Prepaid: An effective way to segment spending


The fifth annual Prepaid Summit: Middle East brought together more than 150 industry leaders. Expert speakers discussed how prepaid payments are overtaking traditional payment techniques. Capital business magazine caught up with Rich Bialek, Director Prepaid Visa CEMEA, Visa -who was one of the speakers- to understand how prepaid services are enhancing the market and easing the operations of every bank.

Could you please share with us the crucial global trends in prepaid services?


Fundamentals still count: There is a continued focus on addressing Anti Money Laundering and Know AML/KYC issues to effectively manage risk. Secondly, prepaid is an effective product platform to identify and address specific market segment opportunities to convert cash transactions to electronic transactions. Third, prepaid is a key component to advancing the financial inclusion and financial literacy objectives of governments.


Which industries and consumer groups are shaping the prepaid market?


Consumers see prepaid as an effective way to segment their spending, particularly for online commerce and travel. Corporations are using prepaid to replace paper based vouchers and cash incentives and rebates. Governments are deploying prepaid to take cost out of delivering government services and provide more transparency.


What are the predictions of financial opportunities in the Middle East?


Prepaid is evolving beyond an entry stage into a period of identifying and pursuing well-defined segments. The combination of defined regulations, a range of processor and program manager options and engaged issuers and distribution partners all signal continued strong growth for prepaid in the Middle East.


What are the key drivers of prepaid market growth in the region?


Government financial inclusion and literacy programs, corporate initiatives to improve controls and reduce the operating costs of incentive and per diem travel programs, consumer interest in segmenting travel and online spend. These trends combined with a strong and growing set of Visa issuers, prepaid processors, program managers and distributors are enabling robust growth in the region.


How can credit cards play an essential role in international transactions?


The Visa brand is a global sign of acceptance for merchants and cardholders enabling all to engage in and enjoy the benefits of international commerce. The Visa Brand serves all of Visa's payment cards: credit, debit and prepaid. Those products provide issuers, merchants and cardholders with an efficient, safe payment method to conduct international transactions. Which benefits a bank can generate from displaying prepaid cards as one of its products? Prepaid provides an ability to strengthen existing customer relationships by adding a new product to a customer relationship. Prepaid can also be used to acquire new customers by addressing a specific need such as travel or online commerce. These new products and relationships provide additional complementary revenues as well.


What do you foresee for the global prepaid market?


Anticipate ongoing growth in consumer understanding and acceptance of the prepaid value proposition; a convenient way to segment spending and a vehicle to access electronic payments for the under banked and unbanked. Continued profitable growth driven by travel, online and government programs. The industry will remain focused on effective risk management to ensure all stakeholders remain confident in the safety and security of the product. The stakeholder set will continue to grow as resulting in an increased number of program manager and processor options.


About Rich Bialek


Rich Bialek is Director of Prepaid Visa CEMEA at Visa. He brings extensive experience in the payment industry and specifically prepaid products, having previously held senior-level positions managing the credit business at Neiman Marcus, GE Capital and Ameritech. Rich also managed Consumer Credit Products for Visa International prior to the formation of Visa Inc. and held the post of Senior Vice President in charge of Strategic Research and Intelligence for Visa International. Most recently, he was CEO and co-founder of nekema (Kemper) providing small business insurance services, CEO of Global Card Solutions, a marketer of prepaid card programs and founder/CEO of Bialek Group, a consulting firm providing venture capital, management consulting and prepaid assistance to a variety of clients.


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