Employee Benefits News: Prepaid Rewards – What’s the story?
Do you know how a prepaid card can be used in your reward strategy or do you need a helping hand?
We know it can be baffling, so we caught up with Debbie Rose, a veteran in the space. After spending 14 years with P&MM Debbie joined Mando, marking a year’s service by launching the Universal Card, building from experience in launching the first ever corporate gift card within the employee bene ts sector.
Can you tell us about prepaid cards for reward – why are they so popular?
The idea for using prepaid in this industry is driven from the need to give a brandable reward o ering choice to audiences that reminds them of where their reward came from. A voucher isn’t brandable and is restricted and a cheque or BACS payment is lost into a bank account balance.
Prepaid cards are all about getting a client’s brand directly into their audience’s hands, offering maximum exposure to the brand, delivered efficiently, whilst providing ultimate choice to the end user. It cements relationships with audiences using our alternative payment solution with a strong focus on a positive cardholder journey and the ability to analyse usage to help tailor future programmes.
Prepaid products provide flexible solutions where vouchers, cash, or BACS style payments are not the answer.
The digital world is creating many new applications for this technology, where people want to use cashless payments in a way that is controlled and separated from the rest of their nances. Increasing online fraud is a good example of a change driver as consumers want the flexibility of being able to buy over the Internet, but have an increasing awareness and fear of financial details being hacked or misused. The collection and storing of bank account details for payments can be an admin heavy process, not to mention the data protection issues. Prepaid eliminates these issues.
You know the reward market well. What are the problems people come up against with other reward models?
The reward market is proliferated with many options which is great for choice. Giving audiences a choice makes them feel like they’re in control and calling the shots. But too much choice can sometimes be overwhelming and even lead to them not making a decision at all, otherwise known as ‘choice fatigue’. In my opinion, its becoming increasingly important to support audiences with their choices.
Paper vouchers are dated and soon will be no more. They are the poor relation to other reward choices often causing the recipient issues on redemption, which quite frankly, in an environment where speed and efficiency are key, paper can be disengaging for all. Gift cards are quicker but offer ‘compacted choice’ in that they can only be spent in that one shop. Both these options require either building and maintaining relationships with retailers or using a third party to negotiate rates on your behalf. Reward points are con ned to the desk top which isn’t supporting how the new generations want to work with technology or agile enough for today’s pace of life.
With technological advances and changes in consumer behaviours (not least the amount of choice on o er) an omnichannel approach is more important than ever. Consumers now search out the unique or niche and it’s near on impossible to scale this type of reward up to make it viable to o er to all.
As consumers increasingly reject credit cards, seek greater protection from online fraud and switch to new ways to access services such as public transport, the rise of prepaid has given way to new advancements and new uses making it current.
How does prepaid counteract that?
Prepaid offers all that choice locally and globally, but channelled through one simple proposition. The retailing space has changed signi cantly in just a few years so o ering your audience consistent, helpful and personalised offering across all channels. Prepaid allows us to deliver both online and o ine ensuring we are meeting customers’ needs wherever they are.
With audiences easily shifting between online and o ine retail channels and demanding an abundance of information at hand, Universal Card provide vital data to help our clients understand individuals’ behaviours which in turn can have a huge impact on decision making for future promotions, recognition etc
We are working with brands that want to offer a special reward such as ‘a movie on us’ / ‘have a coffee on us’ ; simply put brands who don’t necessarily want to have complex agreements with special retailers. We can use the branding of the card to deliver this business message without the need of buy in from retailers.
You were part of P&MM when the rst self-loading & salary deduction employee benefit card, incorporating a network of retailers providing cashback came out. Where is this market going now?
The number of card transactions continue to grow at a faster rate than spending as people use their cards for smaller purchases. This ongoing trend over the last three years re ects the rising using of contactless cards, as well as people buying lower-value items online.
A new report published by Allied Market Research projects that the global prepaid card market is anticipated to reach $3,653 billion by 2022
What do you envison the prepaid market looking like?
Growth in prepaid is inevitable – the above stats just tip the iceberg with demonstrating the predicted growth. I feel there is still much education to be achieved about the use of prepaid and where it can add value to a client’s business process, internally and externally.
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