As the prepaid market evolves, the networks processors use to support proprietary, closed-loop services use will be the next generation of networks best used to support alternative payments, contends T. Jack Williams, president of Dallas-based consultancy Paymentcard Services Inc. and a long-time player in the prepaid industry.

“As merchants look to reduce their cost of payment acceptance, they’ll need a network and they’ll need processors. Those processors that go from offering a gift card to becoming a provider of virtual cards that use the processing rails used for closed-loop gift cards will be the ones that succeed in the future,” Williams says. “The real opportunity is alternative payment strategies, whether mobile, key-entered or whatever.”

 The big processors will win in providing open-loop card processing for payroll and government prepaid initiatives because they have the credibility and breadth of functionality that open-loop clients will require. As such, smaller, closed-loop processors need to look for other markets to compete, Williams says.

“There’s a whole world of virtual accounts in the multimerchant environment,” he says. “Whether that’s a township with a vision to use a parking card to drive sales for downtown merchants or some other strategy, alternative payment strategies that run on existing closed-loop rails will be the opportunity of the future. You have to have the expertise and understanding of the prepaid world, both physical and virtual. It will require a high understanding of the payments infrastructure to win in the years ahead.”

For the full interview with Williams, click here

What do you think about this? Send us your feedback. Click Here.

 

Subscribe Now

Authoritative analysis and perspective for every segment of the payments industry

14-Day Free Trial

Authoritative analysis and perspective for every segment of the industry