CHICAGO--(BUSINESS WIRE)--A new tool developed by the Center for Financial Services Innovation (CFSI) aims to help financial service providers improve the design and delivery of prepaid cards. The Compass Guide to Prepaid is the first of a series of tools and resources CFSI plans to issue on how to apply the Compass Principles- a set of guidelines finalized in a white paper by CFSI in April 2012- across various financial service products.
“Prepaid cards are a good account option because they are flexible, accessible and convenient, particularly for those who cannot or chose not to have a traditional bank account,” says Jennifer Tescher, President & CEO, CFSI. “The Guide was created to help financial service companies ensure they are providing the best quality prepaid product to their consumers.”
In 2011, prepaid card use increased by 18 percent.1 By 2013, the amount consumers load onto prepaid cards is expected to jump 44 percent.2 Prepaid cards account for a large portion of the financial services industry—particularly among the underbanked population. Because of the revenue potential, many larger financial institutions are entering the prepaid market, increasing the need for guidance around developing high-quality products.
The Compass Guide to Prepaid can be used by prepaid program managers to review or improve existing offerings, or to design new ones. Other actors in the prepaid supply chain—such as issuing banks, processors, payment networks, distributors, and investors—can also use the Guide to inform their own assessment tools for prepaid programs and to determine which features and functionality to develop and offer to their prepaid partners.
The Guide is divided into two main components: 1) practices for improving the design and delivery of prepaid products; and 2) examples of how to apply these practices. The practices outlined by the Guide cover all aspects of a prepaid account including:
- Product Functionality
- Marketing and Communications
- Customer Service and Account Information
- Pricing Design
- Distribution Channels and Product Acquisition
- Additional Services
CFSI worked with its Advisory Council on Prepaid to develop the Compass Guide to Prepaid. The Advisory Council is a group of prepaid industry thought leaders convened by CFSI over a period of one year to work together to shape a vision for quality specific to the prepaid industry. The group consists of representatives from a cross-section of different marketplace actors (including practitioners and consumer advocates), members with diverse business models/philosophies and policy positions, and those influential on the industry, at both the individual and corporate level. Walmart and Consumers Union were among the 18 advisory member organizations that weighed in on the Guide and provided support.
“CFSI’s Compass Guide to Prepaid will be a great tool for financial service providers as they develop prepaid offerings for customers such as ours,” says Daniel Eckert, Vice President, Financial Services, Walmart U.S. “As a retailer, we are committed to offering our customers quality products at a great price and value, and this Guide will help ensure suppliers work within a similar framework when it comes to Prepaid.”
“The Compass Guide to Prepaid is a tool developed by CFSI that aims to help prepaid companies offer a better product and better services to consumers,” says Michelle Jun, Senior Attorney, Consumers Union. “As part of their Advisory Council on Prepaid, Consumers Union provided feedback and guidance on how the Guide could be most useful for consumers.”
At this year’s Power of Prepaid Conference, Romy Parzick, Manager, Innovation and Research, CFSI, will be unveiling the Compass Guide to Prepaid as part of a panel entitled “Quality in Prepaid: A Force for Change in Consumers’ Lives.” The conference is to take place from June 3 to June 6 in the Washington D.C.-area.
Learn more about the Compass Guide to Prepaid or download it free at the Center for Financial Service’s website.
This project is supported, in part, by the Ford Foundation and Omidyar Network.
The Center for Financial Services Innovation is the nation’s leading authority on financial services for underbanked consumers. Since 2004, its programs have focused on informing, connecting, and investing – gathering enhanced intelligence, brokering and supporting productive industry relationships, and fostering best-in-class products and strategies. CFSI works with leaders and innovators in the business, government and nonprofit sectors to transform the financial services landscape. For more on CFSI, go to www.cfsinnovation.com or follow us on twitter @cfsinnovation.