Retail drives prepaid. And consumers drive the type and range of prepaid products available at the retail level. Today’s prepaid retail offerings run the gamut from traditional J-hook phone cards to electronically dispensed gift and debit cards and wireless products. According to experts, success in prepaid now lies not only in providing all the products consumers want to buy but also in making them available in the way they want to buy them – electronically or off-the-shelf. The industry has recognized this consumer trend and is working closely with retailers to help them profit from it.
American Wireless of Campbell, Calif., provides agents with prepaid handsets and airtime products. The company is also a master distributor for major cellular carriers and has numerous relationships with specialist MVNOs.
“2006 is an exciting time to be a retailer of wireless prepaid products,” says Bruce Hallinan, vice president, prepaid services for American Wireless. “The wireless industry is poised to undergo a shift. Soon it will transition beyond ‘vanilla’ voice services to a flood of products targeting specific market segments. As one of the first wholesalers of wireless products, American Wireless has established itself as a one-stop shop for retailers looking for a program with a unique selling proposition that also appeals to customers.”
Wireless customers are looking for products with content and style that match their lifestyle, Hallinan explains. Retail channels for prepaid wireless are expanding to meet this surging demand. Low-cost, off-the-shelf products are now available in most convenience stores, and wireless retailers are becoming expert consultants on data program choices such as Amp’d Mobile’s prepaid offer.
“This year’s most exciting development will be the introduction of prepaid programs that are nearly identical to the operator’s postpaid offers but lacking the traditional ties of contract, credit check and monthly billing,” he adds. “American Wireless has years of experience in implementing an efficient, turnkey prepaid solution that allows retailers to focus on what they do best – sales. We are ready to partner with them.”
Phone: (800) 276-2333 Website: www.americanwireless.com
Based in Miami, Blackstone is one of the nation’s leading providers of prepaid long distance international calling cards.
“Traditionally, prepaid product distributors have reached the retail segment through indirect distribution, i.e. wholesalers, smaller distributors, jobbers and agents,” says Dania Gonzales, director of marketing for Blackstone. “Few companies in the industry have been able to adequately transition their distribution from a wholesale concept to a retail concept due to the added support infrastructure required for this type of service. Since the beginning, Blackstone has successfully managed both tiers of distribution through indirect channels but also with a direct sales force that visits thousands of retailer customers each week.”
Though prepaid products have been sold electronically at the retail level for more than six years, many retailers still prefer the J-hook delivery format, Gonzales continues. Blackstone supports both, a fact that surprises many carriers.
“Retail is extremely profitable, if managed effectively,” she adds. “The key is to offer a solution appropriate for every retailer however large or small it may be. Being a true complete prepaid category provider means being able to support everything from live cards to sophisticated vending units in order to ensure that no prospect falls through the cracks. Storeowners now recognize that to carry only wireless products hampers them by not allowing them to take full advantage of the prepaid segment. The trend now is back to basics, where having the right competitive prepaid international long distance mix is as important as selling wireless and other electronic products.”
Phone: (305) 639-9590 Website: www.blackstoneonline.com
Euronet Worldwide Inc./PaySpot Inc.
PaySpot of Leawood, Kan., is the U.S. prepaid subsidiary of Euronet Worldwide, a prepaid processor transacting over $5.5 billion annually at more than 220,000 points of sale.
“Handsets continue to rise in the retail category for many of our merchants,” says Brandon Thompson, vice president, products and marketing for PaySpot Inc. “By partnering with a handful of carefully chosen providers, PaySpot has the unique ability to offer compelling programs specific to our different sales channels from ISO to chain. Selling handsets in a retail venue typically equates to an exponential increase in sales of wireless PINs but only if the handset offered hits the sweet spot of that particular location and/or channel.”
Currently, handsets equate to a significant increase in revenue through markup on the actual equipment as well as the increase in PIN sales, Thompson explains. There will be many entries into the space in an attempt to grab the opportunity at hand. However, only those with sustainable business models, solid technical and customer support and a good value proposition to both the merchant and the end customer will be in it for the long haul.
