Making Prepaid a “Non Zero Sum Game”

A “zero sum game” is a game in which the total of all the gains and losses is zero. On Day 1 of Prepaid Expo USA 2010, President Bill Clinton gave a keynote speech titled “Embracing our Common Humanity”. In his presentation, President Clinton urged the prepaid card industry to make prepaid a non zero sum game, by finding a way to run successful and profitable businesses while serving the goals and needs of the community at large. President Clinton presented some of the problems the world faces, and gave six ways the prepaid industry can both thrive, and help address world problems – non zero sum opportunities.

The President believes that the modern world faces three profound problems:

1. Inequality. The world is entirely unjust, with the poorest countries suffering from a lack of capacity, and the richest countries suffering from rigidity or an inability to easily adapt or change.
2. Instability. The modern world is unstable, partly due to advances in communications and the ease by which information and ideas spread.
3. Unsustainability. The way the world consumes and produces energy is unsustainable.

After discussing each of the three problems, the President then asked: “what can prepaid products do to address these problems?” He answered his own question by suggesting six ways prepaid can be made a non zero sum product by making an impact on one or more of the problems facing the world.

Here are the President’s suggestions:

First, prepaid can serve the underbanked providing them with payment options that do not involve high fees. The prepaid industry is highly in tune with solving this demographic, and the industry has worked for years to provide quality banking products to the underbanked. The topic was the feature of an excellent discussion on Day 2 of the Expo, with Steve Streit from The Green Dot Corporation moderating a panel on “State of the Market: Unbanked & Underserved”.

Second, prepaid can help with healthcare reform. The President suggested that prepaid products, such as reloadable health benefit cards, can save money and reduce some of the waste in America’s health system.

Third, prepaid can help us avoid another debt crisis, by encouraging more people to “pay before” rather than pay later with credit products. The President suggested that prepaid companies should also be doing more to help educate consumers about managing their spending.

Fourth, prepaid can help people in isolated and undeveloped countries. The President gave India, Bangladesh and Haiti as examples where prepaid products (including remittance products) can help bring improved financial power to countries without advanced banking infrastructure.

Fifth, prepaid can help respond to disasters. As an example, President Clinton pointed to the Red Cross’ use of prepaid cards to distribute aid to people after Hurricane Katrina. Prepaid products provided cost savings and efficiency to the disaster relief efforts in New Orleans.

Finally, the President suggested that prepaid can help reduce waste and paper, thereby helping improve our utilization of natural resources. President Clinton pointed to Wal-mart’s recent move to pay many employees using payroll cards. The program will save over 260,000 pounds of paper each year. In the past, we’ve written about how using prepaid cards with direct deposit can help reduce waste.

Attendees of the Prepaid Expo USA will recognize programs that are already implementing the suggestions posed by the President. For example, today, MasterCard International Incorporated announced that it is the exclusive sponsor of “Money Matters National Education Day”, part of National Payroll Week. The program will help teach high school students about paychecks, the payroll systems and the future of payroll – prepaid payroll cards. MasterCard will also sponsor four scholarships for junior and senior high school students for continued education.

What other opportunities are out there to do good while still having successful programs?

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