Wednesday, January 14, 2009

SourceMedia's 4th Underbanked Forum Announced

About The Event - 4th Annual Underbanked Financial Services Forum
 The 4th Annual Underbanked Financial Services Forum presented with the Center for Financial Services Innovation will be held this year June 1-3 in Dallas, TX at The Westin Galleria.

This year's forum will be exploring multiple perspectives on serving the underbanked in today's climate. As awareness of the potential value and demographic diversity of the underbanked market continues to grow, the Underbanked Financial Services Forum remains the best single place to learn from and connect with the people transforming the financial services landscape.

Since its inception in 2006, this annual gathering has become the premier event for players across the financial services spectrum:

* Financial institutions and credit unions
* Technology and service companies
* Retailers and other providers
* Nonprofit organizations
* Government agencies

Back by popular demand...

Underbanked Xtreme Networking is back by popular demand! Borrowed from the idea of speed dating, this networking event delivers an accelerated meet and exchange between industry leaders and innovators. Pre-register before the event to receive an optimized schedule tailored to fit your specific networking needs.

Who are the underbanked?

Get the latest information from industry experts and case studies from on the ground and across the globe on the best strategies and offerings to achieve profitable growth and long-term success.


Javelin Prepaid Card Report Available

New Javelin Report on Evolving Prepaid Card Market, Consumer Usage and How Financial Institutions Benefit

(Click Pic to Enlarge)

SAN FRANCISCO, January 13, 2009 – Javelin Strategy & Research (, today announced availability of a new report about the prepaid card market, which highlights consumer usage and what financial institutions can gain through a prepaid program—more specifically, how a prepaid card issuer should assess and choose a processing partner in order to obtain the greatest success and return on investment from their prepaid card programs.

According to Javelin, the processor choice is often overlooked and undervalued by prepaid program managers. But growth in the complexity of prepaid products, as well as year-over-year transaction volume growth underscores the criticality of selecting the right processor to keep pace and optimize investments long-term. Javelin delves into four key components of an effective prepaid processing program, including managing the card, serving the cardholder, executing the transaction and, getting the most from the platform. A detailed discussion of each component provides decision-making guidance to prepaid issuers chartered with managing a program. The study also takes on several of the common misconceptions about the processor selection criteria, dispelling myths and setting the record straight based on perspectives from practitioners and current market trends.

“Consumers are becoming more reliant on prepaid cards as a primary payment method as the variety of prepaid products expands,” said Javelin President and Founder, James Van Dyke. “This behavioral shift offers financial institutions and other prepaid issuers an opportunity to not only establish longer-term relationships with account holders, but create additional revenue.”

A Wide Array of Prepaid Card Products Make This Payment Method Attractive

Prepaid card applications span a wide range of consumer needs, including teen financial management, gifts, travel, online and in-store shopping, payroll and healthcare benefits. According to the report, with multiple loading and reloading mechanisms available today, prepaid cards have longer-term usage and are less disposable in nature—making prepaid programs attractive to financial institutions as a versatile method to increase revenue.

Prepaid is Not Just for Lower Income and Younger Consumers

According to the study, consumer usage of prepaid card products is growing and extends well beyond the commonly assumed demographics of lower income and younger consumers. Bruce Cundiff, the report author and Javelin’s Director of Payments Research and Consulting, said, “Consumer usage has spread relatively evenly among most income groups, with middle income Americans demonstrating the highest usage of prepaid products both online and offline. What is interesting to note, the multi-channel nature of the prepaid relationship with middle-to-higher income consumers demonstrates and validates the revenue stream capabilities that prepaid issuance provides.”

Security, Risk Mitigation and Regulatory Compliance

Javelin finds that security is paramount in prepaid card issuance, not only in terms of fraud mitigation but also in the scrutiny that issuers face to comply with regulatory Homeland Security standards—anti-money-laundering (AML) and know your customer (KYC) initiatives. Because security matters, prepaid card issuers may be increasingly held accountable for the actions of not only their immediate constituents and customers, but also the indirect usage of their products.

Learn More About Javelin’s New Report

For financial institutions, payment companies and other third parties in the prepaid market, this report delves into the primary components of a prepaid platform and processor relationship. It challenges common myths and describes important risks surrounding prepaid processing. Javelin’s Prepaid Product Evolution Report helps prepaid program mangers better understand how to navigate creation of a prepaid program or expansion of an existing one in order to increase revenue. Javelin provides an overview about the study at :

Or click here to download the brochure (PDF

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How Online Buyers Pay

eMarkerter published an article this morning regarding which payment methods online shoppers use. and projections until 2013.  While credit cards usage is expected to drop 32%, from it's 59% level in 2007 to 40% in 2013, debit usage is expected to grow 15% during the same time period.  (see chart on left)

eMarketer also talked about "why" consumers use "payments services" (e.g. PayPal) and the number one reason, was "most secure...don't have to enter credit card information online."  (they must mean everytime, because when I chose PayPal to make a purchase on eBay, {see number two reason in chart below right} I had to enter my credit card/debit card information) 

With our personal swiping device, you "never" had to enter your credit card information online...just swipe (more convenient and faster) and enter PIN (outside browser space) making for a more secure online payment.   No skimming worries, no tampering worries, just you and your own private swiping device, in the privacy of your home...  Here's the article from eMarketer. 

How Do Online Buyers Pay?
JANUARY 14, 2009

Mostly by credit card, but other payment methods are gaining ground.  Most online buyers pay with credit cards. But the online credit card retail purchase volume growth rate is falling, and not just because of the recession.

Data from a January 2009 Javelin Strategy and Research study reveals that credit card purchase volume will continue to grow online and command the largest market share among payment types, reaching $107 billion by 2013, up from $81 billion in 2008.

Yet that is less than a 6% compound annual growth rate (CAGR), and the percentage of online purchases made with credit cards is set to fall to 40% in 2013, down from 59% in 2007. Javelin said that the share of online purchases made with private-label and prepaid cards would increase during that time.

The increased usage of other payment types is not an outright rejection of cards; Javelin estimated that e-mail payments such as PayPal would still account for only 10% of online purchases in 2013, up from 7% in 2007.

Rather, prepaid and debit cards may be viewed as ways to avoid interest charges, and private-label cards frequently have loyalty or rewards programs that give users cash or products back.

Some online buyers are still concerned about credit card fraud as well. In 2007, JupiterResearch and Ipsos Insight asked users of alternative payment methods including PayPal why they did not use credit cards, and the findings are worth remembering.

More security was the top reason given by online buyers for using payment services instead of credit cards. Respondents also said they used such services because of restricted options on credit cards, and greater flexibility, more convenience and easier dispute resolution than when they used credit cards.

Advertisement: Agencies and brands from all verticals rely on eMarketer Total Access for analysis and data. Daily articles are just the tip of the iceberg. Find out what you are missing. Learn more about Total Access today.

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