Report from MasterCard Europe Prepaid Conference (Sept. 16, 2014)
A white paper released today at MasterCard Europe’s Prepaid Conference in Budapest asserts that financial institutions are not keeping up with consumer demand. The proof: Consumers in a six-nation study are creating ad hoc methods to manage their funds effectively. The conclusion: Prepaid can provide many of the solutions consumers are looking for, “fulfilling consumer needs while simultaneously creating more trusted relationships.” The research, conducted for MasterCard by Ipsos MORI, took place in March – June 2014 in six markets: Belgium, Hungary, the Netherlands, Poland, Spain and Turkey. Twenty-four hundred consumers participated.
The white paper, The Power of Prepaid, contends that consumers across Europe are aspiring to take control of their finances, but have insufficient knowledge of the products available to them to achieve their goal. While they are aware of prepaid products, their depth of understanding doesn’t include the ability of prepaid to address key issues in their financial lives: budgeting, saving, online shopping, foreign travel and equipping young people with financial management skills. The paper’s premise is if consumers understood the “power” of prepaid, there would be greater demand for prepaid products. The paper highlights three key areas of opportunity for issuers: Enabling responsible financial management, engagement and acquisition.
Click here for MasterCard Europe-supplied infographics:
Among the 1,000 prepaid users included in the study, 68 percent owned a credit card and 68 percent had a savings account. This compares to 52 percent and 49 percent, respectively, of non-prepaid users in the study. As in the Philadelphia Fed’s Payment Cards Center’s recently released study of the GPR market in the U.S., the MasterCard white paper suggests that prepaid users include a surprisingly high percentage of individuals with traditional banking relationships—further dispelling the myth that prepaid is exclusively a product for those who lack financial options.
During his presentation, Gianluca Iannelli, head of B2B marketing, highlighted how MasterCard Europe’s ethnographic-focused research could be used to enhance marketing efforts. He highlighted the need to know the customer you’re targeting and the customer’s specific needs, and create the right product for that customer. He also highlighted the necessity to communicate the availability of prepaid solutions to targeted customers in a way that best positions the solution to the need. Finally, he suggested considering alternative communication vehicles—outside of traditional advertising—to reach potential customers. “Talk to them in the right place related to your value proposition,” he suggests.
MasterCard Europe’s conference continues tomorrow. Look for additional coverage in Wednesday’s Pay News.