"Lunch is for wimps." -- Gordon Gekko
The transformation in banking continues, for good or bad. Big financiers can probably relate to Gordon Gekko of the Wall Street movie saga, if only metaphorically. Banking is in a need of a comeback, a refresh, a reawakening, in some ways like Michael Douglas' character in the second installment, "Wall Street: Money Never Sleeps." Check out Gordon on Forbes Fictional Fifteen from a few years ago. The guy's rise and fall ... and rise again is the stuff of legends.
In part because there have been stringent regulations set down by both the Basel committee for 27 countries, and the Durbin Amendment in the U.S., banks find themselves shifting revenue strategies -- if they are smart. Part of the reform is that Interchange transaction fees on debit cards that are collected by banks could decrease by nearly 40% per year! Let me put this in dollars-and-sense: banks could lose as much as $9B of the $22.8B collected each year in interchange fees on debit cards.
One area of opportunity for banks is exempt from restrictions in the bill. Prepaid cards -- the pay-ahead payment vehicle – could be a way to make up that 40%! Major U.S. banks are either offering them now or considering adding them to their consumer products.
Savvy bankers should think about adding prepaid cards to their consumer offerings. They're an increasingly popular way to give prizes and gifts, use for payroll, and for insurance claim settlements, among other things. I've received them and given them and they are so easy to use. And consumers trust them. Prepaid cards are paid for upfront, so there’s no credit check involved, no credit card bill to pay. And they are safer to use over the internet, unlike debit cards where thieves can run up quite a tab by tapping into your entire account.
HP recently announced a self-service Prepaid Card Services solution. If you're in banking and looking to refresh your revenue streams, HP could be part of your transformation ... your comeback. Do it ... after lunch.