A Special Report From The PELORUS Group

STORED VALUE:
21st Century Currency
Assessing Market Dynamics, Opportunities and Challenges To 2007

An Exclusive Report Dedicated To Probing The Issues, Trends
And Competitive Forces Shaping Stored Value Markets
  • Analyzing Why Technology And User Needs Are Now Aligned For Explosive Growth In Stored Value

  • Detailed Opportunity Analysis And Outlook For User Needs And Markets Served

  • Understanding Why Prepaid Telephony Has Set The Stage For Stored Value, And Why Telcos And Prepaid Vendors Are Well Positioned To Exploit Stored Value Opportunities

  • Detailed Strategy Discussions On A Per Company Basis For Existing And Emerging Players

  • Impact Of Stored Value On Prepaid Telecom Vendors, Retailers, The Financial Industry, And Companies That Currently Serve The Unbanked And Credit Challenged

  • Why Stored Value Is All About Convenience

  • Regulation, Standards And National Security Issues

  • Analyzing The Features And Benefits Of Open vs. Closed Stored Value Systems

  • Details Of Recent Success Stories And An Analysis Of Why Other Attempts At Creating Stored Value Systems In The Past Have Failed

  • Cost Saving And Promotional Opportunities Enabled By Stored Value

  • Consumer And Business Segments:  Quantifying Current And Potential Markets

  • The Future Of Stored Value

  •  Market Forecasts To 2007!

An Exciting Vision Of The Promise That Is Stored Value!


The PELORUS Group

The Final Word In

Prepaid Market Assessment

 STORED VALUE:  REDEFINING THE MEANING OF CURRENCY

Stored value cards are changing the way people in the U.S. do business.  Stored value cards impact the way we spend cash, wield checks, and most importantly, employ traditional credit cards.  The prepaid industry, which for the last 15 years focused primarily on telecom services, is about to explode into every sector of the economy.  Stored value cards represent substantial revenue opportunities for new players, but they could also significantly reduce the revenues of banks and major credit card companies, such as Visa and MasterCard.  Either way, the prepaid market is poised for change, and that change promises to be both dramatic and irreversible.

Approximately 50 million adults in the U.S. do not possess credit cards.  Almost 10 million households do not boast bank accounts.  Without access to these financial facilities, millions of people have missed out on benefits of the transactions revolution. Now, stored value cards, aka prepaid debit cards, will enable these disenfranchised to share the rewards of E-commerce.  And the resulting revenue opportunity for players is nothing short of staggering.

Nobody studies emerging prepaid markets more consistently or passionately than The PELORUS Group.  For three decades we’ve been a leader in identifying, analyzing and projecting forward where the market is headed, as well as what the ramifications to industry participants will be.  We hold no punches.  Our thought-provoking assessments are hailed as cogent exercises in realistic market valuations. Organizations around the world tap into our prepaid expertise. “Stored Value: 21st Century Currency” is an exclusive report, offering unprecedented depth and a bold strategic perspective. Its insights and recommendations are the result of years of hands-on research into the rapidly changing credit/debit card landscape. The latest entry in a series of landmark prepaid studies from The PELORUS Group, “Stored Value: 21st Century Currency” may very well be the most provocative such study to date.

The PELORUS Group’s
Stored Value: 21st Century Currency
isolates and analyzes:

  • How the prepaid telecom industry set the stage for stored value cards

  • The benefits of stored value compared to cash, checks and other paper-based systems

  • The features of prepaid debit cards and convenience/gift cards

  • Breakouts of key demographics and the criteria and motivations that governs each

  • Detailed analyses of major players -- their markets, their strategies and their prospects

  • Major market drivers -- today’s and tomorrow’s

  • The significance of the recent Visa/MasterCard settlement with Wal-Mart

  • A cost comparison of stored value cards and credit cards

  • Case studies on Starbucks, Coca Cola, Western Union, and more

  • Why prepaid telecom companies maybe best positioned to lead the stored value card revolution

  • Technology, standards, and regulation -- the underpinnings of the emerging market for stored value cards

  •  Forecasts for major addressable markets to the year 2007!

 

CONTENTS

EXECUTIVE SUMMARY

 

MARKET STATUS CHECK AND DEFINITIONS

  Overview

    Open Systems

    Closed Systems

  Stored Value Applications

    Payroll

    Expense Accounts

    Government Disbursements

    Insurance Payments.

