightly colored, attention-grabbing and designed to fit in a number of spaces.

PRE Solutions also has calculated the profit potentials for merchants based on the transaction revenues and for sales reps, per month and depending on numbers of transactions. These revenue projections are charted and included with the introductory marketing materials for agents to use on sales calls.

Cowie explained that PRE Solutions adds to its offerings for prepaid services providers several times a year. Merchants receive notification by mail that new services are available, and software that enables the new solutions to be purchased is downloaded onto the terminal.

Consumers are discovering the prepaid market, too. PRE Solutions has terminals deployed in tens of thousands of retail locations throughout the U.S. and the Caribbean, Cowie said. Those locations include convenience, grocery and drug stores, check-cashing facilities and wireless services outlets.

"Our first target is the 35% of people who can't get credit, or the unbanked. Prepaid cell time is an absolutely exploding market," he said. "All kinds of consumers - from parents with college-age kids to those with big credit card balances or without bank accounts - are buying prepaid phone time, using stored-value cards with limited secured amounts or paying for satellite TV reception."

PRE Solutions' headquarters in Norcross, Ga., includes a fully integrated distribution center where terminal inventories and marketing materials are managed. Cowie said the company has about 150 employees, mostly in Georgia; an in-house sales staff handles the multi-lane, large-enterprise accounts, and a support team covers MLS and acquirer accounts.

A call center handles customer service calls 24/7/365 and in two languages. Cowie said someone is always available to answer questions on terminal usage, product sales and commission payments. Web reporting is another way both sales reps and merchants can track accounts and volume.

PRE Solutions prepaid services are proving to be a profit center for sales agents, creating new opportunities with more revenue, more door swings and more merchant loyalty. For those merchants, it means a cash flow and profit generator with no inventory, no spoilage, no investment, no shrinkage and no hassles.