Intevacon introduced the Prepaid card in the fall of 2013, and we have since established a growing base of customers selling the Prepaid card at their stores. A few of our customers even sell the Prepaid card as both a gift card and as a reloadable prepaid card, with different perks and payment requirements associated with each. There are many recent articles that have been published discussing consumer trends toward the prepaid card. We thought we would highlight a few so you can start thinking of ways to market your prepaid card.
1. An article published last month by Oil Express called “Trends: Debit card use hits new low” describes how trends are declining away from the use of debit cards and increasing in the use of Prepaid cards, especially among young adults. Bank fees and the federal debit card reform activities contribute largely to the dissatisfaction. You can find a discussion of the trends away from banking institutions in a blog here. With this continued increase in the acceptance of prepaid cards and consumer trends away from banking institutions, the timing could not be better to introduce the Intevacon Prepaid Card.
2. An article by ATM Marketplace called “More Americans using cash to avoid data theft” noted that the recent data breaches have motivated consumers to use cash more often. Calling it the “revival in payment with cash,” the following statistics were provided:
40 percent of those aware of any data breaches said they’d started using cash for more of their purchases when shopping;
43 percent of those aged 18–34 said they’re using more cash; and
45 percent of those aged 35–44 said they’re using more cash.
The Intevacon prepaid card allows the perks of using cash while also offering the convenience of a card. Card holders can use their card at the pump and then reload it at the register. This allows you, the marketer, to increase cash flow and eliminate swipe fees.
3. In line with targeting specific age groups, a recent article by Convenience Store News titled “Millennials & C-stores: The Perfect Fit?” notes that about 75% of Millennials (those born after 1980) shop at convenience stores at least once a week, up from the 68% of total respondents. The number one reason cited by Millennials to shop at convenience stores is to buy beverages, followed secondly by the need to buy gas. Millennials also fulfill their impulses with purchases such as prepared food and health and beauty products. Read our earlier blog here about how Millennials are quickly adopting prepaid cards as a preferred method of payment. Millennials appear to be the ideal candidates to target with a prepaid card.
Let us know if you would like to find out more about our prepaid card or speak to one of our successful prepaid marketers.
Intevacon continues to grow each month in the number of customers who use our system and enjoy the benefits of a proprietary fleet card and prepaid card. It looks like the industry in general is growing as well. A Nielson study was published recently stating that the U.S. convenience store count increased by 1.4% in 2013, adding 2,062 stores.1,2 Probably even more striking, the convenience store industry has doubled in size over the last three decades. 1,2 This is not totally surprising considering that consumers increasingly view convenience stores as more than just an opportunity to purchase fuel. Convenience stores satisfy the demands of on-the-go consumers with their ever-expanding product lines, from fresh foods to a myriad of beverages. In total, convenience stores comprise 34.3% of all retail outlets according to Neilson. 1,2 Of these convenience stores, 62.8% of them are managed by single-store operators. 1,2
More good news for the convenience store industry—a study from Sageworks indicates that 2013 was a strong year for fuel profits at privately held gas stations, with net profits rising almost 3% on average.3 While this is a great trend, the study also noted that privately held gas station owners experienced very little profit from each gallon of gas because the margins tend to be so thin after factoring in the original wholesale cost, taxes, and swipe fees. 3 As a contrast, convenience store retailers have a lower net profit margin on average than most retailers, with the average privately held company across all industries averaging more than 8% net profit margin. 3 This low net profit margin experienced by marketers is yet another reason why Intevacon is excited to be growing. We are able to offer an innovative and dependable system to our marketers without the high transaction fees that are typically associated with standard credit cards. We succeed when our marketers succeed, and that is why we have created a pricing structure that allows for higher margins and keeps the marketer in control of his/her customers.
The convenience store industry comprises an invaluable place in our society. Intevacon is proud to offer alternative payment solutions to our marketers, both in the form of fleet cards and prepaid cards. We enjoy growing relationships throughout the industry, and we aim to support our customers through all of their successes with a system that is both flexible and innovative to their needs.
One of the most common questions that we hear from new customers relates to the process and timing of conversion to our system. Because of the intelligent design built into our system, conversion and training are really very simple. Intevacon has a team of dedicated members to help our customers reach their target Go Live schedules. We can move as fast as needed to get our customers up and running on the Intevacon system.
As a summary, below are the five basic steps for conversion onto the Intevacon System:
Site list and account information sent to Intevacon
Data imported by Intevacon
Gateway device connected at site
Transaction test with POS and product codes
Intevacon system training
Additional system set-up (if required)
The process is direct, and Intevacon is available to assist every step of the way. Our timelines vary from marketer to marketer, with conversion taking less than a week (whew!) to over a month depending on the marketer. Marketers with many sites will need a technician to visit each site to set up the gateway device (small device that allows the POS to talk to our system) and conduct a swipe test at the POS. In most cases, card account data can be automatically imported into our system, eliminating the need to manually key any account information. For customers exporting to an accounting package, we have a transfer file that can be downloaded and sent to your accounting representative for testing.
