Report: Merchants Want More Partners Amid Soaring Prepaid Sales (April 9, 2014)
Prepaid card sales at retail are on the rise, driven by the combined efforts of prepaid providers, processors, networks and merchants, according to a new report by Aite Group. For merchants, including big-box stores, drugstores, grocers and convenience stores, prepaid card sales lead to high-margin revenue—and the greater the variety and types of prepaid cards a merchant offers for in-store purchase, the better. More than 70 percent of the retailers polled for the Aite study, which was conducted in partnership with InComm, reported selling open- and closed-loop prepaid cards and third-party gift cards.
Meanwhile, retailers are on the lookout for more payments partners; more than half of those surveyed said they planned to enter partnerships between now and 2015. Among the most popular partners cited were MasterCard, Visa, American Express and Facebook. Several respondents reported they would be joining with the retailer-led MCX digital wallet venture, PayPal or Google. To a lesser extent, retailers planned partnerships with Groupon, Square and Amazon.
In the report, Aite recommends prepaid providers capitalize on the thirst for partners by promoting the benefits of offering prepaid cards. “Companies that can formulate a meaningful strategic value-added service for merchants should approach merchants with new ideas that result in revenue growth,” said Madeline Aufseeser, senior analyst, retail banking for Aite and the author of the report.