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Friday July 16, 08:29
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Transactions Give Prepay Market New Dimension
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Prepaid wireless revenues in the US will grow from USD 7 billion in 2003, to nearly USD 28 billion by 2008, according to the Pelorus Group, while Canada’s parallel revenues will grow from CD 1 billion to CD 2.7 billion. In 2003, the average annual revenue per subscriber (ARPU) in the US was USD 337, but Pelorus sees this total reaching USD 572 by 2008, and in Canada will grow from CD 329 in 2003, to CD 465 by 2008. Retailers offering prepaid wireless recharge via POS activation (POSA) systems gain extra revenues from selling new prepaid services while attracting additional foot traffic into their stores.
Transaction processing gives the prepaid market a ‘new dimension’ as wireless accounts always need recharging, and consequently the infrastructure established by prepaid wireless vendors and ancillary service providers leads to new opportunities for distributing and refilling prepaid debit cards or gift cards. In fact, “POSA can be a much more efficient payment processing network than the credit card and banking system” which evolved before the development of real-time communications, Pelorus VP, Tom Miezejeski writes in a recent feature for the Prepaid Press.
Wireless service providers have tended to favor post-paid customers due to their propensity to spend more, over prepaid subscribers which until late 2002 were typically from the credit-challenged customer base. Realizing the opportunities in prepaid, however, operators are capitalizing on new market sectors such as the youth, underbanked and credit-challenged markets while identifying niches to target. In short, wireless operators have needed to leverage prepaid services as a way to pursue new revenue streams in a tightening market and this in turn has enabled merchants with POSA systems to generate new profits.
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