Once customers are connected to our system, we provide remote training, and we are always available for additional questions about using the system. We repeatedly hear about how easy it is to use our system, and the online log-in allows customers to have access from any computer to see real-time transactions. Intevacon’s system was built for our marketers, and we continually innovate and improve to meet the needs of our customers. Now that you know how easy it is to convert, are you ready to set up your Go Live date?
Intevacon has expanded into the Prepaid Card business, giving marketers more opportunities to capture revenue while meeting the needs of their customers. As noted in the latest blog, the popularity of Prepaid Cards only continues to grow, and the demographic of Prepaid Card users adds a new opportunity for marketers.
While the opportunity of prepaid card services is very large—$309B was loaded onto U.S. closed-loop prepaid cards in 2012—now is the time for marketers to take advantage of the prepaid trend and educate their customers on the value of making purchases with the Intevacon Prepaid Card.1
A recent article titled “Banks Can’t Afford to Miss the Prepaid Opportunity” only highlights the potential revenue associated with Prepaid Cards.1 Banks are viewing the Prepaid Card as an opportunity to generate fees for activities such as card activation, interchange fees, and reloading. The fees imposed by banks have instigated a new segment of consumer—the “debanked”.2 According to an Aite Group report, there is a $1 billion dollar prepaid card opportunity with these “debanked” consumers who are looking for alternative payment methods from traditional banking accounts.2 These “debanked” consumers are looking for alternative payment methods like the Intevacon Prepaid Card.
While prepaid card users have historically been viewed as the unbanked, underbanked, and now the “debanked”, there is also a large percentage of the millennial generation, 41%, who say they are likely to use a general purpose reloadable card instead of using a bank account.3 Not far behind, 24% of individuals aged 35-49 make the same claim.3 Even better, 70% of atm users buy prepaid cards, and 9 out of 10 atm users who buy prepaid cards would prefer to purchase their prepaid card from a non-financial institution such as a convenience store.4 In addition, a study by Synergistics Research Corp found that 23% of consumers are likely to buy their prepaid cards at a convenience store.3
As the demographic of Prepaid Card users has expanded, so have the purposes for purchasing a prepaid card. Many consumers view the prepaid card as an opportunity to budget, a way to manage money for teenagers, or an alternative to holding a bank account. Businesses can also benefit from the Intevacon Prepaid Card by using the prepaid card as an incentive for engagement. The Intevacon Prepaid Card is also a great alternative for customers who want to carry a fleet card but do not qualify for credit. The popularity of prepaid cards only increases the marketing capacity that can be applied with the Intevacon Prepaid Card.
Intevacon recently made its Prepaid Card available to marketers, and we couldn’t be more excited. The Prepaid Card empowers marketers to offer customers the ability to pay with cash but have the convenience of a payment card. In addition, the marketer can use the Prepaid Card as a tool to offer discounts as an incentive for using cash as a method of payment. Of course, every marketer understands the value of cash payments. With cash payments, especially cash payments loaded onto a card for future purchases, the marketer is able to increase cash flow, eliminate swipe fees, and encourage future purchases.
The Prepaid Card solution seems to only be gaining ground in popularity as an alternative to the credit card. Read a few recent statistics below:
Prepaid card use is growing nationally and globally:
Global prepaid growth is expected to grow at an annual rate of 22% through 2017, reaching $822B.1
As of March 1, 2013, the US government started enforcing a law requiring social security and other government benefits be paid electronically either as a direct deposit or onto a prepaid card.2
Corporations have started utilizing prepaid cards as an alternative means for paychecks, meal vouchers, and healthcare reimbursements. The result is a reduction in fraud, processing costs, and the carbon footprint of using paper. The total commercial prepaid opportunity is projected to reach $325B by 2015 globally.1
Your customers are great candidates for the Prepaid Card:
8.2% of US households are unbanked. This represents 1 in 12 households in the nation, or nearly 10 million in total.3
20.1% of US households are underbanked. This represents one in five households, or 24 million households.3
25% of households have used at least one Alternative Financial Service (AFS) product in the last year, and almost one in ten households have used two or more AFS. In the last 30 days, 12 percent of households used an AFS product.3
The general population also views Prepaid Cards as smart cash. Approximately 48% of the global prepaid open loop opportunity lies within the general population of banked consumers looking to segment their spending on top of their existing payment cards.1
Millennials are also quickly adopting prepaid cards as a preferred method of payment. In June 2013, USA Today reported the results of a survey of more than 1,000 people ages 18 to 34 finding that while 92% currently use a bank, 45% say they have also used outside services including prepaid cards, check cashing, pawn shops and payday loans.4