June 02, 2011 09:30 AM Eastern Daylight TimeAttitudes evolve on social media and the changing regulatory environment
MUMBAI & NEW YORK--(BUSINESS WIRE)--Pre-paid is primed for explosive growth in the coming year, according to a survey conducted by Firstsource Solutions. The survey was conducted at the Card Forum & Expo, held recently in Miami.
“Our findings support recent research about the upward trend in the pre-paid market which shows that an estimated $37 billion was loaded onto prepaid cards last year, compared to $18 billion in 2009 and $9 billion in 2008.”
Fifty percent of payment industry professionals surveyed expect wider adoption of pre-paid cards as more consumers move away from credit cards and cash. Nearly 30 percent of respondents said that more consumers would become “loaders” (i.e. depositing more money to their pre-paid accounts).
“We’re seeing a growing interest in pre-paid cards in consumer segments that weren’t originally drawn to using such a form of payment,” said Tim Smith, Senior Vice President, Banking Financial Services & Insurance, Firstsource. “Our findings support recent research about the upward trend in the pre-paid market which shows that an estimated $37 billion was loaded onto prepaid cards last year, compared to $18 billion in 2009 and $9 billion in 2008.”
Survey respondents indicated that there is a huge opportunity for the pre-paid market to expand its customer base beyond the most likely consumer targets. Over 40 percent indicated that increased scrutiny from regulators regarding loading and set-up fees will pose the greatest risk to the industry. Additionally, 47 percent said educating card holders on the nuances of a pre-paid will be critical to successful adoption and overall growth in the market.
Financial Regulatory Environment
Firstsource’s survey also examined sentiment on the current regulatory climate in the payments industry. While Dodd-Frank was top-of-mind for 45 percent of payments professionals, the Consumer Financial Protection Act has fallen off the radar for most industry executives (only 9 percent of respondents indicated it was currently a priority issue).
Social Media Surge
The majority of survey respondents (66 percent) said that social media platforms have played a critical role in enhancing the customer experience. Three out of four respondents (74 percent) agreed that social media will be a significant factor in customer service in the future. Nearly 35 percent said their organizations use Twitter to connect with customers and monitor online conversations while 30 percent used Facebook to do so. Only 20 percent used blogs, while 18 percent used video sharing or other forms of social media.
“Despite contrary belief, social media adoption has become much more sophisticated in the payments industry,” said Smith. “Banks and credit card issuers are using social media platforms not only to improve the customer experience but to develop new products and service offerings based on customer preferences.”
About the Survey
The survey of 100 professionals in the banking and credit card industries was conducted by Firstsource at the Card Forum & Expo on April 27-29, 2011 in Miami, Fla. Respondents included credit card issuers, as well as banking and payments industry professionals, and service and outsourcing providers.
About Firstsource
Firstsource (NSE: FSL, BSE: 532809, Reuters: FISO.BO, Bloomberg: FSOL@IN) is a leading global provider of customized BPO services to the Healthcare, Telecom & Media and Banking and Financial Services industries. Its clients include Fortune 500, FTSE 100 and Nifty 50 companies. Firstsource has a “rightshore” delivery model with operations in India, U.S., UK and Philippines. (www.firstsource.com).
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