DES MOINES, Iowa– The latest in a series of white papers that examines the future of prepaid cards has been released by TMG. Authors Jeff Falk, TMG director of payments product management, and Jeff Stein, TMG product manager for prepaid, predict the rapidly growing payments channel will become increasingly popular with members of the emerging “contextual consumer” segment.
“Heavily reliant on connected mobile devices, contextual consumers have become accustomed to the convenience and instant gratification of one-click (and increasingly, no-click) purchasing,” write Falk and Stein. “The Internet of Things (IoT) is poised to satisfy this growing demand for effortless finding, ordering and purchasing of everything from laundry detergent and paper towels to savings accounts and investment plans.”
Many contemporary digital payment solutions, such as Apple Pay, PayPal or Pay with Amazon, depend on traditional credit and debit cards to authenticate and fund behind-the-scenes financial transactions. “Yet not every consumer who may be served by the IoT has – or wants to have – a credit or debit card. Enter prepaid,” the authors suggest in the paper.
Falk and Stein concede acceptance of prepaid cards is hit and miss in the current digital payments marketplace. Yet, they expect acceptance to increase as digital payments become more commonplace and demand for prepaid options continues to rise.
To support their prediction that prepaid demand will increase, the pair highlight three consumer trends:
- Hesitation to enroll credit or debit cards in connected devices. Powering connected devices with a prepaid card rather than a credit or debit card can help calm concerns related to financial losses following a compromise.
- Growing consumer desire for anonymity. Using certain types of prepaid cards is one way consumers can make their payments data less traceable.
- Preference for prepaid by Millennials. As the first generation with total connectivity, Millennials are also the pioneering generation of the IoT. The combination of Millennials’ payment preference and IoT engagement creates a market ripe for prepaid.
The paper can be downloaded here: www.tmg.global/trending. Click “Prepaid” to access the paper, “Will Prepaid Cards Embolden Contextual Commerce?”