Opportunities for Prepaid Micropayments

TowerGroup believes that FSIs can form alliances, either with leading industry payments vendors or initiatives from within the telecommunications or financial industries, to embed themselves in the recharge process. This kind of alliance could make FSIs the macropayment transaction behind the micropayment when a direct bank link, debit card, or credit card is used to reload monetary value onto the stored-value account or card. Prepaid payments will expand from proprietary niche solutions to applications with greater reach across multiple market verticals, and driving user adoption will depend in part on creating a trusted, standardized electronic recharge capability that is more convenient for users than cash payments. This recharge solution must be cost effective and ubiquitous enough to compete with physical points of recharge that accept cash. FSIs' scale, breadth, and trusted relationships with customers give them important advantages over emerging competitors.