Innovation Continues, Even As Fundamentals Remain Important – Day Three Recap

The prepaid industry continued to learn how it can move ahead on the final day of the Power of Prepaid conference.

IPA board member Solana Cozzo, of MasterCard, tackled the topic of the nuts and bolts of innovation.

“Never has there been so much hype and so little consensus around innovation,” she said.

Innovation can be driven by design thinking that incorporates three important factors. First, existing technology combined with a good platform and connected to customer emotions will lead to scalable innovation. Second, collaboration is key, because innovation requires partnerships. Third, the customer experience must be at the forefront of design.

This led into a discussion of about designing products for people of color in a panel moderated by AnaLiza Gardner, director of private label banking for IPA Member the Bancorp. Wole Coaxum of MoCaFi, Bertrand Sosa of Rev, and IPA board member Miguel Zepeda of Brinks gave their thoughts on how cards can be tailored to specific audiences. The panel noted that it was important to recognize cultural differences and the needs of particular communities. At the same time, they stressed that designing for cards for targeted audiences does not mean forgetting about the fundamentals of financial services.  Products need to provide financial access and build capacity in a sustainable way.

The Homeland Security panel reminded everyone that payments industry, including the prepaid community, has a responsibility to support law enforcement’s efforts to identify and fraudsters and money launderers.  However, that responsibility needs to be balanced with rights of individuals to protect their personal identifiable information. Lastly, we learned that while Congress plays a role in balancing individual rights alongside giving law eneforcment the tools they need to combat fraud, Congress itself may lack the necessary resources to keep up with an ever evolving industry. 

The day wrapped up with research from the Federal Reserve. The trends in prepaid show that the average value of card transactions is falling across all types. This shows that prepaid is being used for smaller purchases and displacing cash.

The research also shows that fraud trends are moving in expected directions post-EMV. Fraud has trended from in-person fraud to remote fraud, with more fraud happening in card-not-present settings.