14 December 2017
Mike Fromant

End-to-end in prepaid

Mike Fromant - Contis Group Ltd

6Posts 16,205Views 4Comments

The Looming Crisis for UK Credit Unions

19 July 2013  |  2776 views  |  0

In the wake of a recent Citizens Advice study* which revealed that that nine out of ten benefit recipients believe they will be unable to cope when Universal Credit is introduced, there is now an urgent need for both the Department of Work and Pensions and Credit Unions across the UK to consult with the e-money industry in order to gain a better understanding of what online budgeting account facilities are available to unbanked benefits recipients. The switchover will inevitably place huge pressure on the often thinly resourced member support functions in Credit Unions nationwide, many of which are simply unlikely to cope.

The great frustration is that the e-money industry can and is offering facilities to this sector that beat the services of major banks hands down. Sadly, either the government is unaware of these facilities, or it is simply uninterested in promoting their use. Either way, it needs to wake up to the impending Universal Credit crisis and act now to address these issues before it is too late.

On the other side of the coin, Credit Unions across the UK need to modernise their member support facilities through partnerships with prepaid e-money solutions providers, in order to meet the needs of their unbanked members.

With an anticipated eight million Universal Credit payments expected over the first four years aloneƗ, the uptake of financial solutions designed for low income individuals and those with developing financial skills is set grow dramatically in 2013/14. By adopting prepaid solutions, Credit Unions are able to provide many of the traditional money management facilities that banks are refusing to offer. For example, an e-account, together with an account number and sort code is capable of supporting standing orders, money transfers and benefit payments.

By taking this route, members can also benefit from ATM access and worldwide payment acceptance via Credit Union-issued prepaid and debit cards powered by the major payment schemes. Many Credit Unions have already taken this step, but there are still hundreds across the country that haven’t, which is cause for grave concern. Without access to a traditional bank account, where else are these people to go?

For both the government and Credit Unions across the UK, the time to act is now. Otherwise, it will again be this under supported sector of society which will be hit the hardest. The e-money industry is working hard to support the transition to Universal Credit; the onus must now be on other supporting stakeholders to work with us to make the best of the situation.

* Details of the study available here. 

Ɨ Department of Work and Pensions.

TagsMobile & onlinePayments

Comments: (0)

Comment on this story (membership required)

Latest posts from Mike

AmEx and the unbanked - look to the UK for best practice

13 March 2014  |  1957 views  |  0 comments | recomends Recommends 0 TagsPaymentsInnovation

T-Mobile's 'Mobile Money' - where's the added value?

29 January 2014  |  2154 views  |  1 comments | recomends Recommends 0 TagsMobile & onlinePayments

The Looming Crisis for UK Credit Unions

19 July 2013  |  2776 views  |  0 comments | recomends Recommends 0 TagsMobile & onlinePayments

Shoring Up a House of Cards

17 June 2013  |  2598 views  |  0 comments | recomends Recommends 0 TagsCardsRetail banking

Prepaid eAccounts: last and best resort for Universal Credit

19 March 2013  |  2849 views  |  0 comments | recomends Recommends 0 TagsCardsPayments

Mike's profile

job title Managing Director
location Skipton
member since 2013
Summary profile See full profile »
As Managing Director, Mike has operating responsibility for the strategic growth of international end-to-end prepaid and debit solutions provider, Contis Group.

Mike's expertise

Member since 2013
6 posts4 comments
What Mike reads
Mike's blog archive
2014 (2)2013 (4)

Who's commenting on Mike's posts