Innovating Payments in the Digital World: Creative Uses of Prepaid

by Zilvinas Bareisis, October 31, 2016
Industry Trends


Celent has released a new report titled Innovating Payments in the Digital World: Creative Uses of Prepaid. The report was written by Zilvinas Bareisis, a senior analyst with Celent's Banking practice. 

What do companies like Affirm, Kabbage, Oxfam, and Payoneer have in common? They all use prepaid accounts to power their diverse businesses. This report analyses the selected case studies of creative uses of prepaid and technology platforms behind them.

The prepaid market is multidimensional and needs careful definition if we are to conduct meaningful analysis. While stand-alone prepaid products play an important role in many markets today, prepaid accounts can also be used as part of a more complex value proposition. Platforms supporting payments in the digital world are open and modular, enabling clients to create their own use cases, support entitlements rather than account balances, and act as an “issuing gateway” to different companies. The opportunity for financial institutions is twofold.

  • Partnering with the new digital economy firms that want to incorporate payments into the overall experience they are creating for their customers.
  • Exploring opportunities how they can take a leaf out of these new firms’ books and develop new financial services and commerce experiences for their customers.

“We observe innovative companies using prepaid accounts in creative ways to enhance their business models," says Bareisis. “In some instances, the need for prepaid is not obvious at all.” 

“Many financial institutions feel constrained by their legacy processing systems. In some cases that is valid, yet the good news is that they now have real alternatives. Increasingly, financial institutions will be constrained not by technology but only by their imagination,” he adds.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

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Michele Pace
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Table of Contents

Executive Summary





Key Research Questions


The Prepaid Market: A Brief Introduction


Creative Uses of Prepaid: Selected Case Studies



Oxfam: Supporting Disaster-Affected Communities



Kabbage: Lending to Small Businesses



Payoneer: A Cross-Border Payment Platform



Affirm: A New Merchant Payment Method


Supporting Technology Platforms








Implications for the Industry


Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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