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Notes from Day One of CFSI Underbanked

Adam Rust's picture

Posted June 14, 2012

  • Western Union EVP Stewart Stockdale says that the remittance market in Saudi Arabia is the second largest in the world.
  • Stockdale later went on to question the value proposition of most prepaid debit cards. "I am a big critic of the prepaid industry, because fees and attrition are too high. Prepaid has scale because of heavy fees," he said, "but you can't have attrition of 30 to 40 percent every quarter." His point was that the

    short lifespan of most prepaid accounts could be the fault of pricing. If consumers did not feel like they were getting hit with so many fees, maybe they would hold their accounts open for longer. The Western Union MoneyWise prepaid card has no monthly fees and no transaction fees. It generates its revenue from interchange and from $4.95 loading fees.

  • All kinds of companies are using social media to monetize financial education. In general the idea is to find third party sources to pay for the costs of teaching consumers. Lead generation is one revenue stream, but so are merchant programs as well as direct tie-ins with lenders. One concern that comes to mind, at least when social media is used on the back end to help people pay off debts, is how companies will avoid running afoul of the Unfair Debt Collections Practices Act when they share to your friends that you are not paying your bills.
  • Overheard from a presentation: if we know that adjancies lead to stickiness, then what is the secret sauce?
  • Richard Calmas, CEO of Neighborhood Pay Services (RentAssurance) says that 10 to 12 million of America's 40 million apartment units are rented by people with bad credit.
  • A C-Level executive at a payments processor believes that prepaid needs to develop more differentiation in product functionality. There should be a Cadillac card and a bare bones utility card, he suggests, and the pricing should be correlated to that difference. I think it is an intriguing idea, but for the moment is remains merely an abstraction. Right now there are very few services that are not available to any customer with any card. One exception is remote deposit, but the relative scarcity of that option is mostly a factor of adoption. More cards will offer remote deposit by the end of the summer. Even more will have it by the beginning of next year.