As the market for prepaid cards expands and diversifies, many companies are experimenting to see what works — and in the process, they are learning that a product-based mindset could hold them back.

At American Express, for example, "We think about prepaid not as a product, a [general purpose reloadable card] — arguably a checking account and a debit account are GPRs," said Alpesh Chokshi, Amex's president of global payment options. "Prepaid is a business model."

And Amex's implementation of that model is paying off. For the Bluebird card Amex created with Walmart, "we estimate our cost to serve a customer compared to a bank with bricks and mortar, heat and light and electricity … is less than 20%," he said.

The market today for prepaid cards is $425 billion, he said, but the market for the business model — which can also be applied to check, debit and cash users — is $25 trillion.

Chokshi spoke alongside the heads of Green Dot and NetSpend in a panel discussion at PaymentsSource's ATM, Debit and Prepaid Forum, this week in Las Vegas.

For Green Dot, payroll cards aren't a product or a competitive threat — they're just another channel, said Steve Streit, Green Dot's president and CEO.

Green Dot views payroll cards as a model for distribution, comparable to retail stores or the education market, he said.

It's important for prepaid card companies to keep an open mind as they build out their products, even if they have to add features they dread, Streit said.

"As a guy who owns a bank, [remote check deposit] is one risky line of business, I can assure you," he said.

However, more prepaid card companies are exploring ways to support remote deposit capture, and there is a reward for their efforts. "The more ways you can have to put money on the card, the more ways you can have to spend money," Streit said.

Chuck Harris, president of NetSpend, a unit of Total System Services, suggested taking this idea further: prepaid card companies should expect that consumers will someday stop using the desktop Internet as a method of account access.

"You have to operate under the assumption that it's all going to be on the [mobile] device" within five years, he said.

Amex's Chokshi said Bluebird, launched a year ago, was designed for a userbase that doesn't rely on the same infrastructure that mainstream bank customers take for granted.

Much of Bluebird's inspiration came from M-Pesa, a mobile money service popular in Kenya.  M-Pesa demonstrates that "when you don't have the physical infrastructure" for a conventional financial service, "you can leapfrog it," Chokshi said.

Amex plans to target markets where cash is the dominant payment instrument. "You'll see announcements from us in a number of markets around the world where people have phones, or they're unbanked, and where cash is king," he said.

But even the U.S. can be ripe for innovation, Harris added. Square Cash, a new person-to-person payment system that lets consumers send funds simply by typing an email, launched last week. The Square product challenges bank-based P2P systems, which largely rely on apps, mobile websites, and older products such as the paper check.

"Things like [Square Cash] show us that even in the things we think we're doing well today, there's opportunity to improve," Harris said.

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