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.
On Friday, December 13th, US District Judge John Gleeson approved the $5.7 billion class-action swipe fee settlement that has been in discussion since 2012. This settlement is the offspring of private anti-trust litigation that was filed by NACS in 2005 against major credit card companies and banks. The approved settlement was stated to be “woefully inadequate”, and therefore, NACS elected to opt out of the settlement. Now that the settlement has been passed by Judge Gleeson, retailers are said to be left in worse shape than if they had just lost the trial.
This legal decision was very important to marketers, as credit-card swipe fees cost merchants and their customers an estimated $30 billion a year1. Now that the settlement has passed, merchants will be even less protected from unreasonable rates by the credit card companies.
Here is an excerpt of the response from NACS:
The proposed settlement would give merchants a limited right to surcharge that is too complex to implement and would allow the credit card companies to continue to set prices for their member banks. Furthermore, the proposed settlement would do nothing to give merchants competitive network routing choices, and also lock-in many anti-competitive activities of the credit card companies forever2.
As a payment solutions company, we can only offer our condolences to the merchants whose livelihood is affected by this ruling. We can also offer a solution to marketers who want to capture back the revenue lost to the major credit card companies. The Intevacon Proprietary Fleet card allows marketers to offer their customers a payment solution with the capability to leverage card controls, a perfect way to increase loyalty with card holders. Our rates give marketers an advantage and they also leave margin to reward fuel customers with discounts and other incentives. Our Prepaid card nicely complements the function of the Fleet card by providing customers with a cash-based method of payment and the convenience of a card. In all of our efforts, we aim to empower and partner with the marketer.
The petroleum industry fuels the nation’s activity. At Intevacon, we aspire to equip our marketers with the best solutions and the best pricing to win at this endeavor. For more information about our fleet and prepaid card solutions, view an introductory presentation here, or reach out at firstname.lastname@example.org.