Direct Gratification with Prepaid Cards for Incentive Programs
The world is changing at lightning speed, and so is the universe of direct gratification with prepaid cards. This is primarily due to technology advances, increased electronic payment usage, and cost-effective alternatives to cash or checks. It comes as no surprise we see this increasingly popular SPIFF payout method in sales incentives, partner, and channel programs.
According to Global Industry Analysts Inc., forecasts suggest prepaid cards in the global marketplace will reach $3 trillion by 2022. That’s the equivalent of 3,000 times a billion and a lot of zeroes to boot (or spend in this case).
Fundamentally, prepaid cards are payment cards (a predetermined amount is loaded and stored on to the card) – think Mastercard, Visa, Discover or American Express. The industry term is “Open Loop” meaning you can use wherever the merchant accepts this form of payment and not a specific retailer, which is considered “Closed Loop.” There are options for reloadable prepaid cards and electronic cards as well.
A major benefit of prepaid cards is spending flexibility. It also gives the intended recipient the freedom of choice versus selecting from predetermined options or a catalog. Expanding categories include travel, online shopping, and mobile commerce.
While the US continues to represent the largest marketplace, Asia-Pacific (APAC) is emerging as the fastest growing sector, bringing us to virtual prepaid card solutions.
Virtual Prepaid Cards
Virtual prepaid solutions are expanding reach in our universal online marketplace because of immediacy and flexibility. Gone are the days of shipping the actual/physical award to the recipient. Instead, a company, sponsor or program branded email notification is automagically sent, landing in one’s inbox containing a redemption code. In turn, the recipient registers the redemption code to gain access to their virtual prepaid card and can then instantly shop online.
Since this option offers great plasticity, there are some caveats to be aware of:
- print or electronic code retrieval to use in a brick and mortar store is not feasible
- a set maximum load value per card/code due to regulatory and security governance
- redemption codes are valid for a specified amount of time
- international currency conversion fees apply
- prohibited list of countries where transactions are strictly forbidden
There are sure to be emerging changes with mobile commerce (“wallet” features) and alternative payment options on the horizon. Remember, no one size solution fits all. Be sure to leverage Brightspot’s expertise to help design your next incentive program.
Want to know more about other incentive award options, take a look at our Incentive Program Award section!