Posted by Mark Brousseau
Global economic downturns appear to be weighing heavily on the growth of credit and debit card markets worldwide, while simultaneously fueling an increasing demand for prepaid cards.
Prepaid industry participants however, will discover unique challenges in growing their business in the international markets, according to Mercator Advisory Group.
"Going after prepaid opportunities in the international market requires more than just understanding of the macro-economies and regulatory environments in each markets," comments Terry Xie, Director of Mercator Advisory Group's International Payments Advisory Service. "Fully understanding targeted customers, knowing where they are, and what financial help they need, among others critical factors, are pre-requisites for designing and implementing creative product plans to best serve these customers. In addition, selecting the right sales, marketing, and distribution channels while aligning the interests of different parties involved in a prepaid business ecosystem are often key success factors in serving prepaid customers around the world."
Key findings on the prepaid card market from Mercator Advisory Group:
... Legal, regulatory, and cultural differences in international markets are significant and represent challenges for international players.
... Out-of-the-box thinking is crucial as prepaid business is a non-traditional market for the banks. This gives specialized program managers the edge in competition.
... Innovations in providing prepaid solutions to identify and serve un-meet financial needs in developing markets bring lots of potentials.
... The value chains of the prepaid card industry in different markets tend to be complicated and demand careful considerations in the designing of a prepaid business model. Getting different parties involved and building a business ecosystem requires creative thinking and a willingness to cooperate.
... The design of prepaid card products need to be based in-depth understanding of the market opportunities and consumer behavior. A successful prepaid program will have features and functions that resonate with a large group of targeted users with very specific needs.
What do you think? Post your comments below.
Showing posts with label gift cards. Show all posts
Showing posts with label gift cards. Show all posts
Sunday, April 12, 2009
Thursday, January 1, 2009
Recession Impacts Gift Card Sales
By Mark Brousseau
Gift card sales haven't been spared from the global recession.
Store gift cards are expected to generate $61 billion in sales in the fourth quarter of 2008, down from $70 billion in 2007, according to Brian Riley, senior analyst at research firm TowerGroup.
The silver lining: those from financial institutions, like Visa gift cards, are expected to edge up to $28 billion in sales from $27 billion in last year's fourth quarter.
Consumers snapped up gift cards in prior years, USA Today reports. Last December, market research firm NPD Group said about 61 percent of Americans bought at least one holiday gift card in 2007, up from 31 percent the year before and just 16 percent in 2005.
What do you think? Post your comment below.
Gift card sales haven't been spared from the global recession.
Store gift cards are expected to generate $61 billion in sales in the fourth quarter of 2008, down from $70 billion in 2007, according to Brian Riley, senior analyst at research firm TowerGroup.
The silver lining: those from financial institutions, like Visa gift cards, are expected to edge up to $28 billion in sales from $27 billion in last year's fourth quarter.
Consumers snapped up gift cards in prior years, USA Today reports. Last December, market research firm NPD Group said about 61 percent of Americans bought at least one holiday gift card in 2007, up from 31 percent the year before and just 16 percent in 2005.
What do you think? Post your comment below.
Tuesday, September 9, 2008
Gift Cards and the Economy
Posted by Mark Brousseau
Interesting article from Kiplinger's Personal Finance on gift cards:
Got a Gift Card? Use It or Lose It
Some bankrupt retailers honor them, but don't count on it.
By Joan Goldwasser From Kiplinger's Personal Finance magazine, September 2008
Gift cards totaling about $66 billion will be tucked into birthday, wedding and holiday cards this year. According to Brian Riley, TowerGroup's research director for bank cards, roughly one-third will be spent within 90 days and another third within six months. Some $20 billion worth will linger in drawers for months.
Delayed gratification in this case could be a mistake. Retailers are struggling in the current economy, and if a gift-card issuer files for bankruptcy, there's a good chance your card will become worthless.
Although bankrupt companies have assets, which are distributed to the firm's creditors, your status as an unsecured creditor puts you in line behind banks and other secured creditors. They will receive 100% of their investment before you get a dime. If you get anything at all, it's likely to be small, perhaps 5 cents on the dollar.
Sometimes a firm will ask a bankruptcy judge to let it honor gift cards. But don't count on that happening.
Several retailers have filed for bankruptcy recently or appear dangerously close. Gift cards from The Sharper Image are worthless; ditto for those of The Bombay Company.
Lillian Vernon, the once-popular catalog and online retailer, was sold to Current USA, which markets address labels, scrapbooking supplies and other stationery products. Current is accepting Lillian Vernon certificates at face value.
Linens 'n Things is also honoring cards for the full amount. So are Movie Gallery and Hollywood Video, just emerged from bankruptcy.
Bankruptcy rumors are swirling around Circuit City. Customers should redeem its cards pronto.
Interesting article from Kiplinger's Personal Finance on gift cards:
Got a Gift Card? Use It or Lose It
Some bankrupt retailers honor them, but don't count on it.
By Joan Goldwasser From Kiplinger's Personal Finance magazine, September 2008
Gift cards totaling about $66 billion will be tucked into birthday, wedding and holiday cards this year. According to Brian Riley, TowerGroup's research director for bank cards, roughly one-third will be spent within 90 days and another third within six months. Some $20 billion worth will linger in drawers for months.
Delayed gratification in this case could be a mistake. Retailers are struggling in the current economy, and if a gift-card issuer files for bankruptcy, there's a good chance your card will become worthless.
Although bankrupt companies have assets, which are distributed to the firm's creditors, your status as an unsecured creditor puts you in line behind banks and other secured creditors. They will receive 100% of their investment before you get a dime. If you get anything at all, it's likely to be small, perhaps 5 cents on the dollar.
Sometimes a firm will ask a bankruptcy judge to let it honor gift cards. But don't count on that happening.
Several retailers have filed for bankruptcy recently or appear dangerously close. Gift cards from The Sharper Image are worthless; ditto for those of The Bombay Company.
Lillian Vernon, the once-popular catalog and online retailer, was sold to Current USA, which markets address labels, scrapbooking supplies and other stationery products. Current is accepting Lillian Vernon certificates at face value.
Linens 'n Things is also honoring cards for the full amount. So are Movie Gallery and Hollywood Video, just emerged from bankruptcy.
Bankruptcy rumors are swirling around Circuit City. Customers should redeem its cards pronto.
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