Convenience Store Decisions – Open-loop prepaid cards present an ongoing opportunity for c-stores, especially since the prepaid market is fostering activities that are putting more of these types of cards in consumers’ hands.
Open-loop is a term most often associated with a credit card carrying logos such as those for American Express, Discover, MasterCard or Visa that can be used wherever those cards are accepted. They are more likely to carry fees. These are different than closed-loop cards, also called single-purpose cards, which have an individual company’s logo, indicating where the cards can be used.
Retailers are typically paid for each open-loop card they sell, or when they reload them. Additional sales hopefully accrue when consumers use them inside the store or at the pump. The overall growth trajectory of both open- and closed-loop prepaid cards is, however, undeniable. According to Global Industry Analysts Inc., the global market for prepaid cards is projected to reach $3.1 trillion by 2022, driven by the growing need for financial inclusion of unbanked consumers, innovative and expanding card features, increasing online transactions, and rising demand for cost-effective and convenient electronic payment solutions.
There will be a move to a more mobile platform that will reside on consumers’ phones, predicted Perry Kramer, vice president and practice lead at Boston Retail Partners.
“Any convenience store that is not already offering prepaid cards should get in the game,” said Kramer.
“Retailers should consider cross-marketing prepaid cards near a small rack of greeting cards for gift-giving occasions,” he added. “It is also key to proactively monitor the in-stock process to make sure they are not missing sales from out-of-stock positions.”
Read full article: Weighing Open-Loop Cards