25 February 2018
Mike Fromant

End-to-end in prepaid

Mike Fromant - Contis Group Ltd

6Posts 16,413Views 4Comments

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

13 March 2014  |  2006 views  |  0

I applaud AmEx's recent initiative to use technology to help the plight of Amercia’s 70m underbanked citizens, but I do hope it knows that there’s no need to start from scratch. The work being done by e-money institutions in the UK, on the Visa platform in particular, to address the needs of the financially underserved is world beating.

UK programmes of this kind have been tremendously successful for a number of years and can provide a best practice blueprint for AmEx to follow.

Prepaid and debit products have been built in partnership with welfare support institutions like Credit Unions and Housing Associations, for example, offering bank-like payment facilities to those that that have been turned away by the traditional high street banks. The best of these deliver integrated loyalty and rewards schemes linked to value-driven retailers, enabling cash strapped cardholders to generate income from their spending.

But leveraging the right partnerships is just the tip of the iceberg. The flexibility of the e-money environment (of which AmEx is an important part) enables service providers to shape financial solutions to help groups of customers manage their funds in a way that suits their specific circumstances, including the unbanked. On this side of the pond, e- account platforms have already been created that that enable account holders to segregate committed outgoings for, say, rent and utilities, and store them in virtual 'envelopes', thus ensuring they remain untouched until their payments are due. This leaves remaining income easily accessible for groceries and other expenses, or to withdraw as cash from an ATM. These practices are already well established in Europe and could help AmEx circumvent years of research.

Finally, AmEx will also need to recognise that the unbanked cannot be addressed as a single market. State-by-state variations are acute, so the ability to apply appropriate segmentation will determine the initiative’s success in the US, probably more so than it would in the UK.  Assessing and prioritising those support agencies which have the greatest potential to effect change will also be central to the realisation of AmEx’s vision. These organisations truly understand the plight of the unbanked and will cast valuable light on the needs of those they serve. Only then will AmEx be able to develop solutions that are of true value.

We’ll be keeping a close eye on this project. I’m quite sure that UK e-money providers would be happy to lend knowledge and expertise in support of this venture. 



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  |  2006 views  |  0 comments | recomends Recommends 0 TagsPaymentsInnovation

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

29 January 2014  |  2186 views  |  1 comments | recomends Recommends 0 TagsMobile & onlinePayments

The Looming Crisis for UK Credit Unions

19 July 2013  |  2807 views  |  0 comments | recomends Recommends 0 TagsMobile & onlinePayments

Shoring Up a House of Cards

17 June 2013  |  2630 views  |  0 comments | recomends Recommends 0 TagsCardsRetail banking

Prepaid eAccounts: last and best resort for Universal Credit

19 March 2013  |  2865 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