Webinar: Social Media, Fraud Worries Could Boost Prepaid Growth
Consumer fraud concerns and the popularity of mobile messaging apps likely will secure prepaid a firm spot in future commerce, according to Martin Koderisch, a manager at Edgar, Dunn and Company (EDC) during a recent Webinar entitled “Prepaid Payments in the Digital Age.”
Consumers concerned about fraud, particularly when shopping online, may be more inclined to use prepaid to limit their exposure in case of a breach,” Koderisch said. In other words, if a prepaid card number is compromised, the individual’s bank account or credit limit will not be at risk. As such, prepaid cards will become more popular as the world becomes more connected and data breaches continue, he said.
Prepaid also will benefit from the rising popularity of messaging apps, Koderisch predicts. Six of the top 10 mobile apps in the world are messaging apps such as Facebook Messenger or China-based WeChat, both of which enable P2P payments. He provided figures from WeChat’s successful campaign during China’s Spring Fest in February 2015 to show how prepaid and messenger apps can work together. Consumers on WeChat sent some 1 billion “Red Packet” digital money gifts to friends, relatives and others during the festival. For the January 2016 New Year’s Holiday, consumers had sent 2.3 billion such gifts via the WeChat app. “You can send [the gifts] to one person or to random friends, and you can send random amounts,” he said. “You can have a lot of fun with this service.” Traditionally, Chinese consumers give Red Envelopes with cash inside to celebrate the Chinese New Year.
The Webinar also covered broader payments issues based on an industry survey. EDC found that 72 percent of respondents think consolidation will hit the mobile wallet industry within two or three years, and 60 percent believe that the owners of Android and other mobile operating systems will prevail in the so-called mobile wallet wars. When it comes to winning what EDC called the “P2P Payments Battle,” 24 percent said it will be mobile wallet providers; 19 percent said real-time ACH programs; 19 percent said Facebook and other social media; 16 percent said PayPal; 16 percent said bank-owned providers; and 6 percent said other.