Prepaid Payment Cards Start To Catch On In Italy -- ERG trade data forum

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Date Posted: 04:29:01 02/19/03 Wed
Author: Cher Bono( 2003-02-18 )
Subject: Prepaid Payment Cards Start To Catch On In Italy

Prepaid Payment Cards Start To Catch On In Italy
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Italian banks have seen surprising demand for prepaid payment cards, which allow teen-agers and others without bank accounts to make purchases using the same point-of-sale and transaction processing networks as debit and credit cardholders. Since launching the product a little more than a year ago, the banks have issued about 250,000 cards, and in December did roughly the same amount of transactions, says Carlo Maiocchi, manager of business development for bank-owned processor SSB. That compares with just 4,000 transactions the first month of the launch, January, 2002. The average purchase amount is 61 euros (US$65.50) and so far, only 5% of cardholders have canceled their cards. Cardholders can recharge the cards at ATMs and in bank branches, at a cost of 1 euro to 2 euros per recharge. That�s about what it costs for bank accountholders to withdraw money from an ATM not owned by their bank, says Maiocchi. He says he believes consumers like the security of carrying prepaid cards rather than wads of cash, as well as the international MasterCard and Visa acceptance network they have access to. Twenty-one banks connected with SSB are issuing the cards and so are a handful of banks allied with other processing networks. They see an untapped market, which few other banks in Europe are yet going after, he says. Three Italian banks are negotiating co-branding deals with one or more universities this year, seeking to drum up more business with students. "They are hoping that students will become clients of the banks," he says. The banks, of course, earn fees on transactions, as they do with debit and credit card purchases. Anonymous, nonrechargeable prepaid cards are also available, which could be used to dispense wages to temporary employees or given as gifts, Maiocchi says.

( 2003-02-18 )

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