The prepaid industry looks nothing like it did many years ago.
With new technologies and even more use cases, prepaid cards are being used to deliver access to a wide range of payments, whether it’s from an employer or simply a gift card amount from a friend.
As a prepaid industry veteran with more than 20 years in the payments space, Jeff Johnson has had a front row seat to this evolution, serving most recently as chief sales and marketing officer/chief revenue officer for Card Compliant.
But now Johnson is taking on a new role as SVP for Commercial Prepaid at Netspend, and he recently sat down with Karen Webster to talk about his vision for the role now and moving forward.
With the job of leading Netspend’s Commercial Prepaid channel, Johnson will be responsible for managing and expanding the company’s paycard programs, incentive, disbursement and award programs, as well as overseeing the Tip Network, which helps tip-based businesses move to a more streamlined system.
Expanding Prepaid Focus
Johnson explained that traditionally, Netspend’s commercial prepaid business has primarily been focused on the payroll card, which is the delivery of a wage payment system method out to its clients.
But going forward, the focus will be on keeping a close eye on where the industry is moving in terms of the delivery methods for commercial prepaid, he noted.
“The market certainly is driving some of the new ways in which an employee can be paid,” Johnson said.
While the payroll card has been around for quite a while now, he noted that Netspend will look to build out more features and functionalities of a program that allows further access of funds based on the changing trends of how consumers expect to be paid.
One area that presents a huge opportunity in the commercial prepaid space is the growing number of workers in the gig economy, many of whom may either be underbanked or wish to have a separate account for purposes of consolidating income.
Johnson agreed that there is a tremendous opportunity within those segments of the business and that Netspend will look to capture that as it continues to build out incremental products that run alongside of payroll cards. He pointed to the recent launch of the Netspend Small Business Mastercard as an example.
“We want to provide safer and more convenient ways to access that money,” he said.
There’s also an opportunity to leverage additional services within prepaid solutions, such as a savings opportunity, investment opportunity, rewards for usage, etc., which can provide ways for providers to ensure these products are valuable to the end user.
The Move Away From Cash
Netspend’s Tip Network solution provides a way for tip-based businesses to calculate tip-outs, distribute tips and digitally transfer funds. Businesses like restaurants can then move cash digitally while also being able to track the movement of those funds more efficiently.
Johnson said the product has revealed how drastically consumer preference has shifted away from cash in certain sectors, especially restaurants where debit and credit card payments happen so frequently that often there is not enough cash on hand to pay out tips for employees.
This is the gap that the Tip Network aims to fill.
But with any change in delivering wages, there is always a barrier that has to be overcome. In this case, there may be consumers who prefer their tip payments in cash versus receiving funds on a plastic card.
“I think there is going to be some barrier there, but it’s no different than what payroll cards were like 10 to 15 years ago. We’ll use our learnings as we roll this out to refine the product, or better yet, refine the message to the end user of the Tip Card and its benefits,” Johnson explained.
“It’s easy to go create a cost benefit for the restaurant of the world, but ultimately we look to our end user cardholder as the deliverer of our product scheme, so we’ll look to continue to build out a message and augment the product as we uncover the needs of the cardholder.”
As the payroll industry and the markets and use cases it serves continue to evolve, Johnson noted one focal point that has stood out in the as being core to innovation in payments and commerce: immediate gratification.
We now live in a world where it’s easy to have immediate access to account balances or being able to purchase a product instantly across various channels.
“I think the real-time access to that — from data, payments, or the ability to deliver wages or check your balance — has become a core piece of where we are going forward because it’s a part of our daily life to have immediate access to all that.”