Push for Pan-European Account Access Could Spur Prepaid Card Growth (Jan. 10, 2013)
Jan. 10, 2013
European banks and prepaid card marketers are weighing their options as they await word on a European Parliament initiative to guarantee all European Union citizens access to a payment account, according to observers. The push to bring payment services to all springs from a European Commission announcement in March 2012 that laid out “key actions” as part of its Single Market Act II initiative to further streamline and improve consumer, business and financial services across European Union members’ borders. The resolution by the Economic and Monetary Affairs Committee specified the need to “give all EU citizens access to a basic payment account,” while improving bank-fee transparency and the process of switching banks. “Access to payment accounts and other banking services have become essential for participation in economic and social life,” the commission said. The initiative called for lawmakers to draft legislation in December 2012; observers expect to see it early this year.
Such requirements would “represent a headache for banks” on technical and competitive fronts, Zilvinas Bareisis, a senior analyst with Celent, tells Paybefore. But the push to provide every EU citizen with a payment account could also be a boon to prepaid card providers and other nontraditional financial services operators, he suggests. “I do think this is an opportunity for nonbank providers to fill the gap” with services already tailored to unbanked consumers’ needs.
The Prepaid International Forum backs the concept of providing all EU citizens with account access and welcomes the opportunity to get involved. “Prepaid, at its heart, has the premise of making and having a payment account easy to get and easy to use for everyone,” Robert Courtneidge, PIF chairman, tells Paybefore.
U.K.-based Contis Group, whose online banking and prepaid card services target unbanked consumers, also sees possible opportunities in any legislation to mandate account access across Europe. In a blog published early this month, Contis Managing Director Mike Fromant suggested the legislation might drag banks “kicking and screaming” into serving the unbanked. But prepaid card and e-money institutions could “work together” to extend their reach, expand their marketing and provide effective support for this market this year to maximize opportunities, Fromant said.
