Jul 30 2004 : Over 22 million prepaid debit cards will be issued in 2004, and within five years, more than 50 million will be in use, according to the Pelorus Group’s latest study, “Stored Value: Transforming The Payments Industry”. Increasing stored-value card usage in the US “virtually mandates a re-examination of traditional credit/debit models”, Pelorus advises in its report, and banks will need to rethink their market strategies. On the retail side, US supermarket chain Albertsons is tapping into the trend by offering MasterCard’s Green Dot prepaid debit card and prepaid wireless airtime at over 1,800 grocery and drug stores.
Starbucks’ prepaid card pioneered a trend that leads Pelorus to predict US consumers to buy 400 million convenience (prepaid/stored-value) cards in 2004, rather than wait in line to pay for a coffee or food. With about 30 million US households (almost one in three) lacking a credit card, Pelorus identifies this group, together with the 25 million-plus teenagers, as “a prime target for stored value alternatives”. Albertson’s stored-value initiative for example enables consumers to buy the Green Dot Prepaid MasterCard at Coinstar kiosks in its stores, where the cards can be reloaded after being sent to the purchaser’s home.
Banks, credit/debit card issuers and prepaid market players are already tailoring their current strategies to incorporate stored-value products, according to Pelorus. MasterCard and BankFirst recently launched the prepaid Usher Raymond IV Debit Card, which supports debit card payments, ATM cash withdrawals, bill payments and can be accepted anywhere on the global Cirrus network. Standard Federal Bank is also offering its prepaid Money Transfer Card as a way for consumers to access funds at any ATMs with the Cirrus or Maestro logos, or to make PIN-secured payments at any Maestro card-accepting merchant.
Business Wire
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