“There is, of course, a good deal of money to be made in retail,” he adds. “Handsets are one avenue to enhance value. Another is increasing the number of products offered via POS terminals or through integrated electronic cash registers for retailers with multiple locations and multiple checkout points. Our merchants are seeing significant cost savings when current rates and plans are compared to what PaySpot is able to offer.”
Phone: (913) 327-4247 Website: www.Payspot.com
Headquartered in Atlanta, InComm developed one of the first prepaid platforms in the payment processing industry. The platform consists of POSA technology that allows customers to pay for prepaid products upfront and redeem value immediately after the retail purchase.
“Processors like InComm make it possible for retailers to connect with major providers of products and enable activation upon checkout,” says Edward Vargo, manager, marketing services for InComm Inc. “We provide retailers access to hundreds of prepaid products through one technology connection and one reconciliation for all the prepaid products they choose to sell. InComm’s prepaid product suite includes wireless, gift cards, debit cards, long distance cards, games and more.”
The flexibility and scalability of InComm’s network allows the company to be the leader in the industry in the development of new and cutting-edge products, Vargo explains. InComm is also not constrained by technology when it comes to brainstorming new product opportunities.
“Prepaid debit cards are expected to be the fastest-growing segment of the prepaid market in the coming years,” he adds. “According to the Pelorus Group, debit cards will grow from 15 million in 2003 to more than 90 million in 2008. The cards continue to grow in popularity as a means of payment. Retailers can capture their share of increasing market revenue, benefit from repeat business and increase foot traffic with prepaid debit cards.”
Phone: (800) 352-3084 Website: www.incomm.com
Morgan Beaumont Inc.
Morgan Beaumont is a technology solutions company and a premier provider of stored value and prepaid card solutions. The company is based in Bradenton, Fla.
“Recent nationwide disasters have forced more consumers, businesses and governments to use stored value products to transmit funds for purchases and payroll purposes,” says Erik Jensen, president of Morgan Beaumont Inc. “These unfortunate events have familiarized many people with the convenience and security of stored value products. In years to come, you’ll see a steady and continuous increase in prepaid acceptance and usage.”
Prepaid cards provide an opportunity for both merchants and distributors to make money, Jensen continues. The cards offer merchants the opportunity to sell another product at a higher margin of profit. Distributors, meanwhile, not only earn commissions per sale but residuals lasting the lifetime of the card.
“Distributors can earn additional profit by making each merchant a SIRE Network load location. This is Morgan Beaumont’s POS and PC-based software platform that connects merchants with multiple stored value processing and issuing banks, as well as private transaction networks,” he adds. “The SIRE Network is the only certified, compliant, flexible and open network with the ability to offer a variety of products and services, from stored value and gift cards to telecom products and POS adjudication processes to both the prime and sub-prime markets. The distributor would make residuals for every cash load at one of his merchant locations using the SIRE Network regardless of the prepaid product loaded.”
Phone: (941) 753-2875 Website: www.morganbeaumont.com
The Phone Card Warehouse
The Phone Card Warehouse (TPC) of Orlando, Fla., is the nation’s largest wholesaler and manufacturer of prepaid phone cards. The company is also a distributor of prepaid phone cards with sales volume exceeding $170 million per year.
“Retail plays a major role in the phone card business, and yes, it’s on fire,” says Tino Patel, president of The Phone Card Warehouse. “The market is exploding all over and in all directions. It’s unbelievable, and who knows where it will go from here.”
Lower discounts make for quality improvement and dependability, Patel continues. And while they may also mean less profit on single sales, deep discounts increase purchase quantities and reduce complaints, which, in turn, translates to repeat business.
“Our customer base consists of wholesalers, distributors and communications companies, and we provide all of them with the most reliable and dependable cards in the prepaid marketplace,” he adds. “Our prepaid phone cards can be found in more than 100,000 retail locations, including the Disney resorts and gift shops, AM/PM Mini Markets, Amoco/BP, Texaco, Chevron, Citgo, Hess, Mobil, Shell and many other locations. Through the years, distributors, retailers and consumers have relied on TPC to provide dependable products at competitive prices. TPC wholesales/distributes more than 100 different phone card types, from more than 10 telecommunications carriers. We also provide over 50 private-label cards, which we print and activate ourselves. This company is about satisfying the needs of our partners and the wants of end-users. Customer satisfaction is what TPC is all about.”