  Technology Employed

    Smart Cards

    Prepaid Point of Sale Activation

  Evolution of Prepaid from Telephony to Stored Value

    Telephony Sets the Stage

    Another System is Required

    Groups Served

  Evolution of Financial Services  -- Disruptive Innovation

  Credit vs Debit Cards

  A Major Win for Consumers

  Value Proposition

    Consumers/Retailers

    Financial Companies

 

STORED VALUE MARKET DRIVERS AND INHIBITORS

  Overview

  The Unbanked

    Open Systems

  Convenience

    Open Systems

    Closed Systems

  Expense Control

    Open Systems

    Closed Systems

  Fraud Control/Security

    Open Systems

    Closed Systems

  Reduce Expenses/Save Money

    Stored Value vs Credit Cards -- A Cost Comparison

    Account Statements and Customer Service

  Stored Value Can Change the Credit Card Industry

  Regulation and Standards

  A Stored Value Strategy for Prepaid Telecom Companies

    Value Provided By Prepaid Vendors

    Telecom Services, Stored Value & Segment Marketing

    Ethnic Groups

    Youth Market

    Take the Credit Out of Credit Cards

    New Payment Method Required

    Wireless Service Providers

    Conclusion

  Beyond Prepaid Telecom Companies

 

STORED VALUE IN ACTION: CASE STUDIES

  Introduction

  Starbucks Coffee Company

  Coca Cola Company

  American Skyline Insurance Company

  Western Union

  Conclusions

 

POSITIONING TO CAPITALIZE ON
STORED VALUE:  MAJOR PLAYERS

  Overview

  American Express

  Card Express Inc.

  Clarity

  Concord EFS

  Datamark Technologies

  DataStream

  First Data/Western Union

  Intermarte

  MasterCard

  Metavante Corporation

  Morgan Beaumont

  NCMS

  Next Estate

  PaymenTech

  The Rush Card

  QComm

  Radiant Telecom

  Size

  Stored Value Systems - ComData

  Wild Card Systems

  Vesta

  Visa

 

CURRENT MARKET DEMOGRAPHICS AND FIVE-YEAR FORECASTS

  Overview

  Methodology

  Assumptions

  The Stored Value Market In 2003

    Key Factors

    Market Size

  The Stored Value Market -- 2003 to 2007

  Credit Card Projections -- 2003 to 2007

    Dollar Volumes

    Transactions

    Cards

  Debit Cards Projections -- 2003 to 2007

    Dollar Volume

    Transactions

    Cards

  Prepaid Debit Cards -- 2003 to 2007

    Dollar Volume

    Transactions

    Cards

  Prepaid Debit Fee Revenues -- 2003 to 2007

  Convenience/Gift Cards -- 2003 to 2007

    Dollar Volume

    Transactions

    Average transaction

    Cards

  Stored Value: The Next Five-Years

 

PLUS OVER THIRTY CHARTS & TABLES!

Tom Miezejeski is Vice President of Research with The PELORUS Group. With over 15 years experience in the communications industry, Mr. Miezejeski has an extensive background in market research, strategic analysis and technology assessment.    In his current position, Mr. Miezejeski is primarily responsible for the company’s research in the prepaid telephony markets.  Other areas of expertise include wireless, operator and directory services, calling cards and carrier infrastructure equipment.

Prior to joining The PELORUS Group, Mr. Miezejeski was with Telcordia Technologies (formerly Bellcore) where he directed and managed its market research activities.  In addition, Mr. Miezejeski consulted for research firms Northern Business Information (now part of the Gartner Group), The Eastern Management Group and Insight Research.  During this time, Mr. Miezejeski authored over 20 major research studies and worked with key telecommunications carriers and manufacturers on competitive and strategic issues. Mr. Miezejeski has a BBA in Finance and Investments from the City College of New York, and a Master of Business Administration from New York University.

Editor Al Fross has researched and written about the wireless and prepaid arenas for three decades.  He has edited and published many groundbreaking studies, including The PELORUS Group’s “Prepaid Wireless” and “Prepaid Telephony” reports.  He holds an MBA in Finance from Rutgers University

The PELORUS Group
Helping Navigate Change in Prepaid Markets

The PELORUS Group is a market research, consulting, and business planning firm.  Its charter is to provide market research, business management, strategic planning, and competitive intelligence services to its worldwide base of clientele.

Its challenge is to veer away from consensus research, and expose the myths within key telecommunications and information services industries.

Additional reports available from The PELORUS Group:

“The Future of Prepaid Telephony”

“Enterprise Unified Communications”

“Prepaid Wireless”

“Broadband To The Residence”

“The Future of Operator Services

“CRM: The New Call Center Paradigm”

“Wireless Location-Based Markets”

“Operator Services”

“Unified Communications For The Service Provider”

“Softswitches & Broadband Switching: The New Environment”

“Wireless Speech Recognition”

“Enhanced Directory Assistance”

“The Future of SMS"

“European Directory Assistance Markets”

“North American Directory Assistance Markets”

“CTI To CRM”

“Global Speech Recognition”

“North American DA Markets”

“The Future of Contact Centers”

“The Millennium Call Center Survey”

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