www.PrepaidExpoUsa.com

Executive Summary 2011

March 6-9, 2011,

Orlando Marriott World Center

By Marc Dresner, IIR USA

www.PrepaidExpoUsa.com

March 6-9, 2011

Orlando Marriott World Center

By Marc Dresner, IIR USA

Executive Summary

2011

Executive Summary

2011

2 www.PrepaidExpoUsa.com

Introduction & Overview ............................................................................................................................... p3

Program Highlights

I. Leadership Keynote: General Colin Powell (RET) ........................................................................... p5

II. New Regulatory Expectations: A Banking Point of View .............................................................. p11

III. Executive Take on Prepaid .......................................................................................................... p13

(American Express, Discover, MasterCard, Visa)

IV. Prepaid as Incentives: Primary Research Unveiled ..................................................................... p20

V. Public Sector & Prepaid: Federal and State Treasuries Move to Eliminate Paper Checks .......... p22

(Comerica, ACS – A Xerox Company, JP Morgan Chase, the Commonwealth of Virginia)

VI-VII. Prepaid Regulation and Legislation – a Perspective from the Frontlines ............................ p28

– Panel One: Shifting from Defense to Offense ............................................................................. p30

(Blackhawk Network, Schulte Roth & Zabel LLP, NBPCA)

– Panel Two: Fighting for Prepaid State by State .......................................................................... p31

(MetaBank, The Bancorp Bank, Green Dot, Value Pay Services, NBPCA)

VIII. Inspiring Innovation Keynote: Robert Safian, Fast Company .................................................... p34

IX. 5th Annual Paybefore Industry Best-in-Category Awards .......................................................... p37

Conclusion .................................................................................................................................................. p40

Appendix ..................................................................................................................................................... p42

CONTENTS

Executive Summary 2011

March 6-9, 2011, Orlando Marriott World CenterBy Marc Dresner, IIR USA

www.PrepaidExpoUsa.com 3

It has been said before, but this year more than ever it bears repeating: The prepaid industry

is in transition.

In her opening remarks convening Prepaid Expo’s 2011 general session, my friend and colleague,

Hollie Goldman, astutely observed that the prepaid industry is “entering a new stage of maturity.”

As the conference progressed, I quickly began to understand why she chose the term maturity: A

narrative akin to adolescence was unfolding at this conference, distinguishing the prepaid sector

from so many other industries in flux. This is, after all, a relatively young industry still finding its

way. She was referencing growing pains and the rights of passage with which the relatively

nascent prepaid industry has been saddled:

• Technological advancement (particularly mobile, which despite years of unfulfilled prophecy

is inevitable and closing fast, led by dramatic innovation in emerging international markets)

• Economic and socio-cultural upheaval (critical growth drivers yet to be exploited to full potential)

• Globalization (top emerging markets – especially India and China – tend to be under-banked

cash economies with high mobile penetration and with fewer of the infrastructure barriers that

continue to restrict prepaid to swiping in the States)

• Intense legislative and regulatory scrutiny (a flashpoint topic this year)

These topics surfaced repeatedly across four days and 40 sessions, in workshops, panels and

presentations, in private discussions, and in one-on-one interviews I personally conducted

over the course of the conference.

INTRODUCTION & OVERVIEW

(Continued)

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(Continued from p.3)

With more than 1,700 attendees and roughly 125 speakers spanning all facets of the prepaid chain – issuers,

processors, retailers, government agents, technologists and other third-party providers – there was no shortage of

diverse perspectives, yet they all held to the common thread of an evolving, maturing industry.

Notably, we saw an influx of retailers – approximately 175 companies represented – indicating the conventional closed-loop

sector is becoming increasingly complex, sophisticated and, to a large extent, in need of guidance. To wit: At the outset of the

conference, a particularly well-placed retail exec told me retailers are struggling to optimize the value of prepaid programs

and experimenting with new models. He also advised me to keep a close eye on mobile. “Really,” he emphasized, as if

something in my expression betrayed doubt.“That’s where we’re headed, but most of my peers aren’t prepared for it,” he said.

Moreover, Prepaid Expo’s long-time partner associations – the Incentive Gift Card Council (IGCC), Retail Gift Card

Association (RGCA), Network Branded Prepaid Card Association (NBPCA) and Global Prepaid Exchange (GPE) – drew

impressive numbers, fueled not only by mainstay constituents, but by fresh faces thirsty for information and eager to

contribute to common interests and emerging challenges.

In addition, Prepaid Expo’s pre-event workshops this year were deluged by attendees to a point that in some cases inhibited

a working group atmosphere. This was generally regarded as a happy problem by attendees and provided further evidence

that the need for building collaborative, collective, fresh intelligence in a rapidly changing market runs high.

Punctuating the prior point, it’s also worth noting that Prepaid Expo this year introduced two forums devoted to forging

new relationships and to the candid sharing of information and insight, each of which exceeded participation goals and

scored remarkably well among participants:

• Speed Networking – Nearly 100 attendees participated in this trial exercise; survey satisfaction scores

overwhelmingly ranked the experience “good” to “outstanding”; the number of new acquaintances that

respondents expected to stay in touch with after the event averaged 3-5; and more than 99% of respondents

indicated they would participate again.

• “Test Drive an Expert” – Ten specially selected prepaid industry experts – each an authority in a specific

discipline (marketing and promotion, regulatory compliance, performance management, partnering,

processing, talent recruitment, etc.) – were available for appointment-only consultations at 15-minute

intervals under strict guidelines that forbade selling or service promotion. Participants were encouraged to

seek answers to hot-button questions. Appointment slots were booked solid.

Lastly, the exhibition hall, with 100-plus exhibitors, provided an excellent window into the state of the industry.

Based on the bustle and buzz, the traffic, the conversations had (and those overheard), and the variety and scope of

providers this year – first-time exhibitors, in particular – it is safe to conclude that the prepaid industry is not only in

robust health, but poised to shake hands with change.

Nowhere was this sentiment more evident than in the program content, so without further ado, we are pleased to present a

summary of key presentations and panels from the 2011 Prepaid Expo for your review, consideration and edification.

INTRODUCTION & OVERVIEW