FiCentive shows affinity for prepaid
repaid card issuer and program manager FiCentive Inc. is only two months old. But it's mature for its age.
FiCentive assumed the assets of the two-year-old card issuing division of Payment Data Systems Inc. One reason San Antonio-based Payment Data spun off its issuing division into FiCentive is because of the emerging prepaid market's promise.
FiCentive's Chairman and Chief Executive Officer, Louis Hoch, pegs the potential global prepaid industry at a staggering $6.5 trillion. The portion the United States market might expect to realize from that bonanza is "in the trillions as well," Hoch said.
FiCentive is leveraging its relationships with MasterCard Worldwide (the network brand) and MetaBank (the bank sponsor) to dive into prepaid with payroll cards, incentive cards (gift, rewards and rebates, for example), government benefit and insurance claims cards, and general spend cards designed for teens.
Key components
FiCentive is also banking on innovative technologies to give it a competitive advantage in the marketplace. One innovation is a patented bill pay solution that supports an array of uses, from real-time funds transfer to person-to-person payments. The technology is bank-independent, meaning it supports all bank accounts, regardless of account location or type.
Hoch said FiCentive can implement tailored card programs for corporations and retailers in 30 days or less.
Payment Data was also the first company to roll out flat cards, as opposed to embossed cards with raised printing. Also called electronic use only cards, flat cards cannot be used with knucklebusters (the manual and portable card acceptance machines) that are still used in many parts of the world. Because cards cannot be authorized online with knucklebusters, fraudulent cards can go undetected on the old-fashioned, 20th century machines.
Good looking cards
FiCentive's first flat card is the Natalie Gulbis Gift MasterCard, named after the popular professional golfer. It is considered an affinity card, as opposed to a loyalty card.
"There's a lot of similarity between loyalty and affinity," Hoch said. "But affinity, to us, is just a group of potential cardholders that associate themselves with some type of brand or some type of celebrity."
Gulbis fans buy and receive gift cards with Gulbis' picture on them. Cardholders pay issuance, maintenance and lost or stolen card replacement fees.
Pitching affinity
Hoch believes a huge, largely untapped market exists for ISOs and merchant level salespeople (MLSs) to sell affinity prepaid programs. Hoch noted that an affinity group does not have to be based on a particular celebrity. Instead, "an affinity group can be an employer using a payroll card," he said.
"And ISOs are very likely to have some strong relationships that they can leverage," he added. "So if an ISO has sold a utility [company] and is doing its payment processing, then it's a natural fit for them to contact the utility and say, 'What are you doing with your unbanked employees? Are you issuing them checks?'
The ISO can then pitch payroll cards to the utility. "Those types of scenarios are easier to sell into because payroll cards save the employers money, save the employees money," Hoch said. "Payroll cards strengthen the relationship between the employee and employer, and the ISOs can get in there because they have those relationships with those types of companies."
Affinity plays into the mix because the cards are tied directly to workers' employment. In other words, employees have a natural (and obvious) affinity for their employers.
Selling payroll cards through affinity programs is "probably where the ISOs have the biggest quick hit," Hoch said. "It's also a nice recurring stream. And it's a way to leverage their existing relationships."
Hoch suggests enterprising ISOs and MLSs also explore general-purpose reloadable prepaid cards, rebate cards and refund cards.
"There's a lot of opportunities," Hoch said. "It's definitely an exciting time for prepaid."
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