There is an interesting trend starting in the US where convenience stores such as 7-Eleven have now started placing their recharge kiosks in convenience stores pushing people to use prepaid cards inside stores.
Open-loop loads are expected to reach $281.7 billion in 2013, according to the Mercator Advisory Group’s Prepaid Market Forecast 2011–2014 that views the prepaid market slowing down as regulatory and economic issues and other factors continue to shape the market over time. Internationally prepaid providers
Prepaid cards are starting to be tied to financial services, such as remittance and bill payments, but that tie-in can mean that they may compete with stores offering the same services. Judging from the data reported from 2009- 2011, open-loop cards are continuing to move in a decided upswing. Open-loop cards are gaining momentum as businesses and governments see them as a way to reduce paper checks. Plus, they are alternatives for people who have had bad experiences with bank accounts.
Some prepaid card customers also want cards for budgeting or as a safety net instead of using their credit or debit cards when they’re making online purchases. Reloadable cards are an option that generates repeat business from customers who come back to the convenience store to reload their cards. These people will likely buy something while in store, so reloadable cards might lead to incremental sales.
When it comes to developing a prepaid strategy, the bottom line for convenience stores is developing one that benefits their customers. “It sounds cliché, but c-stores need to know their customers as best they can to tailor offers to their base,” said Ben Jackson, senior analyst at the Mercator Advisory Group. “They should also consider ways they can work with prepaid card suppliers to drive more traffic into their stores through things like reloads and loyalty programs.”
As cards that can be reloaded continue to grow it’s interesting to see how these kiosks are growing in the US. We’re excited to see which retailer becomes the first in South Africa to do this and how they will implement this technology.