Both startups and well-established companies are moving fast to deliver innovative payment solutions across a wide array of industries. Fintech has been driving new advances in payroll, general banking alternatives, business-to-business loans, insurance claims payouts and legal settlement claims to name a few.
Because of the flexibility and numerous benefits, one of the solutions many companies have been pursuing is the creation of a prepaid debit card program. The prepaid card payments space is complicated and crowded, with pretty much every program managers claiming to have “best-of-breed technology” and “game-changing solutions”.
So how does a company with little-to-no experience in prepaid sift through the clutter (and buzzwords) to choose the right partner?
As the founder of Next Step Network, and now as an executive at Cardplatforms, I’ve had years of experience both as a program marketer and program manager in the prepaid card industry. Through some painful experiences, I’ve learned the hard way that choosing the wrong prepaid card program manager partner can cause a lot of harm to your business.
In an effort to help you avoid the same mistakes, below are the five key things to look for when partnering with a program manager:
Technology Capabilities: Many program managers in the space use their processor’s back-end and front-end. First, you want to find out who their core processor is. Make sure that the processor they are using doesn’t have a history of frequent downtimes and that they are flexible enough to support your business requirements. You also want to make sure that the front-end being delivered to you has a solid user experience that is aligned with your company’s brand. Many program managers will use the processor’s outdated user interface and just slap your logo on it. Don’t need a front-end because you are developing your own? Make sure the program manager has well-documented APIs. Most importantly, always ask for a demo of their platform. Don’t get caught up in lip-service. Seeing is believing. Finally, find a partner that is staying on the cutting edge. Technology is always evolving and you need a partner that is going to help you stay ahead of the market and your competition.
Quality of Team and Track Record: The size of the team isn’t as relevant as their depth of experience. Obviously, you want to make sure the program manager has enough staff to support you, but more important is that they have the knowledge base and competencies to launch and support your ongoing needs. Do as much research as you can, ask questions, and see how detailed their responses are. Do they truly understand compliance, reporting and all of the other intricate details to effectively run and manage a prepaid card program? If they deflect, use a lot of jargon and/or provide vague responses, that should raise some serious red flags. Make sure you find a team that can simplify this very complex space and can educate you. Lastly, make sure that you ask for references. You want to be sure that they’ve delivered quality solutions with successful outcomes. They could have a list of unhappy clients that are stuck with them because they were over promised and are now locked in to a long-term contract.
Speed to Market: When you ask a program manager how quickly you can get a program to market 9 out of 10 will tell you “90 days”. If you are creating a custom card program, then 9 out of 10 will fail at delivering on that timeline. There is a minimum of 36 steps to getting a program to launch, many of the requirements happening simultaneously. It requires a well-oiled, experienced team to work together to create the artful balance of making sure things are consistently getting done and moving forward, while dotting every I and crossing every T. Make sure that your program manager has a well-documented process with timelines that you can hold them accountable to.
Pricing and Revenue Share: Historically, prepaid card programs have caught a lot of flak for having inflated fees. This is often a result of the passing through and marking up of costs from the processor and bank, to the program manager and finally to you, the program marketer. Program managers often times just pass through their costs and markup the fees, which leads to complicated pricing tables and even more complicated reporting. Make sure you choose a program manager that keeps their pricing table simple, or even better, elects to share in the program costs and program revenues. This creates the truest of partnerships because both have a vested interest in the success of the program.
Customer Service: We live in a time where brands are made or destroyed by the quality of their customer service. Make sure that the program manager has the proper policies and procedures in place to handle your program requirements. Find out if they handle a portion or all of their calls in-house or if they outsource to a third-party with all of the agents overseas. If the third-party is overseas, where are the agents located? How well do they speak English? Do they offer bilingual customer service? Ultimately, this is your brand’s reputation on the line. You want to be confident that the people speaking with your cardholders are treating them in a way that properly embodies your brand’s values.
About the Author:
Eric Dresdale was the founder and CEO of Next Step Network, LLC, a reloadable prepaid card company that was acquired in 2016 by San Francisco-based, True Link Financial. Now in his role as vice president of sales for Cardplatforms, Eric leverages his deep understanding of digital payments and prepaid to craft solutions that deliver significant value to both the enterprise and consumers.
